> ## Content Index > Fetch the complete content index at: https://www.smdp.com/llms.txt > Use this file to discover other available public pages before exploring further. # Water cleanup a contentious task - URL: https://www.smdp.com/water-cleanup-a-contentious-task/ - Published: 2005-11-22T16:00:00.000Z - Updated: 2026-10-23T08:13:35.000Z - Author: Carolyn Sackariason - Tags: Government & Politics, Santa Monica, #archive-import *Who gets what from new water treatment plant will be decided in court* (Editor’s note: This is one article in a multi-part series that follows the ongoing legal fees dispute between City Hall and three prominent law firms that represented it in its water contamination case against oil companies. On Monday, the Daily Press outlined the details of the case.) CITY HALL — When officials here sued the oil industry for contaminating Santa Monica’s water supply in 1996, they never dreamed three major oil companies would agree to pay for and build a new water treatment plant. Now at issue is how much that plant will be worth and to how much of it City Hall’s outside attorneys are entitled. In the landmark settlement, agreed to in November of 2003, the oil companies admitted to their role in contaminating five of the city’s 11 drinking water wells by allowing methyl tertiary-butyl ether, a gasoline additive, to seep into the groundwater. They agreed to settle the lawsuits rather than go to court, paying City Hall more than $120 million. Shell, ChevronTexaco and ExxonMobil also agreed to pay for the design, construction and maintenance of a water-treatment plant at Charnock Well Field, the city’s main water source, located in West Los Angeles. City Hall might have been victorious in its battle with the oil companies and its goal of securing clean water, but how much of that money has to be paid to the contingency lawyers who represented the city remains unclear. The two sides are in the midst of a bitter legal battle over how much the contingency lawyers are entitled to in fees from the settlement. They are set for a jury trial in February. What city officials didn’t bank on was having to pay the contingency lawyers who represented • FedEx & UPS Authorized Shipping Center • Packing & Shipping • Business Cards/Letterhead • Color & Black/White Copying Faxing • Mailbox Rentals (24-hour access) • Newspapers & magazines SANTA MONICA MAILHOUSE ★★★★★★★★★★★★★ them a percentage of the cost of a treatment plant. City Hall argues it should pay the attorneys on the value of the plant, which is yet to be determined. The attorneys argue they should be paid on the cost and operation of the plant, which could be significantly higher than its value. “We believe there is a substantial difference between what the fair market value of a plant that has never built and what the costs of operating it is,” said David Halbreich, an attorney with Morgan Lewis & Bockius, the law firm representing City Hall against the contingency lawyers. “The costs versus the fair market value is what is at issue,” he added. “They think those costs are much higher than what we think.” The treatment plant will become obsolete after Santa Monica’s water is cleaned up and therefore worth nothing monetarily, city officials argue. What’s more, the technology used to clean the water hasn’t been determined, so a pricetag hasn’t been established. Because the legal services agreement between City Hall and the law firms of Texas-based Baron & Budd, Sacramento-based Miller & Sawyer and San Francisco-based Sher & Leff is vague and ambiguous regarding a non-cash recovery, it’s open for interpretation on whether or not the lawyers should be paid on the value of the plant or the cost of building and operating it. The problem is that the agreement doesn’t include a provision for a public works project — specifically a water treatment facility. And because the agreement is ambiguous and open for interpretation — as most legal documents are — the words “and” and “or” relating to fee percentages for the contingency lawyers could mean millions of dollars. “Does ‘or’ mean ‘or’ or does it mean ‘and’?” said an attorney close to the case who didn’t want to be identified. “A great deal of money is at stake by that definition.” But it does include a provision for a “non-cash settlement.” And according to the agreement, an appraiser must be selected to determine the value of the plant. That appraisal process was agreed upon by both sides and the court approved it. A panel has been formed that includes a host of experts, including Rhodes Trussell, a Pasadena-based hydrology engineer, to appraise the value of the plant and what technology could be used to clean up Santa Monica’s water. Hearings have been held on the appraisal process, which included expert testimony from witnesses and evidence brought forth from research. Based on the appraiser’s preliminary findings, a recent report has indicated that the plant could be valued at about $120 million. Los Angeles Superior Court Judge David Minning will review the appraisal, and both sides will then file opinions on its recommendations. The second phase will determine the fair market value of the plant. Then it will be designed and built. City attorneys argue that it’s not fair to the public to pay fees on a speculative value of a plant, which at one point was determined to be $300 million by a trial judge in the middle of the litigation between City Hall and the oil companies as part of a good faith hearing. But now that another valuation of the plant is underway that appears to put the appraisal much lower than originally suggested, the fee dispute between the two sides will remain horrifically complicated and contentious. And because the technology to clean up Santa Monica’s drinking water hasn’t been chosen, the value of a plant could be a moot point anyway. Scientists at the University of California-Davis may have discovered a much more cost-effective way to clean up contaminated water — a bacterial microbe strain that eats MTBE, leaving behind only carbon dioxide. Employing microorganisms instead of a building a massive treatment plant that would use an advanced oxidation system, for example, could save millions of dollars, officials say. Meanwhile, city engineers are looking at the most cost-effective technology to clean up the water and have hired a consultant to come up with a preliminary design for a treatment facility. If such a facility is built, it’s expected to be operational by 2008. But no one wants it when it’s done — not the oil companies, not City Hall and not the contingency lawyers. The lawyers want the monetary value of it, and City Hall, which currently is importing water from outside sources, wants safe drinking water for its residents. “It has little or no value when (the plant) is done,” said Craig Perkins, director of City Hall’s environmental and public works department. “What’s of value is the clean water.” *Originally published in the Santa Monica Daily Press print edition on November 22, 2005.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/112205.pdf?ref=smdp.com)