The adversaries in an epic Mojave Desert land-use fight have settled their long-running dispute, with trash giant Waste Management Inc. agreeing to pay $6 million and deed an 11-square-mile swath of desert to Cadiz Inc., of Santa Monica, a produce grower and water marketing firm.
The civil settlement resolves charges of corporate espionage that spawned civil and criminal court cases during the last several years.
Without admitting any wrongdoing, Waste Management agreed to surrender the cash along with 7,000 acres of creosote flats in San Bernardino County, where the global refuse giant had planned the world’s biggest landfill to receive trash from Los Angeles and Orange counties.
The site of the proposed project, which was abandoned more than four years ago, abuts a vast ground-water aquifer from which Cadiz hopes to earn a fortune in payments from the Metropolitan Water District.
Cadiz, which is also a large grower of citrus and other produce, was the only serious opponent of Waste Management’s Rail Cycle project, so called because it would have involved hauling garbage to the desert by rail.
In a series of lawsuits, Cadiz had accused Waste Management of conspiring to destroy it through a campaign of dirty tricks, in order to eliminate resistance to the landfill.
The settlement “is really for us just a cost justification,” said Waste Management lawyer John Newell. “This was going to cost us money to continue, and the company wanted to focus its energy on the future, not the past.”
Fiona Hutton, a vice president with Cadiz, said the company was pleased the litigation is over. “It’s been a long, torturous journey, I think, for everybody involved,” Hutton said.
The settlement resolves a pair of state court lawsuits--one involving the adequacy of the environmental review for the dump, and the other that sought to make Waste Management pay compensatory and punitive damages for alleged acts of skulduggery against Cadiz. Cadiz had filed similar allegations against Waste Management in federal court, which were thrown out.
Waste Management and several of its executives and consultants were indicted in San Bernardino County in 1998 on a string of felony charges arising from the dump battle with Cadiz.
The charges of wiretapping, stock fraud and other crimes were based largely on testimony by a fugitive and career con man named Joseph Lauricella, who had used an assumed name to land a job with Waste Management rallying public support for the dump.
In 1996, while in Waste Management’s employ, Lauricella was arrested for stealing computer equipment. In a bid for a lenient sentence, he offered to blow the whistle on the company.
However, Lauricella’s credibility as a witness took a nose dive when it was disclosed that he had lied to authorities in the past. It was also disclosed that he had received payments from Cadiz of more than $40,000, purportedly in exchange for documents.
What began as a sensational business corruption case became an embarrassment for prosecutors, who saw many of the charges dismissed in court and were forced to jettison others themselves.
Four of the five individual defendants had all charges dropped. A fifth agreed last fall to plead no contest to a minor charge, which was then cleansed from his record, and to pay a $5,000 fine. Last October, charges again Waste Management were dismissed in exchange for a civil settlement of $5 million and investigation costs.
Waste Management, the largest waste disposal firm in the world, merged in 1998 with Houston-based USA Waste Services Inc. The combined firm became USA Waste but has since changed its name back to Waste Management.
Cadiz operates produce farms in the Central and Coachella valleys and in San Bernardino County. Its president, Keith Brackpool, is a political supporter and advisor to Gov. Gray Davis.
Cadiz’s proposed contract with the MWD could be worth $1 billion over a period of 50 years. Under the deal, Cadiz would receive and store in its aquifer up to 150,000 acre-feet of water a year from the Colorado River. Water would be supplied to the MWD in times of drought.