2524 Shutts & Bowen - Allstate Ins Co - COSShafts
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City of Sanford Florida
300 N. Park Avenue
Sanford, Florida 32771
July 31, 2023
BRETT R. RENTON
PARTNER
Shutts & Bowen LLP
300 South Orange Avenue
Suite 1600
Orlando, FL 32801
DIRECT (407)835-6791
EMAIL BRenton@shutts.com
VIA U.S. MAIL and E-MAIL
Mr. Wade Fairchild
Florida PIP Regional Claim Leader
Allstate Insurance Company
8333 Bryan Dairy Road
Largo, Florida 33777
Re: Conflict Waiver: Allstate Insurance Company and City of Sanford, Florida
Dear Mr. Colbert and Mr. Fairchild:
The City of Sanford, Florida ("City") has requested that Shutts & Bowen represent it to
assist the City as a Public Service Water entity with status updates attendant to a class action
settlement and attendant compilation of data and submission for award concerning a nnllti-
district litigation settlement pending in South Carolina concerning AFFF that caused PFAS
contamination of ground water. Shutts & Bowen currently represents Allstate Insurance
Company and its related entities ("Allstate") in fee schedule litigation under Florida's No -Fault
Statute brought by the City. In our view, the matters are completely unrelated and are connected
in no way.
The purpose of this letter is to confirm the waiver of potential conflict of interest
regarding Shutts & Bowen's representation of the City in connection with the above -noted
matter, and Shutts & Bowen's representation of Allstate in the current and any future fee
schedule litigation brought by the City and/or its affiliates. This letter will confirm your consent
to such representation and the waiver by each of you of any conflict of interest.
The rules regulating the Florida Bar (the "Rules"), as well as Shutts & Bowen's loyalty to
its clients, require that we provide you all explanation of the possible conflicts of interest
resulting from our legal representation of the foregoing parties. We believe it is prudent to
inform you fully of the terms of our representation and advise that you seek independent counsel
on these issues.
ORLDOCS 20757223 11"13F.11311:
shutts.com FORT LAUDERDALE I JACKSONVILLE I MIAMI I ORLANDO I SARASOTA I TALLAHASSEE I TAMPA I WEST PALM BEACH
July 31, 2023
Page 2
Rule 4-1.7 of the Rules does not permit the representation of a client which will be
directly adverse to the interests of another client unless (i) a lawyer reasonably believes the
representation will not adversely affect the lawyer's responsibilities to and relationship with the
other client and (ii) each client consents after consultation. Further, Rule 4-1.7 does not permit
the representation of a client if a lawyer's exercise of independent professional judgment in the
representation of that client may be materially limited by the lawyer's responsibilities to another
client or to a third person or by the lawyer's own interests unless (i) the lawyer reasonably
believes the representation will not be adversely affected and (ii) the client consents after
consultation.
Subject to your consent, Shutts & Bowen will implement an ethical screen, such that the
attorneys directly involved providing services to the City will not communicate formally or
informally with those attorneys representing Allstate concerning the pending litigation, including
without limitation, in-person conversations, telephone and e-mail communications. Tile
attorneys providing representation to the City, on the one hand, and the attorneys providing
representation to Allstate, on the other hand, shall not share, or access, any paper or electronic
files that relate in any manner to the respective parties.
We advise you to consult with independent counsel before deciding whether to proceed
on this basis. if the foregoing accurately reflects our agreement, and you waive any conflict of
interest that may result from Shutts & Bowen representation of any of the parties (after having
been advised of the effect and consequences of such waiver), please sign, in counterparts, the
Consent and Acknowledgment below and forward all counterparts to my attention at your
earliest convenience. Upon our receipt of all counterparts from all parties, we will provide each
party a counterpart signed by all parties.
Very Truly Yours,
Shutts & Bowen LLP
T
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Brett R. Renton
ORI.00CS 20757223 1 TB17 TBF
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July 31, 2023
Page 3
CONSENT AND ACKNOWLEDGMENT
The undersigned hereby acknowledges receipt of the foregoing letter, consents to the
representation referred to therein and waives the conflict(s) of interest as described above.
City of Sanford, Florida
Allstate Insurance Company
By: -1��� By:
William Colbert
City Attorney
Date:
1�1/j- 2
Date:
Wade Fairchild
Florida PIP Regional Claim Leader
ORLDOCS 20757223 1 TBI'.TBI'
shutts.com I FORT LAUDERDALE I JACKSONVILLE I MIAMI I ORLANDO I SARASOTA I TALLAHASSEE I TAMPA I WEST PALM BEACH
July 31, 2023
VIA ELECTRONIC MAIL
City of Sanford, Florida
c/o Lonnie N. Groot, Esq.
300 N. Park Avenue
Sanford, Florida 32771
luroot custenstrom.com
Re: Class Claim in AFFFMDL Settlement
Dear Mr. Groot:
BRETT R. RENTON
PARTNER
Shutts & Bowen LLP
300 South Orange Avenue
Suite 1600
Orlando, FL 32801
DIRECT (407)835-6791
EMAIL BRenton@shutts.com
Thank you for selecting Shutts & Bowen LLP (the "Firm") to represent the City of Sanford,
Florida ("Client") with regard to the above -referenced matter. This letter and the enclosed Terms
of Engagement will describe the basis on which our firm will provide legal services. This letter
will confirm our understanding as to the nature and scope of legal services ("Services") to be
performed by Shutts & Bowen LLP (hereinafter "Firm") in the representation of the Client in the
above -referenced matter for which Services the Client will be responsible for payment. The points
of contact for the Client with respect to the Services is to be Lonnie Groot, Esq. and William L.
Colbert, Esq. ("City Attorneys").
1. Nature and Scope of Services. It is agreed that the Finn shall provide Services
consisting of assisting Client as a Public Service Water entity with status updates attendant to a
class action settlement and attendant compilation of data and submission for award concerning a
multi -district litigation pending in South Carolina styled IN RE AQUEOUS FILM -FORMING
FOAMS PRODUCTS LIABILITY LITIGATION, MDL 2873, consolidating all federal actions
alleging that AFFF caused PFAS contamination of ground water. In re Aqueous Filnt-Forming
Foams Prods. Liab. Litig., 357 F.Supp.3d 1391, 1392 (J.P.M.L. 2018) and a class action settlement
for public water service providers ("Services"). We have agreed that the Finns engagement is
limited to performance of the Services only. Because we are not general counsel for the Client, our
acceptance of this engagement does not involve an undertaking to represent the Client in any other
matter. We may agree with you to limit or expand the scope of our representation from time to
time, provided that any such change is confirmed by the Firm in writing. City Attorneys shall
remain the lead counsel on the matter and the Firm shall provide Services solely at the direction
of and upon request of the City Attorneys. The Finn shall not attend any meetings without the
express request of the City Attorneys.
2. Attorneys to be Assigned. It is agreed that Partner Brett R. Renton, Esq. will be
assigned to this matter by the Firm. Other attorneys and paralegals may be used where deemed
appropriate in order to promote efficiency and cost effectiveness.
3. Fees and Billing. The Firm will be compensated by the Client for all Services
rendered at the discounted rates of $450.00 per hour for partner Brett R. Renton, Esq. Others shall
be billed at their standard rate with a 10% discount applied. The Firm shall provide a written
statement of the hours worked per month to the Client and Client should remit payment within
thirty (30) days of the invoice.
4. Costs, Expenses, and other Disbursements. The Client shall be responsible for costs
and expenses associated with the Finn's rendering of these Services. All costs and expenses billed
to the Client will be at the Firni's actual cost, without any mark-up. All billings for allowed costs,
expenses, and disbursements must be accompanied by backup documentation, such as invoices
from the vendor for services, etc.
5. Other Clients in Unrelated Matters and Conflicts. The Firm has advised, and the
Client acknowledges that the Firm currently and, in the fixture, represents other clients that may be
adverse to the Client in matters which are unrelated to the current Services. As a material term to
the Firm's engagement by the Client, the Client agrees to waive any potential conflicts of interest
for the Finn to represent clients in planning, zoning, licensing, land use, contractual and related
matters adverse to the Client as long as such matters do not relate to the Services that is the subject
of this agreement or representation. Examples of matters involving the Client that would be subject
to the waiver described in the preceding sentence include, but are not limited to, land use and
zoning matters, procurement matters, public-private and other transactions (other than transactions
relating to the scope of Services under this agreement), assisting clients in quasi-judicial
proceedings involving the Client, Eminent Domain and affordable housing matters.
The Finn has advised, and the Client acknowledges, that the Firm currently represents
Allstate Insurance Company, or one of its subsidiaries, attendant to a dispute concerning a charge
for emergency response services incurred by the City of Sanford. The Client agrees that this
representation does not relate to the Services that is the subject of this agreement or representation,
does not constitute a conflict of interest for the Firm and expressly waives any potential conflict
of interest.
The Client agrees that to the extent future potential conflicts of interest may arise that
involve litigation, appeals or arbitration against the Client, that the Client will consider whether it
is reasonable for the Client to provide a waiver on a case by case basis depending on the degree to
which the Client determines: (1) the new matter is unrelated to these Services; and (2) the
sufficiency of the Finn's protocols for ensuring that any lawyers or staff involved in providing
Services are separated from any involvement in the new matter. The Client's willingness to issue
conflict waivers on these bases shall not be unreasonably withheld.
G. Termination and Withdrawal Without Cause. The Client agrees that the Firm may
terminate its relationship with the Client or the City Attorneys at any time for any reason. The
Firm agrees that the Client may terminate its relationship with the Firm at any time for any reason.
No fees shall be paid by Client for Services rendered after the termination of this Agreement.
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Additional information regarding fees and other important matters appears in the enclosed
Terns of Engagement, which are incorporated as part of this letter and which you should review
carefully before agreeing to our engagement. Please indicate your acceptance of the terms of this
letter and our Terns of Engagement by signing and returning a copy of each document to me.
Please call me if you have any questions.
Very Truly Yours,
Shutts & Bowen LLP
Brett R. Renton
AGREED TO AND ACCEPTED:
CITY Or SANFORU;
By: /
t
Title:
Date:
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ATTORNEY-CLIENT
P NILE E/ 3 PRt ;ll[7CTti .
SHUTTS & BOWEN LLP
TERMS OF ENGAGEMENT
We appreciate your (the `Client") decision to retain
Shutts & Bowen as your legal counsel. Although our
engagement is limited to the matter(s) identified in the
engagement letter that accompanies this attachment, the
terms of engagement set forth herein and in that letter will
govern the relationship between us (including all of the
Client's subsidiaries and affiliates) on this and all future
matters, regardless of the scope of any such future legal
services, unless modified in a writing signed by both the
Client and the Firm. The following summarizes our
billing practices and certain other terms that will apply to
our initial and any future engagement to represent you.
1. MONTHLY BILLING: We bill monthly
throughout the engagement for a particular matter, and
our statements are due when rendered. In instances in
which we represent more than one person with respect to
a matter, each person that we represent is jointly and
severally responsible for our fees with respect to the
subject of representation. Our statements contain a
concise summary of each matter for which legal services
were rendered and a fee was charged. We record and bill
our time in one-tenth hour (six minute) increments.
2. ADVANCE DEPOSIT AND ESTIMATES:
When establishing fees for services that we render, we are
guided primarily by the time and labor required; the
novelty and difficulty of the legal issues involved; the
legal skill required to perform the particular assignment;
the fee customarily charged by comparable tires for
similar legal services; the amount of money involved or
at risk; the time constraints imposed by the client and/or
Revised Ane
2014
the circumstances; and the inability to work on other
matters in order to devote time to you, the Client.
It is the Firm's standard policy to obtain an advance
deposit (herein, the "Deposit") upon acceptance of
representation in each new matter. The Deposit shall be
retained by the Finn in our trust account during the terms
of this Agreement and will be used by the Firm to pay
costs, expenses and fees for legal services. Upon billing
you, the Firm, at its option, and any time prior to payment
of such invoice by you, may apply the Deposit to satisfy
the invoice. You agree to pay each invoice timely, in
accordance with its terms, whether or not the Finn elects
to apply all or part of the Deposit to a particular invoice.
Upon payment by you of each such invoice to which the
Deposit may have been applied, the payment will be used
to replenish the Deposit to the level of its original amount.
The Deposit, as replenished each month during the term
of this Agreement, shall be applied to the Final Bill issued
by the Firm following the termination of the Finn's
representation under the terms of this Agreement. If the
Final Bill amount does not exceed the then -unapplied
portion of the Deposit, the excess amount shall be
refunded to you. If the Final Invoice amount exceeds the
then -available Deposit amount, you shall pay the excess
amount upon receipt of the Final Bill. The Deposit
required for the legal matter encompassed by this
engagement letter has been waived for this matter.
As we have discussed, the fees and costs relating to
this matter are not predictable. Accordingly, we have
made no commitment to you concerning the maximum
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fees and costs that will be necessary to resolve or
complete this matter. Any discussion of fees and costs
that we may have had represents only an estimate of such
fees and costs. It is also expressly understood that
payment of the Firm's fees and costs is in no way
contingent on the ultimate outcome of the matter since we
cannot guarantee any particular result or forecast the
outcome of a legal matter with precision and 1.00%
accuracy.
3. ANNUAL ADJUSTMENT OF RATES: This
Firm annually adjusts its billing rates for lawyers and
paralegals.
4. EXPENSES (Costs and Cost Retainer): The
Firm may require an advance cost retainer to ensure that
funds are available to pay consultants, experts and
vendors (e.g. copy services, translators, court reporters,
etc.) whose services are engaged on your behalf to assist
in the representation. A cost retainer is separate from and
in addition to the Advance Deposit referred to in
paragraph 2, supra. Any unused funds remaining in the
cost retainer at the conclusion of the representation will
be refunded to the Client or applied to any outstanding
fees owed to the Firm. In addition to legal fees, our
statements may include out-of-pocket expenses that we
have advanced on your behalf and other charges (which
may exceed direct costs) for certain support activities.
Advanced costs generally will include such items as travel
expenses, filing, recording, certification, and registration
fees charged by governmental bodies, facsimile charges,
long distance telephone calls, courier services, computer
research, photocopying expenses, and court reporter
charges. The Firm, however, reserves the right not to
advance expenses which exceed $100 and the Client may
be asked to pay such expenses in advance. Any unused
funds remaining in the cost retainer will be refunded to
the Client or will be applied to any outstanding amounts
owed the Firm at the conclusion of the representation.
5. THIRD PARTIES SUCH AS EXPERTS AND
COURT REPORTERS: During the course of our
representation, it may be appropriate or necessary to hire
third parties to provide services on your behalf. These
services may include consulting or testifying experts,
investigators, providers of computerized litigation
support and court reporters. Because of the attorney-
client privilege and "work product" protection afforded to
services that an attorney requests from third parties, in
certain situations our Firm, with your consent, may
assume responsibility for retaining the appropriate service
providers. The Client, however, will be responsible for
paying all fees and expenses of third party service
providers who render services for your benefit. You will
be consulted in connection with any third parties whose
services we engage to assist in your representation.
6. DELINQUENCIES: If our monthly statements
are not paid timely after they are rendered, we reserve the
right to discontinue services until our account is brought
current. You agree that non-payment of statements shall
entitle us to withdraw from your representation and you
agree not to contest any such withdrawal and to execute
such documents as will permit us to withdraw.
7. NO GUARANTEES: Either at the
commencement or during the course of our
representation, we may express opinions or beliefs
concerning the litigation or various courses of action and
the results that might be anticipated. Any such statement
made by any attorney or employee of our Firm is intended
to be an expression of opinion only, based on information
available to us at that time, and should not be construed
as a promise or guarantee. We have made no warranties
or guarantees about an outcome or result.
The only thing predictable about a lawsuit is its
unpredictability. Success in a lawsuit means different
things to different people and is a highly subjective
concept. Lawsuits are not subject to quantitative or
mathematical formulae. The outcome of a lawsuit
depends on a host of variable facts which differ from case
to case and individual to individual. Predicting the
outcomes of lawsuits and the possibility of monetary
recoveries with accuracy is impossible. But be
forewarned that lawsuits can be expensive, time-
consuming and disruptive to your life. The process of
"civil discovery" will lead to you being deposed and
having to produce a large amount of records. While your
attorney can and will assist you in this regard, you will be
spending much time assisting in the preparation of the
case since it is your lawsuit in which you have a personal
stake. Accordingly, please do not entertain any
unrealistic expectations of obtaining a specific result. Our
objective will be to help you achieve in every ethical and
legal way we can the best result that a strong effort, the
law and the facts will permit.
S. SCOPE OF DUTIES OF FIRM AND
CLIENT: We will provide the legal services generally
described in the engagement letter that accompanies this
attachment. You will provide us with such cooperation
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and truthful and accurate factual information and
materials as we require to perform legal services on your
behalf. Failure of the Client to disclose material facts to
us truthfully and accurately and/or to cooperate with us or
otherwise fulfill the terms of our engagement may lead to
our decision to withdraw from the representation and it is
understood and agreed that Client will not oppose such a
decision if it is made. It is also understood that you are
not relying on us for business, investment, financial, or
accounting advice or to investigate the character or credit
of persons with whom you may be dealing, unless
otherwise requested and agreed to by the Firm. We will
keep you advised of developments as necessary to
perform our services and will consult with you as
necessary to ensure the timely, effective and efficient
completion of our work. Client is encouraged to request
at any time information pertaining to the subject of the
representation.
9. TERMINATION OF SERVICE: Upon
completion of the matter to which this representation
applies, or upon earlier termination of our relationship,
the attorney-client relationship will end unless Client and
the Finn have expressly agreed to a continuation with
respect to other matters. We hope, of course, that such a
continuation will be the case. The representation is
terminable at will by either party subject to ethical
restraints and the payment of all fees and costs. In the
event that a court of competent jurisdiction refuses to
permit Shutts & Bowen to withdraw upon termination, the
Client remains responsible for fees and costs.
10. RETURN OF CLIENT RECORDS: During the
course of our representation of you, you may be asked to
provide to us various documents. We will hold these
records for you during the pendency of our representation
and for six months thereafter. We will retain the balance
of your file for seven (7) years. It is your responsibility,
however, to secure the return of your records.
11. INSURANCE: Our engagement does not include
responsibility for review of your insurance policies to
determine the possibility of coverage for the claim
asserted in this matter or for notification of your insurance
carriers about the matter or advice to you about your
disclosure obligations concerning the matter under any
applicable law (for example, the securities laws).
12. USE OF ELECTRONIC COMMUNI-
CATIONS: Client acknowledges that Shutts & Bowen
LLP and Client may, during the course of this
engagement, exchange information, convey
documentation and otherwise communicate electronically
with one another and, from time to time, with third parties
in furtherance of the purposes of the engagement. For
purposes of this provision, electronic communications
include, but are not limited to, internet e-mail, instant
messaging, facsimile, and wireless communications.
Client further acknowledges that neither party has control
over the performance, reliability, availability or security
of such electronic communications. Consequently, Shutts
& Bowen will not be liable to Client for any loss, damage,
expense, harm or inconvenience resulting from the loss,
delay, disclosure, interception, corruption or alteration of
any electronic communication. In the event Client objects
to the use by Shutts & Bowen of any form of electronic
communication, it shall so advise Shutts & Bowen in
writing.
13. CHARGING LIEN/RETAINING LIEN: The
Client agrees that the Firm shall have a lien on all of the
Client's documents and personal property and money in
its possession or another's possession for the benefit of
the Client, including any funds held in a trust or retainer
account of the Client which is maintained at or through
the Firm, in order to secure the payment of all sums owed
by the Client to the Firm under this agreement. The Client
also agrees that the lien extends to property or funds
received or receivable by the Client by settlement,
judgment, or otherwise, or which was an issue in litigation
between the parties.
14. CHOICE OF FORUM/CHOICE OF LAW: In
consideration of the Firm's agreement to represent the
Client, the Client agrees that the validity and effect of this
Agreement shall be governed by and construed and
enforced exclusively in accordance with the laws of the
State of Florida, without regard to principles of conflicts
of laws, and agrees to submit to the personal jurisdiction
of Florida courts in connection with the contractual
relationship embodied in these Terms of Engagement.
The Client and Firm ("Parties") hereby submit to the
exclusive jurisdiction of any federal or state court sitting
in Seminole County, Florida for the purpose of any action
arising out of or relating to this agreement (an "Action"),
and agree that all such actions shall be heard and
determined in such Florida federal or state court. Each of
the Parties hereby irrevocably waives, to the fullest extent
it may effectively do so, the defense of an inconvenient
forum to the maintenance of any Action in Seminole
County, Florida.
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15. NO THIRD PARTY BENEFIT. Nothing
herein is intended to create any benefit for a third party.
The attorney-client relationship which is the subject of
this document and the accompanying cover letter would,
if created, exist only between the Finn and the
undersigned Client(s) unless expressly specified
otherwise. A third person or entity who is not named
herein as the "Client(s)" has no legal right to claim that
this Finn owes it (them) any duty or obligation as a result
of the execution of this document. The Firm's only duty
of representation is to the Client(s) named herein and that
duty arises only when the attorney-client relationship is
established in conformity with the ten -ns of this document.
The Client(s) named herein understands that
(he(she)(it) should not say or do anything which might
lead a third party to believe that this Firm is representing
the interests of that third party. Whatever legal advice is
given to the Clients) by this Firm is intended only for the
benefit and use of the Client(s).
16. CLIENT'S ADVANCE CONSENT TO
CONSULTATION WITH FIRM'S IN-HOUSE
COUNSEL OR OUTSIDE COUNSEL. In connection
with our representation of the Client, the occasion might
arise for us to consult with our General Counsel or other
finn lawyers working with our General Counsel who do
not perform work for the Client on the subject matter of
the representation or with our own outside counsel at our
expense, of course. To the extent that we are addressing
our own rights or responsibilities, a conflict of interest
might be deemed to exist between us and the Client as to
such consultation or resulting communications,
particularly if a dispute were to arise between us and the
Client. A condition of this engagement is that, in such
circumstances, the Client hereby consents to such
consultation occurring, and waives any claim of conflict
of interest based on such consultation or resulting
communications that could otherwise disqualify us from
continuing to represent the Client or from acting in our
own behalf, even if doing so might be deemed adverse to
the interests of the Client. The Client acknowledges that
such communications are protected by our own attorney-
client privilege from disclosure to the Client. Client
agrees that such discussions and documents about legal
and/or ethical issues affecting the firm's obligations will
remain privileged and confidential.
Please rear! these Terms of Engagement carefully.
Your agreement to this engagement constitutes your
acceptance of the foregoing terms and conditions. If any
term is unacceptable to you, please advise us now so that
we can resolve any differences and proceed with a clear,
complete and consistent understanding of our
relationship.
These Terms of Engagement and the attached cover
letter contain the entire agreement between you and the
Finn. There are no other agreements or understandings
stated or implied. It is understood and agreed that any
changes, modifications or alterations of these Terms of
Engagement shall be in writing and executed by the Client
and the Firm.
If you have any questions, please call me. If you
agree to our representation on the terms described herein,
please sign below and return this document (cover letter
and Terms of Engagement) to me in the enclosed, self-
addressed envelope.
By signing and returning a copy of this document
(including the cover letter) to us, together with any
requested Deposit, you authorize us to undertake your
representation.
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ACKNOWLEDGMENT
I have read and understand the foregoing and I agree to and accept the terms and
conditions set forth herein.
AGREED AND ACCEPTED:
CITY OF SANFORD, FLORIDA
as
Name: /Ir
Its: Rav Lo �.
Date: 8--(fk'z'
ORLDOCS 20713229 2
City of Sanford, Florida
300 N. Park Avenue
.,,Sanford, Florida 32771
566001328
Tax I.D. No.
Telephone No.
Facsimile No.
Email: lurootw stenstrolll.com
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Sr.FoRb
Z APP' E
CITY OF
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•
FLORIDA
CITY COMMISSION MEMORANDUM 23.148.H
AUGUST 28, 2023 AGENDA
WS X RM X
Item No. �rl
To: Honorable Mayor and Members of the City Commission
PREPARED BY: Lonnie N. Groot, Assistant City Attorney
SUBMITTED BY: Norton N. Bonaparte, Jr., ICMA-CM, City Manager
SUBJECT: Engagement of Legal Counsel; PFAS; 1,4 Dioxane
STRATEGIC PRIORITIES:
❑ Unify Downtown & the Waterfront
❑ Promote the City's Distinct Culture
❑ Update Regulatory Framework
❑ Redevelop and Revitalize Disadvantaged Communities
SYNOPSIS:
Approve a plan of action relating to engaging legal counsel relating to the PFAS and 1,4 Dioxane
contamination issues is being submitted for the City Commission's approval.
FISCAL/STAFFING STATEMENT:
The City investment in engaging legal counsel relative to the PFAS issue is anticipated to be
$10,000 while the proposals anticipated to be received relative to the 1,4 dioxane matter would be
on the basis of a contingency fee with no direct City costs.
BACKGROUND:
A. Technical Matters Introduction:
(1). 1,4 dioxane: The background provided will not explain the 1,4 dioxane issue in depth as
the City Commission has been briefed as to that matter in great detail and has been reviewing the
articles published by The Orlando Sentinel relative to the matter and impacts on the water supplies
of Seminole County water utilities. A link to the series of articles follows:
https://www.orlandosentinel.com/tag/toxic-secret/
(2). PFAS: With regard to the PFAS issue; Per- and polyfluoroalkyl substances (PFAS) are
chemicals that resist grease, oil, water, and heat. They were first used in the 1940's and are now in
thousands of various everyday products. For example, PFAS are used in paints, in products which
keep food from sticking to packaging or cookware, in clothes and carpets to make them resistant
to stains and in firefighting foam to make it work more effectively. PFAS have been given the
common name of "forever chemicals".
PFAS molecules have a chain of linked carbon and fluorine atoms. Because the carbon -fluorine
bond is one of the strongest, these chemicals do not degrade easily in the environment. The United
States Environmental Protection Agency (EPA) has published a great deal of information on PFAS
at the following web site: https://www.epa.gov/pfas/pfas-explained as has the National Institute of
Environmental Health Sciences at the following web site:
https://www.niehs.nih.gov/health/topics/agents/pfc/index.cfm If additional educational sources
are desired, they can be readily provided.
B. PFAS Litigation:
Numerous lawsuits have been filed against the largest chemical manufacturers in the world, as
well as a number of other industrial and manufacturing companies as a result of PFAS
contamination. A large portion of these lawsuits deal with Aqueous Film Forming Foam ("AFFF"),
which is used in fire suppression, fighting and training. As the City Commission may recall, it
assigned the litigation rights for land and/or any water contamination at the Sanford Orlando
International Airport to the Sanford Airport Authority ('*SAA"), who had Shutts & Bowen bring a
lawsuit in 2018. The SAA has been fully funding this litigation.
That lawsuit was removed to federal court and removed further to a multi -district litigation (MDL)
in South Carolina, which removed all litigation in the federal court system involving AFFF based
claims. The first trial out of some 4,000 lawsuits in the MDL over PFAS pollution caused by AFFF
was set to start in June of 2023. This litigation involved a lawsuit brought by the City of Stuart
associated with PFAS contamination of City of Stuart's wells due to fire fighter training activity
by the City's Fire Department and use of AFFF. As a settlement of that litigation, 3M and Dupont
have reached global settlements of a new filed class action lawsuit filed on behalf of all public
water systems in the United States. Those two proposed settlements, totaling nearly 11.5-13.5
Billion, are pending before the Court for approval. As the SAA is not water service utility provider
to the public and does not operate a public water system, it is not going to be able to make a claim
to the settlement proceeds.
Inasmuch as the City does, however, maintain a public water system and would qualify as part of
this class action settlement, if it is approved by the Court, then the City will get formal notice of
the settlement and, currently, would have 60 days to decide to accept or opt out of the settlement.
Unfortunately, the argument is that the 60 -day window will not be enough time for all the well
over 10,000 public water systems in the Nation to get the information necessary to make this
decision. The City, which has a relatively large public water system, is being proactive on this
matter and by moving quickly will be at the front of the line for modeling and decision making
(not caught with facilities and engineers unable to assist due to competing public water systems
trying to comply within the 60 day window). The City could anticipate the possibility of being
paid well over a million dollars in the context of the settlement. Should the City decide to accept
the settlement, it will be required to give a release of its claims against Dupont and 3M, however,
the settlement agreement's terms currently expressly disclaim the SAA's claims in litigation from
the release if the City accepts the proposed settlement.
The efforts of Mr. Renton will be invaluable in the City perfecting its claims and, Mr. Renton will
provide a memorandum explaining the settlement terms and seeking the information from the City
staff necessary to get to support any payout the City based upon a formula that is complex and will
vary due to the number of other public water systems that submit claims and as to how impacted
each is as a result of PFAS contamination in their respective systems. Mr. Renton will further
address and answer any questions the City may have concerning the settlement and litigation.
Although there can be no cap of the amount of the fees, the City controls how much, and the level
of, information required by legal counsel during the course of the proceedings and, more
importantly, controls the provision and detail/volume of data provided with regard to the City's
water system.
As Shutts & Bowen is a diverse law firm, they are asking for a waiver of a dispute concerning a
charge for emergency response services incurred by the City of Sanford against Allstate Insurance
Company, or one of its subsidiaries and as to any conflicts of interest that would preclude the firm
from represent clients in planning, zoning, licensing, land use, contractual and related matters
adverse to the City as long as such matters do not relate to the PFAS settlement claim. Examples
of matters involving the Client that would be subject to the waiver include, but are not limited to,
land use and zoning matters, procurement matters, public-private and other transactions (other than
transactions relating to the scope of Services under this agreement), assisting clients in quasi-
judicial proceedings involving the Client, Eminent Domain and affordable housing matters. These
types of waivers are not unusual for municipalities to enter and the City Attorney does not see
these waivers as an impediment to the retention of Mr. Renton.
C. 1,4 dioxane Litigation:
This agenda memorandum will not go into the detail already explored with the City Commission
as to the costs incurred by the City over the years addressing the threat of 1,4 dioxane
contamination relative to the City's wells and water utility facilities. The City Commission is
aware of the actions taken by the City and the potentially responsible parties (PRPs) because of
the efforts of special legal counsel Jake Varn and the media focus of late on the matter by The
Orlando Sentinel. As a summary for background purposes, 1,4 -dioxane is a synthetic industrial
chemical that is completely miscible (mixes in all proportions) in water. Generally, 1,4 -dioxane is
a likely contaminant at many sites contaminated with certain chlorinated solvents (particularly
1,1,1 -trichloroethane) because of its widespread use as a stabilizer for those chemicals. The EPA
indicates that 1,4 -dioxane is used in "paint strippers, dyes, greases, varnishes and waxes" and is
also found as an impurity in anti -freeze and aircraft deicing fluid, and in consumer products like
shampoos, deodorants, cleaning detergents and cosmetics. The use of 1,4 dioxane by the PRPs is
well documented and the potential health hazards have been well articulated in the recent articles
published by The Orlando Sentinel.
The City could, potentially, engage in claims against the PRPs. As an example of the type of
litigation anticipated, the State of New Jersey has sued Dow Chemical and other companies, of
which several are unnamed, alleging that the companies have significantly contaminated the State
and its drinking water with the 1,4 -dioxane. The lawsuit claims that the firms sold the suspected
human carcinogen knowing that it would "significantly pollute drinking water supplies, render
drinking water unusable and unsafe, threaten the public health and welfare, and harm other natural
resources." And, it has recently been reported that several Long Island water districts seeking to
recover damages arising from alleged contamination of drinking water supplies by 1,4 -dioxane
and the one the primary defendants and the U.S. government agreed to settlement in 2 cases with
the Bethpage case settling in the amount of $49 million and South Farmingdale case settling in the
amount of $15.5 million. The Bethpage lawsuit, sought damages "to ... restore its damaged
drinking water supply wells..." and reimbursement "for the costs of designing, constructing,
installing, operating, and maintaining the treatment facilities and equipment required to remove
the 1,4 -dioxane from its drinking water wells..." As to damages, Bethpage stated that it had
incurred approximately $37 million that related to "exploration, construction, and related
infrastructure spending for its replacement supply wells and capital costs." Bethpage forecasted
that it would require an additional $25 million in operations and maintenance costs associated with
the 1,4 -dioxane treatment at some of its plants. South Farmingdale stated that it had incurred or
will incur at least $30 to $35 million in capital and operations and maintenance costs for treatment
of 1,4 -dioxane at some of its wells, depending on various operational factors. South Farmingdale
estimates that the resolution of its claim against the U.S. would cover "the majority of the capital
costs and a material percentage of the initial operations and maintenance costs associated with
installing necessary treatment technology."
The City could, similarly, pursue any and all similar claims under a contingency fee agreement
with a selected provider of legal services, or otherwise. Although the procurement of legal services
are exempt from competitive procurement requirements, the use of a request for proposals (RFP)
or request for qualification process would provide the ability of the City to competitively evaluate
firms that submit proposals/qualifications while also learning a great deal about the potential
pathways to attaining recovery from the PRPs. The issue as to whether the filing of a lawsuit is
prudent at this time, however, requires further evaluation. Mr. Vam would like to evaluate timing
issues and the status of actions by the Florida Department of Environmental Protection prior to
making a decision about initiating litigation that could require costly expert testimony. His points
are well taken. And, there appears to be potential in joining forces with the County in any efforts
that the County may initiate as to the 1,4 dioxane matter involving County water facilities, etc. If
it is possible to collaborate with the County, that could result in an array of possible benefits to
both the City and the County. A County consultant has already reached out to the City to obtain
information about City facilities and the City has sought information from the County in the past
about County water issues. The assessment of damages is, of course, critical in the pursuit of any
lawsuit claiming damages.
As a matter of full disclosure, this City Commission agenda memorandum was provided to both
Mr. Renton and Mr. Varn and their comments and suggestions were solicited. In addition, please
not that in the years 2000-2001, the Assistant City Attorney, Lonnie N. Groot, was engage as a
contract partner with the Shutts & Bowen law firm.
LEGAL REVIEW:
The Assistant City Attorney has prepared this agenda memorandum.
RECOMMENDATION:
City staff recommends that the City Commission:
(1). Approve the limited engagement of Shutts & Bowen, as set forth in this
agenda memorandum with regard to the PFAS contamination issue, and authorize
the execution of the waiver and engagement letter of Shutts & Bowen.
(2). Consider taking action with regard to the pursuit of 1,4 dioxane claims after
further evaluation as to the timing of any lawsuit being filed, the assessment of
damages and potential collaboration with the County.
SUGGESTED MOTION:
"I move to approve the actions, as proposed."
Attachments: (1). Shutts & Bowen Conflict Waiver: Allstate Insurance Company.
(2). Shutts & Bowen Engagement Letter for Legal Services.