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A $100 million punitive damages award against Wisconsin Electric Power Co. for dumping cyanide-laced wood chips in a Milwaukee town during the 1950s has been whittled down to an $8.7 million settlement with one of the two plaintiffs in the suit. The settlement comes after an appellate court last year rejected the punitive award, and the Wisconsin Supreme Court sent the case back for retrial. City attorney Scott E. Post said West Allis therefore was starting at zero in settlement talks, not $100 million. City of West Allis v. Wisconsin Electric Power Co., nos. 96-CV-005061 and 96-CV-00456. The West Allis Common Council voted to accept the offer after several considerations, he said, including the cost to retry the case, and the likelihood that another high punitive award would not stand on appeal. The second plaintiff in the case, Giddings & Lewis, the property owners, will proceed with a retrial and has a scheduled court date of Oct. 21. The case began six years ago when the city of West Allis and Giddings & Lewis sued WEPCo for dumping 26,000 tons of cyanide-laced wood chips more than five decades ago. The wood chips were left over after pipelines superseded the need to extract natural gas from coal. In 1999, a Wisconsin jury found that the utility had contaminated two sites with intentional disregard for the rights of the property owners. An appellate court upheld the $4.5 million compensatory award but threw out the punitives because an insufficient number of jurors agreed on the verdict questions. R. Ryan Stoll, a partner in the Chicago office of New York’s Skadden, Arps, Slate, Meagher & Flom, led the appeal for WEPCo. Stoll said the settlement is in the interests of the city and WEPCo. He was not counsel during the original trial, but is “vigorously preparing a defense” for the retrial with Giddings. “The punitives are not justified,” he asserted. Giddings’ counsel, Mark M. Leitner, a partner at Milwaukee’s Kravit, Gass, Hovel & Leitner, disagrees. “The way trial lawyers do these things is bring in a mock jury,” he said. “But we’ve got one better than that. Here it’s already been done by evidence presented the first time around.” When discussing a settlement, city lawyers considered the U.S. Supreme Court’s decision in May 2001 in Cooper Industries, Inc. v. Leatherman Tool Group Inc., No. 99-2035, which reversed how punitives are viewed by appeals courts, according to the city attorney. “It used to be that awards from a jury were presumed to be correct,” said Post. “Now a jury verdict is not entitled to any deference.”

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