Settlement proposed in Fort Smith Whirlpool lawsuit


FORT SMITH — A joint motion seeking settlement of a class-action lawsuit against Whirlpool was filed Thursday in U.S. District Court in Fort Smith, while another lawsuit against the corporation remains set for trial next year.

The class-action complaint originally was filed May 20, 2013, in Sebastian County Circuit Court, but Whirlpool filed notice June 25, 2013, removing the case to federal court in Fort Smith.

The complaint sought unspecified damages for nuisance, trespass, violations of the Arkansas Deceptive Trade Practices Act, accuses Whirlpool of fraudulent concealment and sought punitive damages.

According to Whirlpool, which closed its Fort Smith plant in June 2012, a plume of trichloroethylene, or TCE, a known carcinogen, leaked into groundwater at the plant site, then later into a neighborhood to the north. TCE was used at Whirlpool as a degreasing solvent between the late 1960s and early 1980s, according to the company.

Concerns of the contamination emerged after Whirlpool requested a ban on new wells around the site earlier in 2013.

The lawsuits sought damages for “the reasonable expense of necessary repairs and restoration of the property which was damaged, plus the difference in the value of the property before contamination and the value of the property before contamination and the value after restoration,” damages for the loss of enjoyment and use of their properties, and punitive damages.

Last summer, Sebastian County Assessor Becky Yandell reduced the value of properties in and around the contaminated area 25 percent to 75 percent. The contaminated area includes a total of 55 parcels, Yandell said. Three are commercial properties, while 17 are homes in which the owners live. More than 30 are rental properties.

The proposed settlement calls for:

• Property owners inside the area bounded by Ingersoll Avenue, Brazil Avenue, Jenny Lind Road and Ferguson Street will receive compensation in an amount equal to devaluation of those properties estimated by the county assessor’s office or determined by an agreed-upon independent property appraiser.

• Class members outside the bounded area whose property value was diminished by the contamination will receive $5,000, and possibly more in the future, if TCE is detected above threshold levels in groundwater beneath their property.

In return, Whirlpool wants a well-drilling ban and access agreements on the properties.

“What we’re offering is to make the payment based on what the assessor says was the impact on the property value, even though I don’t agree with that,” Whirlpool representative Jeff Noel said Thursday afternoon. “But it is a public figure that’s available. For us, we’re offering this as a resolution in exchange for a well-drilling ban to be put onto the property and access agreements to the property for the ability to do the monitoring wells or whatever things we would need to do.”

U.S. District Court Judge P.K. Holmes III will make a preliminary finding on whether the settlement is fair. If Holmes determines it is, class members will be notified of a formal “fairness hearing,” to provide an opportunity for argument and evidence to be presented in favor of and in opposition to the proposed settlement.

“I believe this is an extremely fair resolution because not only are we proposing to make the resolution based upon the value established by the assessor, but we’re also going to cover all the legal costs so that the property owners get the full value of what the assessor has established,” Noel said.

A proposed schedule of events — assuming Holmes issues a favorable ruling — is also included in the motion, that details deadlines for: notification of class members, filing for attorney fees, opting out of the settlement, completion of appraisals, scheduling a fairness hearing and final approval.

The joint motion for settlement came a day after the plaintiffs filed an amended complaint, which added the accusation Whirlpool violated the Arkansas Solid Waste Management Act. Until action is taken by the court, the case remains scheduled for trial June 29, 2015.

The plaintiff’s attorney Kenneth Shemin of Rogers, couldn’t immediately be reached for comment Thursday.

Two additional lawsuits were filed May 23, 2013, in Sebastian County Circuit Court by Taylor Law Partners LLP of Fayetteville and McMath Woods P.A. of Little Rock — one on behalf of 10 homeowners, and the other, on behalf of landlords who own 36 properties in an area affected by the Whirlpool leak.

Those lawsuits were also transferred to federal court, consolidated into a single lawsuit Feb. 19 by Holmes and seeks damages similar to those sought in the class-action complaint.

A trial in that case remains set for July 6, 2015.

— Times Record reporter Chad Hunter contributed to this report.