W.Va. Chemical Spill Class Action Settlement Is Approved

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Last week, a West Virginia bankruptcy judge approved Freedom Industries Inc.’s class action settlement over a massive chemical spill that left hundreds of thousands of West Virginians without water for days.

U.S. Bankruptcy Judge Ronald Pearson approved the class action settlement, rejecting an argument by West Virginia American Water Company that there was no funding in place for the settlement. The judge found that there is nearly $3 million in insurance coverage currently held by AIG.

The class action settlement funds will not include direct payments to individuals affected by the chemical spill, but it will pay for water testing, health studies and other services that will benefit the victims. “The Stipulation has been entered into between the Debtor and certain plaintiff representatives in what the Court believes, considering the limited resources of the Debtor, to be a responsible and economical means of attempting to obtain a determination and treatment of incident claims at reasonable cost,” Judge Pearson wrote.

Victims of the Freedom Industries chemical spill have also sued West Virginia American Water Company, whose water was contaminated in the spill, and Eastman Chemical, the company that manufactured the chemical. These chemical spill lawsuits, as well as lawsuits that have been filed against individual Freedom Industries employees, are still pending in federal court.

On January 9, approximately 10,000 gallons of coal processing chemical 4-methylcyclohexane methanol (crude MCHM) reportedly leaked from a Freedom Industries facility along the Elk River. As a result, a do-not-use order was issued for nine counties, warning people not to use the water for drinking, bathing, washing dishes, or brushing teeth for days. Freedom Industries filed for bankruptcy protection later that month. The company has since been removed as a defendant from several lawsuits.

The plaintiffs allege that Freedom Industries was aware of the conditions at the facility but failed to take steps to mitigate threats to the environment that were present at the facility. The class action lawsuit alleged that the company’s failure to act directly contributed to the chemical spill.

Dozens of lawsuits have been filed over the chemical leak, many of which are seeking status as class action lawsuits. The plaintiffs and putative Class Members allege they have suffered a variety of injuries from the chemical spill, including bodily injury, emotional distress, lost income and loss of business revenue. This summer, Freedom Industries agreed to pay $2.9 million to settle the consolidated class action lawsuits.

The plaintiffs are represented by Anthony Majestro of Powell & Majestro PLLC, Benjamin L. Bailey of Bailey & Glasser LLP, and Marvin W. Masters of The Masters Law Firm LC.

The Freedom Industries Chemical Spill Class Action Lawsuit is In re: Freedom Industries Inc., Case No. 2:14-bk-20017, in the U.S. Bankruptcy Court for the Southern District of West Virginia.

UPDATE: October 2017, if your business or residential address was affected by West Virginia water contamination on Jan. 9, 2014, you may be entitled to a settlement payment. Click here to file a claim.