Lawsuits filed by Albany and Lebanon against CH2M Hill over wastewater treatment plants that didn’t perform as promised are progressing through Linn County Circuit Court, and a hearing on motions in both cases is scheduled for Jan. 23.
Both civil suits allege that the international engineering firm, contracted to design new and upgraded facilities, failed to properly advise the cities. Unbeknownst to officials, according to the lawsuits, CH2M Hill essentially conducted science experiments using unproven technology that ultimately failed, wasting millions of taxpayer dollars.
The lawsuits allege breach of contract, professional negligence, breach of fiduciary duty, reckless misrepresentation and other claims.
The city of Albany is seeking damages in excess of $20 million. The scope of the damages for the city of Albany’s new water reclamation facility and the Talking Water Gardens wetlands totals roughly $84 million, the Albany lawsuit alleges. The initial complaint in the case was filed in December 2017.
The city of Lebanon is suing CH2M Hill and Operations Management International, the operator of its wastewater treatment plant, for in excess of $12.3 million. The initial complaint was filed in September.
Both cities have demanded jury trials, though the city of Albany also has filed a motion arguing that the cases should be consolidated for discovery purposes. Attorneys representing the parties are the same in both lawsuits, and discovery and other issues were briefly discussed during a telephonic hearing with Judge Michael Wynhausen on Monday morning.
CH2M Hill has denied the bulk of the allegations in responses to the lawsuits, and stated that the cities themselves are at fault for their own choices. In addition, CH2M Hill claims that other parties bear liability, as well, reducing its responsibility.
In both the Albany and Lebanon wastewater treatment plant designs, CH2M Hill recommended a technology called the Cannibal Solids Reduction Process. The “Cannibal System” was billed as being able to dramatically increase the extent to which microbial organisms would consume solid waste.
According to the city of Albany’s lawsuit, CH2M Hill and Siemens Water Technologies Corp., which produced the Cannibal System, claimed that Albany would save millions of dollars over 20 years due to the new technology, and guaranteed a 90% reduction in solid waste.
But CH2M Hill didn’t understand the technology, as Siemens kept many of its product details secret, nor did it tell the municipality that the system was experimental and had not been tested, verified or successfully validated, according to the city of Albany’s lawsuit.
“As a result of Cannibal System failure, Albany faced a financially disastrous situation where millions of gallons of partially digested solids remain in holding tanks. These solids fail to meet the Oregon DEQ and EPA regulations that allow land applications of biosolids on approved farm fields. As additional solids accumulate at Albany’s facility, Albany has no choice but to haul the solids to landfills for disposal,” the Albany lawsuit states.
In February 2012, CH2M Hill for the first time acknowledged that it didn’t fully understand the science of the Cannibal System, according to the Albany lawsuit.
Albany resolved its legal dispute with Siemens by receiving $4.75 million from Siemens in 2012, but that was based in part on CH2M Hill’s claim that it could improve the Cannibal System’s performance. CH2M Hill said that Lebanon’s similar system was performing per specifications, but that facility was also failing, according to the city of Albany’s civil filing.
“In fact, on information and belief, virtually every Cannibal System installed throughout the United States has failed,” the Albany lawsuit states.
The lawsuit also faults CH2M Hill for problems with unpermitted seepage to groundwater and surrounding surface waters from Talking Water Gardens, a component of the wastewater system that was completed in 2011.
The Lebanon lawsuit alleges that OMI deliberately misled the city about the performance of the Cannibal System.
CH2M Hill was founded in 1946 in Corvallis and remained headquartered in Oregon until 1980, when it relocated to Colorado, where the company remains based today. The international engineering firm employs more than 22,000 people and has annual revenues in excess of $5 billion.
The company, which is organized and existing under the laws of Florida, moved the city of Albany’s lawsuit to U.S. District Court in Eugene, but that court and the Ninth Circuit Court of Appeals both ruled that Linn County Circuit Court was the proper venue for the case.
CH2M Hill was sold to Jacobs Engineering, based in Dallas, Texas, in late 2017.
Kyle Odegard can be contacted at 541-812-6077 or email@example.com.
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