Eastman Chemical Faces Federal Suit Over Charleston Spill

Eastman Chemical Co. (EMN), maker of the chemical that fouled the Elk River after leaking from a Freedom Industries Inc. storage tank, was sued by West Virginia businesses and residents who allege the company concealed cancer-causing elements.

Safety data sheets issued by Kingsport, Tennessee-based Eastman for the coal-processing chemical hid scientific information on the risks of its carcinogenic and toxic components, according to the filing Jan. 13 in federal court in Charleston, West Virginia. The Jan. 9 spill forced local businesses to shut down, sent people to hospitals and deprived nine counties of tap water for several days.

“The foreseeable risks of harm posed by 4-MCHM could have been reduced or avoided by reasonable instructions or warnings,” the plaintiffs said in the complaint, referring to the chemical. “Their omission renders the product not reasonably safe.”

Freedom Industries and West Virginia-American Water Co. also were named as defendants. The state attorney general’s office said it has started investigating the leak, which made water undrinkable for more than 300,000 West Virginians. Attorney General Patrick Morrisey said residents need answers on what happened so similar events don’t occur in the future.

Downtown Grill

The plaintiffs demand damages for themselves and others affected by the contamination. They include the operator of a restaurant in downtown Charleston that shut down and women who were evacuated or had to be medically monitored after being exposed to contaminated water and fumes. Michael Manypenny, a member of the West Virginia House of Delegates who said he was exposed, offered to represent people who live outside the area.

Maranda Demuth, an Eastman spokeswoman, said the suit’s allegations against the company had no merit. Eastman wasn’t aware of any studies that offered evidence that the chemical was carcinogenic, she said in a phone interview yesterday.

Eastman is the exclusive U.S. manufacturer of 4-MCHM, according to the plaintiffs. A combination of methylcyclohexane and methanol, it dissolves in water and breaks down into its components, both “known dangerous and toxic chemicals that can cause latent dread disease such as cancer,” they said.

Freedom Industries failed to meet its obligation to report the leak from its storage tank, “built using rivet construction in the 1930s,” until more than a week after residents noticed a licorice smell emanating from the facility, according to the complaint.

Risk Assessment

West Virginia-American Water neglected to do a risk assessment of a potential source of pollution upstream from its water intake on the Elk River, the plaintiffs said.

The water utility, like other companies that may be sued, has a rulebook and may be liable if it can be proved that officials didn’t follow their own guidelines, said Daniel Becnel Jr., a Louisiana lawyer who sued BP Plc on behalf of victims of a 2010 oil spill in the Gulf of Mexico.

Laura Jordan, the utility’s spokeswoman, didn’t immediately return an e-mail seeking comment on the suit. A voice-mail left for Freedom Industries President Gary Southern on the company’s media line wasn’t returned.

In Kanawha County Circuit Court in Charleston, 25 lawsuits seeking group status have been filed over the spill as of today, county clerk Cathy Gatson said in a phone interview.

A complaint filed Jan. 10 by Scott Miller accuses Freedom and the water utility of negligence and causing a public nuisance. The utility failed to deal promptly with the emergency and had no procedures in place to prevent chemicals from getting into the water system, Miller said.

Freedom Industries, formed in 1986, supplies specialty chemicals to the steel, cement and coal-mining industries, according to its website. The closely held company completed a four-way merger nine days before the leak was discovered.

The Eastman case is Vantap LLC v. Eastman Chemical Co., 14-cv-01374, U.S. District Court, Southern District of West Virginia (Charleston).

To contact the reporter on this story: Linda Sandler in New York at lsandler@bloomberg.net

To contact the editor responsible for this story: Andrew Dunn at adunn8@bloomberg.net

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