CHARLESTON – A legal reform group is calling the $45 million fee request for the plaintiffs attorneys who have worked on the 2014 water crisis lawsuit and settlement a prime example of “lawsuit greed.”
The executive director of West Virginia Citizens Against Lawsuit Abuse also said he hopes the fee amount will be “greatly reduced.”
One of the attorneys who worked on the class action case, however, says the request is reasonable and says most people don’t understand all of the work and money that goes into handling such a case. And the president of a statewide group for trial lawyers says CALA is trying to distort the facts.
“Dozens of personal injury lawyers will split $43 million, which means each one will pocket hundreds of thousands of dollars and some will receive million dollar checks,” WV CALA’s Roman Stauffer said. “A family of four that files a claim will barely get $1,000. In their brief, the personal injury lawyers state the fee is more than most courts presume is reasonable.”
In a May 8 filing, the lawyers followed up on the filing last month detailing the proposed $151 million settlement agreement with West Virginia American Water Company and Eastman Chemical that would provide payment to the nearly 225,000 residents affected by the chemical spill that left people in nine counties without water for days in January 2014.
The attorneys seek about $43 million in legal fees and $2.4 million in expenses, according to the court filing. The 2014 chemical spill contaminated the water supply for residents in nine counties.
Terms of the proposed class-action settlement were revealed April 27 in federal court documents. Attorneys involved in the case asked District Judge John Copenhaver Jr. to give his preliminary approval to the 220-page settlement.
West Virginia American Water has agreed to pay $126 million, and Eastman Chemical has agreed to pay $25 million.
“A family of four that was affected for up to nine days without water will likely get just over $100 a day for their hardships,” Stauffer said. “On the other hand, many of these personal injury lawyers will collect million dollars checks. This is in addition to the expenses that have been requested separately.
“Lawsuit greed knows no bounds. These personal injury lawyers are willing to cash million dollar checks, taking money from families that didn’t have water for up to nine days.”
According to settlement documents, households that choose the simple claim form will receive $525 for the first resident and $170 for each additional resident. Businesses, non-profit organizations and government entities that choose the simple form can receive between $6,250 and $40,000, depending on their size.
“We are hopeful that the fees awarded to these greedy personal injury lawyers will be reduced so more money will go to families and businesses that were affected by the water crisis,” Stauffer said. “This money should not pay for new mansions, fancy airplanes, and flashy sports cars for a handful of greedy personal injury lawyers.”
One of the lead attorneys on the case, however, said all of the details and work involved in such a case often aren’t known by most people.
“The important thing for the public to understand is often not explained sufficiently,” Stuart Calwell said. “A case like the water case is three years or more in the making. As a plaintiffs lawyer, nobody pays you. There is no one to send a monthly statement. And while you’re prosecuting a major case, payroll has to be met, motions have to be filed, experts have to be retained. And like I said, there is no one to send a bill to.”
Calwell, who owns The Calwell Practice in Charleston, said the cost of operating a firm like his before any profit is realized is more than $4 million a year.
“Take this case, for example,” he said. “An expensive, risky case like the water case where everyone was blaming Freedom, we had to spend over $2 million unearthing the failures of the water company and the failures of Eastman to put together a case against defendants that could afford to pay and be held accountable.
“It’s a gamble. If we had not succeeded, then all that was invested both in expenses for experts and in keeping the firm operational would be lost.”
He said one way to look at it is to think of the average person.
“Now, ask a person on the street if he is willing to mortgage his house, borrow from banks all on the gamble that somehow at the end of the day, he might get his money back and get paid for his troubles,” Calwell said. “Not many would do that. So what happens when you see a long, involved case come to conclusion and a seemingly large amount for fees, all of that has been risked and gambled over time.”
He cited the Monsanto class action he spearheaded.
“To bring that case to conclusion after fighting it for eight years, we had borrowed and financed over $20 million to bring that case to fruition,” he said. “Had we lost, we’d be sharing space in bankruptcy court with Freedom Industries. The water case is just like that.”
Three firms, including Calwell’s practice, were name class counsel.
“Yes, class counsel was appointed, but there also are 20 to 30 other law firms that will share in that money,” he said. “It’s not a situation where all of the sudden some lawyer pockets $45 million and starts living on a yacht in the South of France. It’s a risky business.
“Check the billings of all of the defense firms that worked on this case. They’re in the tens of millions of dollars. The major companies have insurance for instances such as this.
But nobody complains about the defense side being paid $10s of millions of dollars. We paid six lawyers’ salaries for the three-year period. It’s a risky undertaking, and there’s a lot more to it.”
Calwell said a big settlement like the one requested in the water case doesn’t mean a windfall for anybody.
“It’s a fair settlement,” he said. “On the defense side, it’s the same amount of time and money. It’s a confluence of insurance companies, huge defense firms and plaintiffs law firms that have the resources to bring this cases. And like Paul Harvey used to say, here’s the rest of the story. There are a lot of moving parts, a lot of dynamics.
“But in this case, the settlement does deliver a very meaningful compensation to those who were injured by the outage of water. In this case, I don’t have buyer’s remorse. I think it’s good the way the numbers worked out, the guarantees that are there and the easy claims procedure. Those who don’t file a claim still get a check.
“It’s one big piece of complex litigation. The settlement, I’m very satisfied with it.”
The president of the West Virginia Association for Justice, a group for trial attorneys, said the pronouncement is typical of CALA.
“Roman Stauffer and CALA are again attempting to advance their agenda by distorting facts and misleading West Virginians about the water case,” Jane Peak said Jane Peak. “It would have been nearly impossible for an affected resident, family or business to pursue an individual water crisis case because an individual case would have been too expensive. The amount of attorney time and expert fees would have been cost prohibitive.
“Over the last three years, nearly 130 attorneys and legal professionals worked a total of more than 55,000 hours to represent the 220,000 people affected. These attorneys represented those affected for free before both the West Virginia Public Service Commission and in bankruptcy court. To build the case, they advanced nearly $20 million in expenses. The attorneys are being compensated for the millions spent in time and expenses paid out of pocket without any guarantee that the case would be won and they would be reimbursed.
“Also, although many individuals and businesses can fill out a simple form and get a set amount, those whose damages were higher can also request additional actual damages. It's a matter of filling out a separate form. Even after attorneys' fees, the victims of the water crisis will be fully compensated – something that would not be happening had these lawyers not put justice above their bottom lines and risked millions to prove the case for these West Virginians.”
