As Conrail pushes to settle claims over a train derailment last November that spewed toxic gas into Paulsboro and caused an evacuation of some residents, plaintiff lawyers are complaining about the company’s tactics.
Consolidated Rail Corporation filed an action in Gloucester County Superior Court on Feb. 4, seeking approval of agreements by which parents or guardians of more than 50 children, aged two months to 17 years, waive all future claims and the right to join in any class action over the spill.
The complaint, In re Certain Minors v. Consolidated Rail Corporation, GLO-L-195-13, does not mention how much the children and their parents were paid, but plaintiff lawyers say the sums range from $500 to $2,500, with more paid to those who were evacuated.
Frank Schirripa, of Hach Rose Schirripa & Cheverie in New York, representing more than 600 Paulsboro residents, filed a class-action suit and order to show cause in Superior Court on Jan. 28, seeking declaratory and injunctive relief and a temporary restraining order to halt the settlements, which allegedly create a risk of irreparable harm.
The suit said the settlements were "rampant with pressure tactics, outright misrepresentations and interference with existing attorney-client relationships," especially with regard to minors "whose parents are being asked to sign away their rights without a fair hearing."
It further alleged that Conrail is taking advantage of "people who are economically strapped" by paying them far less than what their claims were worth.
Conrail, in removing several suits filed over the derailment to federal court, had alleged they were worth at least $75,000, the minimum for diversity jurisdiction, Schirripa alleged.
In an accompanying affidavit, Paulsboro resident Yasmeen Stafford said that on Jan. 15, a Conrail representative contacted her on her mobile phone and invited her to visit the company’s office to discuss settlement even after she told him she had retained counsel. At Conrail’s office, she was offered $2,500 for each person in her household on the condition that she provide a letter from the lawyer stating that the representation was terminated, she said.
Two other Schirripa clients submitted similar affidavits.
Before the application for emergent relief could be heard, Conrail removed it to federal court on Jan. 30. The company denied the allegations and said there was no legal basis for the relief sought.
Conrail acknowledged it was settling directly with potential plaintiffs, but only those who initiated contact. It also asserted it was following a set procedure, by which people are asked if they have counsel before any substantive discussion occur. Settlement talks stop with anyone who says he or she is represented, who is a named plaintiff in a pending lawsuit or who has been identified as a client by any attorney. Even if claimants deny having a lawyer, the conversation ends if they appear on a lawyer’s list of clients, Conrail said.
For those with lawyers, the protocol is "for the claims agent to advise the claimant that he or she cannot speak with the claimant about the claim unless the claimant brings in a letter from the firm purportedly representing the claimant, stating that firm no longer represents the claimant."
On the other hand, those without lawyers are presented with a release and are read a standard statement which tells them what they are giving up and names the putative class suits filed thus far and the lawyers who filed them, with an offer to provide contact information.
As for Stafford, Conrail said it had been sent a list that identified her as "Yasmeen Stacey," causing confusion.
At a Feb. 7 case management conference, U.S. District Judge Robert Kugler said he would allow discovery on the matter and set a March 7 hearing date.
One day later, however, Schirripa voluntarily dismissed the case, Stafford v. Consolidated Rail Corp., 13- cv-596. He says he and his co-counsel were seeking emergent relief and by the time Kugler decided the matter, it would have been moot because those inclined to settle would have already done so.
Schirripa says he can understand the confusion about Stafford, but that does not explain why Conrail settled with her children, who were clearly his clients, he said.
He calls Conrail’s request for approval concerning the minors a "reverse friendly" hearing, asking for court approval after the money has already been paid.
Schirripa says he is uncertain whether any of his clients were listed in the complaint but says, "I know of other minors we are representing that were settled out," as well as some adults.
Schirripa, together with Conrad Benedetto of Philadelphia and Michael London of Douglas & London in New York, represents more than 600 clients who have not yet sued for damages because they are "still in the fact-gathering stage."
On Feb. 8, Kugler consolidated eight pending cases on a master docket as In re Paulsboro Derailment Cases, 13-cv-784. But he declined at that point to name lead counsel, as requested by the lawyers at Berger & Montague in Philadelphia and Brodsky & Smith in Cherry Hill, who have filed two class actions and asked for the consolidation.
In addition, Kugler denied without prejudice the plaintiff lawyers’ motion for a protective order to limit and supervise Conrail’s allegedly improper communications with those they refer to as "absent class members," because it was supported only by a lawyer’s affidavit.
A call to Allison Finnegan of Schnader Harrison Segal & Lewis in Philadelphia, one of Conrail’s attorneys in the consolidated actions, was returned by Conrail spokesman Michael Hotra, who provided a statement saying: "The claims process is designed to address claims fairly and promptly, and we continue to assist Paulsboro residents and businesses through this process. This is an important step in Conrail’s commitment to the Paulsboro community now that the incident response is over and rail service has resumed."
Another Conrail lawyer, Jessica Gensler Lippy of Gallagher & Rowan in Mount Laurel, who is handling the effort to win approval of the minors’ settlements, did not return a call.
The National Transportation Safety Board issued a preliminary report on the derailment on Dec. 17, finding the train was moving at 7 mph, 3 mph below the authorized speed limit on the Paulsboro Movable Bridge, when seven cars went off track. Four came to rest in Mantua Creek and one of three released about 180,000 pounds of vinyl chloride, a toxic, flammable, and carcinogenic gas.
NTSB spokesman Terry Williams says the investigation is ongoing, with no projected date for the final report, but he notes that it typically takes about a year.