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Averett v. Metalworking Lubricants Co.

United States District Court, S.D. Indiana, Indianapolis Division

September 27, 2017

Teah Averett, Cindy Malless, Eugene Parsley, Rebecca Parsley, and Crystal Whalen, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
Metalworking Lubricants Co., Defendant

          ORDER

          Hon. Jane Magnus-Stinson, Chief Judge

         Plaintiffs Teah Averett, Cindy Malless, Eugene Parsley, Rebecca Parsley, and Crystal Whalen, on behalf of themselves and all others similarly situated, assert public nuisance, private nuisance, negligence, and gross negligence claims against Defendant Metalworking Lubricants Co. (“Metalworking”) related to the alleged emission of noxious odors from Metalworking’s Indianapolis facility. Plaintiffs rent or own property near Metalworking’s facility, and brought this case as a putative class action on behalf of “[a]ll owner/occupants and renters of residential property residing within one and one-half (1.5) miles of the facility’s property boundary.” [Filing No. 8 at 7.]

         On June 2, 2017, after the parties had conducted extensive discovery and participated in a private mediation, the Court granted Plaintiffs’ Motion for Order Conditionally Certifying Case as a Class Action for Settlement Purposes, Appointing Class Counsel, Appointing Class Representatives, Approving Manner and Content of Notice and Preliminarily Approving Class Action Settlement. [Filing No. 84; Filing No. 85.] Specifically, the Court conditionally certified the following Settlement Class:

1) All owner/occupants and renters of residential property within the Class Area as defined herein…;
2) All persons who have submitted a Resident Data Sheet to Plaintiffs’ Counsel…;
3) All persons included on the list of non-anonymous complainants (regarding alleged MLC Facility odors) to the Indiana Department of Environmental Management…; [and]
4) All persons included on the list of non-anonymous complainants (regarding alleged MLC Facility odors) to Citizens Energy….

[Filing No. 85 at 2.] The Settlement Class includes only individuals who fall within one of the above categories between September 25, 2009 and the Effective Date of the Settlement Agreement. [Filing No. 85 at 2.]

         The Settlement Agreement requires Metalworking to pay $750,000 into a fund for the benefit of the class members. [Filing No. 84 at 14.] After attorneys’ fees, costs and expenses, and a $2,000 service award for each Named Plaintiff are deducted from the $750,000, the remainder of the fund will be distributed on a pro rata basis for all class members who timely submit approved claim forms. [Filing No. 84 at 14.] Each household is limited to a $2,500 recovery under the Settlement Agreement (not including the service award for each Named Plaintiff). [Filing No 84-1 at 15.] The Settlement Agreement also requires Metalworking to “implement a minimum of $250,000 worth of physical improvement measures to its Indianapolis Facility in order to reduce the potential for odor emissions and improve the facility’s environmental performance,” which “includes but is not limited to the installation of a computerized monitoring system.” [Filing No. 84 at 14.]

         The Court preliminarily found that the terms of the Settlement Agreement are “(a) fair, reasonable, and adequate in light of the relevant factual, legal, practical, and procedural consideration of the Action, (b) free of collusion to the detriment of Class Members, and (c) within the range of possible final judicial approval, subject to further consideration thereof at the Settlement Hearing….” [Filing No. 85 at 4.] The Court also preliminarily found that the settlement class met the requirements of Fed. R. Civ. P. 23. [Filing No. 85 at 3-4.] The Court approved the form of notice proposed by the parties, and the procedure by which notice would be given. [Filing No. 85 at 4-6.]

         After administering the settlement, Plaintiffs filed an Unopposed Motion for Final Approval of Class Action Settlement, Certification of Settlement Class, and Appointment of Class Representatives and Class Counsel, [Filing No. 89], and an Unopposed Motion for Award of Attorneys’ Fees, Reimbursement of Litigation Costs, and Service Awards for the Class Representatives, [Filing No. 90]. The Court held a hearing on the motions on September 8, 2017, [seeFiling No. 92], and also heard argument regarding an Objection to the settlement filed by Kristine Van Pelt, [Filing No. 89-1 at 5-8]. The motions and the Objection are now ripe for the Court’s decision.

         I.

         Objection

         On July 6, 2017, Kristine Van Pelt submitted an Objection to the settlement in which she objected to four main aspects of the settlement: (1) the amount of the settlement, including the fact that more than 45% may go to attorneys’ fees, the limit of $2,500 per household, and the $2,000 service award paid to each Named Plaintiff; (2) the “improvements” part of the settlement, because all changes can be implemented within the first year, and Metalworking can afford to spend more on changes; (3) her belief that the effect on property values has not been considered; and (4) the fact that future damages may not be apparent yet, such as health problems, and that the settlement does not take into account the social impact the odor has had. [Filing No. 89-1 at 5-8.] Ms. Van Pelt did not attend the September 8, 2017 hearing, but the Court heard argument from counsel regarding her Objection and finds that it is without merit.

         First, as discussed in detail below, the Court finds that the amount of attorneys’ fees requested (as adjusted below), costs, and the $2,000 service award for each Named Plaintiff are reasonable. Further, the $2,500 recovery limit per household (not including the service award for Named Plaintiffs) is reasonable. Plaintiffs’ counsel clarified at the September 8, 2017 hearing that landlords who own property in the area that is included in the settlement are not class members. Counsel also confirmed that a husband and wife who live in the same household will only receive one $2,500 award. The Court finds that the $2,500 amount per household is reasonable given the risks involved for Plaintiffs in proving their case. As Plaintiffs’ counsel discussed at the hearing, there was a significant risk that the class would not have ultimately been certified or that liability would have been difficult or impossible to prove, given that the Metalworking Facility is located near many other industrial facilities that could have been producing the odor instead, the odor at issue was allegedly caused by leaks rather than steady emissions so it was impossible to map out the area of emissions, and various class members had described the odor differently.

         Second, the Court finds that Ms. Van Pelt’s objection to the portion of the Settlement Agreement requiring Metalworking to spend $250,000 on improvements is without merit. At the September 8, 2017 hearing, counsel for Metalworking discussed improvements that Metalworking has already started to plan, and the Court also finds it particularly significant that the class members are not releasing any claims related to future emissions in the Settlement Agreement or any claims for personal injury.

         Third, Plaintiffs did address the potential decreased property value of homes in the settlement area in their brief in support of their Motion for Final Approval of Class Action Settlement, Certification of Settlement Class, and Appointment of Class Representatives and Class Counsel. [Filing No. 89 at 8.] A positive outcome at trial for Plaintiffs was not a foregone conclusion – instead, Plaintiffs faced numerous risks in obtaining class certification and in proving liability. The $2,500 per household is a reasonable result, even factoring in a potential decrease in home values. Further, the Court notes that many of the class members are renters, who would not be entitled to damages related to a decrease in the value of property that they do not own.

         Finally, Ms. Van Pelt objects to the ramifications the Settlement Agreement would have on future claims related to health issues or enjoyment of property. While class members are releasing claims they have related to the use or enjoyment of their property to date, they are also receiving payment for that release. Ms. Van Pelt’s remaining concerns are unfounded, because class members are not releasing any personal injury claims they may have related to the emissions to date, or any claims at all related to emissions that occur in the future.

         Ms. Van Pelt’s Objection, [Filing No. 89-1 at 5-8], is OVERRULED.

         II. Class Certification, Settlement Agreement, Attorneys’ ...


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