Revival of environmental contamination suit involving former Kerr-McGee Corp. blocked

By Jennifer Learn-Andes - | April 20th, 2017 5:49 pm

Thousands of past and present Avoca-area residents hit another hurdle in their attempt to reactivate a lawsuit in Luzerne County Court that seeks additional monetary awards for diseases and illnesses allegedly caused by the former Kerr-McGee Corp.’s wood treatment operation.

U.S. District Court Judge Katherine B. Forrest in New York City had ordered the 4,300 Avoca plaintiffs to drop the county suit in February 2016, saying their receipt of compensation through a Kerr-McGee bankruptcy settlement processed in New York and a related settlement injunction barred them from additional action.

The Avoca plaintiffs appealed that ruling to the Second Circuit U.S. Court of Appeals, also in New York City, and obtained a freeze on Forrest’s order pending the outcome.

The Second Circuit court issued a ruling Thursday dismissing that appeal based on a lack of jurisdiction and lifting the stay on Forrest’s order to drop the Luzerne County suit.

According to the new 66-page Second Circuit ruling, the Avoca plaintiffs did not demonstrate the appeals court had legal grounds to decide whether or not the county suit was permissible.

It’s unclear if the Avoca plaintiffs will drop the matter or attempt to return to U.S. District Court or another venue seeking further action.

The lead attorney representing the Avoca plaintiffs — Donald A. Soutar, of Weitz & Luxenberg P.C. in New York City — could not be immediately reached for comment Thursday.

Former Avoca Mayor Jim Haddock, whose late mother is among the plaintiffs, said he can’t comment on the decision until he reviews and discusses it with Weitz & Luxenberg.

Haddock, who currently oversees the county’s civil and criminal court records offices, has been optimistic the Avoca plaintiffs will prevail. Proceeding with the 2005 county court suit is justified, he has said, because the bankruptcy settlement covered only about 32 percent of what the Avoca plaintiffs had claimed in damages.

The total bankruptcy settlement was $5.1 billion, with more than $600 million designated for victims in seven groups across the country, including the Avoca plaintiffs, court records said.

Powell Law Group, P.C., had initiated the 2005 suit against the former Kerr-McGee Corp., which manufactured railroad ties in Avoca from 1956 to 1996. Weitz & Luxenberg started handling the Avoca case as co-counsel in 2012, after Powell Law founder and Hazleton area native Robert Powell got in trouble as part of a federal corruption probe into Luzerne County’s court system.

Forrest got involved because Kerr-McGee and related corporate entities filed an action in the New York court to block revival of the Luzerne County suit, arguing the plaintiffs had accepted a settlement and could not go back to the well to obtain more.

Forrest had concluded the Avoca plaintiffs failed to identify an outstanding claim that was not “extinguished” by the bankruptcy settlement. The only remaining target for the Avoca litigation is the entity today known as Kerr-McGee Corp., which did not come into existence until 2001, she has said. This company can’t be held liable because it was formed several years after the negligence and injury alleged in the Avoca litigation, the judge wrote.

Luzerne County Judge William Amesbury was assigned to the case here but had delayed the proceedings to await the federal court ruling, his office has said.

The Avoca plaintiffs have argued the detailed wording in the bankruptcy settlement did not prohibit them from pursuing the county suit. These plaintiffs consciously decided not to object to the bankruptcy settlement because the wording in the agreement kept the door open for them to revive the Luzerne County case, their filing has said.


By Jennifer Learn-Andes

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