Thursday, October 25, 2007

New Hartford v. CRRA

The Waterbury Republican-American published this editorial on Wednesday, Oct. 24:

Towns should stop suing themselves

The class-action lawsuit pitting 70 Connecticut towns against the Connecticut Resources Recovery Authority comes down to a loss of trust and the lawsuit industry's eagerness to exploit conflict. Little good is likely to come of it.

CRRA lost $220 million in making a fiscally and ethically dubious loan to now-defunct Enron Corp. The agency and Attorney General Richard Blumenthal are trying to recover as much of that money as they can through litigation. The towns sued CRRA last year, claiming it should give them some of the money it has recovered because it double-dipped — covering its losses through tipping-fee increases while getting some of the money back in court.

CRRA officials say, correctly, the towns are suing themselves. That's because the $35.9 million they won in court ultimately will go back to the CRRA, either through successful appeals or further tipping-fee increases. Indeed, CRRA has prepared a chart that shows fees ranging from $69 to $80 per ton from 2008-13 if it wins the appeal, and from $86 to $89 from 2009-12 if it loses.

Perhaps even worse, if CRRA disburses the money to the towns and subsequently wins its appeal, the towns will have to give the money back — minus an unrecoverable $10 million to $12 million paid to lawyers.

But even that is not the worst of it. Those guarding the diminishing Enron stash will hold up the $35.9 million payment as evidence CRRA is not entitled to further damage claims.

CRRA is a quasi-public agency that exists to serve the towns by disposing of their trash and garbage. If CRRA and the towns trusted each other's motives and analysis, the lawsuit never would have been filed. In this respect, Superior Court Judge Dennis G. Eveleigh did no one (except the lawyers) any favors by imposing a months-long gag order on the parties that blocked any effort by either side to restore trust.

CRRA is right to fight this ruling to protect its own interests and those of its client towns. The towns' position is understandable; CRRA lost their trust the day the Enron loan went sour and won't get it back overnight. But it's no less true that both sides are destined to come out of this dispute a little lighter in the wallet thanks to the machinations of the lawsuit industry.

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