By Sean Pendergast
By Sean Pendergast
By Jeff Balke
By Richard Connelly
By Jeff Balke
By Casey Michel
By Craig Hlavaty
By Jeff Balke
As recently as March 1996, some at Carbide were still urging adoption of Prudential's plan. A steering committee formed to examine greenbelt issues recommended contracting with Prudential to buy 133 houses in three subdivisions as well as the four contaminated properties and some commercial acreage. "The steering committee feels a prompt introduction of a buyout proposal would likely be a deterrent to additional lawsuits," according to a letter to company vice president Dave Brucker.
But the buyout project is still apparently on hold, because Marcy Boone, who replaced Hockersmith after he retired, denies the existence of any such plan or Prudential's role in formulating it. "We didn't have anybody that told us that we needed to or should [establish a greenbelt]," Boone says.
Why Carbide, or Amoco, Sterling and Marathon, for that matter, are willing to risk hundreds of millions in damages from lawsuits when they could spend a small fraction of that to move the residents remains a mystery, especially given the continued record profits generated by the petrochemical industry. Carbide, for example, netted $1.5 billion over the past two years. "I don't know why the hell you wouldn't buy out these people," says James Nebout, a Texas City attorney who represents 165 clients in one of the Sterling lawsuits.
The answer may have to do with the current corporate obsession with stock prices and shareholder dividends that keeps decision-makers fixated on quarterly and annual reports. And it may be that despite the overall successes of the parent companies, the refineries aren't producing high enough profit margins to keep up with other divisions. In this climate, plant managers may be loath to spend an extra few million that may bust their tight budgets, even if it later costs the companies hugely.
Or it may be that the companies believe that their insurers will pick up the tab for any hefty judgments. In a 1996 federal filing, Sterling listed the ongoing ammonia lawsuits, among several others, and noted that of the $16 million in total costs to date, almost all was insured. Estimating the total possible additional loss from the lawsuits at up to almost $45 million, the company maintained "it is insured or indemnified for this additional reasonably possible loss, except for a portion which is not material."
But that's speculation, because Sterling and the other companies aren't talking. Instead, they offer platitudes of concern for those who live near the plants. "We are well aware of the importance of communicating with these near neighbors, and the community in general," wrote Marcy Boone in a letter outlining Union Carbide's impact on its surroundings, "and we strive to maintain good relationships with our fellow citizens."
Joe Coefield, whose front yard is shaded by a giant Marathon storage tank, wipes a rheumy eye and blows his nose. Ever since Sterling's 1994 ammonia release sent almost 2,000 residents, including Coefield, to the hospital, he's had persistent cold symptoms that won't respond to treatment. The connection, he believes, is clear. "I didn't go to no doctor," Coefield says, "but I just figured out what it was."
But Coefield, who recently turned 82, may not be eligible for damages from the accident. A few days after the ammonia release, Coefield read in the Texas City Sun that Stifflemire Insurance Company would be handling claims on behalf of Sterling, and that people affected by the fumes could stop by the Stifflemire office.
That was nothing unusual. Stifflemire, which represents several of the plants in Texas City, often paid out small amounts to settle minor incidents like property damage from fallout. "Every time something happens, they send you to Jerry Stifflemire," says attorney James Nebout, referring to the company owner. "He gives you 60, 80, 125 dollars."
In this case, Coefield was offered $250 for his trouble. "I signed some papers, and they told me I would get a check in the mail," he says. He left without a copy, and after a few days, the money arrived. But when Coefield later tried to join the lawsuits against Sterling, he found out that the release he signed let the company off the hook for any future damages, including for medical treatment. "They didn't tell me," he says of Stifflemire.
Coefield's was one of several hundred settlements, ranging from $50 to $350, paid by the insurance company. A number, like Coefield, say they neglected to read the fine print. Others, like Patsy Booty, say they didn't really understand the implications of the legalese. "We're sorry we signed it," says Booty, whose four relatives, including three children, lost their right to sue with a few strokes of the pen. "We didn't even know there was gonna be a lawsuit. You don't know too much about the law or something."
Jerry Stifflemire doesn't want to get into the details -- "I don't give interviews," he says -- but he does take a moment to scoff at claims that anyone was misled into taking the settlement money.
"They knew what they were signing," Stifflemire says, before suggesting further questions be directed to a Sterling manager.
Whether or not each person who went to Stifflemire got a fair shake is almost beside the point. In Texas City, if you're poor and fighting the petrochemical companies, the odds are against you no matter where you turn. Many real estate appraisers depend on the companies for their livelihood, and getting a local to declare a property stigmatized by the plants is a long shot. Without industry business, appraiser Rick Wilkenfeld admitted in a deposition for the Sterling case, "I'd be out of business." Wilkenfeld, not surprisingly, testified that he could see no adverse impact on property values from the plants.
Find everything you're looking for in your city
Find the best happy hour deals in your city
Get today's exclusive deals at savings of anywhere from 50-90%
Check out the hottest list of places and things to do around your city