A lawsuit seeking $619.3 million for 4,400 past and present Avoca-area residents exposed to creosote from the defunct Kerr-McGee Corp. wood treatment plant has been moved to federal court in Scranton.
As reported by the Times Leader last month, Avoca plaintiff Stanley Waleski filed the action on behalf of the group in the Luzerne County Court of Pleas against a Philadelphia law firm and two of its attorneys.
The defendants — Montgomery, McCracken, Walker & Rhoads and attorneys Natalie D. Ramsey and Leonard Busby — filed notice this week that they have moved the case to federal court through an automatic action known as a “notice of removal.”
U.S. District Judge Robert D. Mariani posted notice that he has been assigned to the case and will hold a case management conference within four months to discuss any pending motions, settlement, discovery deadlines and other relevant matters.
Waleski’s complaint accuses the Montgomery firm of breach of contract for allegedly failing to take actions seeking top-dollar compensation for the local victims in the 2009 bankruptcy of Kerr-McGee and related entities.
The Powell Law Group hired the Montgomery firm for its bankruptcy expertise in 2009. Powell Law had initiated litigation against Kerr-McGee for the 4,400 plaintiffs that was resolved through the bankruptcy.
The Avoca plaintiffs have blamed cancer, respiratory problems, heart conditions, rashes and other medical issues on carcinogens and chemicals used at the Kerr-McGee operation for four decades until 1996.
In this week’s notice of removal, the Montgomery firm said the change to federal court was proper because the alleged breach of professional obligations asserted by Waleski are tied to a bankruptcy case that was processed through federal court.
Waleski’s suit also attempts to “challenge and circumvent” a 2014 decision of the U.S. District Court of the Southern District of New York approving a $5.15 billion settlement with Kerr-McGee and related entities and the distribution of those funds, the notice of removal said.
While Waleski’s suit was filed April 11, the notice of removal was filed within the required 30 days because the defendants were not served with the complaint until May 10, it said.
The suit argues $619.3 million should be paid because the Avoca plaintiffs were entitled to $949 million but ended up receiving $329.7 million. It accuses the Montgomery firm of conflict of interest and failing to contest the addition of claims from Mississippi, where Kerr-McGee also had a site, leading to a reduction in funds left for the Avoca plaintiffs.
The Montgomery firm has defended its work and contested the “phantom malpractice” argument in an unrelated legal action involving Powell Law and the payment of legal fees.
In this case, the Philadelphia firm will move to dismiss Waleski’s claims, the notice of removal says.
Myers, Brier & Kelly in Scranton and Thompson Hine in Cincinnati are representing the defendants.
Pittsburgh attorney Scott M. Hare filed the suit. He also filed motions last month asking the county court to assign the case to a county judge, schedule a status conference and authorize him to establish a website updating the 4,400 prospective class-action members on legal filings.
Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.