Whirlpool settles with Fort Smith residents

Judge grants dismissal of class-action suit over pollution

FORT SMITH -- A federal court judge has granted a request to dismiss a class-action lawsuit brought by owners of property devalued by groundwater contamination by Whirlpool after the two sides reached a settlement agreement.

U.S. District Judge P.K. Holmes III signed the order Wednesday granting the motion filed by Rogers attorney Kenneth Shemin, who is representing River Rock Holding and Glenda Wilson. The two represent a proposed class of property owners in an area north of the closed Whirlpool refrigerator manufacturing plant affected by the trichloroethylene contamination.

"After extensive arms length negotiations, the putative [supposed] class representatives as well as a substantial number of other putative class members have reached settlement agreements with Whirlpool Corporation," Shemin wrote in the motion to dismiss.

Shemin said Holmes' order was a dismissal, but not a settlement, of the class-action suit and residents entered into individual settlement agreements with Whirlpool.

He wouldn't comment on details of the settlement, saying the terms were confidential.

"In all, the owners of 54 properties have entered into, or are in the process of finalizing, settlement agreements" with the company, Whirlpool spokesman Jeff Noel said in a statement Thursday.

According to court records, Whirlpool offered in an earlier settlement proposal to pay owners of about 100 properties.

The statement said Whirlpool will pay the settling property owners the amount by which the Sebastian County tax assessor reduced the value of property in 2013 as a result of the trichloroethylene contamination plus 33 percent.

In May 2013, Sebastian County Assessor Becky Yandell lowered values by as much as 75 percent on some properties because of the contamination.

In exchange for the payments, property owners will agree to release all claims and dismiss pending litigation, to file deed restrictions prohibiting drilling of wells on the properties and to allow access to their property by technicians to install and check monitoring wells, the statement said.

Nearly 30 other property owners in or near the area of contamination have brought their own lawsuit against Whirlpool. One of their attorneys, Ross Noland of Little Rock, said Thursday his case isn't involved in the class-action dismissal and still plans to go to trial Dec. 7.

But he said some of his 29 clients are making the settlement agreements with Whirlpool. He said he expected the number of his clients settling with the company to be finalized in the next few weeks.

The allegations in the class action and separate property owners' lawsuit are similar. They claim trespass, nuisance, negligence and violation of the Arkansas Solid Waste Management Act.

Noel's statement said the remaining residents still suing Whirlpool are "outliers with demands that are simply unreasonable."

The legal actions grew out of trichloroethylene contamination of groundwater by Whirlpool that migrated from under the plant property in south Fort Smith to under the adjacent neighborhood.

The company discovered the contamination on its property in 1989 and found around 2000 it seeped into the groundwater under the neighborhood. Residents of the neighborhood first learned of the contamination in January 2013, when an attorney for the company briefed them on plans to ask Fort Smith city directors for an ordinance banning the drilling of water wells in the neighborhood.

At the end of 2013, Whirlpool entered into an agreement with the Arkansas Department of Environmental Quality to deal with the contamination.

Under the agreement, the company would treat the chemical under the plant with an oxidizing agent to neutralize the trichloroethylene and rely on natural decomposition of the chemical under the neighborhood coupled with restrictions on drilling water wells.

The company and the Environmental Quality Department have said residents of the neighborhood don't face health risks from the hazardous chemical as long as they don't come in contact with it.

The settlement residents are agreeing to is similar to an agreement the proposed class and Whirlpool reached in the class-action lawsuit in July. That agreement set up two classes.

One is a "well-ban" class of of those with property located over the trichloroethylene plume, who Whirlpool would pay the amount by which their property was devalued plus 33 percent of that amount to cover their legal expenses. The owners also would agree to a deed restriction against drilling water wells on their property and to allow technicians access to their property to install and monitor groundwater monitoring equipment.

A second "fringe class" of those outside the trichloroethylene plume area but whose properties were devalued would receive a flat $5,000, according to the agreement.

In December, Holmes rejected the class' attorney's request to certify the class and proposed settlement agreement. He ruled that attorneys failed to prove it was necessary to form a class of property owners to carry on the claims against Whirlpool. He didn't list his reasons for denying the proposed settlement agreement.

NW News on 04/17/2015

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