Cordoza v. Pacific States Steel Corporation

Pacific States Steel Corporation (PSSC) (defendant) shut down in 1978, leaving a contaminated plant and a bankrupt medical plan for retired steelworkers and their dependents. Eldon Cordoza and other pensioners (plaintiffs) brought a class action in California federal court under the Employee Retirement Income Security Act. After the proceedings, presiding judge Patel ordered PSSC to continue paying for the pensioners’ medical benefits, but PSSC had few assets. Judge Patel and the parties decided to clean up and develop the toxic land where the plant stood to fund the medical plan. The first special master Judge Patel appointed tried unsuccessfully to accomplish that task for six years. Judge Patel replaced him with attorney Bruce Train and Train’s two associates, Theodore Sorenson and Hans Lemke (collectively, Train). Train formed two companies to develop the plant site and use the profits to pay the medical benefits. Train was compensated hourly but also received an interest in the developed land. Train reached agreements with the Redevelopment Agency for the City of Union City (RDA) for funding to develop a small part of the plant site and persuaded another company to perform some clean-up work. However, after six years negotiations foundered, primarily because Train rejected valid offers from the RDA, insisting on more compensation. Judge Patel opened an investigation and limited Train’s authority. After an audit, RDA requested setting Train’s final compensation at $3 million and ordering Train to disgorge the excess. In a detailed 40-page order, Judge Patel catalogued abundant evidence supporting her orders limiting and ultimately terminating Train’s authority as special master, set Train’s final compensation at $1.2 million for each of the three attorneys, and ordered Bruce Train personally to disgorge over $100,000 and pay almost $25,000 in attorney fees. Train filed a notice of appeal, which the court treated as a petition for writ of mandamus.