Judges to probe leak of $35M pollution settlement deal

CHARLESTON, W.Va. — A closed-door review of documents, prepared to inform nearly 600 West Virginia coalfield residents of a $35 million deal to settle their water pollution claims, may help identify who leaked settlement details to The Associated Press, a panel of judges assigned to the case said Tuesday.

Lawyers for those plaintiffs agreed to provide the three judges with a telephone script, letter and any other relevant documents, after lawyers for defendant Massey Energy Co. argued for sanctions because the leak violates the deal’s confidentiality clause.

Both sides reached the review agreement after a Kanawha County hearing into the leak was cut short by Tuesday’s 5.8-magnitude earthquake centered in neighboring Virginia. The tremor rattled windows and doors in the circa-1892 courtroom. The judges announced the agreement from the courthouse steps, where they gathered with lawyers and others when that building and others downtown were evacuated.

During that impromptu session, lawyers also agreed to the appointment of retired Kanawha County Circuit Judge Andy MacQueen to oversee the distribution of the settlement proceeds.

The settlement resolves claims that slurry from washing coal contaminated area well water. About 1.4 billion gallons of the toxic fluid had been pumped into worked-out underground mines between 1978 and 1987 as a cheap way to store it.

Massey and its Rawl Sales & Processing subsidiary were sued seven years ago. Alpha Natural Resources bought Massey for $7.1 billion in June. With Massey and Rawl admitting no wrongdoing, the settlement was announced July 27 after a marathon mediation session.

AP obtained a letter sent to the plaintiffs, and reported its contents Aug. 9. The letter explained that Massey had offered $35 million in addition to the $5 million it had previously agreed to put into a fund to cover medical testing. Dated Aug. 5, the letter also said in bold-faced type, “The settlement amount and other terms are confidential and not to be discussed with anyone not a party to the case.”

Dan Stickler, a lawyer for Massey, argued during Tuesday’s hearing that the disclosure harms the company’s position as it defends against other lawsuits that remain pending.

“Someone in the plaintiff’s camp has breached the agreement,” Stickler told the panel. “It’s tantamount to breach of contract.”

Stickler said inspecting all correspondence from the plaintiffs’ lawyers to the claimants should show whether they did enough to keep the settlement confidential, and whether sanctions may be necessary.

Bruce Stanley, a lawyer for the plaintiffs, said his team had nothing to do with the leak and does not know who’s responsible. He said his team took pains to abide by the confidentiality agreement, and to notify the claimants of it. Stanley said he even tried to dissuade the AP reporter from disclosing at least some details when contacted for comment.

Even if a claimant or someone associated with one leaked the letter, the remaining plaintiffs should not be punished as a result, Stanley told the judges.

Circuit Judge James Mazzone, who heads the panel, noted that the judges have not received the settlement terms. Stickler said it included no specific punishment for breach of its confidentiality.

Mazzone said after announcing the post-hearing agreement that the judges would rule on the matter following the closed-door review.

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