U.S. District Court Judge James Cain Jr. of the Western District of Louisiana recently approved a $3.5 million settlement in a creosote contamination case. The settlement resolves claims against Anadarko Petroleum Corp. and Occidental Petroleum Corp, owned by Shreveport Creosoting Company and International Paper Co. (IP), respectively.

“The settlement, which benefits a class of local residents, was approved despite objections from co-defendants BNSF Railway Co. and International Paper Co.,” according to news site USA Herald.

The case, Rose Epperson v. International Paper Co. et. al., was originally brought by Larry Ashworth, who alleged ground contamination to his property from two creosoting facilities located in Beauregard Parish, Louisiana. The facilities’ owners are located within 5 miles of Ashworth’s property, and the Shreveport facility was classified as a Superfund site in 2018.

“Ashworth also alleged that contamination resulted from the storage and/or transfer of creosoting products from these sites by BNSF. Accordingly, he filed a complaint in this court against BNSF (Railway Co.) and IP, as well Kerr McGee Chemical Corp., Kerr McGee Operating Corp., Anadarko Petroleum Corp., and Occidental Petroleum Corp. as successors/ancestors in title to Shreveport Creosoting Co and its parent company, American Creosoting Co.,” according to the Memorandum Ruling in the case.

The lawsuit claimed negligence, nuisance, and strict liability.

“According to the lawsuit, IP knew the two sites were leaking ‘sludge and waste materials’ into the soil and groundwater near DeRidder, Louisiana yet failed to notify property owners whose land and health may have been affected,” ClassAction.org notes. “The lawsuit explains that in approximately 1918, a subsidiary of American Creosoting Company purchased land from Longbell Lumber Company, who owned land adjacent to the site, to build a plant to use creosote, a dark-brown wood preservative distilled from coal tar, to treat pine utility poles. The two companies allegedly operated the plant until [IP] acquired Longbell in 1957 and took over the other site’s operations in 1963.”

The complaint alleges IP knew about the contamination and didn’t take the proper steps to prevent contamination.

“IP knew that the ponds contained hazardous and toxic wastes generated by the pressure treating operations yet did nothing to try to prevent such leaching from its ponds and flowing through the sediments outside property owned and controlled by IP into and onto innocent adjacent property owned by Plaintiff herein and putative class members,” the lawsuit adds.

“Indeed, none of the putative class members were aware of any notification that their private property was affected with toxic waste generated by IP, and all such private homeowner’s addresses were easily obtainable by IP to send direct mail notifying them of such toxic waste contamination had they cared one bit about the health and safety of individuals and the sanctity of the putative class member’s property.”

Ashworth’s lawsuit defined the proposed class in his suit “at a minimum composed of non-owner residents, home and landowners in the flood plain and subsurface sand and aquifer, between the original sites of contamination and Plaintiff’s property.”

Legal maneuvers

• Occidental and Anadarko moved to dismiss the claims against them for a lack of personal jurisdiction, reserving their rights to argue that Ashworth’s suit violated an injunction issued by the Honorable Katherine B. Forrest of the U.S. District Court for the Southern District of New York. Proceedings in this court were stayed upon consent motion of Ashworth, Occidental, and Anadarko.
• Occidental and Anadarko then filed a motion in the Southern District of New York, seeking to enforce the injunction. Essentially, Occidental and Anadarko argued that Ashworth’s claims were derivative or duplicative of claims settled by Anadarko in bankruptcy proceedings. The Honorable Paul Oetken, who was assigned the case due to Forrest’s retirement, denied Occidental’s and Anadarko’s motion on February 19, 2021.
• Occidental and Anadarko appealed to the 2nd Circuit, which heard oral argument on November 17, 2022.
• Since that time, the parties reached an agreement in principle to settle the action, and the appeal was stayed on their joint motion.

The proposed settlement terms call for Occidental and Anadarko to pay a sum toward the “hard costs” of litigating this action against the remaining defendants in exchange for a release of claims by the plaintiff and members of the proposed class.

“Plaintiff’s counsel also acknowledged numerous difficulties in continuing a suit against Occidental and Anadarko, including the Tronox bankruptcy, a pending motion to dismiss for lack of personal jurisdiction filed by those defendants, and questions as to liability with difficulty accessing sources of proof given that the creosoting operations ceased decades ago,” the Memorandum Ruling adds.

A hearing regarding a motion to approve the settlement was conducted on October 12, 2023, and raised concerns about Ashworth’s proposed class and his ability to represent the personal injury claims presented. This resulted in revisions to shrink the geographical boundaries of the proposed class.

Then, Ashworth made a motion to substitute Epperson as the named plaintiff and amend the original complaint. That motion was granted despite objections from the non-settling parties.

“Epperson now brings this motion, seeking the court’s preliminary approval of a modified class action settlement with Occidental and Anadarko under Federal Rule of Civil Procedure 23(e),” continues the Memorandum Ruling. “Non-settling defendants IP and BNSF oppose the motion.”

“Under the terms of the settlement, Anadarko and Occidental will pay $3.5 million into an escrow account to cover the ‘hard costs’ of continuing litigation against the remaining defendants, with no funds allocated for attorney fees,” USA Herald says. “Any leftover money will be distributed to class members.  Additionally, Anadarko and Occidental agreed to drop their appeal to the Second Circuit as part of the settlement, and [Cain] denied their pending motion to dismiss as moot.”