NEW ORLEANS – A group of former Bayou Corne residents who were evacuated after a massive sinkhole created in the wake of a brine mine failure threatened to swallow up their community confronted the court handling a class action lawsuit on Wednesday saying their lawyers and the court-appointed special master “mistreated and manipulated” them and other members of the class.
Texas Brine agreed to the $48.1 million settlement award after an underground salt dome collapsed in August 2012 creating a still growing 32 acre sinkhole threatening to swallow up Bayou Corne, the lake community constructed over it. Under the settlement, Texas Brine, which had been running the brine mining operation in the area that led to the collapse, essentially agreed to buy out all homeowners in the affected area.
The settlement was meant to reimburse some 275 claimants who were displaced and buy out 85 properties that had to be abandoned in the wake of the environmental incident.
However, a group of about 20 former Bayou Corne residents who were at court yesterday said they were consistently manipulated by class counsel–led by prolific plaintiffs’ attorney Calvin Fayard Jr.
Of note, Fayard and special master A. Shelby Easterly III, who was tasked with making recommendations to the judge handling the case, were found to have had a previous relationship that was only disclosed to the court in the past few weeks. Easterly admitted to having served as the lawyer and notary for Fayard in the past, but said he did not see the relationship as a conflict.
An article in the The Advocate also stated the two were distant relatives.
Prior to and following the settlement, class members said they were fed misinformation by class counsel, who are set to split $12 million for their handling of the case, to get them to not opt out of the class to pursue individual claims. In addition, class members said they were told by their attorneys not to raise objections to the damages they were offered, which were much smaller than what they had been promised by class counsel when they initially signed onto the case.
U.S. District Judge Jay Zainey, who is overseeing the case, said he called the hearing after backlash from many Bayou Corne residents after the publication of a story in the Louisiana Record detailing the $12 million in legal fees Easterly recommended plaintiffs’ counsel receive.
“We wanted to get to the bottom of this," Zainey said. "Under the rules I am not allowed to speak to you privately."
In a letter to the court, Michael Schaff, a 25-year Bayou Corne resident, asked Zainey to address the concerns of some class members in the wake of criticism by outside groups pointing out that class counsel were receiving as much as $1,300 an hour for their work on the settlement that only took two years to bring to a resolution.
In his comments before the court, Schaff, 65, whose home he had hoped to save as it was located on the edge of the affected area, said he felt like he was manipulated into becoming part of the class after being told that Texas Brine would likely undergo bankruptcy and there would be no remaining funds available for non-class members.
“I found out much later, long after the opt out date, that this was a false statement and that there was a sum set aside,” he said.
It was only after the settlement was reached that Schaff found he would be receiving 50 percent less than the initial estimate plaintiffs’ counsel provided him. He objected and was granted a meeting with Easterly who greatly increased the award to 10 percent less than the estimate.
In recalling his experience, Schaff said class counsel obviously quoted higher damage awards estimates to get class members to opt in to the lawsuit. In addition, Schaff said class counsel used intimidation tactics such as telling class members that if they objected to their settlement they were ultimately offered, Easterly might adjust their award by cutting it in half or “zeroing out” the award altogether.
“This was not done in an efficient, fair manner," he said. "It was done on how long you could outlast (Easterly). Some were told if they saw him they would get zero.”
Subsequently, former Bayou Corne resident Deborah Marie Charlete said she felt she was manipulated into accepting the award offered to her due to perceived threats that she may not receive anything if she objected to it.
“If we didn’t take it we couldn’t come in front of him... and if I did, I wouldn’t get anything or receive half. I am so upset that I received so much less than everyone else,” she said.
Many class members relayed their frustration to the court concerning the lack of communication from class counsel on how the settlement award amount was reached.
Nick Romero said he found himself in a battle with class counsel that stretched out over several months in an attempt to find out what the appraised value of his home was.
“At that time I told them I think this is a shakedown," he said. "It is not fair. How do you think people can determine if an offer is a fair offer if you did not get a fair appraisal?"
While Romero said he was never provided with a copy of the appraisal class counsel conducted on his home, he was able to meet with his attorney who left the document in the open at his home while he excused himself from the room. In the attorney’s absence Romero took photos of the appraisal and only after studying the documents did he discover it did not take into account $100,000 worth of his property.
“I had to fight like hell to get my appraisal and my attorney had to step out or I wouldn’t have got what I have gotten,” he said.
Romero was incredulous that any settlement award could be offered without a total appraised value of the land at stake being part of the community discussion.
“(Other class members) felt intimidated that they were not going to get (an award), so they settled without knowing what their appraisal was,” he said.
Such was the case with Kenneth Simoneaux, a Bayou Corne resident since 1982.
Simoneaux said the only reason he opted into the settlement was because he had not been provided the appraised value of his home by the opt out date.
“We had to opt in or opt out by this date and I still did not have one number of which to make a logical decision. I couldn’t just act like this was a game,” he said.
Simoneaux maintains that class counsel routinely withheld information. He said he was upset by not being included in a discussion of a possible settlement and that he only received a letter in the mail telling him how much he was set to receive.
“How would you feel if I destroyed your home, personally, exposed you and your family and grandkids to the gasses we were exposed to? What would you ask for in compensation?” he said. “I’ve totally lost faith in the (legal) system.”
After airing their grievances to the court, Bayou Corne residents were shuttled into another room to speak privately with class counsel about their concerns. Upon returning from the private meetings, class counsel representative D. Blayne Honeycutt, who is Fayard’s law partner, said the group of attorneys did not have further comment on the matter.
“Of the (class members) I spoke to they said they already had their statement and didn’t have anything they wanted to say,” he said.
Honeycutt added that class counsel felt they had served their clients as well as they possibly could have.
“I think we’ve addressed, as best we could, any issues they may have had,” he said.
Despite the numerous complaints aired by the former Bayou Corne residents on the handling of the class action, Zainey said he felt class counsel and Easterly had done the best they could to get an adequate settlement for the displaced residents.
“Given what I have seen and heard today, the settlement on your behalf was an excellent settlement,” he said. “Does this bring back your home? No. I’m sorry.”
In any case, Zainey said the date for all objections to the settlement had already passed and there was not much that could be done going forward.
“My hands are tied as well at this point,” he said.
In closing, Zainey encouraged class members to look toward the future rather than the past.
“Move on with your lives," he said. "This is a horrible tragedy. This is a horrible thing. You’ve been through so much. For your sake, for your children’s sake, move on with your lives."
However, for Schaff, the hearing was just another indication that the situation they were in was completely out of their control and that class counsel was getting away with systematic deception and manipulation.
“I am sorry I wasted everyone’s time with this,” Schaff said as he was exiting the courthouse. “I didn’t receive any sort of closure at all.”