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Martin v. Foster Wheeler Energy Corp.

December 14, 2007

SARAH MARTIN, ET AL., PLAINTIFFS,
v.
FOSTER WHEELER ENERGY CORPORATION, DEFENDANT.



The opinion of the court was delivered by: A. Richard Caputo United States District Judge

(JUDGE CAPUTO)

MEMORANDUM

I am called upon to determine whether or not I should approve the settlement reached in this class action. By Order dated April 19, 2007, I preliminarily approved this Class Action Settlement. A Fairness Hearing was held on August 7, 2007.

BACKGROUND

From approximately 1953 to approximately 1984, Foster Wheeler operated a manufacturing plant in Mountaintop, Pennsylvania. In this manufacturing process, Foster Wheeler operated a vapor degreaser that contained trichloroethylene ("TCE"). When the plant shut down, the vapor degreaser was removed. Foster Wheeler entered into a Consent Order with the U.S. Environmental Protection Agency ("EPA") and the Pennsylvania Department of Environmental Resources ("PADER"), now the Pennsylvania Department of Environmental Protection ("PADEP"), in 1988 to investigate certain environmental concerns which included the TCE found at Foster Wheeler's former site.

In October, 2004, TCE was discovered in certain private wells to the south and southwest of the former Foster Wheeler site, and in August, 2005, Foster Wheeler entered into an Administrative Settlement Agreement and Order by Consent with the EPA and the PADEP. Under the terms of the agreement, Foster Wheeler agreed to undertake to provide public water access in place of private well water at each of the affected locations and arrange for the abandonment of the private wells. The program has been completed with the exception of those residents who have chosen not to allow Foster Wheeler to connect them to public water and/or to abandon their private wells. Foster Wheeler continues to conduct remedial activities at the Foster Wheeler site in the area known as the Affected Area.

The Plaintiffs in this case allege that persons living in the vicinity of the site, including those who obtained potable water from private wells impacted by TCE, have been exposed to hazardous substances emanating from the Foster Wheeler site, and further allege that they are entitled to property damages and funding for medical monitoring to provide for early detection of medical conditions, if any, caused by such exposure. Foster Wheeler disputes that the proposed class in this litigation is entitled to property damages, medical monitoring or any other damages.

I. Settlement Class Certification and Approval of Class Counsel

Plaintiffs seek certification of this settlement class under F.R.C.P. 23(b)(3). Plaintiffs contend, and Foster Wheeler does not contest for settlement purposes, that the class certification is appropriate because (1) the class is so numerous and separate joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and, (4) the representative parties will fairly and adequately protect the interests of the class. Id.

Further, Plaintiffs also contend that Foster Wheeler does not contest, for purposes of this settlement, that class certification is appropriate under Rule 23(b)(3) because questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and a class action is superior to other available methods for the fair and efficient adjudication of the controversy. Id.

Foster Wheeler does not oppose Plaintiffs' request that the Court approve the law firms of Feldman Shepherd Wohlgelernter Tanner & Weinstock and Munley, Munley & Cartwright, P.C. as Class Counsel.

II. Summary of Settlement

The key elements of the settlement, as contained in the Settlement Agreement, are as follows.*fn1

A. Settlement Class

The parties have agreed to a settlement class of a geographic boundary that encompasses the so-called Affected Area plus a buffer zone consisting of 150 feet surrounding the Affected Area and certain areas downgradient of the Affected Area, which in both cases would encompass in the Settlement Agreement, property which conceivably may be impacted for the next ten years by the TCE detected in the Affected Area. Exhibit "A" to the Settlement Agreement sets forth a comprehensive list identifying the parcels included in the Settlement Class and provides a map depicting the geographic boundaries of the Settlement Class (hereinafter "Settlement Class Geographic Area"). The Settlement will include all persons who owned or resided at property in the Settlement Class Geographic Area from August 1, 2004 until August 16, 2007.

B. Settlement Amounts to be Paid by Foster Wheeler

In final settlement of this litigation, and in return for full and unconditional releases of the claims of Class members who have effectively opted out, Foster Wheeler has agreed to pay $1,640,000, which funds shall be first applied as follows:

(a) All settlement administration costs, including the costs of the Class Administrator and notice costs related to the settlement in the Martin Litigation (not to exceed $30,000);

(b) Attorneys' fees awarded by the Court for the Martin Litigation (less any costs in (a) that exceed the limit therein stated); and

(c) Distribution of all remaining funds to the Martin Claimants who submit the required Proof of Claim and Release Form, which shall represent consideration for settlement of the Released Claims as defined in Paragraph 19 of the Settlement Agreement, in accordance with the Allocation Methodology attached as Exhibit "B" to the Settlement Agreement.

In addition to the funds disbursed pursuant to (c) above, funds in an amount not to exceed $40,000 shall be made available to resolve certain alleged water-related problems certain members of the Settlement Class have alleged they are experiencing as a result of the abandonment of private wells located in the area where TCE has been detected ("Alleged Water-Related Funds"). The Alleged Water-Related Funds shall be distributed in accordance with Paragraph 11c of the Settlement Agreement and in accordance with the Allocation Methodology attached as Exhibit "B" to the Settlement Agreement.

C. Opt-Outs

Settlement Class members shall have sixty (60) days from the mailing of the notice to opt out by providing to the Class Administrator, so that it is received within the sixty (60) day period, a written request to be excluded and by otherwise complying with the requirements set forth in the Settlement Notice Plan attached to the Settlement Agreement as Exhibit "C". Settlement Class members who do not effectively opt out shall automatically be included in the settlement as Settlement Class Members and may become a Claimant by meeting the requirements set forth in the Settlement Notice Plan.

D. Settlement Administration

Foster Wheeler has deposited, in accordance with preliminary approval of settlement, in an interest-bearing escrow account at Associated Banc-Corp., 401 E. Kilbourn Ave., Milwaukee, Wisconsin 53202 (hereinafter the "Settlement Account") an initial payment of $100,000. The Settlement Account shall be administered by the Class Administrator on behalf of Class Counsel. The Class Counsel may draw from the Settlement Account to cover administrative expenses, including the costs of notice and other costs incurred in performing the duties of administration of this settlement, by submitting invoices to the Class Administrator for payment. The Class Administrator may draw from the Settlement Account for reimbursement of fees and settlement administration costs paid by the Class Administrator and others prior to establishment of the Settlement Account. Class Counsel will file with the Court and serve on Foster Wheeler monthly reports of activity in the Settlement Account. Should the settlement become final in accordance with Paragraph 10 of the Settlement Agreement, (upon expiration of the time for appeal if no appeal is filed, and upon an order affirming settlement if in an appeal is filed), Foster Wheeler will deposit the remaining $1,540,000 into the Settlement Account. It will be up to Class Counsel to petition for an award of attorneys' fees and reimbursement of costs incurred on behalf of the Settlement Class. Foster Wheeler has agreed that it will not contest or otherwise challenge a just and appropriate award of fees. Those fees and costs will be paid out of the Settlement Agreement as noted above.

After the payment of the proceeds in the Settlement Account, including administration costs and attorneys' fees and costs, Foster Wheeler will not otherwise be liable for any costs, fees, expenses of any settlement class members' ...


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