Conoco to pay $70 million | Levin Papantonio Rafferty - Personal Injury Law Firm

Conoco to pay $70 million

Source: Pensacola News Journal | Release Date: 4/6/2004

Settlement covers property, medical study in Agrico toxic case

Steve Mraz @

ConocoPhillips has agreed to a $70 million settlement with Pensacola residents whose property is potentially contaminated by a toxic plume that has spread from the old Agrico Chemical Co. fertilizer plant in central Pensacola to Bayou Texar.

Pensacola attorney Mike Papantonio, who filed two suits against Conoco Inc. and predecessor Agrico Chemical Co. in 2001, announced the out-of-court settlement Monday.

The settlement, which still must be approved by the Circuit Court, provides:

$65 million to be divided in varying amounts among a maximum of 7,000 people who own, or have owned, some 3,000 pieces of property since 1957.

$3.6 million for medical monitoring of the 3,000 or so residents included in one of the lawsuits.

$750,000 for administering the settlement

The Conoco plant, closed in 1975 and added to the U.S. Environmental Protection Agency's Superfund list in 1989, was located on Fairfield Drive west of Interstate 110.

The affected area is roughly bordered by Cross Street to the south, Palafox Street to the west, Hickory Street and Berkley Drive to the north and the bayou to the east. It also includes all shoreline property along the bayou.

Papantonio said property owners, unless they decide to opt out, could begin receiving their settlement payments by mid-fall. A special master will develop a formula to determine the settlement distributions.

"I'm thrilled," plaintiff Blair Stephenson, who shares a home on East Gonzalez Street with her mother, said of the settlement. "This has been a real victory for the city and the people who have had to deal with all this. It's disappointing to think you can put retirement money into a waterfront home, then find out it's polluted."

Papantonio's lawsuits were the first real tests for Pensacola Gulf CoastKeepers, a local chapter of the national organization Riverkeepers Inc., which is famous for its willingness to take polluters to court.

The first lawsuit alleged that a toxic plume migrating from the fertilizer plant to the bayou devalued property values and contaminated private irrigation wells. It also claimed Agrico misled EPA regulators into approving a cleanup plan that will leave the polluted groundwater in the aquifer where the region gets all its drinking water.

The second suit sought medical screening for area residents and former employees possibly affected by the pollution.

ConocoPhillips, created by a merger of Conoco Inc. and Phillips Petroleum Co. two years ago, is the third-largest integrated oil and gas company in the United States. It reported a net income of $4.7 billion last year.

Company spokeswoman Kristi DesJarlais on Monday confirmed the preliminary settlement but declined to discuss the deal further.

In the past, Conoco and Agrico officials have denied that the plume poses a risk. They also have said the EPA's cleanup plan was an effective one.

"I'm not going to discuss whether we're pleased with the terms of the settlement," DesJarlais said Monday. "... I don't want to get into a discussion on fault."

Papantonio, however, hailed the results, despite initialing asking for $500 million.

"They may say, `We don't admit to liability here. We're not admitting we did anything rong,"' he said. "I've been doing this for 23 years, and I have never seen a company pay this much money unless the things being said about them ... are true."

Behind the settlement

The settlement has not yet been put in writing. Attorneys said that likely will occur within the next couple of weeks.

By settling out of court, both sides avoid a five-week trial that was scheduled for July and potentially years of appeals.

Attorneys will now ask the Circuit Court for preliminary approval of the settlement and a proposed allocation system by a special master.

Then, advertisements will be placed in newspapers notifying people of the nature and specifics of the settlement.

Attorneys also will apply to the court to determine their fee. That figure, separate from the $70 million settlement, could reach as high as $25 million.

Papantonio said several factors caused the final settlement to be much less than the $500 million he initially sought.

Among those factors:

When Judge Michael Jones decided on the area of affected property, he reduced the number of current property owners in the suit from about 11,000 to 3,000.

Plaintiff's attorneys were prevented from pursuing action that would make Conoco responsible for pumping, treating and removing contaminants from the groundwater.

The $70 million figure was arrived at because it is the amount of money Conoco saved by not pumping, treating and removing the contaminants from the property, Papantonio said.

"They never admitted doing it, but we have documents that show that they saved about $76 million," he said. "So that's where those numbers are coming from."

Utility's stance

The Escambia County Utilities Authority could have joined the lawsuit but declined.

The ECUA's position was that it did not have direct evidence to show Conoco-related pollution was responsible for contamination of its drinking water wells in that area.

ECUA Executive Director Steve Sorrell, who was not employed at ECUA until late 2002, said the utility still does not have any such evidence. He said Agrico plant contamination is not causing any problem related to ECUA water, and water provided by ECUA will remain at a high quality.

"The plume, if it exists, seems to be moving toward the bayou and not the wells," he said.

The ECUA also had an agreement that Conoco would pay for any contamination in ECUA wells if it were related to the Agrico site, Sorrell said.

The utility has been forced to close two wells near the site and dilutes water from a third.

Conoco and Utilities Authority scientists said the Agrico pollution had nothing to do with the closures.

Site cleanup

Conoco completed cleanup of the site in 1997 under EPA direction. Contaminated soils were dug up and buried in a lined landfill at the plant site, and a thick clay cap was placed over it to prevent rainwater from carrying more pollutants to the underground aquifer.

The EPA continues to believe that the cleanup protects human health and the environment, according to a case management statement filed by Conoco attorneys.

The settlement does not address potential personal injury lawsuits that could be brought against Conoco if people develop illnesses that can be linked to the pollution.

"Those individuals will have the right to go forward with their suits," said attorney Mark Proctor, who was one of the chief settlement negotiators.

Overall, the lawsuits have sent a strong statement from the community, Proctor said.

"Through the vehicle of this lawsuit, it seems to us that the citizens of the greater metropolitan Pensacola area have stood up and said, `We're not going to sit still when big business comes to our town and tries to ruin our way of life by polluting our waterways, which in turn causes risk to our families and our friends,' " he said.

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