ITEM 6.6 Flushable wipes litigationgo
Otsre a/`�/J/�o
MINNESOTA V
DEPARTMENT INFORMATION
Request for
City Council Action
ORGINATING DEPARTMENT:
REQUESTOR:
MEETING DATE:
Legal
Andy MacArthur, City Attorney
August 24, 2015
PRESENTER(s):
REVIEWED BY:
ITEM #:
City Attorney
Lori Johnson, City Administrator
6.6
AGENDA ITEM DETAILS
RECOMMENDATION:
Staff recommends that the attached Resolution authorizing execution of a Retainer Agreement with the
law firm of Reinhardt, Wendorf & Blanchfield regarding Flushable Wipes Litigation be approved.
ARE YOU SEEKING APPROVAL OF A CONTRACT?
IS A PUBLIC HEARING REQUIRED?
I
No.
No.
BACKGROUND/JUSTIFICATION:
The City of Wyoming and a number of other Minnesota cities have joined as named plaintiffs in litigation
initiated against the makers of flushable wipes requesting injunctive relief and damages for interference
to and damage to City waste water treatment facilities. The City recently was informed that the City of
Elk River had joined in this litigation.
The City has experienced problems with its waste water treatment plant due to flushable wipes. The
litigation seeks to establish a class of cities affected by these products. The City would enter into the
attached retainer agreement which would direct the attorney's undertaking the class action to add
Otsego as a named Plaintiff.
The City would be required to track and pay attention to the litigation and may be required to provide
documents and possibly have the head of utilities be deposed. The retainer has no obligation for the City
to pay any additional costs of the litigation no matter how it turns out. If the class is approved the
attorneys can request that the named plaintiffs receive additional amounts of money above and beyond
other class members upon settlement or an award.
Otsego would not immediately become an additional Plaintiff but would become a named Plaintiff after
current motions in front of the Court have been resolved.
The issue was presented to the Administrative sub -committee which reviewed the material and
recommended that the retainer agreement be approved by the Council.
SUPPORTING DOCUMENTS: x ATTACHED ❑ NONE
• Retainer Agreement.
• Resolution approving Agreement.
• Additional background material regarding the litigation.
MOTION: (Please word motion as you would like it to appear in the minutes.
Motion to approve Resolution No. 2015-45, approving Retainer Agreement with Reinhardt, Wendorf &
Blanchfield.
BUDGET INFORMATION
FUNDING: BUDGETED: ❑ YES
NA o No
ACTION TAKEN
REINHARDT WENDORF & BLANCHFIELD
ATTORNEYS AT LAW
FIRST NATIONAL BANK BUILDING, SUITE e-1250
332 MINNESOTA STREET
ST. PAUL, MN 55101
TEL 651-287-2100 • FAX 651-287-2105
GARRETT D. BLANCHFIELD
G.BLANCHFIELD@RWBLAWFIRM.COM
August , 2015
PERSONAL & CONFIDENTIAL
ATTORNEY -CLIENT COMMUNICATION
Andrew MacArthur
Re: Flushable Wipes Litigation
Dear Mr. MacAuhur:
Pursuant to the City's inquiry, our discussion of the matter, and the City's request, this is
to advise you that our firm, with the assistance of the law firm of Gustafson Gluck PLLC, is
willing to represent the City of Otsego in the prosecution of class action litigation against a
number of manufacturers, distributors, and sellers of flushable wipes that caused harm to
plumbing, sewer, and/or septic systems. The claims in the litigation arise from defendants'
deceptive, improper, unlawful, or tortious conduct in the design, testing, manufacturing,
marketing, distribution, and/or sale of flushable wipes. The City would be pursuing both its own
claims and the claims of other municipalities and entities that expended additional resources in
response to clogs or other sewer or wastewater treatment system issues caused by flushable
wipes.
As a plaintiff and class representative, the City has an obligation to understand the
general nature of the claims, to follow the progress of the case, and to have a commitment to its
prosecution. We will advise you from time to time of the status of the litigation, and you should
feel free to contact us with regard to any questions you may have. As discussed, City staff will
be required to cooperate with members of our firm in locating and producing copies of the City's
documents, and a representative designated by the City may have to appear for a deposition. We
will, of course, explain these matters as we go along, and we will assist you and make the
process as convenient for you as we reasonably can.
Our firm will advance from time -to -time the necessary expenses of the litigation, some of
which may be borne by other plaintiffs' counsel. The City will not be billed for or required
individually to reimburse this firm or other plaintiffs' counsel for such expenses. If a class wide
recovery is obtained, our firm and others may seek reimbursement of expenses from the
recovery.
August , 2015
Page 2
Attorneys' fees for our firm's services in this case on the City's behalf and on behalf of
any class are wholly dependent upon obtaining a recovery. Any attorneys' fees will be paid
solely from any such recovery, and the City will not have a separate obligation to pay attorneys'
fees apart from a recovery. If a recovery is obtained for a plaintiff class, any attorneys' fees paid
from the amount recovered, as well as any expenses reimbursed, must be approved by the Court.
Others may join the litigation as plaintiffs and class representatives, and other law films
may be involved in the prosecution of the litigation on their behalf and on behalf of a plaintiff
class. By this letter, the City also acknowledges that, if we consider it appropriate or necessary,
we may associate with other appropriate lawyers or law firms as co -counsel on the City's behalf
or on behalf of the plaintiff class.
Because our firm's representation in the matter contemplates that the litigation will
proceed on a class basis, the City and we agree that, if at any point the case is no longer
proceeding on that basis, either because of denial of a motion for class certification or for any
other reason, our firm will revisit the issue with you of whether we will continue to represent the
City in the litigation and the basis, if any, on which we would be willing to do so.
With regard to any matters relating to settlement, the City agrees generally to be guided
by our assessment of the legal and factual issues and our advice, recognizing that any class
settlement must be approved by the Court.
If these terms are acceptable to you, please sign the bottom of this letter and return it to
us. This will then serve as our representation agreement.
We look forward to working with the City of Otsego on this matter.
Sincerely,
REINHARDT WENDORF & BLANCHIFELD
Garrett D. Blanchfield
August , 2015
Page 3
ACCEPTED AND AGREED TO:
The City of Otsego understands the responsibilities of a class representative and agrees to serve
as such. The City is satisfied with the terms of the above agreement and, on that basis, does
hereby retain Reinhardt, Wendorf & Blanchfield and Gustafson Gluck PLLC, as the City's
counsel and to serve as counsel for the class in the above matter.
Dated:
4842-4900-0231, v. 1
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO. 2015-45
RESOLUTION APPROVING RETAINER AGREEMENT WITH REINHARDT, WENDORF & BLANCHFIELD
WHEREAS, the law firm of Reinhardt, Wendorf & Blanchfield has commenced legal action on behalf of
municipalities in Minnesota and Wisconsin related to the effect on municipal wastewater treatment
plants of products referred to as flushable wipes; and
WHEREAS, the Council has received and had a chance to review information related to this proposed
class action lawsuit; and
WHEREAS, a number of Minnesota cities have joined in this litigation; and
WHEREAS, the City of Otsego's wastewater treatment facilities have been adversely affected by
flushable wipes; and
WHEREAS, participation in the litigation will be of minimal cost and inconvenience to the City, but may
allow it to recover compensation resulting from damage caused by said products; and
WHEREAS, the City Council has determined that it is in the best interests of the City and its citizens to
become a named plaintiff in the current litigation.
NOW, THEREFORE, BE IT RESOLVED as follows by the City Council of the City of Otsego, Wright County,
Minnesota:
1. The City Council hereby approves the attached Retainer Agreement with Reinhardt, Wendorf &
Blanchfield and authorizes and directs execution of the same by the appropriate officer(s) or
employee of the City of Otsego.
ADOPTED this 24th day of August, 2015.
IN FAVOR:
OPPOSED:
CITY OF OTSEGO
Jessica Stockamp, Mayor
Tami Loff, City Clerk
MEMORANDUM
Attorney -Client Privileged and Confidential
To: Dan Kovar, Public Works Director, City of Wadena
From: Jason S. Kilene, Gustafson Gluek PLLC
CC: Garrett D. Blanchfield, Reinhardt, Wendorf & Blanchfield
Christopher M. Hood and Steven W. Nyhus, Flaherty & Hood, P.A.
Date: July 13, 2015
Re: Summary of Flushable Wipes Litigation
The following summary points are being provided at the City's request, to assist the City's
consideration whether to participate in the above -referenced action as a class representative.
A. A complaint was filed in U.S. District Court for the District of Minnesota on April 23,
2015 by the City of Wyoming, Minnesota, individually and as a putative class action on
behalf of all those similarly situated.
B. Defendants named in this lawsuit are Proctor & Gamble Company; Kimberly-Clark
Corporation; Nice -Pak Products, Inc.; Professional Disposables International, Inc.; Tufco
Technologies Inc.; and Rocklin Industries. The Defendants are known to design,
distribute, market and advertise cleansing wipe products as "flushable."
C. The City of Wyoming alleges that, contrary to the Defendants' marketing claims, these
wipes are not in fact "flushable" and travel through sewage collection and treatment
systems, causing clogs, equipment damage, and other negative effects.
D. The complaint filed by the City of Wyoming requests the following relief:
1) an order certifying the action as a class action;
2) a declaration that the Defendants' flushable wipes do not degrade and are not sewer safe;
3) an order directing Defendants to cease further advertising, sale, and distribution of said
"flushable wipes";
4) an order directing Defendants to establish a fund to compensate class members for costs
associated with ongoing cleanup and removal of flushable wipes from sewer systems;
5) allowable monetary damages; and
6) attorneys' fees and costs.
E. Gustafson Gluck PLLC approached Flaherty & Hood, P.A. for information as to whether
other Minnesota cities may have been similarly affected by "flushable" wipes.
F. Flaherty & Hood, P.A. sent an e-mail inquiry on May 20, 2015 to municipal clients with
whom the firm has a pre-existing relationship, asking to be contacted by any cities that
might be interested in participating as a class representative.
G. The City of Wadena expressed interest and an initial telephone conference call was held
on June 22, 2015.
H. As a "class representative," the City would be pursuing both its own claims and the
claims of other cities and entities that expended additional resources in response to clogs
or other sewer or wastewater treatment system issues caused by "flushable" wipes.
I. As a Plaintiff and class representative, the City would have an obligation to understand
the general nature of the claims, to follow the progress of the case, and to have a
commitment to its prosecution. Counsel will advise the City from time to time of the
status of the litigation, and are always available to answer questions.
It is likely that the Defendants will submit discovery requests to the Plaintiff class
representatives. When this occurs, City staff will be required to cooperate with counsel
in locating and producing copies of the City's documents, and a representative designated
by the City may have to appear for a deposition. Counsel will assist throughout each step
of this process to make it as convenient for the City as reasonably possible.
K. This class action is a "contingency fee" matter, which means that attorneys' fees for
counsel's services in this matter are wholly dependent upon obtaining a recovery. Any
attorneys' fees will be paid solely from any such recovery, and the City will not have a
separate obligation to pay attorneys' fees apart from a recovery. If a recovery is obtained
for a plaintiff class, any attorneys' fees paid from the amount recovered, as well as any
expenses reimbursed, must be approved by the Court.
L. Counsel will advance from time -to -time the necessary expenses of the litigation, some of
which may be borne by other plaintiffs' counsel. The City will not be billed for or
required individually to reimburse counsel for such expenses. If a class wide recovery is
obtained, counsel may seek reimbursement of expenses from the recovery.
M. This matter will be handled primarily by the firms of Gustafson Gluck PLLC and
Reinhardt, Wendorf & Blanchfield. Flaherty & Hood, P.A. is assisting in this matter only
in the limited role of client contact and coordination. Representation of the City in the
matter and prosecution of the claim, however, will be the sole responsibility of Gustafson
Gluek PLLC.
N. If the City is interested in proceeding as a class representative, Gustafson Gluck PLLC
will send a retainer letter for the City to sign. The signature of such retainer letter will
formally commence the representation.
Any questions regarding the foregoing may be directed to Steve Nyhus at 651-225-8840, or by e-
mail to sMhusgr Faherty-hood.com.
2
MEMORANDUM
Attorney -Client Privileged and Confidential
To:
From: Jason S. Kilene, Gustafson Gluek PLLC
CC: Garrett D. Blanchfield, Reinhardt, Wendorf & Blanchfield
Christopher M. Hood and Steven W. Nyhus, Flaherty & Hood, P.A.
Date: July 13, 2015
Re: Summary of Flushable Wipes Litigation
The following summary points are being provided at the City's request, to assist the City's
consideration whether to participate in the above -referenced action as a class representative.
A. A complaint was filed in U.S. District Court for the District of Minnesota on April 23,
2015 by the City of Wyoming, Minnesota, individually and as a putative class action on
behalf of all those similarly situated.
B. Defendants named in this lawsuit are Proctor & Gamble Company; Kimberly-Clark
Corporation; Nice -Pak Products, Inc.; Professional Disposables International, Inc.; Tufco
Technologies Inc.; and Rockline Industries. The Defendants are known to design,
distribute, market and advertise cleansing wipe products as "flushable."
C. The City of Wyoming alleges that, contrary to the Defendants' marketing claims, these
wipes are not in fact "flushable" and travel through sewage collection and treatment
systems, causing clogs, equipment damage, and other negative effects.
D. The complaint filed by the City of Wyoming requests the following relief:
1) an order certifying the action as a class action;
2) a declaration that the Defendants' flushable wipes do not degrade and are not sewer safe;
3) an order directing Defendants to cease further advertising, sale, and distribution of said
"flushable wipes";
4) an order directing Defendants to establish a fund to compensate class members for costs
associated with ongoing cleanup and removal of flushable wipes from sewer systems;
5) allowable monetary damages; and
6) attorneys' fees and costs.
E. As a "class representative," the City would be pursuing both its own claims and the
claims of other cities and entities that expended additional resources in response to clogs
or other sewer or wastewater treatment system issues caused by "flushable" wipes.
F. As a Plaintiff and class representative, the City would have an obligation to understand
the general nature of the claims, to follow the progress of the case, and to have a
commitment to its prosecution. Counsel will advise the City from time to time of the
status of the litigation, and are always available to answer questions.
G. It is likely that the Defendants will submit discovery requests to the Plaintiff class
representatives. When this occurs, City staff will be required to cooperate with counsel
in locating and producing copies of the City's documents, and a representative designated
by the City may have to appear for a deposition. Counsel will assist throughout each step
of this process to make it as convenient for the City as reasonably possible.
H. This class action is a "contingency fee" matter, which means that attorneys' fees for
counsel's services in this matter are wholly dependent upon obtaining a recovery. Any
attorneys' fees will be paid solely from any such recovery, and the City will not have a
separate obligation to pay attorneys' fees apart from a recovery. If a recovery is obtained
for a plaintiff class, any attorneys' fees paid from the amount recovered, as well as any
expenses reimbursed, must be approved by the Court.
I. Counsel will advance from time -to -time the necessary expenses of the litigation, some of
which may be borne by other plaintiffs' counsel. The City will not be billed for or
required individually to reimburse counsel for such expenses. If a class wide recovery is
obtained, counsel may seek reimbursement of expenses from the recovery.
J. This matter will be handled primarily by the firms of Gustafson Gluck PLLC and
Reinhardt, Wendorf & Blanchfield. Flaherty & Hood, P.A. is assisting in this matter only
in the limited role of client contact and coordination. Representation of the City in the
matter and prosecution of the claim, however, will be the sole responsibility of Gustafson
Gluek PLLC.
K. If the City is interested in proceeding as a class representative, Gustafson Gluek PLLC
will send a retainer letter for the City to sign. The signature of such retainer letter will
formally commence the representation.
2