Originally Published: April 24, 2014 6:01 a.m.
PRESCOTT, Arizona - A judge's decision in a lawsuit that pits a major local employer against the City of Prescott is headed to an appeal.
During a closed-door executive session Wednesday morning, the Prescott City Council reportedly directed the city attorney to file a notice of appeal on a recent ruling by U.S. Senior District Court Judge James Teilborg regarding the fluoride discharges from the Pure Wafer, Inc. facility located near the Prescott Airport.
Pure Wafer sued the city in October 2013, contesting the new pretreatment ordinance that set out stricter standards on wastewater emissions.
Earlier, the city had approved a consent order from the Arizona Department of Environmental Quality (ADEQ), agreeing to deal with the high levels of fluoride that had been detected in Prescott's treated sewage and which the city attributed to Pure Wafer, which uses hydrofluoric acid to scrub wafers for recycling.
The city announced its intention to appeal in a press release Wednesday afternoon, stating that the council had also expressed "a willingness to discuss a settlement with Pure Wafer before the appeal is heard by the Ninth District federal court."
The release outlines the city's reasons for the appeal, maintaining that "if the ruling stands, the city will be obligated to pay for the cost of installation and operation of any pre-treatment of Pure Wafer's wastewater."
The potential costs to the city would include $1 million for a process module, and $360,000 annually for operation, according to the press release. It adds that without a fluoride limit on Pure Wafer's wastewater discharge, "it is certain that these costs will increase dramatically, by millions of dollars."
City Attorney Jon Paladini said later Wednesday afternoon that the judge's ruling "basically says that the City Council at that time (of the 1997 development agreement) was agreeing to subsidize" the costs for Pure Wafer's fluoride discharges.
"I can't imagine that that was the intent of bringing Pure Wafer here," Paladini said, noting that the decision would shift the cost for the necessary infrastructure improvements to all of the city's sewer users.
But Pure Wafer Managing Director Jerry Winters said Wednesday that the development agreement that the company entered with the city in 1997 did indeed obligate the city to take on responsibility for the necessary infrastructure improvements.
"They said they would accept responsibility, and now that it's time to put the infrastructure in, they don't want to do it," Winters said.
When the silicon wafer reclamation company (then Exsil, Inc.) was considering moving to Prescott, Winters said, "We were very, very upfront with the city on who we are and what we did."
He also disputes the claim in the city press release that Pure Wafer filed its lawsuit "without prior notification to the city," while the two parties had been discussing possible arbitration to resolve the dispute this past fall.
"That's not true," Winters said. "We met with the city multiple times. We reached out to them and said 'let's settle and not make the lawyers rich,' but they told us they wanted to get a legal rendering."
Paladini maintains that the judge's ruling is so broad that it allows for "no limitation on fluoride discharge" by Pure Wafer. "That was beyond even what Pure Wafer was arguing for," he said.
The outside legal firm that has been handling the city's defense in the lawsuit - Phoenix-based law firm Dickinson Wright Mariscal Weeks - will do the appeal as well, Paladini said.
So far, the city has paid the firm about $106,000 to handle the case.
Along with the injunction, the judge granted attorneys' fees to Pure Wafer. Winters said Pure Wafer's attorneys' costs currently stand at "upwards of $200,000."