Judge: Lawyer ‘made up’ testimony and undermined landmark pollution case

An Iowa law firm's attempt to solicit clients in a lawsuit against Muscatine's Grain Processing Corp. included mass mailings and mobile billboards such as these. (Source: Iowa District Court exhibits)

Two of Iowa’s most well-known attorneys are embroiled in a bitter fight over legal fees and client poaching in a multimillion-dollar lawsuit against one of Iowa’s biggest alleged corporate polluters.

The case involves allegations of attorney misconduct in the $51 million class-action lawsuit against Muscatine’s Grain Processing Corp.

On one side of the dispute is West Des Moines attorney Andrew Hope, whose advertisements for his legal services have made him one of central Iowa’s most recognized lawyers. On the other end of the dispute is Hope’s former co-counsel in the GPC case, Jim Larew, an Iowa City lawyer who served as chief of staff and legal counsel for former Iowa Gov. Chet Culver.

Hope’s attempts to drum up business in the GPC case included mass mailings, a mobile billboard that was parked in a Muscatine neighborhood, and a recreational vehicle that functioned as a make-shift “law office.” They resulted in an ethics complaint — later ruled to be unfounded — as well as court sanctions and a harsh rebuke from a district court judge who said Hope’s sworn testimony in a 2019 hearing was not “remotely credible” and portions of a sworn statement appeared to have been “made up … out of whole cloth.”

In a ruling issued earlier this week, District Court Judge John Telleen said Hope violated his duty of loyalty to former clients in order to pursue a litigation strategy that undermined their case and generated more fees for himself. In the end, Telleen wrote in his ruling, Hope was “compensated handsomely for these efforts.”

Larew declined to comment on the matter. Hope and his attorney, former Iowa Supreme Court Justice Michael Streit, did not return calls seeking comment.

The litigation with GPC began in 2012 when Hope and Larew joined forces to sue the company, alleging it was discharging pollutants and hazardous chemicals into the neighborhood surrounding the corn-milling plant.

Court records indicate that four years before that lawsuit was filed, a GPC official had emailed his colleagues about the potential for “serious problems with the locals,” pointing out that at times “the parking lot and south end of Muscatine (are) covered in a haze.”

In 2010, the company’s environmental director received an email from an Iowa Department of Natural Resources official who said he was “amazed at a bluish-colored haze that was leaving GPC’s property and blanketing the residential neighborhood across from the plant.”

Two years after that, a senior GPC engineer reported that over one weekend “the neighborhood (was) so smoky across the street that it was fairly hard to see, not to mention breathe.”

In 2011, the state sued GPC for violating numerous state and federal environmental laws, and it labeled the plant a major source of hazardous air pollutants, including formaldehyde, hydrochloric acid and methanol. The case was resolved in 2013 when a judge ordered GPC to pay a record $1.5 million civil penalty for violating pollution-control laws.

By that time, Larew, Hope and their co-counsels were pursuing a strategy of suing GPC through a class-action lawsuit that would represent the interests of thousands of Muscatine residents who lived near the plant.

But in late 2014, Hope began advocating for an entirely different strategy that involved filing hundreds of individual lawsuits against GPC. Under newly adopted court rules, cases of that kind were likely to be tried within a year — much more quickly than a class-action case could be heard. Hope argued that his fast-track process of litigating would force GPC to the negotiating table and produce a settlement much more quickly.

Larew and the other attorneys on the case rejected Hope’s idea, pointing out the logistical and practical hurdles in taking that many cases to court at the same time. According to court records, Larew and the others then discovered that Hope had quietly been meeting with Muscatine residents in an effort to have them sign onto his plan of litigating their claims quickly and individually. Arguing that this undermined their clients’ class-action case, they insisted Hope either stop or resign as co-counsel.

Hope chose the latter option, and began trying to sign up Muscatine residents for individual cases. He blanketed the homes that surround the GPC plant with postcards that said, “Attention residents of southend: Suffered the effects of air pollution? You may be entitled to compensation for nuisance damages. Call us today for a free consultation! No fees if no recovery. The sooner you call, the more we can help!”

“What Hope did essentially was to withdraw to seek ‘greener pastures’ by pursuing individualized claims on behalf of his former clients,” Judge Telleen would later rule, adding that the postcard campaign confused residents and undermined the class-action claim Hope’s former clients were already pursing.

An Iowa judge blocked any further mailings, but Hope joined forces with a group of attorneys who then, in Telleen’s words, “worked against the class action” and signed up 800 Muscatine households for the fast-track settlement strategy.

Hope’s strategy did produce a settlement, from which he earned $670,000 in fees, according to court records.

But court records indicate the deal required the homeowners to concede that GPS was taking “reasonable” steps to control emissions from the plant. It also required them to grant GPC permanent easements on their property — effectively blocking claims made by future owners of those same homes. And it required the homeowners’ “future cooperation” with GPC in all matters related to plant emissions, even if meant giving testimony in other court cases concerning the plant.

Hope and his team of lawyers then “dropped a bombshell,” as Judge Telleen later phrased it. They revealed in court that they had negotiated, with GPC, settlement terms not just for their own clients, but also for any of Larew’s class-action clients who could be persuaded to defect and take advantage of the deal negotiated by Hope.

Hope and his co-counsels had again undermined the class-action case, Judge Telleen found, this time by working in concert with GPC itself — the very company Hope was suing on behalf of the Muscatine residents.

This recreational vehicle was turned into a make-shift “law office” and parked in a neighborhood near Muscatine’s Grain Processing Corp. (Source: Iowa District Court exhibits)

Hope and his legal team then parked a recreational vehicle, with a crude sign saying “Law Office” hanging in the windshield, in the GPC neighborhood. Nearby, they parked a semi-truck with a billboard mounted on the back that said, “GPC Settlement Information Office.”

Hope’s team was sanctioned by the court for its  actions, and the lawyers were ordered to give all of the class-action members they had already lured over to their side the right to reverse course and rejoin the class-action case.

Hope had “indisputably contributed to a concerted effort to entice” roughly 800 Muscatine households to abandon the class-action claim he helped initiate, Telleen later stated in his ruling. In the process, Telleen said, Hope had violated his loyalty to those residents and jeopardized their case at “crucial moments” in litigation. “And he was compensated handsomely for these efforts, receiving approximately $670,000 in fees,” Telleen wrote.

In late 2018, Larew and his co-counsel in the class-action case announced they had reached a $51.5 million settlement with GPC. The deal would require GPC to pay $45 million into a settlement fund, and spend another $6.5 million on pollution controls.

Hope immediately claimed he was entitled to at least $1.2 million of the class-action settlement. Larew argued otherwise, and last fall, a trial was held on that issue before Judge Telleen.

The judge ruled this week that Hope wasn’t entitled to anything, noting that it was unlikely he’d have played a significant role had the case gone to trial. “The court understands (Hope) has never tried a jury case to conclusion,” Telleen wrote in his ruling.

“The court did not find Andrew Hope’s testimony to be remotely credible,” the judge added. “He had trouble giving a straight answer to a straight question and was on occasion even admonished by his own trial counsel to simply answer the question asked.  He frequently gave non-responsive answers, even to his own counsel’s questions.  He was impeached on a number of occasions in which his testimony was directly contradicted by exhibits or by his deposition testimony.”

Hope’s conduct in attempting to siphon away clients from the class-action case was the subject of a 2016 complaint filed by eight of the class-action plaintiffs with the Iowa Supreme Court’s Attorney Disciplinary Board.

Streit, Hope’s attorney, told the disciplinary board the complaint wasn’t legitimate and was only a “strategic punch to prevent individual citizens from pursuing their own best interests.”

In 2017, the disciplinary board notified the citizens that after a “thorough review and investigation,” it found no evidence that Hope acted unethically or did anything to jeopardize the class-action case.

As for the plaintiffs in that case, which is now entering its ninth year, they have yet to receive any share of the $51.5 million settlement. That’s largely because of the complex, multi-layered calculations used to determine how much damage certain households, and the individuals in those households, were damaged by the pollution from the GPC plant. But the process of making those calculations is, at least, in the final stages.

Bill backed by GPC parent company would limit environmental lawsuits

A bill backed by Grain Processing Corp.’s parent company would protect it and other Iowa manufacturers from civil lawsuits related to environmental damage.

The bill, which is sponsored by Sen. Brad Zaun, R-Urbandale, would shield Iowa companies from lawsuits that allege they have created a public nuisance or committed negligence if those companies are operating in accordance with all required licenses and permits related to federal and state environmental laws.

In addition to blocking lawsuits for public nuisances and negligence, the bill also would bar lawsuits based “on any similar legal theory.”

The legislation would provide further immunity in cases where the manufacturing facility was already in operation before the person who is claiming to be damaged took up residence near that facility.

Another provision of the bill says that if such a company is sued and ultimately prevails in court, the company can recover all of its expenses related to the litigation.

The bill is opposed by the Iowa State Bar Association and the Iowa Academy of Trial Lawyers, and is backed by the Iowa Association of Business and Industry, or ABI.

“The Kent Corporation is supporting the bill and they are an ABI member,” explained Brad Hartkopf, lobbyist for ABI.

The Kent Corporation is the parent company of Muscatine’s Grain Processing Corp., which has been sued by the state itself for environmental violations and settled lawsuits with citizens for than $50 million.

Hartkopf said the immunity bill “is good public policy,” adding that if companies are complying with all licensing and permitting requirements, they “shouldn’t be held liable for causes of action” brought against them.

 

Clark Kauffman
Deputy Editor Clark Kauffman has worked during the past 30 years as both an investigative reporter and editorial writer at two of Iowa’s largest newspapers, the Des Moines Register and the Quad-City Times. He has won numerous state and national awards for reporting and editorial writing. His 2004 series on prosecutorial misconduct in Iowa was named a finalist for the Pulitzer Prize for Investigative Reporting. From October 2018 through November 2019, Kauffman was an assistant ombudsman for the Iowa Office of Ombudsman, an agency that investigates citizens’ complaints of wrongdoing within state and local government agencies.