Waste Management 2014 Annual Report Download - page 191

WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
On December 22, 2011, the Harris County Attorney in Houston, Texas filed suit against McGinnes
Industrial Maintenance Corporation (“MIMC”), WM and Waste Management of Texas, Inc., et al., seeking civil
penalties and attorneys’ fees for alleged violations of the Texas Water Code and the Texas Health and Safety
Code. The County’s Original Petition filed with the District Court of Harris County, Texas (the “District Court”)
alleges the mismanagement of certain waste pits that were operated from 1965 to 1966 by MIMC. In 1998, a
predecessor of WM acquired the stock of the parent entity of MIMC. On October 9, 2014, the District Court
granted a motion for summary judgment that resulted in the dismissal of WM from the case. On November 12,
2014, the parties agreed to resolve this case with a $29.2 million settlement payment by MIMC and dismissal of
the claims against Waste Management of Texas, Inc. The entire settlement amount was funded into escrow in
November 2014, pending finalization of the settlement. We remain focused on the remediation of the site and
maintain our active participation in the EPA process established to evaluate and determine the appropriate
remedy.
Additionally, on April 30, 2014, the United States District Court for the District of Hawaii issued an
indictment against Waste Management of Hawaii, Inc. (“WMHI”) and two employees of WMHI. The United
States Attorney’s Office for the District of Hawaii had been investigating water discharges at the Waimanalo
Gulch Sanitary Landfill, which WMHI operates for the city and county of Honolulu, in connection with three
major rainstorms in December 2010 and January 2011. The indictment alleges violations of the federal Clean
Water Act, conspiracy and making false statements to the Hawaii Department of Health and the EPA. We are
vigorously defending against this action. Given the early stage of this case and significant issues in dispute, we
cannot currently predict an outcome or estimate a range of loss, but we could potentially be subject to sanctions,
including requirements to pay monetary penalties.
Litigation — In October 2011 and January 2012, we were named as a defendant in a purported class action
in the Circuit Court of Sarasota County, Florida and the Circuit Court of Lawrence County, Alabama,
respectively. These cases primarily pertain to our fuel and environmental charges included on our invoices,
generally alleging that such charges were not properly disclosed, were unfair and were contrary to the customer
service contracts. We have reached a settlement in principal of both the pending Florida and Alabama cases, and
we are currently working on documentation for the settlements. We anticipate seeking preliminary court approval
of the Florida case settlement during the first quarter of 2015, with the Alabama case settlement to follow. The
anticipated settlements will not have a material adverse effect on the Company’s business, financial condition,
results of operations or cash flows.
From time to time, we are also named as defendants in personal injury and property damage lawsuits,
including purported class actions, on the basis of having owned, operated or transported waste to a disposal
facility that is alleged to have contaminated the environment or, in certain cases, on the basis of having
conducted environmental remediation activities at sites. Some of the lawsuits may seek to have us pay the costs
of monitoring of allegedly affected sites and health care examinations of allegedly affected persons for a
substantial period of time even where no actual damage is proven. While we believe we have meritorious
defenses to these lawsuits, the ultimate resolution is often substantially uncertain due to the difficulty of
determining the cause, extent and impact of alleged contamination (which may have occurred over a long period
of time), the potential for successive groups of complainants to emerge, the diversity of the individual plaintiffs’
circumstances, and the potential contribution or indemnification obligations of co-defendants or other third
parties, among other factors. Additionally, we often enter into agreements with landowners imposing obligations
on us to meet certain regulatory or contractual conditions upon site closure or upon termination of the
agreements. Compliance with these agreements inherently involves subjective determinations and may result in
disputes, including litigation.
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