New claimants face uphill battle in bankruptcy settlement for Robert Powell’s Avoca lawsuit

By Jennifer Learn-Andes - | February 4th, 2016 11:00 pm

To sue the former Kerr-McGee Corp. potential plantiff must prove ‘excusable neglect’

By Jennifer Learn-Andes


A new round of potential claimants against the former Kerr-McGee Corp. may face an uphill battle in their quest for damages from the now-defunct manufacturer of railroad ties, as they weren’t among thousands who participated in a class action lawsuit filed against the company in 2005.

Some past and present Avoca-area residents have come forward since a bankruptcy settlement in the case — first filed by since-disbarred attorney Robert Powell — was publicized, saying they also have developed illnesses or health problems they blame on environmental contamination from the Avoca-area manufacturing activities of Kerr-McGee and related entities.

Kingston lawyer Edward Ciarimboli said he is representing about 15 people who are in this situation and continues to receive inquiries from others, in light of recent local media coverage of the bankruptcy settlement agreement.

“We don’t now how this will pan out,” Ciarimboli said.

His firm, Fellerman & Ciarimboli, soon will start filing actions seeking compensation for these clients from a pot of money set aside in the Kerr-McGee bankruptcy settlement for “future tort claimants.”

To be eligible for this money, requesters must prove their failure to participate in the class action was the result of “excusable neglect.”

That means they must justify why they did not join thousands of others who jointly pursued their concerns in court.

For example, some people inquiring about a claim have said they didn’t know about the suit because they moved outside the area.

Ciarimboli does not believe relocation alone will be enough of an argument because the opportunity to participate in the class action was widely publicized, and involved notification letters to residents living around the Kerr-McGee site.

One of his clients has a strong case because he moved to Texas after a divorce and did not receive mail from his ex-wife that was sent to the local residence they previously shared, Ciarimboli said.

He also is representing several descendants of deceased area residents who died before the class action suit was initiated.

The argument that health issues developed after the class action suit may be rejected because class action participants only needed to have exposure to the contamination, not health problems, he said.

“I think it’s a pretty high bar to prove excusable neglect,” Ciarimboli said.

Why? To reserve settlement money for people who were shut out of the opportunity to participate — not those who decided not to participate and want a “second bite at the apple,” he said.

He believes about $600 million of the bankruptcy settlement was set aside for future tort claims at Kerr-McGee locations across the country, but that figure could not be verified Thursday.

Jim Haddock, whose late mother was among the class-action participants, said the total bankruptcy settlement was $5.1 billion, with 12.5 percent going to victims in seven groups across the country.

The Ohio-based Garretson Resolution Group is overseeing the settlement trust. The trust overseers issue decisions on requests for future tort claims, and filers have the option to seek binding or nonbinding arbitration or file court actions if they disagree with the decision, according to Garretson publications.

Many who lived or worked near the Avoca property have received their payments in the bankruptcy settlement, but some are still waiting due to issues with Medicare and Medicaid reimbursements or the processing of estates involving plaintiffs who have died, said Haddock, who serves as an unofficial spokesperson for the Avoca group.

The Avoca-area plaintiffs are trying to reactivate their 2005 environmental contamination lawsuit in Luzerne County Court, arguing they were not made whole through the bankruptcy settlement.

A federal judge ruled this week the county suit must be dropped, agreeing with the argument that the Avoca plaintiffs have no legal authority to go back to the well. A notice of appeal challenging that ruling has been filed.

The bankruptcy settlement covered about 32 percent of what the 4,400 Avoca area plaintiffs had claimed in damages, said Haddock, who is Luzerne County’s civil/criminal record overseer and a former Avoca mayor.

Haddock said around 1,600 Avoca-area residents also obtained settlements through a previous consolidated suit against Kerr-McGee several years before the Powell Law Group filed the 2005 litigation. Plaintiffs who settled in the first round of litigation could not participate in the later suit, he said.

Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.