Residents Lose Challenge to U.S. Steel Settlement

(CN) - The 6th Circuit upheld a $4.45 million class-action settlement against U.S. Steel over claims that its Michigan mill released "metal-like dust and flakes" that fell on surrounding homes. Class members had argued that the award is "unconscionably low" and gives the steel mill a pass to pollute again.

Malcolm Moulton, a plaintiff in the more than four-year-old case, challenged the settlement, claiming the award was too meager - save the 30 percent awarded to the attorneys, which he and others deemed too high. They also claimed the trial court went too far in approving a cap on continuing nuisance claims.

Another off-shoot of the 4,000-member class, led by attorney Donnelly Hadden, objected to the size of the award and the scope the cap, while also accusing class counsel of "collusion" with U.S. Steel.

Though attorneys Jason Thompson and Peter Macuga filed the final amended complaint and were named class counsel, Hadden for years tried to represent residents of Ecorse and River Rouge, and to convince them to opt out of the class action and sue U.S. Steel individually.

Most members of the class will receive about $300 from the settlement. Seven class representatives will receive $10,000 each, and the attorneys get about $1.3 million, the ruling states. Unclaimed funds of about $1.28 million will go to local schools in Ecorse and River Rouge.

Writing for the three-judge panel in Cincinnati, Judge Jeffrey Sutton rejected the various objections.

"The objectors first argue that class-member awards of $300 are unconscionably low," Sutton wrote. "But that objection is based on the misconception that the agreement releases all future tort claims" (italics in original).

The agreement does not bar future claims, so long as the "continuing nuisance is new and did not begin until after the settlement's effective date," Sutton wrote.

"By releasing future claims only for pre-settlement conduct, the agreement sensibly - and reasonably - accommodates U.S. Steel's interest in protecting itself from suits based on identical claims that existed at the time of the complaint (and settlement) without extinguishing the class's right to file distinct claims in the future," Sutton concluded.

The judges were equally unconvinced that class counsel had colluded with U.S. Steel.

"The duration and complexity of the litigation, to start, undermines the objectors' suspicions," Sutton wrote. "The parties litigated for almost four years before reaching a settlement agreement. It is difficult to maintain that class counsel took all of these steps merely to mask its collusion with U.S. Steel, and that the one entity with a bird's eye view of the proceedings - the district court judge - somehow missed the signs that the parties were merely engaged in pretense and posturing."

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