Environmental Group Of The Year: Kirkland & Ellis

Kirkland & Ellis LLP's environmental litigators won a sweeping appellate victory for Dow Chemical Co. in the Rocky Flats radioactive waste case last year, while its transactional team smoothed the path out of bankruptcy for two chemical companies, earning the firm a spot among Law360's Environmental Groups of 2010.

"What we've been able to do is combine a lot of subdisciplines within environmental law," said Walter Lohmann, the head of Kirkland's environmental transactional practice group.

"What we've succeeded in doing is to bring all of the disciplines together."

Kirkland has a long and storied history in environmental litigation that has helped it take a leading position in the field today.

Beginning in the late 1960s, the firm's litigators represented Detroit's Big Three automakers in California in what became known as the Smog Cases. In the 1970s the firm took the lead in litigating the benzene cases and other cases at the dawn of the environmental regulatory era.

The firm's decades of experience in environmental litigation is one of the reasons that Kirkland, with a team led by Washington-based appellate partner Chris Landau and Chicago litigation partner Doug Kurtenbach, was in position to help Dow overturn a $1 billion verdict in Cook v. Rockwell in 2010.

Dow and Rockwell International Corp. had been on the hook for releasing plutonium particles onto property near the former Rocky Flats Nuclear Weapons Plant in Colorado.

A three-judge panel of the U.S. Court of Appeals for the Tenth Circuit in September reversed that, ruling that more than 12,000 class action plaintiffs who owned property near the now-defunct plant northwest of Denver were not entitled to a payout unless they could prove their property was actually damaged by the plutonium particles or that they'd lost use of the property for a reasonable cause.

The ruling further stated that property owners' fears that leaked plutonium would damage their health was not a sufficient basis to award damages unless that fear had scientific backing.

Rocky Flats, now a wildlife refuge, operated as a U.S. government plant producing nuclear weapon components beginning in 1952. First Dow and then Rockwell operated the plant on a contract basis until it was shut down by the FBI and Rockwell was charged with environmental crimes in 1989.

Colorado residents first brought the class action against Dow and Rockwell in 1990, alleging the plant's standard practices resulted in the release of plutonium particles into their homes, threatening their health and lowering their property values. Kirkland had been representing the companies throughout the drawn-out litigation.

The case spent a decade and a half in litigation before a federal jury found both companies guilty of negligent conduct in 2006. Two years later a judge ordered Dow to pay out $653 million in compensatory damages and ordered Rockwell to pay $508 million. The September ruling reversed and remanded that decision.

The Tenth Circuit ruled that the jury was improperly instructed that any amount of plutonium found on the plaintiffs' property was sufficient to prove Dow and Rockwell's negligence under the Price-Anderson Act, a federal law that governs liability for nonmilitary nuclear facilities, according to the Tenth Circuit's ruling.

Instead, the appeals court decided, the companies could only be found negligent if the plutonium level in nearby homes was high enough to cause evident illness or to cause residents to reasonably abandon their homes.

Lohmann said the plaintiffs in the Rocky Flats case were considering an appeal to the U.S. Supreme Court.

While the Rocky Flats case was a big, sexy win in a trial court setting, Kirkland's environmental transactional group was also able to help Chemtura Corp. and Tronox Inc., two chemical companies that emerged from bankruptcy protection in 2010, settle massive environmental claims.

According to Lohmann, the Chemtura settlements were "wide," while the Tronox settlement was "deep."

Over the course of 2010, Chemtura reached two settlements totaling around $26 million with the U.S. Department of Justice and 19 different states for cleanups around the United States. The firm also helped Chemtura reach a $3.9 million settlement to cover cleanup costs in the Gowanus Canal in New York City.

While Chemtura was forced to pay a lot of money for the cleanups, Lohmann said it could have been much worse: The original federal claim was for around $2 billion.

"It was the culmination of a ton of work in a lot of jurisdictions," Lohmann said.

With Tronox, a Kirkland team led by partner Jeanne Cohn-Connor was able to negotiate a major settlement with the Justice Department that will see the chemical company pay $270 million. The settlement also calls for Tronox to pay 88 percent of funds won by the pigment maker in its fight against Anadarko Petroleum Corp. and Kerr-McGee Corp. over a spinoff that Tronox has alleged put it on a path toward bankruptcy. Tort claimants are slated to receive the rest of any possible proceeds.

That settlement, which resolves federal claims as well as claims from 22 states, six local governments and the Navajo Nation, was approved Jan. 18.

The settlements were evidence of the crossover between the firm's environmental group and its successful corporate, bankruptcy, appellate and other practices.

According to Granta Y. Nakayama, the head of Kirkland's environmental litigation practice group and the former chief enforcement officer at the U.S. Environmental Protection Agency, the crossover gives clients confidence that the environmental group will not just understand the issues at hand but have a good understanding of the rest of a company's operations.

"I think there's great synergy there," Nakayama said.

Lohmann said the transactional group grew, in a way, from Kirkland's successful private equity group.

"We've been able to carve out a deeper and wider chunk of every transaction that our group works on," Lohmann said, adding that the group had developed a "turn-key role on environmental aspects of transactions."

At the same time, the practice group has worked closely with Kirkland's successful bankruptcy practice, particularly in the last 18 months.

"The group's work has really proved to be recession-resistant," Lohmann said.

He said the bankruptcy end of his group's work is trending down, while the deal work is picking up.

Kirkland's environmental practice group is made up of 31 attorneys, most of whom are based in Washington. Along with the litigation and transactional groups, the firm also handles white collar environmental cases.

The group plans to expand, Nakayama said, adding that although climate legislation appears to be dead, environmental enforcement is not seeing any slowdown under the Obama administration.

"We're not looking at this as some sort of plateau," he said.

Nakayama returned to Kirkland in 2009, joining the ranks of former EPA and Justice Department Environment and Natural Resources Division officials swelling the practice group. Prior to taking his position as the head of the EPA's Office of Compliance and Enforcement, he worked at Kirkland between 1994 and 2005.

He said that during his time at the EPA, he would see hundreds of environmental attorneys from all the major law firms. Kirkland's team stood out as the sharpest, he said.

"From that vantage point, it certainly became clear to me that Kirkland was a unique place," Nakayama said.

The firm's attorneys were always involved in cases with a great deal at stake, as evidenced by its big wins in 2010, Nakayama said.

"If you want exciting work, this is the place to be," he said.

REPRINTED WITH PERMISSION FROM THE JANUARY 26, 2011 EDITION OF LAW360 © 2011 PORTFOLIO MEDIA INC. ALL RIGHTS RESERVED. FURTHER DUPLICATION WITHOUT PERMISSION IS PROHIBITED