By Ray Downs
By Lindsay Toler
By Danny Wicentowski
By Lindsay Toler
By RFT Staff
By Lindsay Toler
By Allison Babka
By Lindsay Toler
Meet Marvin K. Kaiser, veteran bean-counter for one of St. Louis' high-profile businesses. Not just any number-cruncher, Kaiser's an executive vice president and chief financial officer; his company's top bean-counter. Signs all the important papers. Keeps the boss honest.
But Kaiser has another, darker side, say some lawyers.
This Marvin K. Kaiser might be a conspirator. A polluter. One of the bad apples responsible for fouling Herculaneum, the small town about 30 miles south of St. Louis.
For 110 years, Herky's big smelter has belched out lead particles -- more than a million pounds of lead has been pumped into the air just since 1994. No secret, this pollution: A generation's worth of studies indicated that Herky was being contaminated, but Missouri officials waited until last year to begin acting tough with the smelter's owner, Doe Run Resources Corp.
Doe Run is where Marvin K. Kaiser hired on in December 1993. He's not the executive in charge of environmental practices at the nation's dominant lead company. He doesn't oversee operations at the nation's biggest smelter. There are no pictures of 60-year-old Kaiser sprinkling lead dust on Herky's kids.
But for lawyers suing the company, that's not what matters.
As Doe Run's chief financial officer, Kaiser is an integral part of Doe Run's budgeting process. It's his signature, among others, on forms authorizing the purchase of pollution-control equipment or contaminated properties in Herculaneum.
Given this seemingly vital role, the lawyers argue that Kaiser has to be intimately aware of the Doe Run's woes.
And yet it took the intrepid lawyers -- who've been on the case since 1995 -- until late last year to figure out just how critical Kaiser might be to the case.
Turns out it's as much a matter of where Kaiser lives as it is his place in the corporate hierarchy.
In the mid-1990s, while state and federal regulators dithered, Herculaneum residents and property owners began hitting Doe Run with lawsuits, alleging they'd been harmed by the smelter. The suits, filed in Circuit Court in Jefferson County, named Doe Run and its parent company, New York City-based Renco Group Inc., as defendants, among others.
The early lawsuits included actions seeking damages for two classes of plaintiffs: property owners who claimed lead had hurt property values and residents who sought long-term medical monitoring because of lead exposure. Lawyers representing those plaintiffs included Jeffrey J. Lowe of St. Louis-based Simon, Lowe & Passanante and Kevin Hannon, a Denver-based lawyer who represented residents there in a successful action against a smelter operator.
But those cases hit a wall named M. Edward Williams. In December 2000, long before Doe Run began making the evening news, the Jefferson County circuit judge ruled that the lawyers had failed to support class-action status for their clients. Rather than continue in Hillsboro, the plaintiffs' lawyers refiled the cases in St. Louis Circuit Court. (Counting individual injury cases being handled by other law firms, Doe Run now has at least nine smelter-related suits on its hands.)
Why move the cases? "St. Louis city is a better venue," Lowe says.
Lowe won't elaborate, but many lawyers see St. Louis juries and judges as a bit friendlier, and often more generous, to plaintiffs. Lowe's firm, for example, has done well in the city: According to the Missouri Lawyers Weekly, for the last two years Simon, Lowe & Passanante has won the state's biggest money judgments in St. Louis Circuit Court.
But there seemed to be one problem with moving the Doe Run cases north:
None of the plaintiffs lived in St. Louis; none of the defendants had any operations in the city. Doe Run's headquarters have been in the county since 1983.
Doe Run's lawyers pounced. If neither the plaintiffs nor the defendants lived or did business in the city, the cases likely were in the wrong court. Before Doe Run's motions to dismiss were heard by a judge, the plaintiffs' lawyers amended their lawsuit to add a key company executive as a defendant.
Of all of Doe Run's 1,419 employees, one -- just one -- resided in the city. And it just happened to be the chief financial officer, Marvin K. Kaiser.
To Doe Run's lawyers, it's clear what's going on: "A blatant attempt to fix venue," thundered lawyer Andrew Rothschild at a hearing last month on his motion to dismiss the first of six suits that name Kaiser. Rothschild and Richard Ahrens, partners with Lewis, Rice & Fingersh, are handling the bulk of Doe Run's environmental legal-defense work.
Sure, Kaiser may well be an executive who authorizes company purchases and signs financial statements, but when he's signing documents he's acting "in his role as chief financial officer and not as chief environmental officer," argued Stephen P. Krchma, one of Kaiser's lawyers.
Kaiser and Doe Run's lawyers argued that Missouri case law is clear: Even if a corporate officer knows of company wrongdoing, that's not enough to make the officer liable. Instead, he'd have to actually participate and benefit from it.
Records show that Kaiser collected more than $1 million in compensation in 1998, 1999 and 2000, including $340,000 in bonuses. So didn't Kaiser benefit from decisions not to spend more money on reducing pollution?