Niagara Gazette

Local News

May 19, 2008

POWER COALITION: Zito banks on trial

Former Niagara Power Coalition Executive Director Mark Zito said he remains confident in the outcome of his multi-million dollar lawsuit against the group, despite last week’s State Supreme Court ruling that eliminated all but one of his case actions.

While Zito declined further comment, attorney Steven Cohen said he believes his client could get a jury trial within the next year and will eventually be awarded at least $20 million for his role in brokering what he categorized as “the largest power deal in the history of the world.”

“Now that this case is going to a jury and the defense has never given us a settlement figure of even $1, we’re gearing up for trial,” said Cohen of the Buffalo-based firm Lorenzo & Cohen. “The $300,000 that this case could’ve bee settled for, that figure is off the table.”

Attorneys representing the coalition and its members are studying their options in defending the remaining claim, however they said State Supreme Court Justice Richard Kloch’s ruling last week was a big victory and that Cohen’s certainty of a jury trial is premature.

“We’re pleased the judge dismissed almost the entire case,” said Stan Widger Jr., a partner with Nixon Peabody, which was hired to defend the coalition as a whole. “All the justice decided is that (Zito) barely pled enough to have his remaining motion survive. The plaintiffs managed to dodge that bullet.”

Zito sued the coalition for $37.5 million in August claiming he was not properly reimbursed for his work in negotiating a settlement with the New York Power Authority in support of the relicensing of the Niagara Power Project. As a result of the settlements, the power coalition will receive $9 million annually for the next 50 years to use for projects along the Niagara River Greenway, cash for capital projects and cheap hydropower from the power authority.

Estimates on the total value of the package vary, but generally range from $400 million up to the $1.2 billion mark. The coalition consists of Niagara County, the City of Niagara Falls, the towns of Lewiston and Niagara, as well as the school districts of Lewiston-Porter, Niagara-Wheatfield and Niagara Falls.

Zito’s case targeted the coalition as a whole and each of the individual entities. However, Kloch dismissed all of the individual motions in a decision late last week, along with defamation and breach of contract claims. Cohen said Kloch’s rulings were anticipated and he pointed out Zito had already agreed to drop the individual cases.

Cohen said the judge not dismissing the overall case against the coalition is an optimistic sign and leaves Zito eligible for anywhere between 5 to 15 percent of the settlement’s total value, based on industry standards. At 5 percent, the amount would be at least $20 million based on the $400 million estimate. On the high end, Zito could be awarded upwards of $120 million — an astronomical amount compared to the $300,000 he had once requested in order to settle the case, Cohen said.

“Mr. Zito put in 14 years for the coalition, he had the foresight and the drive to do this and nobody ever expected him to come back with $1.2 billion for these communities and school districts,” Cohen said. “It is my position he should be entitled to the same compensation that a professional company would receive if it had been hired to do the same work.”

Cohen said he will be requesting a jury trial be scheduled within a year due to his client’s deteriorating health condition. Zito suffered a stroke earlier this year.

“I have no doubt the defense is going to attempt to tie this up in appeals so that Mark Zito dies before this case can reach a jury,” Cohen said.

The defense remains “extremely confident” in its case and is evaluating its next move, said Robert J. Fluskey Jr., an attorney for Hodgson Russ, which represents the individual coalition members of the towns of Niagara and Lewiston and the Lewiston-Porter School District.

Fluskey vehemently denied Cohen’s insinuation that Zito’s health is tied to the case’s progress.

“My clients’ legal strategy is not going to be motivated by an attempt to take advantage of the unfortunate health conditions of Mr. Zito,” he said. “We don’t believe he has a strong case and that’s what our actions will be based upon.”

Contact reporter Rick Forgioneat 282-2311, ext. 2257.

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