UNION CITY, TENN. - The legal battle over class-action settlements for leaking polybutylene pipe systems has moved to Tennessee, where a judge tentatively approved an $850 million settlement by Shell Oil Co. and Hoechst Celanese Corp. Judge Michael Maloan handed down the preliminary approval on July 31 in Tennessee State Chancery Court in Union City. The settlement involves a national class-action lawsuit filed in that court earlier this year, according to Shell spokeswoman Dee Dee Taylor.
But a lawyer who represents homeowners in another national class-action suit, this one in Alabama, has threatened to block the settlement. Houston lawyer George Fleming called the Tennessee agreement ``a sweetheart deal'' for Shell and Hoechst Celanese.
Fleming said he will oppose the deal at a hearing in Tennessee on Aug. 9.
Under the Tennessee-court settlement, Shell and Hoechst Celanese would cover the cost to replace leaking polybutylene plumbing systems with new plumbing of the homeowners' choice. Shell said any homeowner with a leaking polybutylene plumbing system with metal or acetal insert fittings installed as early as 1978 may qualify. How many homeowners would qualify was not immediately available.
Hoechst said the agreement also would cover proven property damage.
Houston-based Shell, which supplied polybutylene pipe resin, and Somerville, N.J.-based Hoechst Celanese, which made acetal used to make the fittings, did not admit their products were defective.
``The settlement will avoid future litigation expense and ensure that homeowners can resolve their problems quickly,'' Shell said in a statement.
Shell and Hoechst Celanese both agreed on the $850 million figure, but the companies will decide later how to divide up the amount, said Hoechst spokesman Mike Opilla.
Meanwhile, after a number of out-of-court settlements in local jurisdictions, the ongoing polybutylene pipe controversy is evolving into a battle of national class-action suits fought with dueling press releases.
On June 30, the Alabama case moved a step closer to trial when Circuit Judge Eddie Hardaway certified the class in a case heard in Eutaw, Ala. Shell and Hoechst Celanese had argued that rural Greene County, Ala., was not the correct place to hear the case, but Hardaway rejected that claim.
In May, another acetal resin supplier, DuPont Co. of Wilmington, Del., settled for $120 million with thousands of homeowners nationwide.
After the July 31 ruling in Tennessee, Houston lawyer Fleming promptly distributed a press release criticizing the deal for ``trying to avoid a jury trial in Alabama, which would have determined their true liability.''
Fleming charges that the Tennessee settlement, if given to all 6 million homeowners he claims are eligible, would translate into just $142 per household. Juries in prior polybutylene pipe trials have awarded an average of $35,000 per housing unit, including all damages, said Fleming.
An earlier attempt by all three resin companies, Shell, Hoechst and DuPont, to settle for $750 million, was defeated in February when a state judge in Texas ruled his court did not have jurisdiction over a national class-action case.
Maloan's Tennessee court would have such jurisdiction if the most recent settlement receives final approval.
