Appealing residents argue against appeal bond
EAST PALESTINE — The attorney representing the residents appealing the $600 million class actions settlement with Norfolk Southern took aim at the lawyers who brokered last year’s deal in a response to their motion filed in Youngstown’s U.S. District Court that his clients be required to post a nearly $1 million appeal bond.
Tennessee-based attorney David Graham, who filed an appeal (known as the Troyan appeal in court documents) on behalf of Zsuzsa Troyan, Tamara Freeze, Sharon Lynch and Carly Tunno, doubled down on his clients’ claim that class action counsel hid or ignored crucial environmental results from class members in his answer filed on Friday.
“Figures don’t lie — but liars figure,” Graham wrote. “Class members were provided false and misleading information — as detailed in the Declarations of Scott Smith, Stephen Petty and George Thomson. Thus, unsurprisingly, they eagerly embraced what appeared to be a ‘good deal.'”
Smith (a independent scientist), Petty (a chemical exposure expert) and Thomson (retired toxicologist) have all spoken out against the settlement and called into question data provided by the Environmental Protection Agency (EPA). Petty’s declaration is especially damning as Petty was hired by the law firm Simmons Conroy (plaintiff’s lead co-counsel) to conduct testing.
Graham laid out the case for his clients’ inability to afford the $850,000 bond request or the suggestion that since the four filed under one appeal they could more easily afford such a bond.
“Dividing a $600 case filing fee four ways is entirely different, by over three orders of magnitude, from posting a bond of $850,000,” Graham wrote. “Being able to buy lunch at McDonald’s does not equate to ability to purchase a Class A share of Berkshire Hathaway stock — current market price $682,001.”
Co-lead counsel is requesting $25,000 for miscellaneous appeal costs — an amount Graham said “appears to be plucked from a hat” — and $825,000 for increased administrative costs that will be billed by Kroll Settlement Administration (the firm processing claims). Graham also took issue with that figure.
“No explanation why Kroll will require more labor, more paperwork, or will incur more postage or other external cost to administer class members’ benefit claims because of appeal can be discerned,” he wrote.
Graham called class counsel’s claim that the appeal “will delay payments to the overwhelming number of settlement class members who support the settlement” a moot point.
“If class counsel were truly concerned with the effect of possible appeal, they should have insisted on immediate payment of settlement funds to class members, or that Norfolk Southern pay interest on the settlement monies (or deposit the lump settlement sum in an interest bearing account),” he argued, casting doubt on the widely accepted assumption that the funds were already collecting interest somewhere.
Graham’s filing on Friday attempted to pick apart the points made by class counsel in their motion asking for an appeal bond. That motion, among other things, charged that the appeal was without merit and was filed in bad faith as Tunno had no basis to appeal since she did officially object to the settlement’s final approval.
Graham argued that if the appeal lacked lacked merit, class counsel would not have needed an additional 30-day to prepare briefs on the matter or to retain outside counsel, writing that “a group of 1,597 lawyers found it necessary” to do so. He also argued that Carly Tunno had not acted in bad faith, insisting that, despite claims to the contrary, she had objected to the settlement’s approval and wrote that “Tunno’s standing to appeal is an issue for the Sixth Circuit [of Appeal] to decide.”
Graham also addressed speculation that he appealed on behalf of Rev. Joseph Sheely without Sheely’s authorization. That assertion, he wrote, “has been wholly debunked.”
Whether or not, Sheely wanted to appeal has been a matter of debate. In the days following his appeal, Sheely reportedly told several media outlets that the appeal process began without his permission, but in a later interview with the Associated Press, Sheely said he had wanted to appeal the settlement and only expressed regret after receiving death threats from those upset with his decision. His appeal pressed pause on the direct payments (awards of up to $70,000 per household for property damages) which were to be distributed by the end of 2024 and could delay those payments for up to two years.
Class counsel requested that Sheely also be required to post a bond of $850,000 — a requirement Sheely said would add “insult to injury” in a signed declaration on Oct. 9. Sheely’s appeal will be heard at the same time as the Troyan appeal and is still moving forward.
T. Michael Morgan of Morgan & Morgan, who initially lauded the settlement, has also appealed its final approval, taking issue with the how the $180 million in legal fees was divided and distributed. Class counsel has not requested that Morgan post an appeal bond — even though Morgan is the only appealing party who would have no trouble paying it. Morgan & Morgan is the largest personal injury law firm in the United States with over 1,000 attorneys, offices in every state and a recorded annual revenue of $2 billion in 2023.