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August 1st, 2017
environmental
U.S. DISTRICT JUDGE REJECTS ELK RIVER CHEMICAL SPILL SETTLEMENT

A West Virginia federal judge rejected a proposed $151 million deal reached by American Water Works and Eastman Chemical that would have settled class claims arising from a 2014 coal-processing chemical spill, but indicated the agreement is salvageable.  Good et al. v. American Water Works Co. Inc. et al., Case No. 2:14-cv-01374, (S.D. W. Va., July 6, 2107). The chemical, called methylcyclohexane methanol, or crude MCHM, caused nausea, vomiting and eye irritations that led to infections after it entered the water supply in January 2014.

As a result of the spill, West Virginia's governor declared a state of emergency for nine counties and water to about 300,000 people was cut off for days.  Eastman Chemical sold the crude MCHM to Freedom Industries, which owned and operated a storage tank that leaked the chemical into the Elk River. The lawsuit alleged that Eastman had a duty to warn Freedom about storage incompatibilities because MCHM was known to be corrosive.

American Water Works, two of its subsidiaries, Eastman and counsel for the proposed class in April submitted the settlement agreement to U.S. District Judge John Copenhaver, and though the judge said much of the deal is fine, he said there were four issues that prevented its approval.  Judge Copenhaver raised concerns about how the terms awarded money, the appeals process for claims disputes, legal fees and the timeliness of payments to spill victims.  The Court ordered the attorneys to refile a settlement agreement that meets the standards set forth in the Order.

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