A Tulsa judge has approved a $1.3 million settlement in a class-action lawsuit involving former residents whose properties were bought out during the government’s relocation of people living in the Tar Creek area, an EPA Superfund site in northeast Oklahoma.
The agreement, approved Thursday by District Judge Dana Kuehn, calls for attorneys of the residents to receive $650,000 from the settlement and former Picher residents splitting the remaining $650,000.
One former Picher resident, Patty LaFalier, said she has heard the settlement works out to about $4,000 per household.
“I think most people are thrilled to get anything at all,” she said.
LaFalier and her late husband, Johnny, were among as many as 260 former Picher residents who sued after becoming dissatisfied with the buyout process.
LaFalier said an appraiser initially offered the couple $17,000 for their home of nearly 40 years.
“And I thought, ‘uh, uh, I’ve got more lumber in (the house) than that amount,’” she said.
The couple later accepted a $47,000 offer for their house, despite believing it was worth more.
Multiple property owners filed two lawsuits in 2009 and 2010, claiming they were offered low-ball buyouts during the relocation process. The two lawsuits were later merged.
The properties were to be sold to a trust for an amount equal to the average cost of comparable housing elsewhere in the county, according to the lawsuit.
The offers were approved by the Lead-Impacted Communities Relocation Assistance Trust. Taxpayer money was put into the trust for distribution to property owners, according to court documents.
Picher, located in Ottawa County, was dissolved in 2013 after its residents were relocated due to environmental pollution and the prevalence of sinkholes caused by lead and zinc mining.
Between 1915 and 1930, Picher and the neighboring town of Cardin were the center of the largest zinc mining operations in the world.
Mining ended in the area in the 1970s, but its effects devastated the town. Mountains of chat — or mining waste — were left throughout the area, and sinkholes — collapsing ground — were common.
Children in the Ottawa County towns were found to have elevated levels of lead in their bodies.
The federal- and state-funded relocation of residents involved 878 buyout offers and cost $44.8 million.
After combining the two cases, Kuehn ruled in 2013 that the class could be certified to pursue the lawsuit.
Defendant Cinnabar Service Co., a Tulsa-based company that appraised the properties before the voluntary buyout offers were made, appealed the decision to grant class-action status. The Court of Civil Appeals affirmed the district court’s decision in July 2014.
Attorneys for the residents agreed to the settlement after learning Cinnabar was “virtually assetless except for a diminishing $2 million insurance policy,” court documents filed on behalf of the former residents say.
“In other words, the longer the case went with rising defense costs, the less the available recovery for class members becomes,” the court filing states. “Should plaintiffs obtain a verdict at trial, the policy proceeds would continue to diminish throughout the lengthy appeal.”
Attorneys for the property owners received no opposition to the proposed settlement or the amount requested by their attorneys, court records reflect.
LaFalier said she was happy to see the case concluded.
“I’ve lost my husband since all this took place,” LaFalier said. “He died about a year ago, and he was very avid about the case. He felt like people had been ripped off.”
Cinnabar denies all charges of wrongdoing or liability arising from its conduct involving the buyouts, according to the settlement agreement. The company specifically denied that it “low-balled appraisals to the detriment of settlement class members.”
Attorneys for both sides did not respond to calls for comment.