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W.Va. water contamination class actions consolidated

By Kyla Asbury | Jun 24, 2014

CHARLESTON, W.Va. (Legal Newsline) - An order to consolidate five class action lawsuits involving the water contamination crisis in West Virginia in January has been filed in federal court.

The five class action lawsuits were consolidated because they all involve damages and injuries sustained from the water contamination crisis in which a chemical called MCHM was released from a Freedom Industries facility in to the Elk River on Jan. 9 and affected nine West Virginia counties.

The defendants in the lawsuit include American Water Works Company; American Water Works Service Company; Chemstream Inc.; Eastman Chemical Company; J. Clifford Forrest; Freedom Industries LLC; West Virginia American Water Company; Mountaineer Funding LLC; WV Funding LLC; Etowah River Terminal LLC; Gary Southern; and the Dow Chemical Company.

The plaintiffs filed a joint motion to consolidate on March 28.

"Our court of appeals affords broad discretion to district courts in assessing the desirability of consolidation, recognizing the superiority of the trial court in determining how best to structure similar pieces of litigation," the June 3 order states.

It has also provided guidelines for exercising that discretion, according to the order.

"Those guidelines essentially balance the specific risks of prejudice and possible confusion with the potential for inconsistent adjudications of common factual and legal issues and the burden on available judicial resources posed by multiple lawsuits. Efficiency from a time and cost perspective are also considered."

The risk of inconsistent adjudications, substantial expense to the parties and inefficient use of court resources markedly increases here if the court declines consolidation at least to some extent, according to the order.

The court ordered that the five cases be consolidated for all case events up to and including the conclusion of discovery, at which time the court will consider further efforts to coordinate and streamline the litigation, according to the order.

"The purpose of consolidation is to best serve the interests of the judicial economy," the plaintiffs' March 28 memorandum in support of the consolidation motion stated. "Rule 42 is designed to give the court broad discretion to decide how cases on its docket are to be tried, to 'promote judicial dispatch and economy and to guarantee substantial justice to the parties.'"

The plaintiffs claim the tank storing the MCHM at Freedom's facility was built using rivet construction in the 1930s and on Jan. 9, government officials discovered a licorice smell originating from Freedom's facility, according to complaints filed in January soon after the spill in the U.S. District Court for the Southern District of West Virginia.

Freedom did not self-report the leak of MCHM, although it had an obligation to do so immediately, according to the suits.

The plaintiffs claim airborne release of MCHM from the facility caused chemical air pollution, resulting in ambient concentrations well above the odor threshold for the chemical over an area of several square miles and over a period of several days after the Jan. 9 release.

West Virginia-American Water reported that only 2,000 to 5,000 gallons of MCHM leaked into the Elk River, however, that number is as yet unknown, with recent estimates of 7,500, according to the suits.

Eastman is the exclusive U.S. manufacturer of MCHM and Eastman had a duty to make full disclosure on Material Safety Data Sheets for MCHM under the Emergency Planning Community Right to Know Act and to reflect accurately the state of knowledge of the medical and scientific communities about the toxicity of MCHM.

Eastman placed MCHM into interstate commerce and issued MSDS sheets and other warning data that were inadequate and not protective.

The plaintiffs claimed Southern, Freedom's president, knew or should have known about the conditions at the facility and is acts and omissions in ignoring obvious threats to the environment and failure to take appropriate steps to mitigate them directly contributed to the plaintiff's damages.

The chemical spill tainted more than 300,000 WVAWC customers' water in parts of nine counties across the state.

The Center for Disease Control advised pregnant women to not drink tap water until the chemical is completely gone from the water.

Freedom filed for bankruptcy protection in January. On Jan. 29, Freedom's suggestion of bankruptcy was filed in the U.S. District Court for the Southern District of West Virginia at Charleston.

"The United States Bankruptcy Code, Section 362(a) (1), (2), (4), (5) and (6) provide that the filing of a petition operates as a stay of the continuation of any action or proceeding against the debtor, any action or proceeding to recover a claim against the debtor to enforce a judgment obtained that arose before the commencement of the case, to create, perfect or enforce any lien, or to collect or recover a claim that arose before the commencement of the case," the document states.

Southern signed a bankruptcy petition, estimating Freedom's debts at $10 million or less, but the cost of the water contamination disaster is likely to run much higher.

The plaintiffs are being represented by David R. Barney Jr. and Kevin W. Thompson of Thompson Barney; Van Bunch of Bonnett Fairbourn Friedman & Balint; Sean Cassidy, Stuart H. Smith, Michael G. Stag and Stephen H. Wussow of Smith Stag; and P. Rodney Jackson of the Law Office of P. Rodney Jackson.

American Water Works Company, American Water Works Service Company and West Virginia American Water Company are being represented by William C. Ballard of Jackson Kelly.

Mountaineer Funding and WV Funding are being represented by Charles J. Kaiser Jr., Jeffery D. Kaiser and Denise Knouse-Snyder of Phillips Gardill Kaiser & Altmeyer.

Chemstream is being represented by Niall A. Paul of Spilman Thomas & Battle.

Freedom is being represented by Stephen L. Thompson of Barth & Thompson.

Eastman is being represented by Marc E. Williams of Nelson Mullins Riley & Scarborough.

U.S. District Court for the Southern District of West Virginia case number: 2:14-cv-01374

From Legal Newsline: Kyla Asbury can be reached at classactions@legalnewsline.com.

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Organizations in this Story

Nelson Mullins Riley & Scarborough The Dow Chemical Company

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