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Nunn and Gregg Resolve Complex Environmental Dispute Through Innovative Arbitration Process

3/24/08

Nunn and Gregg Resolve Complex Environmental Dispute
Through Innovative Arbitration Process

Eastman & Smith Ltd.'s Environmental Practice Group was retained by a Fortune 50 company which was involved in a dispute over the allocation of responsibility for environmental cleanup costs between two former plants in a Midwestern city. Each historically contributed to the contamination of a local river. The stakes in the matter were high, exceeding well over $30 million in cleanup costs and related liabilities. Resolution of the allocation dispute was complicated by the necessity that the Firm's client and the opposing plant owner work together to negotiate cleanup terms with governmental agencies and implement remedial actions on an expedited basis.

The parties recognized the resolution of their allocation dispute required extensive, complex discovery and expert review. Therefore, a series of interim funding agreements were reached allowing the parties to work cooperatively in responding to the government without delay while trying to resolve their allocation differences. The parties tried mediation and commenced preliminary discovery, including interviewing former employees and sampling on each other's property. When mediation efforts failed, the parties negotiated a binding arbitration agreement specifically tailored to their situation rather than litigate or follow standard American Arbitration Association arbitration procedures. The arbitration agreement provided for focused, cost-effective additional discovery, and a unique hearing process with modified rules of evidence to enhance efficiencies while maintaining evidentiary safeguards.
The arbitration process utilized resulted in the completion of discovery in about eight months, with no significant disputes. This was quite a feat considering the exchange of thousands of documents and numerous expert reports, completion of sampling and undertaking of fact and expert witness depositions. Once done, the generated information allowed the parties to renew settlement negotiations rather than proceed immediately to an arbitration hearing. With the assistance of the arbitrator, a settlement was reached and memorialized early in 2008. This settlement covers all past and future cleanup expenses and other related liabilities. Eastman & Smith's client was pleased with the terms of the settlement as well as avoiding costly and acrimonious litigation. By working cooperatively and creatively in resolving a difficult allocation problem, the parties also have been able to achieve a successful and timely river cleanup under the U.S. EPA's accelerated cleanup program.
Firm members, David W. Nunn and Joseph A. Gregg, were lead counsel in this matter. Both Mr. Nunn and Mr. Gregg focus their practices in the area of environmental law. Mr. Nunn can be reached at 419-247-1672, Mr. Gregg at 419-247-1657.

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