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HomeMy WebLinkAboutCC 13 POTLATCH CLAIM 05-06-91CONSENT CALENDAR NO. 13 5-6-91 %OA LM Inter -Com SATE: MAY 21 1991 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: WILLIAM A. HUSTON, CITY MANAGER SUBJECT: POTLATCH CORPORATION - CLAIM AGAINST THE COUNTY SANITATION DISTRICT AND MEMBER CITIES RECOMMENDATION: That the City Council authorize the County Sanitation District to provide the City's legal defense related to litigation involving the District and its member cities. DISCUSSION: Per the attached letter from the General Manager of the County Sanitation District, the District is offering to provide the City legal defense, at the District's expense, for a claim filed against the District. The letter explains the lawsuit and how the District will provide the City's legal defense. The City Attorney and staff feel it would be in the City's best interest to authorize the District to represent the City per the terms set forth in the letter. WAH W. potvscty.wah IS, AT/ON Stan C O Val• ° n U u� Aiw­S h S'n�e 195 ORgAGE GOV14� _ Mr. William Huston City Manager City of Tustin 300 Centennial Way Tustin, CA 92680 �;OUNTY SANITATION DISTRICTS OF ORANGE COUNTY, CALIFORNIA P.O. BOX 8127, FOUNTAIN VALLEY. CALIFORNIA 92728-8127 10844 ELLIS, FOUNTAIN VALLEY, CALIFORNIA 92708-7018 ( 714) 962-2411 March 22, 1991 RECEIVED i MAR 2 i 1991 RE: Claim of Potlatch Corporation and Simpson Paper Company v. City of Anaheim and 22 Other Cities and Municipalities in Orange County U.S.A. v. Montrose Chemical Corporation, et al., U.S. District Court No. CV90-3122-AHH Dear Mr. Huston: I write to you with the understanding that in recent weeks, your agency has been served with a claim relating to the above -referenced litigation, together with a request for documents under the California Public Records Act, and that this matter has been reviewed by your staff and legal counsel. While this matter is relatively new to your agency, the County Sanitation Districts have been aware of it and have had to respond to a similar claim and request for production of documents since early November, 1990. We have likewise been aware of the nature of the original litigation which involved the Los Angeles County Sanitation Districts, who were named as a principal party defendant in the lawsuit filed in the United States District Court for the Central District of California. During the past several months, the Districts and their General Counsel, Thomas L. Woodruff, have expended a considerable amount of effort to evaluate the claim and the possible impact upon the Districts and their member agencies. The litigation is extremely complex and having basically been filed under the provisions of the Federal Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), we have informed our Directors of the potential magnitude of the suit in the event the Districts and their member agencies are actively brought into this litigation. The National Oceanic and Atmospheric Administration ("NOAA"), as lead agency for the U.S. and State governments, filed the original suit to recover costs and damages under CERCLA ("Superfund") against Montrose, several other industrial corporations and the Los Angeles County Sanitation Districts, alleging that their historical actions have damaged the marine habitat off Palos Verdes and the Los Angeles Harbor. Montrose was the major manufacturer of DDT before it was outlawed. Mr. William Huston City of Tustin March 22, 1991 Page Two of Three COUNTY SANITATION DISTRICTS of ORANGE COUNTY, CALIFORNIA 10844 ELLIS AVENUE P.O. 80X 8127 FOUNTAIN VALLEY. CALIFORNIA 92728-8127 (7141962-2411 Although a similar situation has not existed in Orange County, the corporate defendants are now seeking to bring virtually any major Southern California ocean discharger and any industrial firms that discharge PCB's, DDT's, and in fact heavy metals into a metropolitan sewerage system, into the lawsuit. As with most environmental litigation, one of the objectives of the corporate defendants is to expand the base of defendants to the largest possible number, so as to spread the burdens and risks. You have been named because industrial firms located within your jurisdiction are connected to, and discharge directly to, your local collector sewers. Upon recently learning that 23 member agencies of the Districts, including your City, had been served with a claim by Potlatch Corporation and Simpson Paper Company, my office, and that of the General Counsel, have done a further evaluation of the impact on our member agencies; and Mr. Woodruff has had preliminary contact with your City Attorney. As you know, the Sanitation Districts provide regional wastewater collection, treatment and disposal for all of Central and Northern Orange County, including the areas of 23 of the incorporated Cities and some unincorporated areas. Four of the Cities are served by independent Sanitary or Water Districts, and our Board is.of._course comprised of the Mayors, City Council Members, Supervisors and Directors of our 25 member agencies. (To help better familiarize you with the Sanitation Districts wastewater management program, I am enclosing a copy of our general information brochure.) The Sanitation Districts have always taken great pride in the level of service provided to the improved properties within the areas of their member agencies, and that has been accomplished by an unmatched level of cooperation among the member agencies so as to provide a level of facilities and service leading to a guarantee of the highest degree of protection of the public health, environment and marine resources. Based on that, it was my recommendation to our Boards of Directors, that the Sanitation Districts agree to coordinate and provide the collective defense of all 25 members of the Districts related to this litigation. My recommendation was not only premised upon a need and desire to ensure continued intergovernmental cooperation among all the member agencies, but obviously to minimize the tremendous expense that could be incurred as a result of these claims and litigation. It is inevitable that the Sanitation Districts will be the most actively involved agency in this litigation, in view of the fact that the allegations are essentially premised upon damages to the ocean as a result of sewer discharges. It is our Sanitation Districts that in fact regulate the discharges of hazardous or toxic waste from the specified industrial dischargers located within the jurisdiction of your entity. We provide the technical criteria for allowing discharges and also cause the periodic inspection, monitoring and enforcement of all of the applicable federal, state and Sanitation Districts' laws relating to those entities. We do not believe that the Cities or Sanitary/Water Districts have any of the involvement in terms of local connections that would constitute the basis for significantly involving them in this litigation. In fact, we believe the naming of the Orange County Sanitation Districts and their member agencies in this suit is totally without merit. Unfortunately, however, the private enterprise corporate defendants seek to expand the base of defendants to the largest number possible, especially those with the proverbial "deep pockets". Mr. William Huston _. City of Tustin March 22, 1991 Page Three of Three COUNTY SANITATION DISTRICTS of ORANGE COUNTY, CALIFORNIA 10844 ELLIS AVENUE P.O. BOX 8127 FOUNTAIN VALLEY, CALIFORNIA 92728-8127 (714) 962-2411 At the Boards of Directors Meeting of March 13, 1991, our Boards unanimously approved the Sanitation Districts accepting and providing the defense of each of the 25 member agencies. This is to be done by the coordination of efforts by the Districts' Office of General Counsel, and will be done without any expectation of sharing of expenses by the member agencies or seeking any sort of reimbursement thereafter. We want to emphasize that no member agency is obligated to accept this offer extended by the Districts. Each agency is certainly free to continue to provide their legal defense through counsel of their own choosing. In such event, I would like to suggest that Mr. Woodruff continue to coordinate with your choice of counsel, so as to provide the best possible united defense for all of our agencies. The only limitations on this proposal by the Sanitation Districts are that the Sanitation Districts will not pay for or reimburse any legal expenses incurred directly.by an agency through the selection of counsel of their own choice. Secondly, the Sanitation Districts will not provide the defense in the event the litigation is expanded to allege damages caused by such things as surface water run-offs or other causes not related to operation of a sewer system. I believe that the action of the Sanitation Districts, apart from being generous, is very well reasoned, and that a coordinated effort to provide documentation, response to the claims, and even the actual defense in the event of litigation will produce a faster, more cost-effective, and optimum final resolution. Mr. Woodruff is again directly contacting your City Attorney to outline this action of the Boards of Directors,*with the primary emphasis at thjs time being to coordinate a search of records and insurance policies of your agency, to provide a uniform response to the request for.production of documents, and to evaluate the insurance coverage which each agency may have that would assist in this defense. If you have specific questions, concerns you to direct them to me, but would also Mr. Daniel Spradlin who will be managing of Rourke & Woodruff, will be most happy of course, as to your counsel. N . Ge JWS:sc Enclosure cc: Director Charles Puckett Director Richard B. Edgar Director Leslie A. Pontious or comments, I would certainly invite indicate that Mr. Woodruff or this litiga ion on behalf of the firm r espon it ctly to you, as well, rra y ester a er