Title
Resolution to Approve and Appropriate Funding for the Seventh Amendment to Professional Services Agreement with Bodman, PLC, for Legal Services Relative to 1,4-Dioxane from Gelman Sciences, Inc., dba Pall Life Sciences ($75,000) (8 Votes Required)
Memorandum
The City has previously litigated against Gelman Sciences, Inc., dba Pall Life Sciences (Gelman) relative to the 1,4-dioxane that Gelman released at its property in Scio Township that has migrated as one or more plumes, via aquifers, both under properties within the City of Ann Arbor and under properties in Scio Township.
On October 27, 2016, the Michigan Department of Environmental Quality (MDEQ) - now known as EGLE)-promulgated, and Governor Snyder approved, an emergency cleanup criterion of 7.2 ppb for 1,4-dioxane, replacing the 85 ppb criterion that was previously in effect, and that cleanup criterion of 7.2 ppb has since been adopted on a non-emergency basis.
Under the circumstances, the State was in negotiations with Gelman regarding possible revision of the consent judgment. In December 2016 the City, various Washtenaw County parties, and the Huron River Watershed Council moved and were granted permission to intervene in the case between the State and Gelman. In February 2017, Scio Township also was granted permission to intervene. Although the intervening parties can pursue litigation as parties to the case, the City and other intervenors became involved in the negotiations and met on a regular basis in an effort to reach agreement on an amendment to the consent judgment satisfactory to the intervening parties.
Since the 6th Amendment was entered on February 2, 2021 (which contemplated a more limited evidentiary hearing on March 22nd), there has been extensive activity in the case including motions to reconsider the court order for hearing and stay of the state court litigation, change in nature and scope of the scheduled evidentiary hearing at a court motion hearing on March 22nd, emergency appellate review, preparation for evidentiary hearing with expert preparation.
The City Attorney initially selected the Bodman, PLC, law firm to provide advice, to pursue the motion to intervene, and to assist with the negotiations. That selection was based on the firm’s familiarity with the issues and details of this matter because of its representation of the City in the prior litigation against Gelman, and the firm’s environmental experience and expertise. Including amendments 1 through 6, the contract with Bodman, PLC, has reached $722,500.00 for legal services, and, $27,500.00 for the City’s share of expert services.
The total cost of the firm’s additional legal services in March and April , 2021 is approximately $55,000. The amount of time spent on the negotiations, including the exchanges of drafts, court conferences, emergency motions and appeals and preparation for evidentiary hearing and providing advice as needed, ended up being significantly more time consuming than anticipated. Although the amount of time and cost of legal services going forward cannot be predicted with certainty, the costs for recent and foreseeable efforts through June of 2021 would be about $20,000, which would bring the total contract amount for legal services to $797,500.00.
In addition, the contract includes the City’s original and amended $27,500.00 share of the cost of expert services fees.
Bodman, PLC, complies with the City of Ann Arbor’s Non-Discrimination and Living Wage Ordinances;
Approval of this seventh amendment in the amount of $75,000.00 to the professional services agreement with Bodman, PLC for the Gelman 1,4-dioxane litigation, of which $75,000.00 is for legal services, for a total contract amount of $825,000.00, is recommended.
Staff
Prepared by: Stephen K. Postema, City Attorney
Reviewed by: Stephen K. Postema, City Attorney
Approved by: Tom Crawford, City Administrator
Body
Whereas, On October 27, 2016, the Michigan Department of Environmental Quality (MDEQ) promulgated, and Governor Snyder approved, an emergency cleanup criterion of 7.2 ppb for 1,4-dioxane, which criterion of 7.2 ppb has since been adopted on a non-emergency basis;
Whereas, The City was granted permission to intervene in the lawsuit brought by the State of Michigan, through various state agencies, against Gelman Sciences, Inc., dba Pall Life Sciences regarding the 1,4-dioxane plumes originating on Gelman’s property;
Whereas, The City joined the negotiations regarding possible amendment to the consent judgment between the State and Gelman in the state’s case and has pursued those negotiations with other parties who also were granted permission to intervene;
Whereas, Additional efforts were required for those negotiations and provide advice after the negotiations were concluded, and there has been extensive activity in the state court litigation, including emergency appellate review, and an evidentiary hearing;
Whereas, The Bodman, PLC, law firm is well qualified to provide legal services representing the City relative to the Gelman 1,4-dioxane plumes, including representing the City in both negotiations and litigation;
Whereas, The City and firm entered into an initial contract for legal services, which has been amended six times for a total contract amount of $750,000.00, including $722,500.00 for legal services and $27,500.00 for expert services;
Whereas, The City Attorney recommends a seventh amendment in the amount of $75,000.00 $825,000.00, of which $797,500.00 is for legal services and $27,500.00 is for expert services, to continue those legal and expert services; and
Whereas, Bodman, PLC, complies with the City of Ann Arbor’s Non-Discrimination and Living Wage Ordinances;
RESOLVED, That a seventh amendment to the professional services agreement for legal services with Bodman, PLC, be approved in the amount of $75,000.00 to provide continuing legal services relative to the Gelman 1,4-dioxane plumes;
RESOLVED, That the Mayor and City Clerk be authorized to execute the seventh sixth amendment to the professional services agreement with Bodman, PLC, subject to approval as to form by the City Attorney; and
RESOLVED, That the City Attorney and City Administrator be authorized to take the necessary administrative actions to implement this resolution.