Class Action Settlement in Zeon Case Opposed by Eboni Cochran of REACT

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In the case of Dickens et al v. Zeon GP, et al, Judge Heyburn denied a proposed class settlement in August of 2009, after objection by Eboni and John Cochran and others that the settlement was unfair.

On May 1, 2011, a joint motion was filed by the Plaintiffs and by Zeon, seeking preliminary approval of a new class action settlement. If approved, the settlement would bind everyone who lives or lived, and owns or owned property within a 2-mile radius of the Zeon plant from July 28, 2001 to May 1, 2011 unless that person opts out. Persons with in the class area would have 60-days to either file a proof of claim or to opt out, if the Court approves the preliminary settlement. A ?fairness hearing” would be held before the settlement becomes final.

The new proposed class settlement contains many of the same unfair provisions as the agreement that was rejected by the Court, including provisions seeking to limit future claims by class members and seeking to prohibit lawsuits for a five-year period by class members even if the emissions from Zeon exceed the highest emissions in the past five years.

What class members who file claims get:

Under the settlement Zeon would pay $1.475 million dollars into four funds.

Within the 1-mile radius, a pool of $600,000 is established for those who lived or owned property between 2001 and April 15, 2011 and submit a claim form. Money is divided equally among each property (which includes commercial, residential and all other properties) for which a clam form is submitted, with a maximum payment to each land parcel of $750. Whatever amount is paid per property would then be divided among all current and former residents and owners of that property since 2001.

For each parcel, if there is more than one claim, 20% of the total share for that parcel is divided among owners and 80% divided based on residency. For multiple ownership and residency claims for a parcel, divided based on term of residency or ownership with current owners and residents awarded more. Any funds left over go to Elementary School Fund.

It appears from the filed list of addresses that there are roughly 1,975 separate properties within the 1-mile radius. Assuming one owner and one resident only per home, if all landowners filed, the settlement would provide $303.79 to each property. With each owner and resident at any time during the 10-year period of 2001-2011, the maximum of $750 per parcel is divided. The only way in which a landowner will receive $750.00 is if no more than 800 claims are filed out of the potential 1,975.

For the 1-to-2 mile residents, a $350,000 pool is created, to be divided along the same lines as for the 1-mile or less properties, and total for each parcel is capped at $100. Any funds left over go to Elementary School Fund.

According to the list of addresses filed with the proposed settlement, there are 12, 239 properties in the zone of 1 to 2 miles from the plant. If a claim is filed for each parcel, each landowner would receive $28.59. The only way that a landowner would receive the maximum amount of $100 is if 3,500 or fewer claims are filed out of the potential 12,239.

$250,000 goes to an “Elementary School Fund” paid to the Jefferson County Educational Foundation to support academic or extra-curricular programs, services, equipment, materials and supplies to be distributed in approximately equal amounts to nine elementary schools located within the Class Area, including Brandeis, Cane Run, Carter, Crums Lane, Foster Traditional, John F. Kennedy Montessori, Maupin, Mill Creek, and Schaffner Traditional. Unless excess funds are added from the balances remaining in the class payments, each of the schools would get $27,777, less whatever overhead the Foundation charges.

$300,000 would go to costs, expenses and attorney fees.

What class members give up:

The settlement would release Zeon from all claims that any class members “ever had, now has, or hereafter can have” relating to the matters alleged in the lawsuit, including all claims that could have been asserted, except for personal injury claims that could not have been asserted at the time of the settlement.

The class members agree that the settlement funds compensate them for past, present and future claims for nuisance or trespass, property damage, negligence, strict liability, health effects, personal injury or punitive damages relating to air emissions, releases and odors, provided that the air emissions and releases are not greater than they were at any time or for any year during the past five years

The only future claims that could be made would be claims based on substantially different manufacturing processes and resulting in substantially different or greater air emissions, releases, or odors than current or historical operations and for claims based solely on a catastrophic release from the Facility (i.e., an unexpected, accidental incident resulting in releases atypical in nature and dramatically greater in amount than those historically associated with regular plant operations).

Class Members who don’t opt out, also agree to issuance of an injunction barring them for five years from filing any lawsuit for damages or an injunction against Defendants arising from or relating to air emissions, releases, or odors from the Facility, except for claims for personal injury that could not have been asserted, in whole or in part, prior to the date of this Settlement Agreement or any claims for relief based solely on future operations of the Facility that involve both substantially different manufacturing processes and result in substantially different or greater air emissions, releases, or odors than current or historical operations, and claims for relief based solely on a catastrophic release from the Facility.

So while the “Release” portion of the agreement protects Zeon only if they don’t emit more than the highest emissions over the last five years, for the first five years of the agreement, class members can’t sue even if the emissions are substantially higher than the last five years.

What happens now?

The next step in this case will be the Court decision to approve the preliminary settlement or to reject it. If the Court approves the preliminary settlement, notice will be mailed to each property within the 2-mile radius, and newspaper notice will be published. The receipt of that notice triggers a 60-day period in which those who live or did live, own or did own property in the 2-mile radius, to either file a proof of claim and release form, or to file an opt out form. A “fairness hearing” has been tentatively set for August 31, 2011.

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By Kentucky Resources Council on 05/02/2011 5:32 PM
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