Supreme Court affirms $93M class action settlement

By Jessica M. Karmasek | Nov 25, 2013


CHARLESTON — The state Supreme Court of Appeals has upheld the approval of a $93 million settlement in a class action lawsuit over a chemical used in Agent Orange.

The state’s high court issued its 14-page memorandum decision Friday.

The court, which voted 4-1 in favor of the deal, said it found “no substantial question of law” and “no prejudicial error” in the Putnam County Circuit Court’s Jan. 25 decision.

Judge Derek Swope, who was appointed in 2011 by Justice Margaret Workman to preside over the case, approved a deal reached 11 months earlier that sets up a 30-year medical monitoring plan and provides $22.5 million in fees and another $7 million in costs for Charleston attorney Stuart Calwell and his firm.

A primary fund of $21 million will pay for the testing of those eligible class members, and up to $63 million in additional funding will be available over the life of the program.

Also, the agreement will set aside up to $9 million to professionally clean homes in the Nitro area.

About 4,500 homes are located in the areas where individual remediation “may be desirable,” according to the company.

The settlement resolves all claims in pending litigation, as well as class actions, filed in West Virginia.

According to the complaints, during the years that Monsanto was operating its trichlorophenol plant, it adopted an unlawful practice of disposing of dioxin waste materials by a continuous process of open “pit” burning.

The dioxin in question — known as 2,4,5 trichlorophenoxyacidic acid or 2,4,5-T — was used by the military as part of the herbicide Agent Orange in Vietnam.

Monsanto, which has denied the burning practice, instead described it as an “incineration” process when questioned by regulatory authorities.

The residents’ complaints called the process “dusty” and said the company’s dust control was “haphazard,” causing more than 3,000 pounds of the dioxin to be released into the Nitro air.

The Nitro plant was operated by Monsanto until 1995 when the plant merged with Akzo Nobel, a Dutch company, and began operating as Flexsys America Inc.

In 1997, Monsanto renamed a subsidiary as Solutia Inc. and the Nitro plant was distributed to Solutia. The plant eventually closed in 2004.

Class members represented by attorney Thomas Urban objected on several grounds. Some of them were:

-A cy pres award should be given to a cancer ward in Teays Valley, among other causes, with unused settlement funds instead of having unused funds given back to Monsanto;

-Not enough class members will receive medical monitoring and not enough houses will receive any clean-up;

-Cleaning of the houses has no proven efficacy;

-A compensation system for future cancers should be set up; and

-Triggering events that make up $63 million of the settlement are unlikely to occur and are an attempt to increase the value of the settlement and amount of attorneys fees.

The triggering event requires that 25 percent of people who take part in medical monitoring have blood dioxin levels that are in the top one-to-two percent in the country.

Another group of objectors, represented by Ruth McQuade, claimed the settlement was unlikely to deliver more than $15 million to class members. McQuade said Calwell’s fee could be as high as 70 percent of the total settlement.

Swope wrote that he believes the objectors accounted for less than 100 of the approximately 5,000 potential class members.

“In sum, we believe the record demonstrates that the settlement is based on objective evidence and was reached only after extensive discovery,” the Supreme Court’s majority wrote.

“The settlement results from zealous, rigorous advocacy by both parties. Therefore, we cannot conclude that the circuit court abused its discretion in finding it to be fair, adequate, and reasonable.”

The majority added, “Petitioners simply draw unsubstantiated conclusions because the ultimate settlement was not as beneficial as they believed it could have been.”

Justices Robin Jean Davis, Menis Ketchum, Allen Loughry and Workman concurred in the decision. Chief Justice Brent Benjamin dissented.


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