[StBernard] Judge favors settlement in St. Bernard oil spill

[Westley Annis]

Judge favors settlement in St. Bernard oil spill
Governor at hearing to back residents 
Friday, January 05, 2007
By Susan Finch
Staff writer 
A federal judge said Thursday that he is inclined to give his blessing to a
plan to settle a class-action lawsuit stemming from a massive oil spill
during Hurricane Katrina in St. Bernard Parish. 

 
At the end of a two-hour hearing in New Orleans where Gov. Kathleen Blanco
plugged the $330 million settlement in the Murphy Oil case as "a victory for
the people of St. Bernard Parish," U.S. District Judge Eldon Fallon said the
proposal has been embraced by the overwhelming majority of affected
residents and appears to be fair, reasonable and adequate. 

But Fallon said he won't formally decide until he issues a written ruling.
He did not say when the decision will be issued, but he hinted it will be
soon. 

Blanco's courtroom appearance, unusual for an elected official in a
private-sector civil matter, came at the suggestion of attorneys for the
plaintiff class. 

Invited to the podium by Fallon, Blanco said the settlement "brings urgent
relief to an estimated 6,000 households without the delay of trial and
appeals." Moments earlier, the judge said it normally takes five years to
resolve such cases, but that "we didn't have five years. There would be no
parish. There would be no one there." 

The governor thanked Fallon for "driving this settlement" and Murphy for
"reaching an agreement that includes environmental cleanup and economic
assistance to affected families." 

The settlement would end a case spawned when a storage tank at Murphy's
Meraux refinery was moved off its base by Katrina's floodwaters, spilling 1
million gallons of oil. If Fallon gives the settlement a go-ahead and no
appeals are filed within 37 days, Murphy could start cutting checks and
buying property sometime next month, a refinery spokesman has said. Members
of the class face a Jan. 31 deadline to file claims to get a share of the
settlement fund. 

Blanco told Fallon that she has been working for 10 months to get money for
the Road Home program, as well as a recent assurance from the U.S.
Department of Housing and Urban Development that Chalmette residents who are
part of the settlement class won't see their Road Home grants reduced by
what they collect from Murphy. 

Blanco noted, however, that the HUD assurance does not cover residents of
several blocks nearest the refinery whose property Murphy has offered to buy
at a rate of $40 per square foot of living space. Murphy attorney Kerry
Miller said the buyout price reflects "the absolute top end of the range of
real estate sales in St. Bernard" since Hurricane Katrina. Murphy wants to
use the purchased property to create a buffer zone of green space between
its refinery and residents. 

Owners in the buyout area can choose to keep their homes and get payments
from Murphy based on the level of oil damage to their property, but if they
decide to sell, "They can sell to Murphy, the Road Home or on the open
market, whichever brings them the most," Blanco said. 

Attorneys for Murphy and the state will meet next week to determine how to
help owners decide which option will yield the most money if they choose to
sell. 

The settlement area is divided into four zones, depending on how much damage
was assigned to each. 

Attorneys for the class said the settlement requires Murphy to make sure the
affected area is thoroughly cleaned and puts no cap on what the company
spends to achieve that goal. The remediation will be supervised by
government regulators "with the court's oversight," Miller said. 

"All properties will be tested before reoccupancy," said Miller, who
reported that more than 18,000 soil, air, structure and other tests have
been done on 5,500 properties in the affected area, which is bounded roughly
by Paris Road on the west, St. Bernard Highway on the south, the 40-Arpent
Canal levee on the north and Jacob and Mary Ann drives on the east. 

Some residents had their homes cleaned earlier by the refinery and were
cleared to move back into the neighborhood by state and federal agencies. 

Two objections to the proposed settlement are outstanding and will be dealt
with in Fallon's ruling. Nineteen other objections have been resolved,
according to retired state appeals court Judge Robert Klees, the oil spill
case special master appointed by the judge. 

Part of the total of the settlement is $80 million Murphy paid last year to
settle claims of 2,800 of the 6,500 property owners and renters in the
affected area. Another $160 million is set aside in the settlement to pay
property owners and renters for damages, while $90 million is set aside for
environmental cleanup work. 

Attorneys for the plaintiffs have asked Fallon to order Murphy to pay them
$11.5 million in fees, plus $2.6 million in costs for their work. Court
records show Murphy's legal team has filed paperwork branding the proposed
fees outrageously high. Fallon did not take up that request in open court
Thursday. 

. . . . . . . 

Susan Finch can be reached at sfinch at timespicayune.com or (504) 826-3340.