Conrail offering cash settlements to Paulsboro residents who sign away rights to sue

Tanker cars derailed in November in Paulsboro, leaking toxic chemicals into Mantua Creek. Under Conrail's cash settlement, residents would not be able to sue for future health conditions or property damage.
Tanker cars derailed in November in Paulsboro, leaking toxic chemicals into Mantua Creek. Under Conrail's cash settlement, residents would not be able to sue for future health conditions or property damage. (ED HILLE / Staff Photographer)
Posted: January 19, 2013

Conrail is offering cash settlements to Paulsboro residents and businesses affected by November's leak of toxic vinyl chloride from a ruptured tanker car - if they agree not to sue the company for health problems they might discover later.

The offer drew curious residents to the company's claims office, but some are now panning it as an effort to take advantage of a needy community. A lawyer for residents who already have filed suit said settlements might end up on shaky legal ground because the company was not providing legal assistance to residents in weighing the terms.

The leak was caused by a train derailment that sent four tanker cars into Mantua Creek.

One car breached, releasing 23,000 gallons of the hazardous chemical into the atmosphere, according to the U.S. Environmental Protection Agency, forcing the evacuation of nearly 700 residents.

The five-page settlement document says residents cannot sue for any future health conditions whatsoever, and lists at least a dozen different forms of cancer, neurological damage such as Parkinson's disease, and "emotional distress" as examples of illnesses for which people would not be able to sue.

They also would not be able to make claims for medical monitoring or property damage.

The settlements offered range from $500 for people who live outside the evacuation zone, established by officials leading the response, to $2,500 for those who live inside the zone, according to some residents.

It was unclear whether the amounts were per household or per person.

A Conrail spokesman would not discuss details, saying only that it was treating "each claim differently." Some people have signed settlement agreements, Michael Hotra said, but he could not say how many had accepted it since it was first offered a week ago.

The settlement includes a nondisclosure agreement.

It also immunizes a long list of other entities, including Conrail parent companies, the Association of American Railroads, and emergency responders.

Attorneys representing people who have already sued Conrail lambasted the company for what they called an attempt to take advantage of people in an economically distressed town. They also note that important data, such as the levels of vinyl chloride to which people were exposed, remain unclear.

Mark R. Cuker, an attorney representing more than 50 Paulsboro residents in a suit filed last month against Conrail and its parent companies, described the offer as "draconian."

By signing the agreement, "you are done, no matter what happens to you the rest of your life," he said. "What they're doing is pretty outrageous."

He noted that federal and state health officials had yet to issue the findings of a survey of residents on health issues.

On Monday, Stuart Lieberman, a lawyer who filed a separate suit Jan. 8 on behalf of 52 Paulsboro residents, wrote to Conrail saying in part that "Conrail has a moral obligation" to provide people with a lawyer while reviewing the settling document.

"The failure to do so," Lieberman continued, "may very well result in a challenge to the legal sufficiency of such settlement agreements."

In a statement, Hotra said the settlement process "is an important step in Conrail's commitment to the Paulsboro community." He added that before any claim was resolved, each claimant was informed about pending class-action lawsuits and made aware that settling "impacts a claimant's ability to participate in litigation."

Rick Swedloff, an assistant professor at the Rutgers-Camden School of Law, said Conrail has every reason to want to settle. Litigation could be more expensive, he said, adding, "Who wants to be in lengthy litigation when you know you spilled chemicals all over?"

Paulsboro residents, Swedloff said, face a similar calculus: "How much are you getting? And what's the probability that you're going to be harmed more down the road?" He emphasized that he has not followed the incident and was not an expert on vinyl chloride.

Jill Swindell-Filiaggi, 43, a plaintiff in one of the suits, said Thursday that she was appalled that "there are people wanting to go forward with that kind of offer, basically signing away their health."

She said a line snaked around Conrail's claims office as people heard about the offer. Swindell-Filiaggi said interest in settling has started to wane, however, as residents have learned more about the implications of signing the document.

"I think Conrail has completely taken advantage of people taking the offer," she said. "It's very clear to see. This area is very suppressed. It's a poor community. They know, by waving a carrot, a small carrot, people are going to go for it without realizing what they're doing."

Jim McGovern, 64, described the offer as "extremely cynical and irresponsible." Conrail, he said, was "trying to walk away from its obligation to the people they exposed."


Contact Andrew Seidman

at 856-779-3846 or aseidman@phillynews.com,

or follow on Twitter @AndrewSeidman.

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