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DuPont agrees to Spelter settlement

Read the settlement: http://blogs.wvgazette.com/watchdog/ CHARLESTON, W.Va. -- DuPont Co. has agreed to a settlement valued at $150 million to resolve a bitter court battle over the pollution of the Harrison County community of Spelter, lawyers for the company and area residents announced Tuesday.

DuPont will pay $70 million and fund a 30-year medical testing program estimated to cost $80 million in a deal that still faces a review by 8,500 area residents and needs the approval of Harrison Circuit Judge Thomas Bedell.

If finalized, the settlement would eliminate the need for a retrial in March on the key issue of whether residents filed their original lawsuit within the legal time limits for doing so.

DuPont had appealed a variety of issues in a three-year-old jury verdict that awarded residents nearly $400 million for property cleanup, medical monitoring and punitive damages. The Supreme Court upheld most of the verdict, but ordered a new trial on the statute of limitations issue.

Both sides were also facing the possibility of continued appeals after the retrial, and said they were happy to end the litigation.

"DuPont is pleased to reach an agreement that places our focus on the Spelter site and the community and not on lengthy and contentious legal proceedings," said DuPont general counsel Thomas L. Sager.

Farrest Taylor, lawyer for the residents, said, "We're very excited about the settlement. You've got a fairly substantial settlement here."

The Spelter site, just north of Clarksburg, was originally a DuPont gunpowder mill that opened in 1899. After that facility burned down, Grasselli Chemical Co. built a zinc smelter and a company town. DuPont bought Grasselli in 1928 and operated the smelter until 1950, when an internal report showed air-pollution upgrades would cost $325,000.

In the late 1980s, federal environmental officials began investigating the site. DuPont got involved, eventually repurchased the smelter and steered the cleanup toward the state Department of Environmental Protection's voluntary program, rather than the more stringent federal Superfund program.

Under the deal, $4 million from a $70 million guaranteed settlement would go toward kick-starting the medical monitoring program and toward cash payments for the nearly 6,000 current and former residents who do not own property in the area, said Charleston lawyer Jim Lees, who represented DuPont in settlement talks.

"The availability and amount of cash payments to property owners and medical monitoring class members will depend upon various factors, including, but not limited to, the total number of class members participating in the medical monitoring class," the settlement document states. "The amount of individual cash payments cannot be determined at this time."

The other $66 million of the $70 million will go toward property remediation of pollution in the Spelter area and legal fees and costs for the residents.

At trial, an expert for the residents had put those costs at $62 million, and the jury awarded property owners $55.5 million in cleanup costs.

Taylor said that a settlement administrator appointed by the judge believes the remediation can be done for about $20 million, based on a more detailed study than the one used at trial by the plaintiffs.

Initially, a public notice posted online by settlement administrator Edgar Gentle III indicated the plaintiffs' lawyers planned to seek $30 million in fees and $11 million in expenses. But that notice was later removed from the Web site, and replaced with a version of the public notice that did not specify the proposal legal fees and expenses being sought.

DuPont also agreed to fund a "pay-as-you-go," 30-year medical testing program for current and former residents "so as to ensure that any effects from exposure are discovered and treated in a timely fashion." Taylor said that program is estimated to cost about $80 million.

The original jury verdict against DuPont included a medical monitoring program valued at $130 million, based on 40 years worth of testing, and $196.2 million in punitive damages.

The case brought complaints from the business community about punitive damage awards in West Virginia. At one point, then-Gov. Joe Manchin filed a friend-of-the-court brief urging the justices to at least hear a full appeal of the punitive damages DuPont was ordered to pay.

In a March decision, the Supreme Court generally upheld a series of ruling that set the scope of the 2008 trial. But, the court also ruled that punitive damages may not be awarded based only on claims for future medical monitoring costs because of past toxic exposure. That ruling cut the original punitive damages award against DuPont by 40 percent, from $196.2 million to about $117.7 million.

Justices also slashed the punitive damages by another $20 million, based on their conclusion that DuPont should have been given credit for what it said were the funds the company spent cleaning up the site, leaving the punitive damages award at $97.7 million.

A hearing on the proposed settlement was tentatively scheduled for 9 a.m. Dec. 30 in Harrison Circuit Court.

The proposed deal comes six years after DuPont agreed to a $107.6 million deal in a medical monitoring case filed on behalf of thousands of residents whose drinking water was polluted with the toxic chemical C8 from DuPont's plant in Wood County.

"DuPont has had manufacturing operations in West Virginia for more than 80 years with a solid track record of investment, employment and community involvement," said Sager, the company's general counsel. "We remain committed to operating our facilities in the state consistent with our core values and continue to play a meaningful role in the economic future of West Virginia."

Reach Ken Ward Jr. at kward@wvgazette.com or 304-348-1702.


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