O.C. Seeks Better Deal on Oil-Suit Lawyer Fees

Dist. Atty. Tony Rackauckas was given two weeks to negotiate a better contract with four environmental law firms after county supervisors balked Tuesday at the cost of hiring the lawyers. The law firms would represent the county in suits against oil companies over contamination claims.

Rackauckas wanted to hire the private firms at an hourly rate, which he estimated would cost $6 million to $10 million over the next five to 10 years. The county alleges that several oil companies contaminated soil and ground water under 330 gas stations.

The amount shocked supervisors, who said the litigation costs were not included in the county’s strategic financial plan. The board voted 3 to 2 on a motion by Supervisor Todd Spitzer to continue negotiations with the firms but explore whether the lawyers would accept payment on a contingency basis, which would substantially reduce the county’s costs.

Private law firms that negotiated the national tobacco settlement provided their legal services on a contingency basis, argued Supervisor Chuck Smith. He added that he was not comfortable approving the contracts without a comparison of a contract based on the contingency method.

“If we go with a contingency plan, the firm that takes the case has all kinds of incentive to get this over with early,” Smith said.

Supervisors Tom Wilson, Spitzer and Smith voted for contingency-plan negotiations. Supervisors Jim Silva and Cynthia P. Coad were against the idea.

Contingency Plan Has Risks; Price Appeals

Under a contingency plan, the firms absorb litigation costs up front but get a percentage of the judgment. Rackauckas hopes to collect at least “a few million dollars” in penalties against the oil companies. That money would be put into a fund for cleanup efforts.

The oil companies include Arco, BP Amoco Corp., Thrifty Oil, Arco Chemical, Lyondell Chemical and Shell.

Initially, Rackauckas preferred a contingency arrangement but changed his mind after his staff advised him that the judge could rule against such a plan, making it legally risky for the county.

In addition, the judge could disqualify the law firms and force the county to hire new ones, Rackauckas said.

The law firms are Liner, Yankelevitz, Sunshine & Regenstreif LLP; Lynn, Tillotson & Pinker LLP; Resolution Law Group; and Sherman, Salkow, Petoyan & Weber.

Rackauckas argued that the firms would best serve the public’s interest because they have significant expertise in environmental law and are well prepared to establish a database. More than 200,000 documents have been entered as evidence in two pending lawsuits, suits which Rackauckas wanted the law firms to enter.

The cases involve about 330 current and former gas-station sites in the county where there has been soil and ground-water contamination because of leaking underground storage tanks. The county has cited the sites repeatedly.

The gasoline additive MTBE, which helps reduce air pollution but may cause cancer at high concentrations, has been detected at the top of the county’s aquifer. But it does not immediately threaten the county’s drinking water, officials said.

The county is unique in the state because it has its own supply of drinking water, Rackauckas said. About 75% of the water is drawn from county aquifers.

“In essence, we’re sitting on a big aquifer,” Rackauckas said. “MTBE and other pollutants can permeate into the soil a lot faster here than other places in the state.”