Title
Dept/ Agency: Law
Action: ( X ) Ratifying (X) Authorizing ( ) Amending
Type of Service: Professional Services Contract
Purpose: Representation in Aluminum Sulfate Class Action
Entity Name: Hagens Berman Sobol Shapiro LLP and Golub Isabel & Cervino, P.C.
Entity Address: 455 N. Cityfront Plaza Dr. Chicago, Illinois 60611 and 160 Littleton Road, Suite 300, Parsippany, New Jersey 07054
Contract Amount: Undetermined. No municipal funds to be expended
Funding Source: Funds, penalties, attorney’s fee recovered through the Class Action Lawsuit
Contract Period: November 16, 2015 through November 15, 2016
Contract Basis: ( ) Bid ( ) State Vendor (X) Prof. Ser. ( ) EUS
( ) Fair & Open ( X ) No Reportable Contributions ( ) RFP ( ) RFQ
( ) Private Sale ( ) Grant ( ) Sub-recipient ( ) n/a
Additional Information:
body
WHEREAS, Liquid aluminum sulfate is a coagulant used to, among other things, remove impurities and other substances from water. The principal customers for liquid aluminum sulfate are municipalities like the City of Newark (“Newark”), which use it for water treatment, and pulp and paper manufacturers which use it in their manufacturing processes; and
WHEREAS, Newark learned that on or about September 29, 2015, a former Vice-President of Sales and Marketing for General Chemical Corporation (“General Chemical”), pled guilty to “a one-count Information…in which he is charged with one count of violation 15 U.S.C. § 1 in connection with a combination and conspiracy to suppress and eliminate competition in the sale and marketing of liquid aluminum sulfate by agreeing to rig bids and allocate customers for, and to fix, stabilize, and maintain the price of, liquid aluminum sulfate sold to municipalities and pulp and paper companies in the United States from at least as early as 1997 and continuing until approximately July 2010.” Plea Agreement, ¶ 1, United States of America v. Frank A. Reichl, No. 15-cr-00554 (D.N.J. October 27, 2015); and
WHEREAS, from at least as early as 1997 and continuing until approximately July 2010, General Chemical and its co-conspirators agreed to fix, stabilize, and maintain prices of liquid aluminum sulfate through bid rigging and customer allocations for liquid aluminum sulfate sold to municipalities and pulp and paper companies in the United States, including Newark. This conspiracy unreasonably restrained interstate and foreign trade and commerce in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1; and
WHEREAS, Newark purchased substantial quantities of liquid aluminum sulfate directly from the General Chemical between 1997 and July 2010. As a result, Newark was damaged and paid more for liquid aluminum sulfate than it would have in the absence of the price-fixing conspiracy; and
WHEREAS, Newark as the largest municipality in the State of New Jersey is best situated to initiate a class action as a class representative and has a need to acquire legal services to proceed with this litigation; and
WHEREAS, the Corporation Counsel of the City of Newark on behalf of Newark caused a class action as a class representative to be initiated in order to represent the interests of all class members, including Newark’s, and obtain injunctive relief and to recover damages, including treble damages, costs of suit, and reasonable attorneys’ fees arising from the conspirators antitrust violations; and
WHEREAS, as a class representative, Newark has a duty to adequately and fairly represent the class by being familiar with the litigation, vigorously prosecuting the litigation, and hiring lawyers experienced in class action litigation; and
WHEREAS, at no cost or expense to Newark, and in order to discharge its duties as a class representative, the Corporation Counsel selected as lawyers to represent Newark both Hagens Berman Sobol Shapiro LLP, (Hagens Berman) a firm with national experience in class actions that has participated in numerous consumer, antitrust and securities cases, with aggregate recoveries in the hundreds of millions of dollars; and Golub Isabel & Cervino, P.C., (Golub Isabel) a New Jersey firm with a deep understanding of and familiarity with the operations conducted by Newark’s Department of Water and Sewer Utilities, out of which Newark’s aluminum sulfate claims have arisen; and
WHEREAS, the Mayor and the Corporation Counsel desire to enter into an Agreement to provide legal services in the Aluminum Sulfate Class Action Litigation that sets forth the terms of representation of Newark by Hagens Berman and Golub Isabel which also establishes that Newark has no obligation to pay costs or attorneys’ fees while this litigation is being prosecuted on its behalf by its attorneys; and
WHEREAS, this Contract is awarded without competitive bidding as an exception to public bidding, pursuant to N.J.S.A. 40A:11-5(1)(a)(i), professional services; and
WHEREAS, the Corporation Counsel has determined and certified in writing that the value of this contract will exceed $17,500.00; and
WHEREAS, Local Public Contracts Law N.J.S.A. 40A:11-1, et seq. requires a Resolution of the Governing Body authorizing the award of contracts for professional services and further requires that the contract itself must be available for public inspection; and
WHEREAS, the actions contemplated by this Resolution shall result in the award of a non-fair and open contract in accordance with N.J.S.A. 19:44A-20.5; and
WHEREAS, Hagens Berman and Golub Isabel have completed and submitted a Business Entity Disclosure Certification which certifies that they have not made any reportable contributions to a political or candidate committee in the City of Newark in the previous one year, and the contract will prohibit Hagens Berman and Golub Isabel from making any reportable contributions through the term of the contract; and
WHEREAS, the Local Public Contracts Law (N.J.S.A. 40A:11-1 et seq.) requires that notice of the award of contracts for “Professional Services” without public bidding must be published in a local newspaper; and
WHEREAS, the Municipal Council adopted the Contractor Pay-to-Play Reform Ordinance, 6PSF-a, August 1, 2012, which forbids the award of a contract to a Business Entity, as defined therein, which has made or solicited political contributions to Newark Municipal Candidates, office holders having ultimate responsibility for the award of a contract; candidate committees of the aforementioned candidates; and political or political party committees of the City of Newark or County of Essex; and continuing political committees or political action committees regularly engaged in the support of the City of Newark municipal or County of Essex elections; and certain other political party or candidate committees, in excess of certain thresholds.
WHEREAS, the Municipal Council of the City of Newark believes it is in the best interests of the City of Newark to enter into an Agreement with Hagens Berman and Golub Isabel for legal representation of the City of Newark as the Class Representative in the Aluminum Sulfate Class Action
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The Mayor of the City of Newark and/or his designee, the Corporation Counsel, are authorized to execute a contract with Hagens Berman Sobol Shapiro LLP 455 N. Cityfront Plaza Dr. Chicago, Illinois 60611 and Golub Isabel & Cervino, P.C., 160 Littleton Road, Suite 300, Parsippany, New Jersey 07054, to provide legal services and represent the interests of all class members, including Newark’s, and obtain injunctive relief and to recover damages, including treble damages, costs of suit, and reasonable attorneys’ fees arising from the conspirators antitrust violation in the Aluminum Sulfate Class Action with no obligation by the City to pay costs or attorneys’ fees while this litigation is being prosecuted on its behalf by its attorneys
2. The contract is ratified from November 16, 2015 to the date of adoption of this authorizing resolution.
3. The term of the contract is for one year.
4. This contract is awarded without competitive bidding as an exception to public bidding pursuant to the provisions of the Local Public Contracts Law (N.J.S.A. 40A:11-5(1)(a)(i)), professional services, pursuant to the non-fair and open procedures of the State Pay-to-Play Law (N.J.S.A. 19:44A-20.5), and the Business Entity has certified that it has not made or solicited a contribution in violation of the Contractor Pay-to-Play Reform Ordinance 2:4-22C
5. The Determination of Value and Business Entity Disclosure Certification are attached and will be filed with the Office of the City Clerk.
6. A copy of the executed agreement shall be filed in the Office of the City Clerk by the Corporation Counsel and shall be made available for public inspection.
7. A notice of this action shall be published in the newspaper authorized by law to publish a legal advertisement and as required by law within ten (10) days of the adoption of this Resolution.
STATEMENT
This resolution ratifies and authorizes the Mayor of the City of Newark and his designee the Corporation Counsel to enter into a contract with Hagens Berman Sobol Shapiro LLP, 455 N. Cityfront Plaza Dr. Chicago, Illinois 60611 and Golub Isabel & Cervino, P.C., 160 Littleton Road, Suite 300, Parsippany, New Jersey 07054, to provide legal services and represent the interests of the City of Newark as the Class Representative and all class members in the Aluminum Sulfate Class Action.