MUSCATINE — A Muscatine County District Court Judge ruled this week residents who signed a settlement over emissions at the Grain Processing Corporation plant were not given complete information from lawyers negotiating the agreement.
In September, lawyers, who are being referred to as the Parry Group in court, announced they reached an agreement with GPC, where residents who have lived within 1.5 miles of the plant on Oregon Street for at least eight years could win up to $33,000, depending on proximity to the plant, home ownership status and other factors.
In order to sign the settlement, residents must opt out of a class action lawsuit, which is ongoing in court and will go to trial next July. Residents who have lived within 1.5 miles of the GPC plant, between April 2007 and this year, are automatically included in the class, which seeks compensation for the loss of enjoyment of properties due to emissions.
According to court documents, approximately 14,000 individuals are currently included in the class action lawsuit. Since the announcement of the settlement agreement between GPC and the Parry Group, more than 2,000 residents have opted out of the class action.
Class action lawyers have argued the Parry Group has been soliciting their clients by encouraging residents to join the settlement without offering complete information. For example, in the announcement, the lawyers announced the top dollar amount residents could win in the settlement, but did not list the other conditions of the agreement.
The Parry Group has argued the settlement is the quickest way for residents to win compensation from GPC over emissions, and, at a hearing Oct. 2, said many clients are sick or elderly and in need of money now. Attorney Ron Parry said no one knows what the outcome of the class action lawsuit will be or how long the court process will last.
At the October hearing, Kelsey Knowles, a lawyer for GPC, said the settlement was negotiated because it was not "feasible" for GPC to litigate hundreds of individual claims at the same time as the class action. She added GPC was admitting no wrongdoing by agreeing to the settlement.
Tuesday, Judge Thomas Reidel agreed with the class counsel, arguing the Parry Group's settlement announcement "paints a rosy picture that is not a fair representation of what it purports to be; it shows what settling class members receive, but not what they give up."
The judge said the lawyers failed to inform potential clients about the terms of the agreement, including residents would not be able to sue GPC for future harm caused by its operations and that residents would agree to placing a permanent easement on their properties, allowing GPC to continue operating its plant regardless of the environmental impact.
In addition, he said, the settlement announcement did not mention the fee the lawyers will claim in the agreement. The group of lawyers will receive one-third of any monetary sum received by a class member, according to the judge and court documents.
"Yet most egregiously, the Parry Group Announcement solicits ... class members and encourages them to opt out, but only in the interests of obtaining this fee," Reidel wrote in his ruling.
Despite the incomplete announcement, the judge ruled the settlement is still valid.
"The Court declines to mandate that hundreds of Muscatine residents who have elected to retain private counsel will automatically have that decision voided by the Court," he wrote. "Muscatine residents have a right to seek certainty rather than the hope of a better outcome."
He said many residents have chosen to opt out of the class action for personal reasons. But, he ordered the Parry Group and GPC to issue a corrective notice to class members who have opted out after Aug. 31.
The corrective notice, he said, will ensure class members have made a "conscious, informed, and independent decision."
The notice will include information about the opt-out period, the court's recent ruling, that the settlement terms they received may have been incomplete, plus that class members are allowed to seek legal advice from any attorney, including, but not limited to, the Parry Group.
The judge ruled the Parry Group and GPC will jointly pay the cost of the corrective notice, saying GPC contributed to the present situation by approving the settlement announcement, knowing it did not include all terms of the agreement.
In addition, the judge ordered for an "opt-in period" of two weeks, so that class members have the option to void their settlement agreement and join the class action lawsuit again. The dates of the two-week period are to be determined, but the period will begin once the corrective notice is issued.
The opt-in and corrective notice are only available to the more than 2,000 residents who have signed the settlement agreement after Aug. 31. Before that date, around 280 clients had hired the Parry Group, and they are not subject to the ruling, according to the judge.
In short, the judge ruled Muscatine residents have the right to make fully informed decisions in suing GPC over its plant's emissions.
"So long as the decision is fully informed and independent, Muscatine residents are more than capable of weighing their own long- and short-term interests and deciding for themselves what is in their best interests," Reidel wrote.
Next, lawyers will write the corrective notice, to be approved by the judge. Then, the timeline for the opt-in period, where residents may choose whether to join the class action lawsuit again or stay with the settlement, should be set.