Court Dismisses 1 of 4 Law Firm Defendants in Suit Over Failed Harrisburg Incinerator Deal

A Commonwealth Court judge has dismissed multiple parties, including one of four law firms named in the lawsuit, from a lawsuit over a financially ruinous project to retrofit an incinerator in Harrisburg that has bankrupted the city and placed it under municipal administration.

After hearing preliminary objections to the case, Judge Michael Wojcik issued an order on September 9 dismissing several of the named plaintiffs and their claims, as well as Defendants Foreman and Caraciolo, one of the four law firms named as defendants in the lawsuit.

The plaintiffs’ attorneys from Harris, Wiltshire & Grannis filed the initial fit In 2018, the Harrisburg Authority (now known as Capital Region Water) said “more than $ 360 million in debt” into the incinerator. The agency defaulted and the debt fell on the city and its citizens.

The lawsuit states that a “working group” of finance professionals and law firms that the agency hired to borrow money for the project benefited from the failed project and “are not yet responsible for the damage they caused”.

The working group, according to the lawsuit, provided the city with misleading information that led to the city entering into “careless and illegal debt guarantees”.

Two finance companies and an engineering firm Obermayer Rebmann Maxwell & Hippel, Buchanan Ingersoll & Rooney, Eckert Seamans Cherin & Mellott and Foreman, formerly Foreman & Foreman, are named as defendants.

Obermayer, Buchanan Ingersoll and Eckert Seamans are charged with breach of duty of loyalty, errors of law and unjust enrichment; and Eckert Seamans faces additional charges of complicity in breach of duty. Prior to dismissing the lawsuit, Foreman had been charged with aiding and abetting loyalty and unjust enrichment.

The court upheld a preliminary objection from Foreman that the state aid count was legally insufficient because the claim was based on a letter from a lawyer the firm sent to one on behalf of the firm’s client, the Harrisburg Authority Lender wrote. The court said Foreman could not be held liable to the city because it was acting in the legitimate business interests of its client, and dismissed the company from the lawsuit.

Defendants also successfully challenged multiple plaintiffs’ powers of action, which resulted in the Commonwealth of Pennsylvania, Governor Tom Wolf and the Pennsylvania Department of Community and Economic Development being removed from plaintiffs.

The court agreed with the defendant’s argument that the Commonwealth did not have parens patriae to bring common law claims against the defendant, and said that the Commonwealth did not have that authority either, as the Attorney General would not have the authority to assert such claims.

The DCED, an agency subordinate to the governor, was dismissed because its claims were based solely on the alleged damage to the city and therefore had no legal standing. As a result, several DCED charges against the defendants were dismissed.

The defendants also argued that the Harrisburg City Coordinator was not standing, but the court dismissed the objection.

In an e-mailed statement, Matt Haverstick, a Kleinbard attorney representing Eckert Seamans, wrote, “Eckert is pleased that the Commonwealth Court has agreed that the Commonwealth of Pennsylvania and the Department of Community and Economic Development do not have authority are to file this lawsuit. As for the remainder of the decision, at this stage in the proceedings the court is legally obliged to hold every fact relied on in the complaint to be true. Eckert is confident that a different result will occur as soon as it can provide evidence of the inaccuracy and inaccuracy of the allegations and claims against Eckert in this matter. “

Walter Anderson of Harris Wiltshire did not return a request for comment, nor did the lawyers of Conrad O’Brien (representing Obermayer), Barley Snyder (representing Buchanan Ingersol) or Swartz Campbell (representing Foreman).

The case is labeled Commonwealth of Pennsylvania vs. RBC Capital Markets.

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Law firms are bringing US $ 360 million in debt to a failed Harrisburg incinerator