DEF. LLOYD L. HODGES & THE LLOYD L. HODGES COMP ARE ENGAGED IN DISMANTLING AN OIL REFINERY OWNED BY DEFENDENT CITIES SERVICE COMPANY (CITCO) IN EAST CHICAGO, IN. ACCORDING TO THE COMPLAINT, THE DISMANTLING OPERATIONS HAVE RELEASED LARGE QUANTITIES OF ASBESTOS, A KNOWN HUMAN CARCINOGEN, INTO THE AIR, THREATENING THE HEALTH OF WORKERS & RESIDENTS OF THE AREA. THE REFINERY IS LOCATED IN A LT IND. AREA AT THE INTERSECTION OF CLINE & CHICAGO AVENUES. SEVERAL CO.'S ARE LOCATED TO THE SOUTH OF THE SITE, & TO THE NORTH & EAST ARE RESIDENT. SECTIONS. CITCO OPERATED THE REFINERY UNTIL 1976, & CURRENTLY OPERATES AN OIL STORAGE TERMINAL AT THE FACILITY. HODGES BEGAN THE DEMOLITION IN LATE FALL OF 1976. AS PART OF THE OPERATION, HODGES DISMANTLES BUILDINGS & EQUIPMENT WHICH ARE INSULATED OR FIRE PROOFED WITH FRIABLE ASBESTOS. LRG QUANTITIES OF ASBESTOS HAVE ACCUMULATED ON-SITE. AS A RESULT OF THE ORIGINAL DEMOLITION PROCESS, APPROX. 15,000 CU FT OF ASBESTOS MAT'L REMAINED IN PILES IN AN OPEN AREA OF THE SITE. ALSO, BROKEN PIPES AND TANKS WERE FOUND SCATTERED THROUGHOUT THE SITE, MANY NOT FULLY STRIPPED OF THEIR COVERINGS. PURSUANT TO AN AGREED PRELIM ORDER, FILED SEPT 4 1980, LARGE ASBESTOS PILES WERE REMOVED FROM CITGO'S PROPERTY & THE UNDERLYING DIRT SCRAPED CLEAN IN NOV. 1980. ON AUG 17 1982, REGION V INSPECTED THE SITE & FOUND APPROX 100 ACRES COVERED WITH ASBESTOS-CONT