Many Hands Await $151M West Virginia Chemical Spill Payout

After a $151 million settlement was reached in a West Virginia chemical spill that tainted a local water system, the real wait begins for residents and businesses hoping to cash in on the claims process.

And for whoever is hired to administer it, that could be a daunting task.

“This is not self-help,” compensation expert Kenneth Feinberg said Tuesday. “This is not the type of program where `we’ll bring somebody in and educate them.’ This requires an experienced neutral (person) who’s processed claims, who’s done it before, is not intimidated by the complexities or the challenges.”

West Virginia American Water will pay $126 million and Eastman Chemical will pay $25 million under the tentative settlement announced last week in federal court in Charleston.

The certified plaintiffs included more than 224,000 area residents, more than 7,300 business owners and an undetermined number of hourly “wage earners.”

Plaintiffs’ attorney Stuart Calwell said Tuesday it’s important that the claims process “doesn’t leave anybody out.”

“Now it’s a task of making sure that it’s distributed to fairly compensate the several different types of claims that are likely,” he said.

In January 2014, a tank at Freedom Industries in Charleston leaked thousands of gallons of coal-cleaning chemicals that got into West Virginia American Water’s treatment plant 1.5 miles downstream. It prompted a tap-water ban for days for 300,000 people in nine counties. Businesses were temporarily shut down. Residents cleared store shelves of bottled water, and hundreds of people headed to emergency rooms for issues from nausea to rashes after coming into contact with tap water that smelled like licorice.

“In my view, that’s the heart of it – it’s the daily disruption,” Calwell said.

Attorneys, including those from the plaintiffs’ side who will collect legal fees from the settlement, will head back to court Nov. 14 to tie up loose ends on the agreement.

In addition to appointing a claims administrator, Calwell said he hopes the process of notifying the public will begin by the end of the year. There likely will be direct mailings to water customers, potential bulletin board notices in apartment buildings, print and broadcast media advertisements and the use of social media.

Victim compensation funds were set up after the September 2001 terrorist attacks, the 2010 Gulf of Mexico oil spill, the 2013 Boston Marathon bombings and the recent General Motors ignition switch scandal. Volkswagen has hired Feinberg to handle a compensation fund for car owners caught in an emissions-cheating scandal.

Feinberg said the administrator’s checklist in the chemical spill claims process must include a methodology for distributing the settlement.

It could differ for businesses and residents.

For businesses, someone who runs a hot dog stand may not get compensated as much as, say, a manufacturer with 95 employees. Residents’ claims, though, could come down to a decision to compensate everyone equally rather than weighing a wide variety of stories about individual suffering, Feinberg said.

“You’ve got to try to make it as simple as possible,” he said. “It’s a challenge. This has been done before. The tough part is the emotional impact on victims. They were very worried.”

Karan Ireland of Charleston was one of them. But for her, getting a big fat check is “not that important.”

“It was more for me about just having some sense of validation and vindication,” she said. “I do think the money will be important for our community. I had to get child care last minute because schools were closed. People had medical bills, buy drinking water, replaced appliances.

“It took a toll on us economically and emotionally.”