A federal judge on Monday again delayed taking any action on a settlement that lawyers for Kanawha Valley residents and businesses propose to resolve civil claims against two former Freedom Industries officials over the January 2014 Elk River chemical spill.
U.S. District Judge John T. Copenhaver Jr. told attorneys for former Freedom officials Gary Southern and Dennis Farrell that he wants to see more movement toward similar settlements in two other spill-related cases before he will sign off on the class-action deal between Southern and Farrell and thousands of area residents and businesses whose drinking water was contaminated by the spill of Crude MCHM and other chemicals from Freedom's facility on the Elk.
Farrell lawyer Mike Carey and Southern lawyer Pam Deem said that they had both held talks with attorneys in one of the other spill cases, filed by the West Virginia Hospitality and Travel Association, but had not reached settlements. Carey and Deem both said that their clients had not been formally served with the other pending case, filed by the city of Charleston.
During a hearing Monday afternoon, Copenhaver also said he would not schedule further hearings on the case until he hears of some progress. Instead, the judge said, lawyers should plan to report any such progress to him each month during the regular status conferences that Copenhaver holds to discuss matters in the broader class-action suit pending against West Virginia American Water and Eastman Chemical over the water crisis that followed the Freedom spill.
"Until I hear from the defendants, Mr. Farrell in particular, but Mr. Southern as well, that some accommodation has been reached in these other matters, I don't see any reason for us to come back," Copenhaver said. The judge said he would continue the matter "on and on and on, until I hear something from someone that there's a break."
Monday's was the third hearing Copenhaver has held on the settlement with Southern and Farrell since the proposed deal was formally announced in court papers filed in December.
Under the proposed settlement, Southern would pay $350,000 and Farrell $50,000 to the class of residents represented in the case. The money would be paid into a court account, and then used only "to benefit the class" after some later order from Copenhaver. The exact plans for the money have not been made clear in court documents, hearings or a public notice to the class members.
Lawyers for the residents have defended the deals, noting that Southern and Farrell also both gave up claims to Freedom's insurance payments, a move that allowed more than $3 million to be used in paying spill claims in Freedom's bankruptcy and on the cleanup of the company's former Etowah River Terminal, where the incident occurred.
In one previous hearing, Copenhaver complained he had not been presented adequate evidence to weigh Farrell's financial situation and his ability to pay any settlement. During a second hearing, Farrell declined to provide additional financial information when Copenhaver said the details would have to be made public to be considered in his eventual ruling on the settlement.
The Southern-Farrell settlement issues come with the backdrop of continued litigation by lawyers for residents and businesses in their class-action against West Virginia American and Eastman Chemical in a case that had been set for trial next month, but has been delayed amid a huge number of pre-trial motions and wrestling between rival factions of lawyers, with one pursuing the trial before Copenhaver and another hoping to resolve the spill litigation in state court instead.
Lawyers are pursuing West Virginia American, alleging the water company did not properly prepare for such a spill or respond appropriately to the incident. They allege that Eastman Chemical, which made Freedom's MCHM, violated chemical safety laws by not disclosing information about the chemical's health effects and its potential to corrode Freedom's storage tanks.
Reach Ken Ward Jr. at kward@wvgazettemail.com, 304-348-1702 or follow @kenwardjr on Twitter.