The Joplin Globe, Joplin, MO

March 2, 2013

More than 200 former Picher residents claim lowball offers

By Wally Kennedy
Globe Staff Writer

PICHER, Okla. — It has been five years since Patsy Huffman packed up her belongings to escape the problems that plagued her hometown of Picher, the epicenter of lead and zinc mining in the Tri-State District.

But she will never be able to pack away the memories of the life she lived there or the town she once knew.

“I raised two kids — a boy and a girl — in that house,’’ she said, pointing to the gray remnants of a foundation. “The front porch was here, and the garage was over there. You know, I can hardly picture things now, it has been so long.’’

With the Mahutska chat pile looming in her backyard, Huffman’s house and those of virtually every other property owner in Picher were bought out and demolished by the Lead-Impacted Communities Relocation Assistance Trust.

The decision to do that was based on studies that showed the ground below Picher was so heavily undermined that it could collapse at any time. In 2008 — the year she moved — a shaft leading to the Keltner Mine opened up across the street from her home.

“It was sad in a way, but it was for the best what happened here. We needed out of here,’’ she said.

Huffman used her relocation money from the trust to resettle in nearby Commerce. Some of her neighbors are former residents of Picher.

But she and more than 220 other former Picher property owners believe they did not get a fair shake from the trust and have alleged in lawsuits that their properties were intentionally undervalued by appraisers working for the trust.

The officers of the trust have countered that allegation with statements that everyone was treated equally, that fair prices were paid and that friends of trust officials were not given preferential treatment.

More than 700 pieces of property were involved in the $60 million buyout.

Trust officials also claim that the majority of Picher’s relocated residents received fair deals or they would not have accepted the buyout offers, but some residents said they accepted what they characterized as “take-it-or-leave-it” offers because they thought it might be their only chance to get something for their properties.

Huffman and many other property owners are parties to a lawsuit in which they hope to recover some of the money they believe they are owed.

On Friday, in the District Court of Tulsa County, Associate District Judge Dana Kuehn heard arguments that could decide whether granting class-action status to the group of former Picher residents is warranted against the leaders of the trust, its appraisers and an insurance company that have been named as defendants.

“It’s been a long time coming,’’ Huffman said.

‘I KNOW THE ISSUES’

Five people were subpoenaed to testify at Friday’s hearing: Dr. Mark Osborn, a Miami physician who headed the trust; Larry Roberts, of Miami, the operations manager for the trust; J.D. Strong, former Oklahoma secretary of the environment who served as state adviser to the trust for former Gov. Brad Henry; Ed Keheley, a member of the trust who resigned over the way appraisals were being handled by the trust; and Missy Beets, a former Picher resident now living in Miami.

Instead of soliciting their testimony, Kuehn listened to arguments for and against the certification of the class action by the attorneys representing the plaintiffs and those representing Cinnabar Service Co., one of the appraisal companies.

When it came time to hear from the plaintiff’s witnesses, Kuehn questioned whether additional testimony was necessary.

“I don’t think we need to hear that today. That’s not an issue to fight today,” she said.

Rather, she posed questions to the attorneys for both sides, particularly those representing the defendants. She also said she believed the court had sufficient information — briefs, affidavits and depositions — with regard to the case.

Based on those comments, Kuehn said there was no need for the witnesses to testify because they would not speak to the primary issue that the court would ultimately decide, which is the issue of liability for the defendants.

“I know the case. I know the issues,’’ the judge said.

MAKE OR BREAK

John Wiggins, the attorney for the property owners, said the court, in deciding whether to grant class-action status, must look at the issue of liability as “the common question that dominates.’’

He told the court the appraisers for the trust uniformly demonstrated “a pattern of misbehavior that was common to the class.’’

He said Missy Beets was selected to be the representative for the class because her appraisal was a typical example of the alleged mishandling of appraisals that occurred.

The behavior in the Beets case, he said, demonstrates the common harm to all class members.

“If we lose before a jury with the Missy Beets case, we lose all 221 cases. It is over,’’ Wiggins said. “If we are successful, the question of liability has been answered for all members of the class.’’

He told the court class certification would achieve judicial economy by having one case instead of 221 individual cases. He also admitted to the court that many of those individual cases would not move forward because many plaintiffs do not have the wherewithal to proceed as individuals.

“We must have the power of class action,” he said. “This is the kind of case that class action was designed to serve.’’

Proof, damages vary

Joe Fears, the attorney representing Cinnabar, said it appeared to him that the court must look at “broad-ranging concerns of misconduct by the defendants that affect a broad range of individuals in the same way.’’

He said giving the former Picher residents class-action status would not address the individual issues that are involved with each plaintiff. He also questioned how class-action certification would be managed in terms of the amount of damages.

“The liability and damages are intertwined,’’ he said. “If a plaintiff alleges a lowballed appraisal, they must offer proof they have been lowballed. The proof will have to vary and so will the damages.’’

Fears also said one person might believe their lowballed appraisal might have cost them $1,500 while another might believe $5,000 is more appropriate in terms of their individual loss.

He also said the court would not gain anything by granting class action to the plaintiffs. He said it would essentially shortcut the requirements for proof to get to the damages, which would not be uniform among members of the class.

TOOLS TO RESOLVE DAMAGES

Wiggins said the court has at its disposal tools to resolve the issue of damages once the issue of liability has been resolved for all members of the class.

“Discovery would determine those damages,’’ he said. “It’s liability that unites the cases, and we would decide that question one time.’’

To do otherwise, he said, could lead to inconsistent verdicts for the same behavior.

Wiggins cited instances in Oklahoma in which the liability issue was resolved and then damages were awarded on an individual basis.

Fears said the damages awarded to the class representative might not be representative of what other members of the class would be entitled to receive in terms of damages. He said the court must consider damages and how they might be awarded if it decides to certify the former Picher residents as a class.

Kuehn did not rule on the question of class-action status on Friday but told the attorneys it would not be long before her decision is handed down.

Trust formation

The Lead-Impacted Communities Relocation Assistance Trust was formed in 2006 after a study by the U.S. Army Corps of Engineers found that the abandoned mines under Picher, Cardin and Hockerville had a high risk of caving in.