Seneca Economics and Environment, LLC
Success Stories
The outcomes of the cases discussed below reflect many factors, including the factual situations in dispute, the relative strengths of the attorneys and expert witnesses on each side, the history of each case, and other considerations.  Nonetheless, Seneca played a key role in bringing about the reported outcomes:
  • As a result of Mr. Fuhrman’s trial testimony in U.S. v. The New Portland Meadows, in 2003 the U.S. District Court for the District of Oregon accepted Mr. Fuhrman’s financial methodology for calculating the economic benefit of noncompliance and rejected the federal government’s standard approach, which is incorporated in its “BEN” model.  BEN’s financial methodology is to compound past savings due to alleged noncompliance to the date of assumed penalty payment at a very high rate of interest, a corporation’s ”weighted average cost of capital” (WACC).  Mr. Fuhrman’s approach is to adjust alleged past savings due to noncompliance to the present on the basis of short-term U.S. Treasury bills, with adjustments for taxation. There is support in the academic literature on corporate finance for this methodology.
  • In 2004, the U.S. Court of Appeals for the Third Circuit remanded to the U.S. District Court for the Western District of Pennsylvania the lower court’s 2002 decision in U.S. v. Allegheny Ludlum Corporation (ALC).  In the earlier decision, the District Court had set the monetary fine at $8.24 million, twice the amount of economic benefit the government’s expert witness had calculated on the basis of his calculation of Allegheny Ludlum Corporation’s WACC rate.  As part of the remand, the Third Circuit stated that the use of 12.73% (the calculated WACC rate used for compounding past alleged savings to present values) “may so vastly overstate the economic benefit to ALC of its improper discharges, that it does not ‘level the playing field,’ and that it constitutes an abuse of discretion.”  366 F.3d 164 (3rd Circ. 2004), at 169.  During the litigation immediately following the remand, the U.S. Department of Justice sought a $12 million civil penalty, half of which was for alleged economic benefit.  Shortly after Mr. Fuhrman’s deposition on behalf of the defendant, the case settled for $2.375 million.
  • An environmental citizens’ group accused a California agribusiness of violating the Clean Air Act and related state requirements, thereby obtaining an economic benefit of between $9.5 million and $12.2 million.  Mr. Fuhrman’s expert report heavily criticized various aspects of the plaintiff’s economic expert report, including the interest rate used to compound past economic savings to present value and various analytical assumptions.  The case settled for less than $1.5 million, including settlements both with the plaintiff citizens’ group and state and local governmental authorities.
  • An environmental citizens’ group sued a large mining company for alleged Clean Water Act violations.  In this case, the plaintiff’s economic expert concluded that the company gained an economic benefit ranging from $60.6 million to $81.6 million.  Mr. Fuhrman’s analysis concluded that the company’s alleged economic benefit due to noncompliance was between $5.16 million and $23.1 million, depending on the compliance technologies that the trier of fact might determine were necessary to achieve compliance. The case settled for $4.5 million plus plaintiff’s attorney fees.
Needless to say, prior results do not guarantee future results.