A group of 4,400 Avoca-area plaintiffs must drop a controversial environmental contamination lawsuit first filed by disgraced attorney Robert Powell, a federal judge in New York ruled Monday.
The Avoca plaintiffs recently tried to reactivate their 2005 lawsuit in Luzerne County, filed by Powell Law Group, P.C., against the former Kerr-McGee Corp., which manufactured railroad ties in Avoca from 1956 to 1996.
The suit alleged contamination from the company’s wood treatment plant caused diseases, illness and death.
However, the Avoca plaintiffs and others across the country were awarded compensation from a bankruptcy settlement with Kerr-McGee and related corporate entities that had been approved by the U.S. District Court based in New York City.
Kerr-McGee and related corporate entities filed an action in the New York court to block revival of the Luzerne County suit, arguing the plaintiffs had accepted a settlement and could not go back to the well to obtain more.
U.S. District Court Judge Katherine B. Forrest held a Dec. 3 hearing that attracted a busload of Avoca plaintiffs and issued a ruling Feb. 1 ordering the Avoca plaintiffs to dismiss the Luzerne County suit and “make no attempt” to file similar claims against Kerr-McGee or related entities “in any other forum.”
The case also is of interest to plaintiffs in an unrelated suit involving the Luzerne County Kids for Cash scandal.
Powell, who was charged in the juvenile justice corruption case, has negotiated a settlement with juvenile victims and their guardians requiring him to pay $4.75 million and possibly more if his net worth is determined to be higher.
Powell initiated the Avoca litigation and could receive additional legal compensation if the revived Avoca case resulted in additional awards in Luzerne County Court.
Powell cannot practice law because he was disbarred, but he is still listed as president of the Powell Law Group. Jill Moran is listed as secretary of the firm in state corporation records.
The Powell firm brought in New York City firm Weitz & Luxenberg, P.C. — famous for their asbestos litigation — to handle the environmental case, but the Powell firm continues to act as co-counsel in the Avoca litigation, according to paperwork filed by Weitz & Luxenberg in the New York court.
Jim Haddock, whose late mother is among the plaintiffs, said Wednesday he was not aware of the ruling but expects an appeal will be filed.
The Avoca area residents had argued they are legally permitted to seek full compensation and emphasized they were not “made whole” by the bankruptcy settlement. Their filing cites a claimant who must still undergo medical monitoring but received a bankruptcy case settlement of only $1,608 and another with lung cancer who was paid just $225,121.
Judge: Positions ‘mistaken’
In her ruling, Forrest described some legal positions taken by the Avoca plaintiffs as “mistaken” and “misguided.”
The corporate entities that operated the plant from 1956 to 1996 — the period of questionable activity alleged in the Luzerne County suit — were part of the bankruptcy settlement, she said.
That means the only remaining target for the Avoca litigation is the entity known today as Kerr-McGee Corp., which did not come into existence until 2001, she said. Her order describes this company as “(new) Kerr-McGee.”
New Kerr-McGee wasn’t part of the bankruptcy settlement and can’t be held liable because it was formed several years after the negligence and injury alleged in the Avoca litigation, the judge wrote.
“No plausible claim is left for the Avoca Plaintiffs to pursue against (new) Kerr-McGee Corp,” she said.
The Avoca plaintiffs had intended to “carve out such claims” during the bankruptcy settlements, but “intent alone cannot breathe life into that which has ceased to exist,” she wrote in the 59-page opinion.
Haddock, a former Avoca mayor who now oversees Luzerne County’s clerk of courts and prothonotary’s offices, has informally become a local spokesperson for the Avoca plaintiffs.
He has said his mother suffered from several medical conditions that he blames on carcinogens and chemicals used at the Kerr-McGee operation and believes the company is responsible for cancers in both adults and children, respiratory problems, heart conditions and rashes and other skin disorders.
The bankruptcy settlement covered about 32 percent of what the 4,400 Avoca plaintiffs had claimed in damages, he said.
Many people who lived or worked near the Avoca property have received their payments in the bankruptcy settlement, but some are still waiting due to issues with Medicare and Medicaid reimbursements or the processing of estates involving plaintiffs who have died, Haddock said.
The total bankruptcy settlement was $5.1 billion, with 12.5 percent going to victims in seven groups across the country, he said.
Luzerne County Judge William Amesbury was assigned to the case here but had delayed the proceedings to await the federal court ruling, his office said.
Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.