Scathing Sacramento Bee editorial on the growing embarrassment, fiscal and otherwise, facing the city of Lodi in California’s San Joaquin County over a too-cute-by-half plan to recoup groundwater cleanup expenses by passing the bill to insurers for local businesses. Lodi officials “came up with a novel strategy: Assume authority from the state and federal governments for the clean-up, and then pass a local law that forces the polluters (or their insurance companies) to pay whatever legal costs the city might run up during the process of prosecuting the case,” even though the city’s own actions contributed to the toxic mess. Armed with the law requiring opponents to pay its fees, the city invested “$6.3 million of its own money in lawsuits against several downtown businesses and their insurers. The balance of $16 million spent on legal outlays was borrowed at credit-card interest rates from the investment banking firm Lehman Brothers of New York”.
The scheme hit the rocks last month when U.S. District Judge Frank C. Damrell Jr. ruled that the city’s cleanup ordinance conflicts with federal law and is unconstitutional. Judge Damrell said Lodi’s attorneys “have often produced unnecessarily voluminous or redundant filings and imaginative ploys that have sent this litigation needlessly down paths”. The result: “important remediation efforts have been brought to a grinding halt.” The city’s “cost recovery scheme generates the opportunity for a financial windfall for some few fortunate professionals, as well as Lehman Brothers, Inc., an investment bank, which has no interest in cleaning up the contaminated site,” Damrell said. The editorialists conclude: “Lodi is left with a problem far greater than its underground pollution and it has only itself to blame.” (Jan. 3; Cameron Jahn, “Court ruling may put Lodi on the spot for millions”, Sacramento Bee, Dec. 24). Updates: Jan. 17 (city fires attorneys responsible for litigation strategy); May 8 (messy aftermath).
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