Freedom Offers $2.9M Class Action Settlement for W.Va. Chemical Spill

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Last week, a $2.9 million class action settlement was proposed by Freedom Industries Inc., the bankrupt chemical company accused of causing the spill that contaminated drinking water in West Virginia this winter.

The proposal would settle two dozen class action lawsuits that hit the company after a coal processing chemical leaked into the water supply in Kanawha County and surrounding counties in West Virginia. According to documents filed July 18 in federal court, the Freedom spill class action settlement will include money Freedom received from its insurance company and half of the net proceeds from asset sales. In late June, Freedom’s insurer, AIG, made a deal with Freedom after defense and emergency response costs well surpassed AIG’s policy limits.

In their memo of support, the plaintiffs said “[a]s an initial matter, Plaintiffs advise the Court that resolution of all claims against Freedom is imminent.”

“In addition to establishing Freedom’s liability, the settlement will extinguish any contribution claim that WVAWC might have been able to assert,” the plaintiffs continue. “With the exception of the Excluded Parties,” states the class action settlement documents, “the Parties intend the Class to encompass all claims made (whether individual or class) in the Incident Related Lawsuits presently pending in the District Court naming Freedom as a defendant for alleged claims arising from the [Jan. 9 chemical spill].”

Additionally, the Freedom chemical spill settlement document states “[i]t is contemplated that settlement proceeds for the benefit of the Class…will be distributed, for cy pres purposes only, and approval by the District Court of the settlement will include authorization to make distributions for such purposes.”

Multiple class action lawsuits were filed after the well-publicized Jan. 9 spill contaminated the drinking water of 300,000 residents in West Virginia. The class action lawsuits alleged that on Jan. 9 a Freedom Industry facility released the chemical 4-methylcyclohexane methanol was released into the Elk River. Exposure to 4-methylcyclohexane methanol causes severe burning in the throat, severe eye irritation, non-stop vomiting, trouble breathing and/or a severe skin irritation that can lead to blistering.

This chemical contaminated the water supply for the surrounding areas and contaminated the water in Kanawha, Putnam, Boone, Jackson Lincoln Roane, Clay and Logan counties as well as part of Cabell county. The spill affected both residents and businesses in the area. Many were forced to rely on bottled water for an extended period of time and were unable to wash, shower, do laundry or other activities as the leak was stopped and the water supply decontaminated.

Freedom Industries makes chemicals used in the mining, steel and cement industries as well as for other purposes. The company went bankrupt shortly after the leak was discovered.

In April, the cases were consolidated into a single class action lawsuit alleging that Freedom caused the chemical spill and held off notifying the public until hours after the water had already been contaminated.

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 West Virginia Chemical Spill Class Action Lawsuit is Desimone Hospitality Services LLC v. West Virginia-American Water Co., Case No. 2:14-cv-14845, in the U.S. District Court for the Southern District of West Virginia at Charleston.

UPDATE: On Sept. 16, 2014, A West Virginia bankruptcy judge approved Freedom Industries Inc.’s class action settlement to benefit 300,000 people whose water was contaminated in the January chemical spill.

UPDATE 2: 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.