HomeMy WebLinkAbout2011-04-25 11-137 ORDERItem fl . 11 1:37
Date: ADII 25 2011
Item/Subject: Order, Authorizing the Execution of a Settlement Agreement with
Citizens Communications Company, now known as Frontier Communications
Corporation, and a Third Party Defendant
Responsible Department: Legal
In November 2002, the City of Bangor fled suit against Citizens Communications
Company (Citizens) in the United States District Court for the District of Maine alleging
that Citizens contributed to pollution of the Penobscot River. In February 2007, the City
Council approved a settlement agreement with Citizens. The settlement agreement
provided that the City assign any rights It has against third party defendants in the
lawsuit to Citizens and that Citizens could continue to pursue its claims against them.
This Order will authorize the execution of a settlement agreement with Citizens
Communications Company, now known as Frontier Communications Corporation, and
third party defendants Maine Central Railroad and Pan Am Railways, Inc. and a Side
Agreement with Frontier Communications Corporation to make dear that Frontier's
costs attributed to its pursuit of the Railroad will not be considered in the final
calculation of the amount due the City from Third Party Defendant payments.
Department Head
Managees comments:
Clry Ma
Associated Information: Omer, Agreement
Budget Approval
FnanceDiMohr
Legal Approval
ily Soliciror
Introduced for
x Passage
_ First Reading
Page _ &_
Referral
� . p, Assigned 0 Councilor _ p.) ,
CITY OF BANGOR
April 25, 2011
(IME.) ORDER, Authorizing the Execution of a Settlement Agreement with Citizens
communications Company, now known as Frontier Communicators Corporation, and Third Party
Defendants
WHEREAS, in November 2002, the City of Bangor filed suit against Closers Communications
Company in the United States District Court for the District of Maine (styled City of
Bangor, Maine v. Citizens Communications Company, at al., Civil Action 02-183-8-
S) alleging that Citizens contrbuted W pollution of the Penobscot River; and
WHEREAS, in February 2007, the Guy Council of the City of Bangor approved a settlement
agreement with Citizens Communications Company, and
WHEREAS, the settlement agreement provided that Me City W Bangor assign any rights It has
against Third Party Defendants in Me lawsuit to Citizens and net C oms could
continue to pursue it claims against them; and
WHEREAS, the settlement agreement provided Mat any recovery from Third Party Defendants
shall, after reimbursement of Citbe& expenses to reach a settlement, be divided
two-thirds to Citizens and one-third to Me City of Bangor, and
WHEREAS, Citizens Communications Company, now known as Frontier Communications
Corporation, has reached a negotiated settlement with a Third Parry Defendants,
namely Maine Central Railroad Company and Pan Am Railways, Inc.
NOW, THEREFORE, BE IT ORDERED BY THE QTY COUNCIL OF THE CIN OF BANGOR THAT
Me Guy Manager is hereby authorized to execute a settlement agreement with Frontier
Communications Corporation and Third Party Defendants Maine Central Railroad Company and
Pan Am Railways, Inc. in the matter of City of Bangor v. Citizers Communications Company, et
al., Civil Action 02 -183 -B -S (D.C. Me), said settlement agreement to be substantially Me same
as attached hereto and in a final form as approved by the City Solicitor or Assistant City
Solicitor and a Side Agreement Regarding Evidentiary use of Railroad Settlement, said
agreement to be substantially as attached hereto and in a final farm as approved by the City
Solicitor or Assistant City Solicitor.
IM = Co0 =
April 25, 2011
ffitiw Made and Seconded for Passage
Passed
SY
(nTiS,y e...w.._j4 og the ExecutIm of
Settleasnt_� t=citizens
c��ni�. fid ce�aoy. now ewer as
U 99 C�C&4ons Corporation, and
Third Party 0nfe to
i'. '37
Sit AOREEMENT AND RELEASE
THIS S=Et.IENi AGREEMENT AND RELEASE ("Agreement") is entered into by Mem
CaruaiReilmad Conations, e Maim Crtral liailmad%and Pan Am Railways. Inc. ("Pan Am'),
the Ianer formerly Saracen as GuilfnN Transportation Indua ron, Inc. (collectively. the "Settling
Comments"), the City of Bangor, Maine (the "City"), and broader Comihurdcadimer;
Corpamtion, formerlyknowa sa Cirsams Communications Compatry ("Prom1ar) frolleetively
all portiere above, fee "Settling PanieA) to become eRective on the dee provided in Intergraph
1(h) below (&a"Ef carive
WHEREAS, the Settling Parties agree that contamination associated with or and basements
mbnancaa eaism in certain portions of DwmeRY Cove in red Penobscot River (ted "Sfic"S
WHEREAS, ou or about November 22, 2002, the City filed acivil action in the United Stntce
Dinner Court for District of Maim("District Cowl'),docketaAasCivil Action No. 02rov-
00183 (die "Action'), against FTondcr alleging Mffi some or all of the wovmmimmtipn at Ire Site
reaolted from historical operation of a manufactured gas. plant want the intersection of Main
Street and Paton Street (die "Singer MOP'), and seeking recovery, enter man, of costs incurred
or to be insured at the Site for assessment, dmmenmnb claim tip, mitigation, removal, remedial
carbon, or other response to mmol or threatened releases ofhdrrdous substances or enter
contmnimnta and injumtive not of retaining frontier o remediate for Slm ("Response Costs');
WHEREAS, Maine Cental Railroad end Pm Am oavmd number cleaned the mil yard in Sector,
Maine (the "Rail Yard"), which has at times occupied more than 30 acres along the berms of
Dutmett's Cove:
WHEREAS, Frontier sulloqumtly filed third patty, complaints in the Action against a number of
thbd party defendants, including Maine Central Railroad and Pan Am;
WHEREAS, Frontier wall the City entered into a settlement agreement i a which the City agreed
to mWeemke the cleanup ofroe Sire and indemnify flantier fm all liability for such oleamp, and
Frontier agreed to melee a payment to as memw account for Its cleanup of the Site;
WHEREAS, Frontim and the City negotiated a Consent Damon ("Femme/City Cement
Dei with the State o f Maine and the Mai rte Department of Environmental Promctlon
("grate') that was lodged tome District Court,
WFIEREAS,
de: Charter Court entered the FronterAfty Consent Decree an a partial final
judgment am hater entered a final judgment to Ne Action, which inoeryomted Certain orders
allowing Frontier to file its claims (iretention claom assigned to it by me City) against Maine
Central Railroad, Pan Am and remain other Third Parry Defendants, in a new action in the
District Coag deckled as Civil Action No. 07-cv-00113 (the "New Action');
WHEREAS, certain Third Party Defendants, appealed the partial final judgment and the final
jmgmeat in the Action, which appeal were consolidated before the United States Court of
Appeals forte Fina Cirmit (tlu "Appeals'):
1
aascvWsurmxetwateam�irto.w
Ii 137
WHEREAS, the United Stares Coral OfAPPols for the Fid Circuit Wood an opinion deciding
the Appeals And affimdng the judgments below on lWy 9, 2009, and
WNEREAS, the Settling parties domes to canpmmiae, finery scule, Polly releaae and discharge
all claims by and among diem related W rhe Action, the New Action, the Appeals, and the Sire As
aitl to the m mt providai in this Agreement;
NOW, THEREFORE, Po consideration of all Andral advenanta and stipulations ofdismioal
captained herein and in coa3 iantlon. of the Pyramus by the Settling Defendants, as specifies in
Parearaoh 2 offbis Adeamrnt the trades hello agree as follows:
I. Release and Dismissal ofClaims,
As of the
I MY of tneir respective Past or imsent
As well As any predeiressor corporations,
I Paseo directors, officers, managers,
hareholders, insurers, reinsurers,
am, separately And collectively nowh a
in unarareared, named or
may have in the Bouton agmiam a Setting Deferment Released Party related W rhe Action, rise
New Areca, the Appals, and the Site, excepting, however, any obligations specifically sn toll
in this Agreement or in flue Consent Decree provided for in paragraph 3.
fc) As soon as reasonably possical following Ne wdplete execution of Nis
Agri Frontier, Maine Central Resonant. and Pan Am will jointly move, in the New Action.
(i) fm a stay of All proceedings bnween them or against Maine Central Fail mad And For Am in
AIndsmo Ant 105010e ["1.n 10w
'S7
the New Action, including discovery, pending carry by the District Com of the Cement Deese
describd n paragraph 3 of this Agreement, (it) for entry of the Consent Decree micarfld in
pmagapb 3 of this Agreement M fiml judgment; and (iii) for orders providing for disntissal with
puJudice ofMc claims between Man, including all claims assigned to Frontier by the art, and
all claims that have been brought by to City and any other Third -Parry Defendant against Maine
Cannel Railroad and Pon Am in Ne New Action. Upon complete execution of this Agreement,
Frontier, the City, Maine Central Railroad, and Pan Am agree that rine shall initime or require
responses to discovery against or from each other in to New Action, unless the District Com
directs otherwise or detemiues not to enter the Consent Decree described is paragraph 3 of this.
Agrecment.
(d) Notwhhstntding the releases provided bourn, ouch Smiling Pang agrees net to
cause, in say subsequent action initiated by Ne Ureal Stares Environmental Protection Agency
related to the Site, such releases m adefense many resulting contribution claim by my other
Scttlingpmty.
2. Paveruma. Meisu Central Railroad and Pan Am shat make Namara in the aggregate
armanscrat of$ 00,000, which if timely paid w prescribed below wiII conetlate Full Satisfaction
of the amau ds owed m Former. Thou payments them the made in Imtallwassma the fiat of
which chart be 200,000 due by wire turner on the earlier ofAugest 1, 2011 or the miry of to
Concern Dxra described in peregreph 3 of due Agreement. The balance shall be road in 10
manlNy, commitments of $120,000 such, wit paymm¢ to be made by wire transfer on the first
day ofeach successive month beginning after 30 days following to due date ofte first
inualbn u The obligation to make these payments still be enfomeable 0uough the Consent
Decree described below in paragraph 3 of this Agreement.
�STRdi9aXi:2IlmsZ4;
release of all the State's claims against Maine Central Raflsontl and Pon
.._...._.._._..... ......... ......._ .
gahood and Pan Am in (be New Action. The Consent Came shall not include any provisions
tsimOiawiththis Agmcmenimthe FronticNcity Consmt Deome. Maine Centra Avlroad
and Pan Am, Frontier and the City agree to infmnr Me District Com in Me joint motion for
entry of the Consent Decree that (i)the mime of Maine Control Railroad and Pan Am, Frontier,
and the City is emungent upon army of Convent Donee wit proJuions consistent with this
Smiled and (ill each of Mane Central Railroad aM Pan Am. Founder, card the City mserves the
rightm whhdraw its concert tremble Consent Donee in to event to District Court makes any
3
nrf[cusanenaVrsaioensrnv.0 caro
137
material modifications to the Consent Decree as lodged, and thereby renders the Consent Decree
me osistem with mu Section
(b) Phe"FIBeefive Date"ofthumAgreement wall"a Hata tim Consent Demo is
amered by aw Distrot Conn pmrvant to ahbscofion (a),
4. Admission of Liabi , By mtaing into this Agreement, Maine Cental Rvlmed and
Pm Am admitlability for the Site Contamination at Bumted's Cove to IM extent of $2 million.
5. No Third Pam RieM1ts. Notwialsunding any other provision of Urs Agreemmtto the
contrary, mating in this Agreement shall be interprtad to create any train or benefitamaruiog to
any person or early Amt a Sanford; Party, a Frol derlCity Released Patty, a Settling DeferdaM1t
Released Piny, of the Smte of Marne. -
6. Claims Aamot Other lEmInn After the Effective Date, aponrenimble written request
tram Frontier in mwwetioa emb Fmmierb settlement of any claims against any other party, the
Settling DeFendams agree m execuk arelsom of arty claims ening out of or with regard m the
Site Dames such parties. N settling Contribution Cholera against any other party, Frontier agrees
to obtain a ranome from AM perry of any claims that perry may have molnar the Sealing
Defendants with mmect to the Site.
7, Imemae Effect. We Agreement shall be cundurively Mining on not for the bmefitof
the Selling Patties and their respective corporne auaessora(whetlmr by merger or purchase of
all or who mdeay all antedate assets), designs, bmdraptcy m semen or damns, "stores mad
o3mminramrs.
B. Notices. Notices required m be given uder this Agreemem And be provided in writing
delivered by bast, firmnIms, or overnight moil directed to each Settling Parys representative
and to its counsel, ss follows:
mithne Pct
frontier Carvnwimiou[
Smarr K. mclo'n
man S. Haps
CoryanYon
FlonOp Conanunirdipv
Men P. Mame
Cmpomn
Meyer Brown LLP
Three Hqm MdW Nak
1999 K now, N.W.
SomtoN, CT 06905
WUM1ingbn DC Blme
Maine Cmaal RalAmd and Pan Am
Fm&dkF. msdw
R¢EaNwn. Whinnw.UT, &
Badger
P O. Box 24N
Harmer, My 04402.2429
day oFBmgve, Maine
Nmm S. Habana
City So1160,
11 Harrow snood
Beogm, ME 04401
4
nw[wax@rtvncaiaU mu:l 1 are
may
I :�7
To all Site -rebased issues between the
MY an the other hand, this Agreement.
and supoisedes any sad all other
Itds Agreement does not modify the -
:pt that the City agrees. it shall not he
trust Faihae t or Pan Am ginseng to
the Settling Paries thin this Agreement
this
any kind or menswear, or, bi)they have mean mry notion in detrimental rebiame upon any oral
promise mwmmmdcetion to effort modification of this Agreement.
10. Dwlicme Orinimis. This Affiament meY be executed in duplicate originals, eecM1 of
which is equally ddmisslble into evidence.
11. Maine L This Agreement shall be coremi and mtofced narrator to the laws of the
Sate of Maine.
12. 1a y' pp: The Sealing Paries hereby admit and consent to exclusive jurisdiction in
hur United Statce Distant Court for the District of Maine for any actions lost may anx over Ne
Performance, interpretation orcommitment of any prevision of this Agreement. The Singing
Parties 0rha agree that they will be subject m personal judsdicdoo in the DuIrict of Maine for
proposes of any nation arising out of any provision off as Agreement.
13. Join Pmoaretion ofAmemimeI This Agreanmr shall be interpreted as if it wart
prepmai collectively by the Settling Paries, such that any uncertainty of ammituiry shell not be
co¢atned egairat way Settling Party
14. Authority, Each Patty to this Agreement«pmsmm that the person signing on its behalf
has been duty, authorized m execute this Agreement, and to enter into the settlement described
he in.
)The reit of this page is intentionally blauk.j
i 1137
M WITNESS NERF,OF, the Senli% Parries have placed their anNodm sipetwea on the dates
Rt fotlb below.
FRONTIER COMMUNICATIONS CORPORATION
Br:
Title.
Daze
MAINE CENTRAL RAILROAD COMPANY AND PAN AM RAILWAYS, INC.
BY:
Title.
Date:
CITY OF BANGOR, MAMB
BY:
Thle:
Date:
��2mgioa i W. -n Toro 6
l .77
SIDEAGREEMENT REGARDING EVIDENTIARY USE OF
RAILROAD SETTLEMENT _
THIS SIDE AGREEMENT REGARDING EVIDENTIARY USE OF RAILROAD
SETTLEMENT (the "Side Agrorment") is entered into effective April _, 2011, by the
City ofBamgm, Maine (the "City"), and Frontier Communications Corporafioq formerly
known in Cifizens Communications Company ("Frontier').
WFIEREAS, the City and Frontier me panics to a remain Settlement Agreement
and General Release made effective on or about February 16, 2007 (hereinafter, the
"SaWementAgrement"); and
WHEREAS, the City and Frontier wish to enter into a settlement agreement with
Maine Central Railroad Company ('Main Central")and Pan Am Railways, Inc. (`Pam
Am'), in the Form attached hereto as Exhibit F (the "Railroad SenlemenC), which would
Love the effect of modifying the effect or certain provisions of the Settlement Agreement;
and
WHEREAS, the City and Frontier Settling have idenritied possible disagreements
regarding The interpretation of the Settlement Agreement, which possible disagreements
they both believe would be best resolved after execution of the Radical Settlement; and
NOW, THEREFORE, in consideration of the mutual covenants set forth herein
and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the City and Frontier agree as follows:
The modifications to the Settlement Agreement made by the Railroad
Settlement shall not be used as, or otherwise considered to be, evidence
in any lawsuit or other proceeding involving rights or obligations of the
City or Frontier arising under the Settlement Agreement, except on the
sole issue of showing that the City has no right under the Settlement
Agreement to recoveries from Maine Central or Pan Am.
M WITNESS HEREOF, the Settling Prince have placed their authorized signatures on the dates
set forth below.
FRONTIER COMMUNICATIONS CITY OF BANGOR, MAINE
CORPORATION
AMECVRPE1Jr1wa5T/Ia2ry.pp.11 lnl<