Attorneys for a South Carolina law firm have negotiated settlements, estimated to total between $125 million and $145 million, on behalf of the U.S. Virgin Islands as compensation for contamination caused by refineries on the southern coast of St. Croix.
Jerry Evans and Gordon Rhea of Richardson, Patrick, Westbrook & Brickman in Mt. Pleasant represented the Virgin Islands in its suit, along with John Dema, an attorney based in Christiansted, St. Croix. Evans and Rhea are members of the Virgin Islands bar.
The settlements will cover damage caused by two refineries, one for oil and one for alumina, an aluminum oxide with a variety of commercial applications. The oil refinery had allowed millions of gallons of petroleum to seep into the groundwater through leaking underground pipes and storage tanks.
Alumina refineries create a toxic waste product known as red mud. At the St. Croix refinery, red mud and other corrosive byproducts had contaminated the ground surface and seeped into the soils and eventually the groundwater. Both refineries are now closed.
Rhea said that some of most serious damage caused by the refineries was to a large aquifer, an underground water source.
Evans
“Of course, on a Caribbean island, when you’re in the middle of a salt water ocean, a freshwater aquifer is an incredibly valuable resource,” Rhea said. “The contamination had an extreme risk of causing a huge harm.”
The defendants in the case include Hess Oil Virgin Islands Corporation and Hovensa, which owned the oil refinery; and Lockheed Martin, St. Croix Alumina, Alcoa World Alumina and St. Croix Renaissance Group, which owned the alumina refinery. The settlements will include cash payments of approximately $67.25 million, and the defendants agreed to pay for the cost of clean-up work at the sites, the cost of which is still being determined.
Rhea described the settlements as “a win-win” for both sides.
Rhea
“The Virgin Islands government will get this important resource cleaned up and will be compensated for the harm, and of course the industrial giants stepped up and did what we hope anyone similarly situated would do, that is, they’re accepting responsibility and fixing the damage they caused,” Rhea said.
The government of the Virgin Islands initiated the first of the lawsuits in 2005 in federal court. The settlements were reached in stages, and the final settlement, with the oil refinery defendants, was reached on May 28. Several of the alumina refinery defendants settled in 2012, and work on that clean-up is already underway. Two remaining defendants have yet to reach a settlement with the government.
“This kind of development is extremely rewarding because the impact of this kind of contamination, particularly from an oil refinery, can be devastating to a small community,” Rhea said. “Now that this pollution is getting fixed, it’s going to do to a lot to improve the lives of a lot of people, and that is very rewarding.”
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SETTLEMENT REPORT – ENVIRONMENTAL DAMAGE
Case name:
Commissioner Department of Planning & Natural Res. v. Century Alumina Company
Court: U.S. District Court for the District of the Virgin Islands
Case number: 1:05-cv-00062-HB
Judge: Harvey Bartle
Amount: $67.25 million in cash plus environmental remediation and restoration work estimated to cost $58 million to $76 million
Settlement date: In stages, with the final settlement reached May 28
Mediator: Edward Cahn, retired U.S. District Court judge
Attorneys for the plaintiffs: Jerry Evans and Gordon Rhea of Richardson, Patrick, Westbrook & Brickman, Mt. Pleasant; and John Dema, Christiansted, St. Croix.