Court of Appeals rejects settlement in alleged water contamination suit due to conflict of interest

LAWRENCE COUNTY,  Ala. — A settlement in a class action suit alleging chemically tainted Tennessee River water was thrown out Monday by the Eleventh Circuit Court of Appeals. The settlement was drawn up between the West Morgan-East Lawrence Water and Sewer Authority and their customers on one side and Daikin America, Inc. on the other.

The settlement terms required Daikin to pay $5 million, $4,450,000 of which would go to the Water Authority and $550,000 would go to the attorneys. The customers would receive no money directly from the settlement, according to Gathing’s Law Firm, which appealed the settlement. Under the settlement, instead of customers receiving funds for damages suffered, the Water Authority would apply a $450,000 credit to the water bills amounting to about $50 in credits for each of the 300 customers.

The Water Authority used $4 million of the settlement to cover the cost of a temporary GAC or granulated activated carbon filtration system in 2016. Customers have seen a recent surcharge on their bills to help pay for maintenance on the system.