DuPont Offers $70 Million to Settle West Virginia Pollution Case

November 29, 2010

Chemical company DuPont last week offered to pay $70 million and spend millions more on medical monitoring for the next 30 years to end a legal battle over a toxic exposure case it lost in West Virginia.

The proposal drew an initial positive response from some plaintiffs. DuPont has been appealing a 2007 jury verdict that ordered it to spend $130 million on medical monitoring for some 8,500 people and $55.5 million to clean up properties contaminated with arsenic, cadmium and lead from a former zinc-smelting plant in Spelter.

The proposed settlement would wipe out a $196 million punitive damage award DuPont has also been fighting.

Despite that, a key plaintiff and at least one plaintiff’s attorney said the offer would deliver benefits without years more of litigation.

Before it can be approved, the proposal must be reviewed by the members of the class-action case, who can raise objections at a fairness hearing set for Dec. 30 in Clarksburg with Harrison County Circuit Judge Thomas Bedell.

Of the $70 million on the table, $4 million would be set aside for cash payments to people who are eligible for medical monitoring because their exposure increases their risk of becoming sick.

The remaining $66 million would cover the cost of cleaning up properties, launching the medical monitoring program, paying attorneys and paying the plaintiffs in amounts to be determined later.

Settlement documents posted on a website show the plaintiffs’ lawyers are seeking two-thirds of that money — $30 million to cover their fees and $11 million in expenses they incurred pursuing the case.

In addition to the $4 million cash payment program, DuPont is offering to run a 30-year medical monitoring program for people who meet certain residency requirements. People will have six months to sign up for that program, which would be monitored by a committee with members from both parties and a settlement administrator.

The cost of that program to DuPont depends on how many people participate.

Spelter resident Becky Morlock, one of the 10 named plaintiffs, said DuPont’s offer is in the community’s best interest.

“It sends a message to corporations that, yes, we absolutely need the jobs, but not to the extent that it hurts the health and well-being of our families and children,” she said. “After all, just because we’re ‘open for business’ in West Virginia doesn’t mean we’re open for illness.”

Morlock’s comment was a reference to state welcome signs former Gov. Joe Manchin had erected during his term to send a pro-business message to companies considering doing business in West Virginia.

The Division of Highways has since replaced those signs, which were not well-received, with the traditional description of the state as “Wild and Wonderful.”

The case centered on a zinc smelter that operated for 90 years in north-central West Virginia, producing more than 4 billion pounds of slab zinc and 400 million pounds of zinc dust for use in rustproofing products, paint pigments and battery anodes.

By 1971, a toxic waste pile stood 100 feet tall, covering nearly half the 112-acre site. Dust loaded with heavy metals and other toxins often blew into homes in Spelter and other small communities around the site.

The plant closed in 2001, and DuPont worked with state regulators to demolish buildings and cap the ground with plastic and soil.

In 2007, a jury ruled DuPont was negligent in creating the waste pile, and that it had deliberately downplayed and lied about possible health threats. It awarded $380 million in punitive damages — an amount the state Supreme Court later cut to $196 million.

The high court affirmed the jury’s other awards, but it sided with DuPont in ruling the company could seek another trial on the timeliness of the plaintiffs’ original claims. Both sides have been preparing for a 2011 trial on that issue, which could have determined whether any damages were ever paid.

Plaintiffs’ attorney Farrest Taylor said the settlement would avoid a potentially yearslong delay in compensating his clients.

“Even if we were successful in March, you’re probably looking at another four to six years of appellate work,” he said.

DuPont’s offer ensures properties will be remediated and that residents benefit from a “a fairly extensive medical monitoring program that is almost equivalent to what the jury awarded.”

The jury had ordered a 40-year program valued at about $130 million; Taylor said the value of the current, open-ended plan is probably about $80 million. The offer shaves 10 years off the time frame, he said, because there was some dispute about how long it could take for various illnesses to manifest.

“We think this is a reasonable resolution, considering the potential for delays,” Taylor said.

DuPont general counsel Thomas L. Sager said in a statement that the company believes the proposed agreement with the plaintiffs will put the focus on the community “and not on our lengthy and contentious legal proceedings.”

He said DuPont has had operations in West Virginia for more than 80 years, “with a solid track record of investment, employment and community involvement.”

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