Judge issues $50M judgment against Elkhart environmental nuisance

Residents who live near a waste dump and wood-waste processing facility in Elkhart won a default judgment of more than $50 million against the former owners. The sum appears largely a symbolic figure, however.

Chief Judge Philip P. Simon of the U.S. Court for the Northern District of Indiana, South Bend, ordered VIM Recycling Inc. and K.C. Industries LLC to pay damages of $50,568,750 to more than 1,000 people who filed a class action in 2009 against the site with a checkered environmental history. Property owners who lived near the site claimed odor, dust and byproducts of the operation caused health problems.

According to Simon’s order, six named plaintiffs and 134 class members who initiated the suit receive a judgment of $15,000 a year for each year they were impacted by the operation, from October 2003-July 2011. Simon ordered more than $16 million for those litigants, for an average judgment of more than $111,000 per plaintiff.

Another 885 class members who joined the litigation are entitled to share a judgment of $34,293,750, Simon wrote, for an average of $38,750 per plaintiff. The awards also require payment of post-judgment interest.

Simon noted the VIM and K.C. defendants did not reply to the class members’ complaint, but he said the key official with those companies who ran the operation, Kenneth R. Will, is individually responsible under the Comprehensive Environmental Response, Compensation and Liability Act.

“Although in default, Will appeared at the hearing on the present motions and has submitted two written filings in connection with the default judgment proceedings,” Simon wrote. He noted Will provided a personal affidavit regarding the financial condition of the corporate defendants, but he cannot represent the interests of VIM or K.C. in the action because he is not an attorney.

“Plaintiffs seem to have come to the conclusion that the judgment being entered via this order will be, in many respects, a pyrrhic victory,” Simon wrote. The VIM defendants “appear to be judgment-proof. Indeed, as the Plaintiffs have noted, ‘there is a real concern in this case that the defaulted Defendants’ assets will be insufficient to satisfy the judgment.’

“Because of this, I approve the suggestion that any recovery on the judgment can be ‘distributed on a pro rata basis among the class,” he wrote. Plaintiffs also may petition the court for approval of a cy pres charitable distribution in the event any recovery is trivial.

Simon’s order closes the matter with the entry of default judgment for claims of environmental nuisance and private nuisance against all parties and a Resource Conservation and Recovery Act claim against VIM. Other counts were dismissed, and plaintiffs previously settled claims against Soil Solutions corporate entities that now own the property.

The case is Carmine Greene, et al. v. Kenneth R. Will, et al., 3:09-CV-510.