NEW ORLEANS — The federal judge overseeing a class-action lawsuit over the Bayou Corne sinkhole told plaintiffs upset with their attorneys’ handling of the case that he believes the lawyers, the suit’s court-appointed special master and the $48.1 million settlement they put together were “very fair.”
About 15 to 20 plaintiffs showed up Wednesday for the hearing that U.S. District Judge Jay C. Zainey ordered at the federal courthouse in New Orleans after one of the plaintiffs sent him an email complaining that he, his wife and other plaintiffs had been mistreated and misled by their lawyers. Zainey said others also have called his office complaining that the attorneys’ $12.03 million in fees, which is 25 percent of the settlement, was too high.
Ten of those plaintiffs spoke to Zainey for more than two hours Wednesday while the suit’s class counsel, other plaintiffs’ lawyers and other observers listened.
The former Bayou Corne residents spoke about a host of issues. Many were focused on their having enough information from their attorneys about how the case was shaping up so they could make decisions about whether to stay in the case and, later, to object to their home buyout and damages awards.
Opting in had great significance in the class action. It meant relying on the class counsel, instead of going it alone with other lawyers, to take on Texas Brine, the company many blame for the sinkhole.
Opting in also meant that residents would have to be bought out and move away from Bayou Corne, something many were reluctant to do.
The sinkhole appeared in early August 2012 after a Texas Brine-operated salt dome cavern broke open and pulled in surrounding rock. Methane gas released by the sinkhole’s formation continues to threaten the area, the state says. Most of Bayou Corne remains under an evacuation order more than two-and-a-half years later.
With several other cases and claims pending in federal and state court and the ultimate outcome of the sinkhole case dragging into the year, the class action focused on allowing Bayou Corne and Grand Bayou residents who wanted to be bought out to move away and be made whole.
Zainey repeatedly expressed his sympathy for the plaintiffs’ situation in which they lost their homes and their way of life but also underscored the uncertain nature of taking their case to trial and his belief the settlement is a good one and its administration fair.
He also pointed out repeatedly that notices detailed the settlement’s particulars, some of which residents objected to on Wednesday, but that he received no objections before he approved it.
Zainey also noted that under Louisiana law, questions remain about whether general damages, such as for emotional distress, can be awarded over the loss of one’s home.
In a trial, a general damages award from a jury could have been appealed, the judge noted.
“Quite candidly, I was impressed that the settlement was as great as it was,” Zainey said.
Of the $48.1 million settlement, Zainey said, $20.6 million has been paid in home and property buyouts and another $11.5 million on general damages. Another roughly $12.03 million has been set aside for attorney’s fees.
The remaining funds are for the attorneys’ upfront costs, the special master’s fees and a reserve for those who opted out of the class action.
Zainey issued no formal ruling Wednesday but said he felt it was important to have the gathering to hear from the plaintiffs and so they could get more information.
The plaintiffs’ complaints Wednesday included not being informed verbally or in writing about key deadlines to object to the broad settlement and later their damages awards for mental anguish, not being able to see copies of their home appraisals for their buyouts, being rushed from their homes after closing on their home buyouts and being told that the 25 percent cut for attorneys’ fees wouldn’t be from the full amount of the settlement.
Though these plaintiffs have received damages checks, buyout funds and have found new homes away from Bayou Corne, emotions were still raw Wednesday. Several needed a glass of water to clear dry throats, fought back tears or let them flow.
Mike Schaff, who sent the initial email to Zainey that prompted the hearing, detailed how he believed his attorneys initially told him the $48.1 million settlement would be enough for all the claims, despite his concerns to the contrary; but, as time and deadlines passed, his general damages award was cut.
Schaff complained of rough treatment by special master A. Shelby Easterly III. Schaff also said that if the class attorneys believed his idea for a damages award was too high, he needed to be told that directly so he could make a decision.
“I don’t need to be managed into staying in the class,” Schaff said.
Adding to his upset was that he had not been informed that part of the $48.1 million settlement was set-aside money for those who had opted out of the class action.
Another plaintiff, Debra Charlet, alleged her attorney told her she could not object to her damages award or would risk having it cut in half or dropped to nothing.
Charlet, who was tearful in court, provided the sharpest emotion of the afternoon, deferring on the judge’s suggestion to hold a microphone for another plaintiff about to speak after her.
“You take it because I might throw it at his head because he’s afraid to look at me,” she said.
Charlet’s attorney, Brian Marcelle, later flatly disputed the allegation. He said he represented 60 clients, including several who had appealed their general damages award late last year.
After the residents spoke, Zainey allowed the lawyers to speak with plaintiffs privately for about an hour and 20 minutes in a nearby courtroom. Unintelligible, loud discussions could be heard at times.
A few, such as Betty Thibodaux, left after an hour, upset and tearful about the whole situation.
“I just had to get out,” she said.
Once the plaintiffs and attorneys returned to Zainey’s courtroom, the class counsel did not answer the plaintiffs’ objections point for point but told the court they were available for questions.
Easterly, who came in for criticism from several residents, said he tried to be as fair as he could with each of the plaintiffs and was sympathetic to their plight.
In a statement from the suit’s class counsel, attorney Lawrence Centola III said every plaintiff received required notice, including information about the attorney’s fees that would be sought, and attorneys held town hall meetings to keep their clients updated.
“Class counsel agrees with the final comments made by the court after hearing from all class members present that this is an excellent settlement and that the attorneys did an excellent job in a very short period of time,” Centola wrote.
Follow David J. Mitchell on Twitter, @NewsieDave.