From One BILLION to SIX bucks... $1,000,000,000 to $6
PALCO will pay $6 in whistle-blower lawsuit
Pacific Lumber Co. announced this week that it will pay $6 as part of an agreement struck with its accusers to settle an estimated $1 billion “whistle-blower” lawsuit against the timber company alleging federal false claim violations.
The stipulated agreement documents that would resolve PALCO’s single largest claim against the bankrupt company and its subsidiaries were filed in federal bankruptcy court Friday and the matter is expected to be heard by the judge overseeing the case Feb. 28.
The qui tam, or whistle blower, suit was filed under seal in California Superior Court in 2006 by Richard Wilson, the former director of the California Department of Forestry, and CDF forester Chris Maranto, who allege federal False Claim Act violations in the sustained yield plan permit that set harvest levels prepared by PALCO and approved by CDF as part of the Headwaters Agreement.
Nearly eight years after they were approved, Wilson and Maranto said they discovered the SYP permit relied on false computer modeling and the improper inclusion of hardwoods data provided by PALCO.
The lawsuit also alleges the truthful disclosures of growth and yield during the 100-year duration of that SYP would have resulted in significanlty reduced harvest levels.
According to the terms of the settlement, which has the approval of acting assistant U.S. Attorney General Jeffrey Bucholtz, Wilson and Maranto would receive $1 each from PALCO, Scotia Pacific and Salmon Creek.
Similar to another settlement agreement approved by the court last week, the whistle blower lawsuit still leaves the door open to pursue claims against PALCO parent-company MAXXAM and its owner Charles Hurwitz.
Frank Bacik, PALCO vice president and general counsel, stated in a news release announcing the deal that the SYP that set PALCO’s timber harvest levels was subject to an extraordinary administrative process and review that lasted nearly four years and involved some 80,000 pages of documentation detailing the very best information available at the time.
“There was ample opportunity within that process to challenge testimony and exhibits, but these accusations were not raised until eight years later,” Bacik stated in a news release. “We’ve believed from the outset that the claims were without basis in law or fact, and this settlement supports that belief.”
To resolve the issues raised in the claims, PALCO’s attorney’s argue that Texas judge Richard Schmidt would have to apply California’s complex forestry and environmental laws and review voluminous exhibits relating to the three year SYP approval process.
The stipulation agreement resolves the need to do so at almost no cost to the PALCO’s or its affiliate companies’ estates, the court filings state.
The settlement deal follows on the heels of another settlement agreement approved by the federal bankruptcy court Feb. 1 that allowed PALCO to settle for $1 each 60 long-standing flood damage claims from Elk River and Freshwater Creek area residents totaling nearly $100 million.
Area attorney Bill Bertain, who represents the Elk River and Freshwater Creek residents, said previously those flood claim settlements were beneficial for his clients because they freed the matter from the Texas court and allowed them to move forward in Humboldt County against MAXXAM and Charles Hurwitz.
Bertain, along with attorney Philip Gregory from the Bay Area-law firm Cotchett, Pitre and McCarthy that also represents Maranto and Wilson in the whistle blower lawsuit, declined to comment on the matter.
By NATHAN RUSHTON, The Eureka Reporter
Published: Feb 8 2008, 11:17 PM · Updated: Feb 9 2008, 10:28 AM
Showing posts with label Cotchett. Show all posts
Showing posts with label Cotchett. Show all posts
4.24.2007
TS - Gallegos wants Bay area firm to help with PL suit (Cotchett)
Gallegos wants Bay area firm to help with PL suit
By James Tressler The Times-Standard March 07, 2003
EUREKA -- Humboldt County District Attorney Paul Gallegos is expected to ask the Board of Supervisors next week to let him hire a powerful Bay area law firm to assist in his lawsuit against Pacific Lumber Co.
The reason he's going before supervisors is to ask them to pony up some money to help pay at least some of the legal bills. His own department's budget can't handle all of them.
The request is on the board's agenda next Tuesday. It'll likely be heard fairly early in the morning.
The Burlingame firm, Cotchett, Pitre, Simon & and McCarthy, represents California Public Employees Retirement System, the Regents of the University of California, and has represented the state Senate and Assembly. The firm has also sued Enron, WorldCom and other companies associated with corporate fraud.
According to a March 5 draft proposal signed by Joseph W. Cotchett and sent to Assistant District Attorney Tim Stoen, the firm is asking for a fee of 14.5 percent of any recovery should the district attorney's office prevail against the timber company.
The district attorney launched a suit against PL last month, alleging the timber company didn't hand over important data on landslides before the $480 million Headwaters Forest deal was signed in March 1999. That alleged deception allowed the company access to more timber each year than it would otherwise have been allowed.
It also has caused damage to slopes and streams, filled in the Humboldt Bay shipping channel with sediment, and harmed bridges, roads, homes and the property rights of Humboldt County residents, the suit claims.
In the lawsuit, Gallegos is asking PL pay damages of up to $2,500 per tree for every one cut as a result of its alleged deception surrounding the Headwaters deal. The district attorney's office has estimated the company cut 30,000 trees it shouldn't have been allowed to cut, which appears to mean the damages the district attorney is seeking are in the neighborhood of $75 million. Of that, the Bay area firm would want more than $10 million plus expenses.
According to the firm's draft proposal, the firm would serve as special counsel, while the district attorney's office would be the lead attorney and retain full control over the lawsuit.
County officials Thursday were reviewing Gallegos' request to retain the firm, and asking Gallegos supply figures on how much, if any, money would have to come out of the county's pocket. The firm will have to be paid for its time and expenses and that's likely to add up to a hefty amount if the litigation drags on and depending on how much of the work is turned over to the Burlingame firm.
County Administrative Officer Loretta Nickolaus said while the county regularly retains outside counsel on lawsuits, it's highly unusual for such counsel to be retained for the district attorney's office.
Nickolaus indicated that it's likely the district attorney's office will have to pick up the tab for retaining the firm out of its own roughly $880,000 annual budget. That might be tough to do.
The Board of Supervisors hasn't yet taken any official stance on the lawsuit. Fourth District Supervisor Bonnie Neely, wife of former District Attorney Terry Farmer, who Gallegos beat in last year's election, has criticized the new district attorney for not consulting the board before moving forward with this litigation.
The high-profile lawsuit has sparked a wide range of opinions from the public. Some, including the Environmental Protection Information Center in Garberville, which has a similar lawsuit against PL, have praised Gallegos for challenging the timber company. But others, including county supervisors Roger Rodoni and Neely, have accused Gallegos of political grandstanding and serving as a dupe for environmental special interests.
PL officials have called the suit another step toward trying to put the timber company out of business, and have said the suit is based on allegations that have already failed in the courts before.
Attempts to reach Gallegos for comment Thursday were unsuccessful. But in the wake of controversy, he has stood by his decision to file suit, telling reporters he feels obligated to respond to public concerns about environmental violations.
By James Tressler The Times-Standard March 07, 2003
EUREKA -- Humboldt County District Attorney Paul Gallegos is expected to ask the Board of Supervisors next week to let him hire a powerful Bay area law firm to assist in his lawsuit against Pacific Lumber Co.
The reason he's going before supervisors is to ask them to pony up some money to help pay at least some of the legal bills. His own department's budget can't handle all of them.
The request is on the board's agenda next Tuesday. It'll likely be heard fairly early in the morning.
The Burlingame firm, Cotchett, Pitre, Simon & and McCarthy, represents California Public Employees Retirement System, the Regents of the University of California, and has represented the state Senate and Assembly. The firm has also sued Enron, WorldCom and other companies associated with corporate fraud.
According to a March 5 draft proposal signed by Joseph W. Cotchett and sent to Assistant District Attorney Tim Stoen, the firm is asking for a fee of 14.5 percent of any recovery should the district attorney's office prevail against the timber company.
The district attorney launched a suit against PL last month, alleging the timber company didn't hand over important data on landslides before the $480 million Headwaters Forest deal was signed in March 1999. That alleged deception allowed the company access to more timber each year than it would otherwise have been allowed.
It also has caused damage to slopes and streams, filled in the Humboldt Bay shipping channel with sediment, and harmed bridges, roads, homes and the property rights of Humboldt County residents, the suit claims.
In the lawsuit, Gallegos is asking PL pay damages of up to $2,500 per tree for every one cut as a result of its alleged deception surrounding the Headwaters deal. The district attorney's office has estimated the company cut 30,000 trees it shouldn't have been allowed to cut, which appears to mean the damages the district attorney is seeking are in the neighborhood of $75 million. Of that, the Bay area firm would want more than $10 million plus expenses.
According to the firm's draft proposal, the firm would serve as special counsel, while the district attorney's office would be the lead attorney and retain full control over the lawsuit.
County officials Thursday were reviewing Gallegos' request to retain the firm, and asking Gallegos supply figures on how much, if any, money would have to come out of the county's pocket. The firm will have to be paid for its time and expenses and that's likely to add up to a hefty amount if the litigation drags on and depending on how much of the work is turned over to the Burlingame firm.
County Administrative Officer Loretta Nickolaus said while the county regularly retains outside counsel on lawsuits, it's highly unusual for such counsel to be retained for the district attorney's office.
Nickolaus indicated that it's likely the district attorney's office will have to pick up the tab for retaining the firm out of its own roughly $880,000 annual budget. That might be tough to do.
The Board of Supervisors hasn't yet taken any official stance on the lawsuit. Fourth District Supervisor Bonnie Neely, wife of former District Attorney Terry Farmer, who Gallegos beat in last year's election, has criticized the new district attorney for not consulting the board before moving forward with this litigation.
The high-profile lawsuit has sparked a wide range of opinions from the public. Some, including the Environmental Protection Information Center in Garberville, which has a similar lawsuit against PL, have praised Gallegos for challenging the timber company. But others, including county supervisors Roger Rodoni and Neely, have accused Gallegos of political grandstanding and serving as a dupe for environmental special interests.
PL officials have called the suit another step toward trying to put the timber company out of business, and have said the suit is based on allegations that have already failed in the courts before.
Attempts to reach Gallegos for comment Thursday were unsuccessful. But in the wake of controversy, he has stood by his decision to file suit, telling reporters he feels obligated to respond to public concerns about environmental violations.