CHARLESTON — While those affected by the 2014 Elk River chemical spill should be receiving their checks soon, the plaintiffs attorneys who handled the case will split more than $22 million in fees.
U.S. District Judge John Copenhaver signed the final order in June, and the last details of sending the checks were finalized earlier this month. About 200,000 checks totalling about $73 million will be in the mailboxes of those affected soon.
Anthony Majestro of the Charleston law firm of Powell & Majestro recently told The West Virginia Record the claims administrator was finished processing claims and has been waiting for negotiations with Freedom Industries' former president to be completed.
Former Freedom Industries President Gary Southern agreed to a settlement of $1 million to the water crisis victims on top of the $101 million settlement from West Virginia American Water and Eastman Chemical.
"Mr. Southern had previously agreed to settle for $350,000 to settle the claims against him, but the judge didn't believe that was enough," Majestro said.
On Sept. 1, the plaintiffs filed a supplemental memorandum in support of expedited motion for final approval of partial class action settlement with Southern in U.S. District Court for the Southern District of West Virginia. Majestro said Southern's settlement will add about 1 percent to each of the settlement checks.
The total claims filed in the class action totaled more $83.6 million, meaning the settlements were lowered from approximately a $550 flat payment to $482. That is almost 88 percent of the original flat payment estimate.
Copenhaver also lowered the amount assessed in attorney fees from 30 percent to 25 percent and finally to 22 percent.
According to the Application for Approval filed with the court Sept. 6, attorneys handling the case already received one payment of just over $11 million in July, and another equal payment still is pending. A payment of more than $1.7 million in attorney costs was paid in July as well, and the settlement administrator – John Jenkins of SmithCochranHicks in Charleston – was paid more than $1 million in August.
In addition to the pending $11 million attorney fee payment, also listed on the Application for Approval as pending are attorney fee payments of $11,000 and $220,000 from individual settlements with Freedom Industries owner Dennis Farrell and Southern, respectively, as well as settlement admin fees of almost $1.9 million and $107,000 in admin out of pocket fees.
There also is a second contingent fund of up to $50 million from West Virginia American Water and its insurers to pay claims in which class members opted to prove their actual damages. Those include residential, business and governments as well as pregnancies possibly affected by the chemical spill, medical expenses, injuries and lost wage claims. Attorneys also will get 22 percent of the sums paid out from the contingent fund.
Those claims currently are being adjusted, and Majestro said those payments should be made sometime soon.
"Those fees represent over four years of work of over 22 law firms," Majestro said. "As of February 2017, the lawyers had put in over $20 million in time. In addition, the lawyers personally expended $2.5 in litigation expenses. The lawyers working on the case represented the class in state court, federal court, federal bankruptcy court and before the West Virginia Public Service Commission.
"Until this July, they had not been paid anything. Keep in mind that the defendants vigorously denied liability. There were 93 depositions taken in 10 states, two million pages of documents reviewed and 60 major motions. This was not a suit where the case was filed and immediately settled. Class counsel continue to devote significant time to seeing that the settlement is administered correctly."
Majestro said the case has been a success for the plaintiffs.
"In the end the governments, businesses and residents are receiving $73.6 million dollars," he said. "Another $30 million plus (after fees) is likely to be paid from the contingent fund. Most of this money will be returned to the economy, further helping the individuals and businesses who suffered from the spill four years ago."
The 2014 chemical spill affected more than 300,000 people in nine West Virginia counties.
The class action lawsuit alleged WVAW did not adequately prepare for or respond to the chemical spill and that Eastman Chemical, the maker of the chemical MCHM, did not properly warn Freedom Industries of the dangers of its chemical or take any action when officials learned the Freedom facility along the Elk River in Charleston was in disrepair.
WVAW and Eastman both deny any liability and blame the crisis on Freedom Industries.
U.S. District Court for the Southern District of West Virginia Case number: 2:14-cv-01374