Beginning in November 1992, Tucson Water unsuccessfully tried to deliver treated CAP water directly from the canal west of town to select parts of town. The results were a nightmare of broken pipes and discolored and foul-smelling water.
At first city officials ignored the problem, but eventually decided to compensate people minimally for some of the harm done. The city paid a maximum of $500 for water line damage, $250 for plumbing fixtures and $100 for small appliances. In total, over 5,500 claims were filed and almost $2 million shelled out.
While this program was still underway, the City Council in October 1994 voted to discontinue the direct delivery of CAP water. But that didn't satisfy a lot of people. The following July came a class-action lawsuit seeking damages from the city mostly for people who felt they had been shortchanged by the earlier financial reimbursement program.
To determine how many people considered themselves part of this "class," Tucson Water customers were asked to submit claim forms. Thousands poured in, with most seeking relatively small dollar amounts for damages to large appliances, trouble with plumbing lines and fixtures, nuisances or personal injuries.
Much of the time since then has been spent trying to narrow the list of claimants. The city is represented by the law firm of Mesch, Clark & Rothschild, which has been paid over $100,000 to date for work on the case. The firm has argued that at least 4,000 of the claims should be thrown out. Reasons range from people filing claims even though they never received CAP water, to the earlier city program having already reimbursed them for all their expenses. The city also wants to disallow all personal-injury claims.
Terry Anderson, director of the city's risk management division, says that about 4,300 claims remain in the case, totaling $6.6 million. But Darren Clausen, an attorney for the MacBan Law Offices, which represents, the plaintiffs, indicates that additional millions could be sought for annoyance and discomfort experienced during the CAP fiasco. "People had catastrophic water damage to their homes," he emphasizes.
As part of the lawsuit, the city in 1997 admitted that "With regard to Central Arizona Project water that the City distributed to its retail customers from November, 1992 through November, 1994, the City had a duty to manage the level of pH in the water and/or to replace the City-owned steel and galvanized distribution pipes that were used to distribute the water. The City breached this duty."
Gary Cohen, one of the outside attorneys representing the city, says that the municipality is not contesting that CAP water caused damages, but believes some sort of individual process should be used to determine who should be compensated.
Anderson agrees. "We were hoping to wrap this up as one package," he says, "and it's probably best for everybody to solve it through mediation."
While local attorney Lawrence Fleischman recently attempted to lead mediation efforts, the results weren't positive. Lawyers for the plaintiffs sought $6.6 million, and the city reportedly responded with an offer slightly over $1 million to cover all claims under $10,000. Clausen estimates that includes 95 percent of the claims and says, "It isn't even in the ballpark. The city either has to try harder, or we're wasting our time." There are no more mediation sessions set, and Clausen says his firm is getting ready to go to trial.
THUS, THE DATE FOR the court case is rapidly nearing. A "bellwether" approach will present a representative sample of claimants to the jury.
According to Clausen, 30 claimants, 10 selected each by his firm, the judge and the defense, will be prepared to testify about their experience and what it cost them. This, he says, will give the jury an idea of the problems' general causes and will show the overall impact of CAP water by offering a cross-section of witnesses.
Cohen for the city, however, has problems with this concept. "I'm not sure what the purpose of the bellwether approach is," he says. "Everybody knows there are many invalid and inflated claims. The city could deal with the valid claims, but the plaintiffs refused to do that. I don't think we can whittle down the number through this approach. The jury might determine the validity of those 30 claims and the money they might be owed, but I don't know what will happen with the remainder of the claimants after that."
Anderson concurs. He says it is the city's position that the "bellwether" cases don't apply to all of those filed. Then he adds, "I assume the court isn't anxious to try 4,300 cases." But, he says, "Maybe these first 30 cases will break the ice for the mediation process."
The jury trial is scheduled to begin October 9 before Judge Charles Harrington and is expected to last about four weeks. Depending on the outcome, the city could pay any award from either a $7 million insurance trust fund or a $5 million reserve fund set aside for claims of $1 million or more.
These two accounts are supported annually with premiums paid by every city department using money that comes from the general fund. This money could finance employee salaries, playground equipment and garbage trucks if it didn't have to be used to mop up after the damage done by CAP.