Residents settle for $48 million in sinkhole lawsuit

Texas Brine Co. and the class-action plaintiffs who sued over the sinkhole that forced hundreds from their Bayou Corne homes have agreed to a $48.1 million settlement that includes buying out their properties and settling other claims related to the underground collapse of the company’s salt dome cavern.

Filed midday Tuesday in U.S. District Court in New Orleans, the proposed settlement is awaiting preliminary approval from Judge Jay C. Zainey and comes about a week before the litigation was set to go to trial Monday.

“We firmly believe the $48 million is a really good settlement number,” said Larry Centola, one of the attorney’s representing the owners and residents of about 90 homes and camps in the Bayou Corne area.

Though a precise number of people was not immediately available, Centola said the 90 properties have been under an evacuation order in place since Aug. 3, 2012, when the now nearly 30-acre swampland sinkhole first emerged.

The settlement comes a few weeks after Texas Brine closed on the last of the 66 direct, out-of-court property buyouts and appears to provide a path toward conclusion for another wave of Bayou Corne residents displaced by the sinkhole disaster now more than 20 months old.

Several suits over the sinkhole are pending against Texas Brine and are not part of the proposed settlement, including those brought by pipeline companies, large landowners, parish government and the state.

If Zainey grants preliminary approval of the proposed settlement, the attorneys and plaintiffs will have to go through a multi-step process, including the selection of a special master, before the settlement becomes final and individual claims can be reviewed and paid.

Centola said the payments would be split up into buyouts of plaintiffs’ properties and a separate damages component for emotional distress and other factors.

Centola said he hopes plaintiffs will see some of the settlement money possibly in a few months.

“Property settlement class members will be able sell their property to Texas Brine as early as this summer. Then they can move on and, hopefully, start the next chapter of their lives,” he said.

Plaintiffs’ attorneys fees have been capped at a maximum of 25 percent of the settlement figure. He said the fees will be determined after the plaintiffs are paid.

Henry Welch, 67, who evacuated with his wife, Carolyn, and moved four times in one year after the sinkhole, said he does not yet know if the settlement will be enough to restore him financially to before the sinkhole appeared.

Welch had been living in a paid-for mobile home on the water in Bayou Corne but has taken out a loan for the house he is living in now in Paincourtville. He said he fears replacement cost won’t be enough.

“It’s hard to say ... if it’s a good deal or not. It just depends on how much they are going give me. If I don’t get enough, it ain’t a good deal,” said Welch, who is retired.

Welch said his attorneys were supposed to meet with him and other plaintiffs Tuesday evening.

Texas Brine officials said in a statement that negotiations with the plaintiffs’ attorneys resulted in the “definitive agreement” conditioned on the purchase of the residents’ property by Texas Brine.

“This settlement with the Class represents another major milestone in resolving issues associated with the sinkhole,” a Texas Brine statement says.

“While great progress has been made on resolving residential claims, Texas Brine remains committed to continuing its sinkhole response activities through the implementation of a comprehensive, long-term monitoring program.”

Texas Brine officials and their attorneys declined further comment Tuesday.

Under the agreement, all claims against the company would be dismissed and Texas Brine would admit no fault in the sinkhole disaster.

Scientists think the sinkhole was caused by a Texas Brine-operated salt dome cavern mined too closely to the outer face of the massive salt deposit.

That led to a breach in the underground cavity that shifted surrounding rock, leading to the sinkhole.

The sinkhole is undergoing continued, though slower growth, but is not expected to reach La. 70, the Bayou Corne community or the Bayou Corne waterway before the sinkhole finally stops.

Methane gas released underground by the sinkhole also poses a safety concern, parish and state officials say. Texas Brine disputes this claim.

Under the proposed settlement, individual plaintiffs will be asked to fill out claim forms to submit to the special master, who is proposed to be Denham Springs lawyer A. Shelby Easterly III.

Zainey then will preside over a fairness hearing and rule on whether the overall settlement is fair and reasonable before granting final approval.

The special master will then review and make recommendations on individual plaintiffs’ claims.

Four Texas Brine insurance companies would share in the settlement costs. Settlement funds would be deposited in an account at Whitney Bank and then paid out to the plaintiffs.

The settlement comes as Texas Brine’s attorneys at the Kean Miller LLP law firm in Baton Rouge have been waiting on Zainey’s approval of the firm’s voluntarily withdrawal from the case. Conflict-of-interest claims were made by another company in the litigation that Kean Miller has represented in the past.

Kean Miller had argued it appropriately handled the conflict, but Kean Miller’s departure could have posed a delay to a plaintiffs’ trial while Texas Brine’s new lawyers got up to speed.

Centola said the settlement negotiation had been going for months before Kean Miller sought to withdraw. He added that the plaintiffs’ attorneys were not allowed in a recent hearing over the claims, which involved attorney-client privilege, and don’t know the full details of the dispute.

“All we know is we got a favorable result for our clients, and we’re excited about it,” Centola said.