Payments in the $151 million settlement of a lawsuit over the January 2014 water crisis provide "substantial benefits" to Kanawha Valley residents, businesses and workers while avoiding the costs and risks of a lengthy federal trial, lawyers said this week in asking a judge for approval of the details of the deal.
Attorneys representing a class of 224,000 residents and 8,000 businesses urged U.S. District Judge John Copenhaver to give his initial sign-off to the settlement, a move that would trigger an official public notice and the ability for victims of the water crisis to object to or opt out of the deal.
The judge's preliminary approval is the next step toward residents, businesses and workers being able to file claims, for the eventual final approval of the deal and for tens of thousands of checks to be in the mail.
The class-action lawsuit was filed in the wake of the "do not use" order for the regional water supply after the Jan. 9, 2014, chemical spill at the Freedom Industries facility 1.5 miles upstream from West Virginia American Water's drinking water intake on the Elk River.
"The benefit of settlement now to the putative class members exceeds the cost of continued and protracted litigation and avoids the potential risks associated with a trial," the class lawyers said in a legal brief filed in U.S. District Court in Charleston.
For example, the legal brief explains, by filing a simple claim form that requires no proof of damages or expenses, each residential household can be paid $525 for the first resident and $170 for each additional resident. A family of four would receive an estimated payment of $1,035, the brief notes.
Businesses, nonprofit groups and governmental entities can receive total compensation under the simple claim form process ranging from $1,875 to $40,000. Additional payments will go to pregnant women and residents with medical expenses.
And any resident or business can try to obtain a larger payment if they can submit documentation of expenses for things like replacing hot water tanks, buying bottled water or lost business. Workers can be paid for hourly wages they lost if their place of employment had to close.
Claim forms and other information will be available on a website, www.wvwaterclaims.com, once the judge gives his approval. Information also will be available by calling a court-appointed claims administrator at 855-829-8121.
"Avoiding the unnecessary and unwarranted expenditure of resources and time would benefit all parties, as well as the busy court," the legal brief said. "The proposed settlement provides an expeditious route to recovery for the settlement class that heavily outweighs the cost, uncertainty and various other risks associated with continued litigation."
Lawyers for the water crisis victims filed their legal brief shortly after filing a joint motion with West Virginia American Water Co. and Eastman Chemical Co. asking Copenhaver for preliminary approval of the settlement. The two sides filed their 220-page settlement agreement late Thursday night, six months after reaching a tentative deal on the eve of trial.
In the case, lawyers for residents and businesses alleged that West Virginia American did not adequately prepare for or respond to the spill and that MCHM-maker Eastman did not properly warn Freedom Industries of the dangers of its chemical or take any action when Eastman officials learned that the Freedom facility was in disrepair.
West Virginia American and Eastman continue to deny any liability, and say the blame for the crisis rests with Freedom Industries, which admitted to criminal pollution violations related to the spill.
West Virginia American is paying $126 million in the settlement and Eastman is paying $25 million. Attorneys for the residents and businesses have generally asked Copenhaver to approve them being paid the equivalent of 30 percent of the first $100 million paid out of the settlement and 25 percent of the remaining $51 million. A more detailed request for legal fees and expenses remains to be filed.
Technically, approval of the settlement also will require the judge to approve a new "settlement class" that lawyers intend to be made up of all plaintiffs from the existing federal class-action case and a collection of state-court cases that made similar allegations but were filed by different lawyers.
Potential members of that settlement class - basically any business or resident who received tap water from the Elk River intake plant and any hourly wage earner whose employer closed because of the spill - can choose to object to the terms of the deal or to opt out of it.
Deadlines for filing claims, objections or opting out have not yet been announced.
The class counsel - attorneys Stuart Calwell, Kevin Thompson and Van Bunch - said in their new legal brief that they remain confident they would have prevailed at trial. Defense lawyers for West Virginia American and Eastman, though, "are equally confident," the class counsel said.
"The proposed settlement is the culmination of nearly three years of hotly contested, full-bore litigation in this court," the brief said. Over that time, the lawyers conducted more than 100 depositions, including 20 experts, and about 500,000 pages of documents were exchanged during discovery. The extent of this investigation and litigation allowed the parties "to uncover sufficient evidence to make fully informed decisions and weigh the pros and cons of various settlement options."
The brief also said "the amount of compensation available under the proposed settlement is consistent with the best assessment of the damages and losses relating to the plaintiffs' claims that are to be settled, particularly given the costs of litigating the claims individually."
It said most of the claims in the case were "negative-value claims," meaning that litigating them would cost more than they were worth and that it is just the sort of case that well-suited for class-action certification.
It also said Copenhaver had "first-hand knowledge of the arm's length nature of the negotiations," as the judge "held regular conferences in chambers to monitor and propel the settlement process."
The local group Advocates for a Safe Water System will discuss the settlement, and lawyers will answer questions about it, at a public meeting Tuesday at 6 p.m. in the Appalachian Room of the Geary Student Union, at the University of Charleston.
Reach Ken Ward Jr. at kward@wvgazettemail.com, 304-348-1702 or follow @kenwardjr on Twitter.