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When the job is to fight oil companies, water providers turn to law firms for help. But when the fight results in a $120 million cash settlement, things can turn ugly.
The city of Santa Monica hired three law firms after it discovered in 1996 that five wells providing 80 percent of its drinking water had been tainted by the gasoline additive MTBE.
The oil companies settled those lawsuits last year for $120 million plus a commitment from the oil companies to clean up the wells. Two of the law firms want $66 million from Santa Monica for their efforts on the case.
The city says that is too much and filed a lawsuit last month that claims the attorneys from two of the firms dragged out the negotiation process to increase their legal fees.
Miller & Sawyer, a firm in Sacramento, who represented South Tahoe Public Utility District in its MTBE-related lawsuits, is one of the firms named in the lawsuit filed by the city.
The city of Santa Monica hired three law firms after it discovered in 1996 that five wells providing 80 percent of its drinking water had been tainted by the gasoline additive MTBE.
The oil companies settled those lawsuits last year for $120 million plus a commitment from the oil companies to clean up the wells. Two of the law firms want $66 million from Santa Monica for their efforts on the case.
The city says that is too much and filed a lawsuit last month that claims the attorneys from two of the firms dragged out the negotiation process to increase their legal fees.
Miller & Sawyer, a firm in Sacramento, who represented South Tahoe Public Utility District in its MTBE-related lawsuits, is one of the firms named in the lawsuit filed by the city.
Duane Miller, of Miller & Sawyer, on Thursday said the lawsuit is frivolous and unexpected.
"We've worked on the Santa Monica case for four years and never been reimbursed for our time," Miller said. "When the settlement was announced the mayor indicated we achieved exceptional results and that the taxpayers were fully and completely taken care of.
"When the time came to pay, the client decided we were overreaching. We stand by the contract we all asked for and the (rate) the city agreed to pay a long time ago when we took the case."
Attorneys for the city of Santa Monica failed to return phone calls on Thursday.
South Tahoe Public Utility District received $69 million from the MTBE lawsuits it filed against a handful of oil refineries. Methyl tertiary butyl ether is an oxygenate, a chemical that makes gasoline burn more completely, that the district discovered had leaked from underground gasoline tanks and contaminated its water wells. To date, the additive has led to the shut down of 13 district wells.
"We've worked on the Santa Monica case for four years and never been reimbursed for our time," Miller said. "When the settlement was announced the mayor indicated we achieved exceptional results and that the taxpayers were fully and completely taken care of.
"When the time came to pay, the client decided we were overreaching. We stand by the contract we all asked for and the (rate) the city agreed to pay a long time ago when we took the case."
Attorneys for the city of Santa Monica failed to return phone calls on Thursday.
South Tahoe Public Utility District received $69 million from the MTBE lawsuits it filed against a handful of oil refineries. Methyl tertiary butyl ether is an oxygenate, a chemical that makes gasoline burn more completely, that the district discovered had leaked from underground gasoline tanks and contaminated its water wells. To date, the additive has led to the shut down of 13 district wells.
"We offered the oil companies an opportunity to settle early on," said Dennis Cocking, South Tahoe Public Utility District information officer. "They turned their nose up at us. They laughed at us."
So the district turned to attorneys for help. About 1,600 tall file cabinets of paperwork and several years later, a jury found MTBE to be a defective product and the oil companies agreed to settle with the district.
Document presented on behalf of the district showed that the oil companies knew that methyl tertiary butyl ether had the potential to harm water supplies but went ahead and sold it anyway, Cocking said.
After paying legal fees, the district netted $45 million of the $69 million settlement. But $10 million was spent immediately on infrastructure expenses such as drilling replacement wells and reconfiguring the district's water system. More than $30 million in a district account to treat MTBE related water issues.
"Before we signed anything it was crystal clear what our level of commitment to (the law firm) was, what the contractual agreement was," Cocking said. "The law firm takes some risk along with the plaintiff. If we don't win they don't win."
So the district turned to attorneys for help. About 1,600 tall file cabinets of paperwork and several years later, a jury found MTBE to be a defective product and the oil companies agreed to settle with the district.
Document presented on behalf of the district showed that the oil companies knew that methyl tertiary butyl ether had the potential to harm water supplies but went ahead and sold it anyway, Cocking said.
After paying legal fees, the district netted $45 million of the $69 million settlement. But $10 million was spent immediately on infrastructure expenses such as drilling replacement wells and reconfiguring the district's water system. More than $30 million in a district account to treat MTBE related water issues.
"Before we signed anything it was crystal clear what our level of commitment to (the law firm) was, what the contractual agreement was," Cocking said. "The law firm takes some risk along with the plaintiff. If we don't win they don't win."
Cocking said general counsel at the utility district checked to see whether 30 percent of a settlement going to attorneys fees was typical for the work that needed to be done. The answer came back as "yes," and the district's board of directors approved a contract with the Miller, Sawyer & Sher. Sher has since left the firm.
"I was in trial for 10 months ... working 14 to 16 hour days," Miller said. "That's an irreplaceable slice of life gone."
Miller said he couldn't specifically say how much money his firm ended up collecting in fees from the South Tahoe case because he was away from his desk speaking inside an airport. But, he said, the fees were part of the settlement that was agreed on.
"Obviously it was substantial, but it was earned," Miller said. "To go against the refineries, taking on the gasoline industry, it is one heck of a fight. It was the first MTBE case where a jury found gasoline contained a defective product. We fought the Tahoe case tooth and nail knowing it would set a precedent around the entire country and it did."
- Gregory Crofton can be reached at (530) 542-8045 or by e-mail at gcrofton@tahoedailytribune.com
"I was in trial for 10 months ... working 14 to 16 hour days," Miller said. "That's an irreplaceable slice of life gone."
Miller said he couldn't specifically say how much money his firm ended up collecting in fees from the South Tahoe case because he was away from his desk speaking inside an airport. But, he said, the fees were part of the settlement that was agreed on.
"Obviously it was substantial, but it was earned," Miller said. "To go against the refineries, taking on the gasoline industry, it is one heck of a fight. It was the first MTBE case where a jury found gasoline contained a defective product. We fought the Tahoe case tooth and nail knowing it would set a precedent around the entire country and it did."
- Gregory Crofton can be reached at (530) 542-8045 or by e-mail at gcrofton@tahoedailytribune.com
