The Delaware Superior Court has approved a $65 million class action settlement in one of the Mountaire environmental civil lawsuits. By settling, the Mountaire companies do not admit responsibility for the alleged groundwater or air contamination caused by their wastewater disposal activities — but the company agrees to pay people who may have been affected in a roughly 25-square-mile zone.
“To the class members, I hope the results here improve your life and make up for at least some of the losses you believe you’ve suffered. No settlement is never perfect, and that is especially true where, as here, liability was strenuously fought,” the Hon. Craig. A Karsnitz announced at the April 12 fairness hearing via Zoom.
Anyone who has lived or worked full-time in most parts of Millsboro or Dagsboro, at any time since May 1, 2000, when the company first acquired the Millsboro poultry processing plant, could be eligible for compensation under the Mountaire Settlement Class. That includes any property located partly or entirely within either the “Groundwater Area” and/or the “Air Area” (see the official map at www.MountaireSettlement.com).
Cuppels v. Mountaire is just one of several lawsuits that arose after a 2017 “wastewater upset” in which untreated poultry-processing wastewater was spray-irrigated directly onto agricultural fields.
Investigations shined a light on Mountaire’s many environmental violations over the years, which is now reflected in the settlement’s 21-year eligibility period. Plaintiffs alleged that “since it acquired the Millsboro plant in 2000, Mountaire had sprayed billions of gallons of highly contaminated wastewater and liquefied sludge on lands near residences. The waste was made up of feathers, dirt, fecal matter, blood, flesh and fat, as well as slaughtering, grease chiller and processing wastewater.
“The company knew its disposal practices were polluting Millsboro’s groundwater and air by increasing the levels of chemicals like nitrates, ammonia, and hydrogen sulfide to dangerous levels. But they did not spend the money to fix the problem or even warn local residents…”
“What followed was some of the most litigation I’ve been part of in my entire career,” said plaintiffs’ co-counsel Chase Brockstedt, who investigated nitrates in groundwater; airborne odors and chemicals; loss of property values and much more.
“This lawsuit and settlement send a strong signal to polluters everywhere that communities will not stand by and watch their way of life destroyed by environmental contamination,” said Philip Federico, co-counsel for the plaintiffs.
Judge approves settlement, and thousands register
After the class action settlement was proposed in January of 2021, the public had to register by March. Currently, there are an estimated 3,850 valid, on-time registrations (plus 50 late-filed forms). That comes from 4,130 timely forms (minus 220 exact duplicates and 56 forms from “habitual fraudulent filers,” according to the RG2 company, which is still processing registrations). There were also 30 opt-outs, several of which were filed belatedly.
The results of the class action suit are legally binding to people who lived or worked in that area, whether or not they wish to participate. For instance, they cannot bring a future lawsuit for the exact same issues.
There were only four objections, out of some 7,000 potential class individuals.
Ultimately, the judge said he believed “that the settlement is in the best interest of the class members. This case was contentiously litigated. The parties fought over many and all issues … when contrasted with the possibility of [receiving] nothing, the settlement is a far better alternative,” said Karsnitz. “The trial itself would have been lengthy, difficult and fraught with uncertainty.”
Mountaire also would have argued for a smaller geographic impact area, if the company even lost.
Some people still unhappy and have lingering questions
Only four people raised objections about the settlement, and three spoke at the Georgetown hearing. However, legal counsel on both sides considered input from outside the class boundaries to be “without merit.”
But because their rights are not bound by this class-action settlement due to being outside the boundaries, those people could pursue their own legal actions against defendants in future.
Located northwest of Millsboro, some people alleged that of some kind of dumping (whether fertilizer or another material) is still occurring near their homes. They saw the courthouse as the last place to raise those concerns.
Additionally, after paying a retainer fee and submitting evidence to the class-action attorneys, some were furious and even broken-hearted to not be included on the final settlement map.
“I went to all of those meetings. I filled out all of those papers. I waited patiently … to get a reply that ‘You’re not in the area,’” said Vereta Simon, who has owned her home for 34 years, seen questionable materials tilled into the agricultural fields, and seen her children and spouse deal with debilitating medical issues. “Someone is dumping. Clean it up. Give me and my husband … the chance to grow old. You took too much from me. I can’t just pick up and leave. That is my home.”
But it all comes down to proof.
“If it were up to us, we would have an unlimited number of people and funds,” Brockstedt responded. “Ultimately [the experts who drew the maps] had to base their opinions on objective scientific data. … No lawyers were involved in drawing the lines. … It simply came down to what we could walk into a courtroom and prove to this court.” Every incident must be “something we can prove was directly tied to Mountaire.”
Those houses are not downwind or downgradient of Mountaire’s activities, which is the topic at hand. The objectors’ allegations cannot be definitively tied to this particular lawsuit.
Anyone outside of the class-action area can still pursue individual legal action against Mountaire for environmental issues, although the judge noted that is “cold comfort.”
“I do sympathize with those who were excluded that wanted to be included. Testimony today was palpable and sincere and expressed some anger that they weren’t part of the class. The disappointment is real, but the evidence determines the results,” Karsnitz said.
Overall, the judge noted, it was “outstanding results for many, many people who are inside the class areas. … There is always a euphoria and regret when cases get resolved. I think you’re excited because you worked hard and you achieved a wonderful result. I think there’s always a regret because you’ve wonder whether you could have done better or whether something at trial might have happened differently that might have been advantageous to either of your clients. That’s the nature of settlement… if nobody’s quite happy, then the settlement’s probably a good one, and I think that’s today.”
More legal and environmental wins
It was a fiercely litigated case, the judge noted. Karsnitz commended the lawyers on both sides for (mostly) civilly, skillfully and vigorously representing their clients.
Karsnitz also approved attorneys’ fees for the plaintiff firms, Baird Mandalas Brockstedt LLC of Delaware, and Schochor, Federico and Staton P.A. of Maryland. Subtracted from the $65 million pot, the plaintiffs’ attorneys will receive a 25 percent ($16.25 million) payment, plus expenses of $2.5 million. After three years of intense research and litigation, that request is actually less than the approximately 33 percent that they might have requested in such a case.
The individuals who led the class action case also expanded their reach into the federal district court case. Such a group is allowed to — and did — become intervenors while Mountaire and Delaware Department of Natural Resources & Environmental Control (DNREC) were drafting a consent decree that didn’t have enough teeth to protect the environment, residents argued. The intervenors successfully pushed for a larger Mountaire investment, including $120 million for necessary plant upgrades and $20 million for ongoing maintenance.
Along with this month’s $65 million settlement, attorneys suggested that this total $205 million impact could be the largest nitrate groundwater contamination resolution in history. Besides improving the mechanical wastewater treatment system, additional efforts include, continuing to provide bottled water to certain residents, installing at least 60 acres of phytoremediation, and establishing a process to respond to odor complaints.
About a year ago, Mountaire made another a private settlement with another group of about 100 citizens, the Balback family and others, represented by Jacobs & Crumplar P.A.
“While Mountaire does not believe that it caused any damage to any of the plaintiffs, it chose to settle the case in order to achieve a final resolution and to allow construction of a new wastewater treatment plant to proceed,” the company announced. “The settlement resolves all outstanding class-action claims for injuries, damages or nuisance.”
“We are moving ahead with building our new state-of-the-art wastewater treatment plant, which is advancing quickly,” said Phillip Plylar, president of Mountaire Farms in Millsboro. “We’re ready to put this chapter behind us and forge a new relationship with our neighbors moving forward.”
Mountaire Farms’ parent company is based in Arkansas, with operations in Delaware, Maryland, Virginia and North Carolina, and provides work for nearly 10,000 people in those regions.
“Mountaire Farms of Delaware is proud to have been a key member of the Millsboro community for over 20 years, and by entering into the proposed settlement agreement, Mountaire is taking the final step toward putting litigation behind them and focusing on their core mission of sustainably providing their customers with quality products … and being a good neighbor,” said Mountaire attorney Tim Webster.
The next steps forward
So, the path has been laid. The Court has approved the class action settlement. People have registered to participate, but that doesn’t mean they’ll all get a check in the mail tomorrow. Now, the settlement administrator (the Hon. Irma Raker, a preeminent arbitrator and retired senior judge from the Maryland Court of Appeals) will ask participants to submit details on their claims (such as health, well water, home value or other). And she’ll decide how to weigh the severity of each.
After attorney and court fees, the rest of the account will be divvied up based on those individual claims. Checks can be written, or trusts set up for minors. A few million dollars will be reserved for any late filers (anyone who files late in the next 12 months, or who discovers new issues in the next five years).