HomeMy WebLinkAbout2007-02-12 07-087 ORDER_COUNCIL ACTION
Item No. DI-DRI
Date: February 12, 200]
Item/Subject ORDER, Authorizing the Execution of a Settlement Agreement with Citizens
Communications Company
Responsible Department Legal
In November 2002 Me City of Bangor fled wit In the United States District Court for the district of Maine
against Citizens Communications Company (Citizens) alleging that Citizens contributed to pollution of the
Penobscot River (City of Bangor, Maine v. Citizens Communications Company, et al., Civil Action 02 -183-
B -S). The District Court established a three-phase procedure for trying Me Issues M be litigated. Phase 1
addressed liability as between Me City and Others, Phase U would address selecting Me method of clean
up for the pollution in Me River, and Phase III would address Me potential liability a additional third
parties named by Cigars in the Lawsuit Ager the Phase I Mal, the Court found Mat Cil zens was 60%
liable for the remediation of the pollution and Mat Me City was 40% liable. Phase ]I (remedy selection)
and Phase III (third -party liability) remain to be tried by Me Court.
This Order will authorize Me efe on of a settlement agreement with Citizens Communiations provided
that, under Me definitive settlement agreement: 1) @liens shall pay the sum of $7.625 million Into an
ewl account Mat may be Invested In a prudent manner at Me City's direction; 2) Me City will perform
the remedy for the pollution in the Penobscot River as finalized wM the Department of Environmental
Protection (DEP), provided Me City shall have Me we right to complete remedy ne podatlons with the
DEP and to manage the clean up project; 3) Me City will be permitted to use Me parties'joint
erwhonmental consultant to Me extent it dears; 9) the City will be allowed to draw down on the escrow
account to pay Me costs of constructing the remedy and shall retain any remaining escrow funds after
the remedy is completed; 5) in Me event Me escrow fund Is depleted poor to completion of the remedy,
Me City will pay any remaining costs; 6) any recovery from third party defendants in Me perp ing
litigation, after reimbursement of expenses Incurred from the data of a ution of the settlement
agreement forward, shall be divided two-thirds to Citizens and one -Mini to Me escrow fund; 7) to the.
extent allowed by law, the amounts due from Citizens to the escrow fund will be reduced by 2/3rds of the
amount of the clean up performed pursuant to a federal appopriabon, if any; 8) Citizens shall protect
Me City against any claims, losses, costs or expenses resulting from Citizens' daims against Mind party
defendants; 9) the City shall provide an indemnity M Citizens against any claims arising out of or related
M the tar contamination in the. Penobscot River or elsewhere In Me city limits of Bangor; and 10) Me City
and Citizens shall each dismiss all claims in the Lawsuit against the other.
The Settlement Agreement shall also include a provision Mat Me City and Citizens will cooperate in
pursuing claims against Mintl pardes provided Citizens bears Me costs for such efforts, and shall
cooperate to reach an agreement on the terns of a Consent Decm with Me DEP and Me State of Maine,
provided further that Me settlement by and between the City and Clowns shall be contingent upon a
Consent Decree reasonably acceptable M Citizens, but with the City retaining the sole right M negotiate
Me remedy with DEP.
Department Head
Arrigoeda Couxil«Teirisgtou In 1
Fehzvary 1Z, ]OOT
CITY OF BANGOR
(TITLE.) ORDER,AuthorizingN Executlonofa SettlemeMAgreemeMwith
Citizens Communications Company
WHEREAS, in November 2002, the City of Bangor filed suit against Citizens
Communications Company (Citizens) alleging that Citizens contributed to
pollution of the Penobscot River; and
WHEREAS, the District Court established a three-phase procedure for trying the issues
to be litigated in the Lawsuit underwhich Phase I would address liability as
between the City and Citizens, Phase II would address selecting the method
of clean up for the pollutlon in the Penobscot River, and Phase III would
address the potential liability of additional third parties named by Citizens in
the Lawsuit; and
WHEREAS, after the Phase I trial, the Court found that Citizens was 60% liable for the
remediation of the pollution In the Penobscot River and that the City was
40% liable; and
WHEREAS, Phase If (remedy selection) and Phase III (third -party liability) remain to be
tried by the Court; and
WHEREAS, the parties have the right to appeal the decisions of the Trial Court after the
end of Phase III, which appeals could present considerable risks and
expenses for both the City and Citizens; and
WHEREAS, the City and Citizens have reached a compromise to resolve all issues as
between those parties, including allocation of costs of the environmental
dean up, their rights to appeal Phase I, their rights to try and appeal Phase
It of the Lawsuit, and their rights against the third parties;
NOW THEREFORE, BE IT ORDERED BY THE CITY COUNCIL OF THE CITY OF BANGOR
THAT the City Manager Is hereby authorized to execute a settlement agreement with
Citizens Communications Company ("Citizens') in the matter of City of Bangor v.
Citizens Communications Company, et al., Civil Action 02-183-B-5 (D.C. Me), provided
that under the definitive settlement agreement 1) Citizens shall pay the sum of $7.625
million into an escrow account that may be Invested In a prudent manner at the City's
direction; 2) the City will perform the remedy for the pollution In the Penobscot River
as finalized with the Department of Environmental Protection (DEP), provided the City
shall have the sole right to complete remedy negotiations with the DEP and to manage
IN CITY COUNCIL
February 12, 2001
Motion Made and Seconded for Passage
Motion Made and Seconded to
Amend by Subsituoion
Passed
Motion Made and Seconded for
Pa�aage As Amended
Pagaad
I — CITY MPAM:
p 07-087
OPUBR
(TITLE) Authorizing the Execution
of a Settlement Agreement with
Citizens Communications Company
Assigned to Counudlor PAftAINGTON
f
Budget Approval:
Legal
Legal Approval:
0, 1
City S Ilcltor
—X Passage
_ FIM Reading Page 1 oF_
Rehrml
AecigoeA to Councilor Famnigtoo 07487
�Yner's. February 12, 2007
K'
CITY OF BANGOR
(TITLE.) ORDER, Authorizing the Execution of a Settlement Agreement win
Citizens Communications Company
WHEREAS, In November 2002, the City of Bangor filed suit against Citizens
Communications Company (Citizens) alleging that Citizens contributed to
pollution of the Penobscot River; and
WHEREAS, the District Court established a three-phase procedure for trying the issues
to be litigated in the Lawsult underwhich Phase I would address liability as
between the City and Citizens, Phase II would address selecting the method
of clean up for the pollution in the Penobscot River, and Phase III would
address the potential liability of additional third parties named by Citizens in
the Lawsuit and
WHEREAS, after the Phase I trial, the Court found that Citizens was 60% liable for the
remediation of the pollution In the Penobscot River and that the City was
40% liable; and
WHEREAS, Phase II (remedy selection) and Phase III (third -party liability) remain to be
tried by the Court; and.
WHEREAS, the partles have the right to appeal the decisions of the Trial Court after the
end of Phase RI, which appeals Could present considerable risks and
expenses for both the City and Citizens; and
WHEREAS, the City and Citizens have reached a compromise to resohre all issues as
between those parties, including allocation of costs of the environmental
clean up, their rights to appeal Phase I, their rights to try and appeal Phase
II of the Lawsuit, and their rights against the third parties;
NOW THEREFORE, BE IT ORDERED BY THE CITY COUNCIL OF THE CITY OF BANGOR
THAT the CM Manager is hereby authorized to execute a settlement agreement with
Citizens Communications Company ("Citizens') in the matter of City of Bangor v.
Citizens Communications Company, et al., Civil Action 02-183-8-5 (D.C. Me), provided
that under the definitive settlement agreement: 1) Citizens shall pay the sum of $7.625
million into an escrow account that may be Invested In a prudent manner at the Ciws
direction; 2) the City will perform the remedy for the pollution In the Penobscot River
as finalized with the Department of Environmental Protection (DEP), provided the City
shall have the sole right to complete remedy negotiations with the DEP and to manage
the clean up project; 3) the City will be permitted to use the parties! joint
environmental consultant to the extent it desires; 4) the City will be allowed to draw
down on the escrow account to pay the costs of constructing the remedy and shall
retain any remaining escrow funds after the remedy is completed; 5) In the event the
escrow fund Is depleted prior to completion of the remedy, the City will pay any
remaining costs; 6) any recovery from third party defendants in the pending litigation
shall, after reimbursement of expenses incurred from the date of execution of the
settlement agreement forward, be divided two-thirds to Citizens and one-third to the
escrow fund; 7) to the extent allowed by law, the amounts due from Citizens to the
escrow fund will be reduced by 213rds of the amount of the clean up performed
pursuant to a federal appropriation, if any; 8) Citizens shall protect the City against any
claims, losses, costs or expenses resulting form Citizens claims against third parry
defendants; 9) the City shall provide an indemnity to Citizens against any claims arising
out of or related to the tar contamination In the Penobscot River or elsewhere in the
junediction city limits of Bangor; and 10) the City and Citizens shall each dismiss all
claims in the Lawsuit against the other.
Said Settlement Agreement shall also Include a provision that the City and Citizens will
cooperate In pursuing claims against third parties, provided Citizens bears the costs for
such efforts. Said agreement may aim include provisions making It contingent on the
parties reaching an agreement with the DEP and the State of Maine on a Consent
Decree reasonably acceptable to Citizens, provided that the City shall retain the sole
right to negotiate the remedy with DEP notwithstanding any such Consent Decree.
Said definitive settlement agreement to be executed by the City Manager shall be In a
final form as approved by the City Solicitor or Assistant City Solicitor consistent with, or
more favorable to the City than, the foregoing.
AMEPCED
07-087
the clean up project; 3) the City will be permitted to use the parties' joint
environmental consultant to the extent it desires; 4) the City will be allowed to draw
down on the escrow account to pay the costs of constructing the remedy and shall
retain any remaining escrow funds after the remedy is completed; 5) In the event the
escrow fund is depleted prior to completion of the remedy, the City will pay any
remaining costs; 6) any recovery from third party defendants in the pending litigation
shall, after reimbursement of expenses incurred from the date of execution of the
settlement agreement forward, be divided two-thirds to Citizens and one-third to the
escrow fund; 7) to the extent allowed by law, the amounts due from Citizens to the
escrow fund will be reduced by 2/3rds of the amount of the clean up performed
pursuant to a federal appropriation, if any; 8) Citizens shall protect the City against any
claims, losses, costs or expenses resulting from Citizens claims against third parry
defendants; 9) the City shall provide an indemnity to Citizens against any claims arising
out of or related to the tar contamination in the Penobscot River or elsewhere in the
jurisdiction city limits of Bangor; and 10) the City and Citizens shall each dismiss all
claims in the Lawsuit against the other.
Said Settlement Agreement shall also include a provision that the City and Citizens will
cooperate in pursuing claims against third parties, provided Citizens bears the costs for
such efforts. Said agreement may also include provisions making it contingent on the
parties reaching an agreement with the DEP and the State of Maine on a Consent
Decree reasonably acceptable to Citizens, provided that the City shall retain the sole
right to negotiate the remedy with DEP notwithstanding any such Consent Decree.
Said definitive settlement agreement to be executed by the City Manager shall be in a
final form as approved by the City Solicitor or Assistant City Solicitor consistent with, or
more favorable to the City than, the foregoing.