Late last week, U.S. District Judge John T. Copenhaver Jr. issued a 93-page order in which he declined to give preliminary approval to the settlement with West Virginia American Water Co. and Eastman Chemical.
Copenhaver told the parties he would not approve them issuing a public notice to members of the plaintiff class or scheduling a hearing to consider potential objections to the settlement — a requirement for final approval by the court — until changes are made to language about tiered payments to various-sized businesses, the ability of victims to appeal denial of claims, fixed-base payments for medical claims and a schedule to hold off any payments until appeals are resolved.
The judge also indicated he would reduce the payments to lawyers for residents and businesses by at least $5 million.
“In our view, those concerns, once met, will only strengthen the settlement and the ability of those impacted to receive fair compensation,” Calwell said.
In the case, lawyers for residents and businesses alleged West Virginia American did not adequately prepare for or respond to the spill, and Eastman, maker of the main chemical that spilled, did not properly warn Freedom of the dangers of its chemical or take any action when Eastman officials learned the Freedom facility was in disrepair.
Under the settlement, residents and businesses can obtain uniform settlement payments by filing claim forms, or they can potentially receive larger distributions by providing receipts or other proof of money spent for things like replacing hot water tanks or buying bottled water.
The settlement also provides additional payments to women who were pregnant at the time of the spill, residents who had medical expenses and hourly wage earners who lost money when businesses closed during the water crisis.
The judge said the appropriate amount would be 25 percent of the $101 million, which would reduce that part of the legal fees from $30.3 million to $25.25 million.
The lawyers would also receive 25 percent of whatever is eventually paid out of a second pot of $50 million in settlement money from West Virginia American Water.
“The additional fee of 15 percent for some, and the unlimited fee for most others, would send the total attorneys’ fees in this case soaring well above the 25 percent figure preliminarily approved by the court,” the judge wrote.