REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of October 25, 2022
TO: Mayor Bailey and Members of the City Council
SUBMITTED BY: J. Patrick Tang, City Attorney
SUBJECT: Resolution Approving a Legal Services Agreement with Sher Edling LLP RECOMMENDATION:
Provide authority to the City Manager to enter into a legal services agreement with Sher Edling LLP to pursue recovery of PCB clean-up costs from Monsanto Corporation BACKGROUND:
Polychlorinated biphenyls (PCBs) are a human-made chemical that was used for a wide range of commercial, household, and industrial uses starting in the 1920s and ending in 1977 after PCBs were banned in the Toxic Substances Control Act.
Monsanto produced nearly 99 percent of all PCBs used in the United States.
PCBs are known or suspected to cause a wide range of cancers including non-Hodgkin’s lymphoma, breast cancer, liver cancer, gallbladder cancer, gastrointestinal cancers, pancreatic cancer, and skin cancer. They are also implicated in numerous non-cancer health problems including cardiovascular, endocrine, gastrointestinal, hepatic (liver), immune, neonatal, neurological, ocular, and reproductive harm.
DISCUSSION:
PCB contamination is widespread across the Bay Area. Water and sediment containing PCBs end up in wastewater and stormwater systems, which eventually make their way into San Francisco Bay. In order to comply with stringent regulations to prevent further contamination and implement PCB load reduction measures, cities and counties will be required to implement a wide range of actions, including some or all of the following:
• Testing and monitoring;
• The installation of “green infrastructure” to capture PCBs in runoff; • Measures to control PCB discharges when structures with PCBs are demolished; • Identification and abatement of PCB-contaminated sites; • More frequent street sweeping;
• Trash capture devices that capture particles carried in runoff; and • Ongoing maintenance of green infrastructure such as capture devices.
In 2016, the City of Long Beach filed a lawsuit against Monsanto, to recover costs associated with removing PCBs from the environment. On March 14, 2022, the court approved a Class Action Settlement that would provide Contra Costa County permittees approximately $9.3 million dollars to fund PCB cleanup efforts. The share for Hercules per the proposed settlement would be $312,976. However, an independent analysis undertaken by Geosyntec concludes that the cleanup costs for Hercules will likely be from $5-$9 million, far in excess of the proposed settlement amount.
Based on the Geosyntec report, information provided by the City Attorney, and the recommendation from Public Works Director Mike Roberts, the Council on July 12, 2022 voted unanimously to reject the settlement offer and, like the majority of cities in Contra Costa County, pursue litigation against Monsanto to recover the anticipated actual cost of cleanup.
Many of the cities in San Mateo and Contra Costa County, and the Board of Supervisors on behalf of the County, have retained Sher Edling LLP, an environmental law firm in San Francisco, as their counsel for PCB litigation. Under the proposed retention terms, if Sher Edling were retained to represent Hercules, the matter would be taken on a contingency basis. This means that the City would not pay any legal fees until and unless there was a recovery, in which case Sher Edling would receive a percentage of the award. Details regarding the fee arrangement are provided in the attached legal services agreement.
ACTION:
Consider adoption of a resolution authorizing the City Manager to enter into a legal services agreement with Sher Edling LLP to pursue recovery of anticipated PCB related cleanup costs from Monsanto Corporation.
ATTACHMENTS:
Resolution Authorizing the City Manager to enter into a legal services agreement with Sher Edling LLP Legal Services Agreement with Sher Edling LLP