Lockheed Offers $5 Million to Settle Toxics Suit

Lockheed Martin Corp. made an about-face Friday, offering $5 million to about 300 Burbank residents instead of fighting them in court to settle claims they got sick from toxic chemicals the aerospace giant released into the air, soil and ground water during decades of defense manufacturing.

The settlement offer, if accepted, could end four years of litigation in Los Angeles County Superior Court between the residents and Lockheed. Despite its offer, Lockheed is not admitting guilt.

The company already has paid out $93 million to settle other claims by thousands of residents and former workers who say they were sickened. A separate lawsuit by other residents against Lockheed is pending in federal court, and is unaffected by the settlement negotiations in state court.

It is unknown how much money each resident would receive, but it will be significantly less than the tens of thousands of dollars that each plaintiff got in a 1996 secret settlement with Lockheed.

Residents’ attorney Thomas Foley said Friday the settlement will be allocated by lawyers for the plaintiffs using a formula that takes into account the types of illnesses their clients have suffered, how long they lived in Burbank, and how close they lived to Lockheed’s factories.

He also said the attorney fees--typically 40% of the settlement amount--and other legal costs have not yet been calculated. Those costs must also be paid from the settlement money.

Plaintiffs have until Oct. 16 to accept or reject the offer. Before it becomes final, Judge Carl J. West also must sign off on the deal.

If the offer is rejected, the case is scheduled to go to trial next year.

The proposed settlement will cover about 200 plaintiffs whose claims are awaiting trial in state court, plus 140 plaintiffs whose cases were dismissed earlier this year and are now on appeal.

Plaintiffs were advised by their attorneys not to comment about the settlement offer.

The offer comes as government regulators are investigating elevated levels of chromium 6 in the San Fernando Valley’s drinking-water supplies.

Lockheed has admitted using materials that contained chromium 6, also known as hexavalent chromium, a known carcinogen when inhaled, during its decades of manufacturing airplanes, but company officials say the contaminated topsoil has been removed.

Timing a Coincidence, Lockheed Officials Say

Lockheed spokeswoman Gail E. Rymer said Friday there is “absolutely nothing” linking the company’s settlement offer with recent news coverage of elevated chromium 6 levels in some of the county’s drinking-water supplies.

“This all started well before chromium 6 became an issue,” she said, adding that the settlement talks began almost a year ago, at the request of plaintiffs’ lawyers.

Foley, however, said the negotiations didn’t get serious until late last month.

Chromium 6 is one of three primary toxins the plaintiffs say caused them to get sick. On May 2, West ruled there was insufficient scientific evidence to show these toxins had actually caused the illnesses alleged by the plaintiffs.

With that ruling, Rymer said, the company decided to settle--saying it would be cheaper than to litigate the cases.

“We feel we’ve had our day in court,” she said, referring to West’s May 2 ruling.

Lockheed attorney Pierce O’Donnell made the same point in a Sept. 29 letter to the plaintiffs’ counsel. O’Donnell said the company “views settlement merely as a prudent business decision, most certainly not an acknowledgment of liability.

“In other words, the legal fees and expenses for Lockheed Martin to complete the litigation, including trial, are substantially greater than our monetary offer,” he wrote.

O’Donnell estimated that Lockheed has spent more than $1 million so far to defend against the state claims, and was expecting to spend at least $2 million more if the case went to trial.

Lockheed has acknowledged the toxins were used during construction of airplanes, but has maintained that residents were not exposed to toxins in levels sufficient to have caused their alleged illnesses. Despite its offer, Lockheed is not admitting guilt.

The Superior Court and federal lawsuits were filed in 1996, after Lockheed secretly paid $60 million to 1,357 Burbank residents with similar legal claims.

At that time, Lockheed officials charged that residents left out of the earlier settlement had filed “copycat” lawsuits in hopes of getting money for health claims they could not substantiate.

After the second round of suits was filed, O’Donnell told residents at a community meeting in January 1997 that Lockheed intended to defend itself. “There will be a trial in full light of day for all to see and for all to form their own opinions,” he said.

In court filings since, Lockheed has argued the plaintiffs waited too long to file their suits. Foley conceded that was a vulnerability.

“Clearly, there is a risk [the cases would be thrown out if the settlement doesn’t go through], and we’re telling them that,” he said.

The court, he said, could rule that plaintiffs who received a newspaper between 1986 and 1996 should have known that Lockheed was contaminating the environment, and made their legal claims earlier.

Foley said such suits are increasingly difficult for plaintiffs to win. The state courts have recently tightened the rules so cases can be dismissed before any evidence is presented, even if the plaintiffs say they did not know, within the one-year statute of limitations, that outside contamination was making them sick.

Meanwhile, Lockheed’s Rymer sees the settlement offer as an attempt to end years of ill will. “I feel bad [that] the relationship we all had over the 60 years has resulted in this,” she said. “I hope we can get back on track and work with the community in addressing the continuing environmental cleanup.”

Lockheed built aircraft--ranging from the P-38 fighter during World War II to the F-117A Stealth fighter--in Burbank from 1928 until the early 1990s, after Lockheed Corp. merged with Martin-Marietta and moved its headquarters to Bethesda, Md.

Huge Cleanup Costs at Superfund Site

In 1986, the U.S. Environmental Protection Agency declared much of the east San Fernando Valley around Lockheed a Superfund cleanup site, after finding two chlorinated volatile organic compounds, perchloroethylene (PCE) and trichloroethylene (TCE), in the ground water.

Since then, Lockheed has spent $265 million to clean the soil and water underneath its old factories, and an official said it could spend $100 million more over the next two decades as the cleanup continues.

Lockheed’s former factories have been demolished. Some of the land has been converted to parking for Burbank Airport, while other land is targeted for major retail development.

As a condition of settlement, the plaintiffs must dismiss their legal claims against the company. And Lockheed must agree not to seek reimbursement of its $1 million in legal costs from plaintiffs--which is permissible under state law, if the company had won at trial.

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From Jet Fighters to Shopping Centers

Former Lockheed sites have been converted to airport parking lots and retail stores. Much of the land awaits redevelopment.

Source: Lockheed Martin