Published: Star Tribune: Newspaper of the Twin Cities
Author: David Phelps; Staff Writer
Date: August 24, 2006

Former and current employees of Katun Corp. took action this week to recover a potential pot of $15 million that they say was improperly demanded after Katun paid the U.S. government $11 million in criminal fines for its role in a mail and wire fraud scheme.

The workers say Katun coerced them, as employee shareholders in the privately held company, to pay the company for pro-rated portions of the $11 million fine.

The employees are attempting to capitalize on a federal court ruling this summer that said former Katun CEO Terence Michael Clarke did not have to contribute $1.7 million toward the fine as part of an indemnification agreement.

The employees say the company should not have demanded such payments from them.

“The idea that the company is going after low-level employees is atrocious,” said Greg McEwen, one of the attorneys representing the employees.

The company has said it intends to appeal the Clarke ruling. “We expect [the result of] that appeal to dispose of this lawsuit,” general counsel Luke Komarek said.

Xerox Corp., once a 30 percent owner of Katun, is a codefendant in the lawsuit.

Filed in Hennepin County District Court, the lawsuit names 10 current and former Katun employees as plaintiffs and seeks to represent as many as 250 in a class action.

The suit says plaintiffs paid the company amounts ranging from $92,000 to $1,350. The lawsuit said the company threatened to turn the matter over to collection services if employees did not pay.

McEwen said reimbursement to the employees, plus interest and tax benefits they didn’t receive when Katun was sold to PNA Holdings in 2002, could total $15 million.

David Phelps - 612-673-7269

Copyright 2006 Star Tribune: Newspaper of the Twin Cities

Inver Grove Heights attorney Gregory N. McEwen and his Iowa colleague, Don Beattie, have secured a $9.6 million verdict for two victims of an anhydrous ammonia tank explosion that occurred in Calamus, Iowa, in 2003.

The verdict consists of $3.8 million for the heirs of 68-year-old Bob Ryan, who died 13 days after the explosion, and $5.8 million for Nathan Nissen, who was 27 when he was injured. The men had just finished filling the tank when it ruptured, spilling 1,500 gallons of anhydrous ammonia.

The verdict is primarily against Trinity Industries, which manufactured the tank. Other defendants settled prior to trial for $2.25 million and were found to be 20 percent negligent, meaning that they will recoup 80 percent of their settlement from Trinity, said McEwen. The $2.25 million is included in the $9.6 million verdict.

After the explosion Ryan dragged Nissen to an emergency water tank and held him underwater, then insisted that Nissen be airlifted first from the accident. Ryan was posthumously awarded a Lifesaving Award of Valor from Iowa Gov. Tom Vilsack.

Nissen was burned over 51 percent of his body and spent 87 days in the hospital. His medical bills were about $487,000, said McEwen. Although he is back to work at the River Valley Cooperative, where he worked at the time of the explosion, he suffers from frequent infections and respiratory illness.

McEwen said he asked the jury to communicate with the defendants in a language they could understand by returning a large verdict and also told the jury an injury in Iowa was worth as much as an injury in Chicago or Minneapolis. He believed the rural jurors could relate well to the plaintiffs.

Copyright, 2006, Minnesota Lawyer (Minneapolis, MN)

When a train derailed near Minot, ND., on Jan. 18, 2002, five overturned tanker cars released almost 221,000 gallons of anhydrous ammonia into the night air as local residents lay sleeping. The incident spawned much litigation. Many of the Minot cases were consolidated before Hennepin County District Court Judge Tony Leung and entitled In re the Soo Line Railroad Company Derailment of January 182002 in Minot, ND.

The cases have added to a national debate on whether railroads can be sued in state court. The railroads argue that the plaintiffs’ claims are pre-empted by federal law – which does not provide a cause of action. Meanwhile, local plaintiffs’ lawyers are upset with a series of federal appellate rulings in favor of the defense in the Minot litigation. The litigation’s convoluted procedural history is difficult to follow, but here is a sampling: *The railroad removed one of the first filed state cases, known as the Allende case, to federal court in Minnesota under the doctrine of complete pre-emption.

The plaintiffs moved to remand the case back state court, arguing that the plaintiffs asserted only state law negligence claims and that the Federal Railway Safety Act (FRSA) did not transform such claims into a federal cause of action. U.S. District Court Magistrate Judge Janie S. Mayeron found against complete pre-emption, and the derailment cases went back to state court and Leung. * Another group of plaintiffs, known as the Lundeen plaintiffs, subsequently filed suit in Minnesota state court. The railroad removed these cases under federal question jurisdiction because the Lundeen plaintiffs included a violation of federal law on the face of their complaint. Ultimately, the Lundeen plaintiffs amended the complaints to remove the federal allegations, and U.S. District Court Judge Richard Kyle remanded. The railroad appealed to the 8th U.S. Circuit Court of Appeals, which ruled in its favor, finding federal jurisdiction based on complete pre-emption of the negligent inspection claims. *

The railroad subsequently removed its other state court cases, including the Allende case (for which a verdict had been rendered in February 2006) and another case – the Elm case – which was in trial. U.S. District Court Judge Michael Davis granted a motion by the Elms to remand their case back to state court. * The railroad petitioned the 8th Circuit for relief from the remand order via a writ of prohibition.

The appellate court ordered the Elm case back into federal court and set a briefing schedule on the writ. Motions to remand have been made in the other Minot derailment cases, but no hearings have been set. * In a class action brought by Minot derailment victims in North Dakota federal court – MehI v. Canadian Pacific Railway – U.S. District Court Judge Daniel L. Hovland granted the railroad’s motion to dismiss based on pre-emption as a defense (as opposed to complete pre-emption, the jurisdictional doctrine) earlier this year. Appeal of the MehI decision is pending in the 8th Circuit.

No remedy? The end result of this tangled web of litigation may be that because of the doctrine of federal pre-emption, the plaintiffs will lose their right to any recovery because the FRSA does not provide the injured persons a remedy.

The plaintiffs’ lawyers argue that such a result would be wholly inequitable given that the railroad has already admitted liability for the derailment in the Minnesota state court cases. The railroad’s lawyer counters that had Congress intended for the plaintiffs to recover, it would have made provision for their recovery under federal law.

The railroad’s position is simple, explained its attorney, Tim Thornton of Minneapolis. Congress enacted the FRSA in 1970 and decided that safety was best ensured through a uniform system of regulations and exclusive authority to regulate the railroads in the federal system. It is true that some plaintiffs – even those who have received jury verdicts – will lose their causes of action if the railroad prevails, but that is the law as enacted by Congress, said Thornton.

Plaintiffs’ attorney Steven M. Hunegs of Minneapolis told Minnesota Lawyer he would frame the issue simply: “How is it that a railroad safety statute – 30 years after its passage – can be found to insulate a railroad from admitted liability in a catastrophic derailment?” Minneapolis plaintiffs’ attorney George Eck agreed, saying that Congress could not have intended to prevent victim recovery where the railroad admitted liability. “I’m an advocate but this is a fairly-stated issue. We think the question answers itself,” he told Minnesota Lawyer. The various twists and turns in the case have led to a “rogue result,” said Eck. “Somehow we got off into Never Neverland.” Due process is at stake, said Ronald Barczak, one of the attorneys for the Elm plaintiffs.

“The railroad is attempting to deprive innocent people of their basic constitutional rights to a jury trial. What is the railroad afraid of? Justice?” Inver Grove Heights attorney Gregory N. McEwen, who is handling about 40 percent of the train derailment cases, questioned the long-term implications of the railroad’s strategy. He told Minnesota Lawyer that it may ultimately not be in the railroad’s best interest to escape liability when it has already admitted responsibility for the accident in open court.

“If recovery is tenuous, how many other communities are going to want railroads? Pretty soon people are going to be up in arms. The bigger issue is the impact on the railroad’s business,” McEwen said. Plaintiffs’ attorney Richard G. Hunegs said that it is “not ridiculous” to view the railroad’s arguments as part of a tort-reform strategy. “You’re seeing a conservative Congress trying to codify large areas of law that [arguably] pre-empt state common law,” he said. “You’re going to see these issues involving every one of the regulatory bodies.

You’re going to see us swimming in pre-emption claims.” Both sides agree on one thing – the railroad cases are chugging down a lengthy track. “These cases are by no means done. If we don’t prevail at the 8th Circuit there will be another appeal,” said McEwen. Thornton told Minnesota Lawyer: “This case is more likely to go to the U.S. Supreme Court than any case I’ve handled.”

Copyright, 2006, Minnesota Lawyer (Minneapolis, MN)

Published: Star Tribune: Newspaper to the Twin Cities
Author: Tony Collins; Chuck Haga; Staff Writers
Location: Red Lake, Minn.
Date: 2006-07-21

The Red Lake School District has agreed to pay $1 million to 21 families of those killed or injured in the March 2005 shootings that left 10 people – including the teenage gunman – dead.

Although $1 million is the maximum the district can be held liable for under state law, it’s not enough, said LeeAnn Cobenais-Thunder, mother of Steve Cobenais, one of the most seriously injured.

“Steve and the other victims’ families deserve more,” she said Thursday.

The settlement between the families and the district was announced Thursday and came after more than a year of negotiations, said Shamus O’Meara, lead attorney for the school district.

Of the $1 million settlement, which must be approved by state and federal courts, $900,000 will go to the families of those killed and injured. The remaining $100,000 will be held in escrow for future distribution or to cover new claims.

A judge will decide how much each family will receive of the $900,000.

Tribal Chairman Floyd (Buck) Jourdain, reelected in a run-off election Wednesday, said, “there is no compensation when it comes to the loss of a loved one. I just hope this helps the families in some way.”

Phil Sieff, a Twin Cities attorney who negotiated the settlement on behalf of the victims’ families, said Thursday that the settlement offers families some compensation and allows the school district to focus on educating students.

“Of course, the victims’ families are disappointed the amount isn’t greater,” Sieff said. “It isn’t going to compensate any of the families for their losses, but they understand we’ve obtained the maximum that could be recovered from the school district.”

On March 21, 2005, Jeff Weise, 16, killed his grandfather and grandfather’s girlfriend at their home, then drove to the school and opened fire, killing seven others before taking his own life.

In January, 17-year-old Louis Jourdain, the son of the chairman, was sentenced to up to a year at a juvenile treatment facility after pleading guilty to sending threatening messages in connection to the shootings.

Further litigation is possible, but no one would comment Thursday on what form that might take.

“If we determine there are other responsible parties, we will likely pursue those parties in civil litigation,” Sieff said.

Cobenais-Thunder said her family has incurred about $500,000 in medical bills for Steve, who was shot in the eye and suffered brain damage. The 16-year-old has a prosthetic left eye. He has had three major surgeries and still has two or three more to go.

Cobenais-Thunder said that whatever portion of the settlement Steve gets, some will go to the lawyers and to the state of Minnesota, which is paying for her son’s health care through Medical Assistance.

“Personally, I don’t think we should have to pay Steve’s medical bills,” she said. “Steve didn’t ask to be shot.”

Arnold Pemberton, chairman of the Red Lake school board, said in the news release that he hopes the settlement means that the district and Red Lake community can “take a significant step toward healing and our future together, always remembering and respecting the victims and families lost and affected by this tragedy.”

Sieff and St. Paul attorney Randy Thompson represented 11 of the families involved in the
settlement. Inver Grove Heights attorney Gregory McEwen and Bemidji attorney Mark Rodgers represented nine. Minneapolis attorneys Elliot Olson and Richard Ruohonen represent Cobenais.

“No amount of money that Steven gets is going to make up what he went through,” Ruohonen said. “We hope whatever part of the $900,000 he receives will at least assist him in getting the help he needs. It’s a step in the right direction.”

The Red Lake settlement is one of the highest in recent memory.

In the aftermath of the 1999 shootings at Columbine High School in Colorado, in which two gunmen killed 12 students and a teacher before committing suicide, families of at least 13 of the victims split a $285,000 settlement from the county school district and sheriffs office.

The teacher who was killed reached a $1.5 million settlement with the county and a student who was wounded reached a settlement for $117,500, according to media reports.

About 30 families also shared in $2.85 million settlement that was essentially funded by the homeowner’s insurance policies of the gunmen’s parents and three others who provided weapons to them.

In all, 37 wrongful-death and injury lawsuits filed against the families of the killers, Eric Harris and Dylan Klebold, were settled between 2001 and 2004.

Cobenais-Thunder said her family wants to make sure that Steve will be able to get the care he needs.

“Who knows what’s going to happen to me or his father?” Cobenais-Thunder said. “We want to make sure he’s properly taken care of.”

Staff reference librarian Linda Scheimann provided research for this report. The writers are at tcollins@startribune.com and crhaga~startribune.com.

MORE ABOUT RED LAKE

- In the aftermath of the shootings at Red Lake High School, Star Tribune reporters and photographers spent several months on the reservation last year. For their stories and photos, see www.startribune.com/redlake.

- Red Lake Net News is a website with information about the reservation and other Indianrelated news. The address is www.rlnn.com.

Copyright 2006 – Star Tribune: Newspaper of the Twin Cities

Published: Star Tribune: Newspaper of the Twin Cities
Author: Pam Louwagie
Location: Lakefield, Minn.
Date: November 30, 2003

Robert Kruger lay writhing alone on the linoleum floor in the kitchen of his neighbor’s farmhouse, screaming for the end.

“Please, God, let me die!”

Sharp, deep burns stung his back and arms. He coiled, delirious with pain.

All he had wanted was a warm shower. When he went to relight the pilot on his water heater, he didn’t know that propane gas had leaked into the basement of the rented house he shared with his brother near Dundee, Minn.

He struck a match.

The explosion destroyed the house and plunged him into unimaginable pain from mostly third-degree burns over 54 percent of his body. Minutes later, as he lay on the floor at his neighbor’s house, where he’d gone to call 911, he thought he would rather die than live through any more.

Now, a year and a half after the explosion leveled the house, Kruger, interviewed at his mother’s home near Lakefield, Minn., where he now lives, said he wants to save others from a similar fate. “I wouldn’t wish it on anybody,” he said.

Who is responsible for such explosions is a point of debate.

Estimates on the number of propane explosions nationwide vary. The National Fire Protection Association reports that in 1998, there were 1,600 propane fires in U.S. homes, resulting in 41 deaths and 260 injuries.

In Minnesota, more than 210,000 households use propane for heating, according to the Propane Education & Research Council. An explosion in Maple Lake destroyed a house in early October while the homeowner was away.

In September, a propane explosion at a house near New York Mills sent two people to the hospital. Many propane fires happen in rural areas where natural gas lines aren’t plentiful.

While there are dangers and necessary precautions with any power source, some who have studied the propane industry say it should do more to make people aware of the precautions for propane.

Kruger, 46, is suing the companies that bottled and sold the propane, commonly called LP gas, claiming they were negligent in not demanding that he use a propane detector and in failing to warn him that the odor added to the gas may fade.

Kruger’s St. Paul attorney, Greg McEwen, claims it’s an industry problem of failing to inform customers properly about how to handle propane.

Industry attorneys say that explosions are a horrible tragedy, but that the industry isn’t to blame. Pamphlets with warnings of odor fade and recommendations to use a gas detector are dispensed, they say. And they contend that odor fade is rare and gas detectors are only an aid, that people are still responsible for ensuring safety by following proper procedures.

Propane is safe when used properly, those representing the industry say. Too many homeowners try to install or repair equipment themselves, they say.

Paul Peterson, an attorney for the Nobles County Cooperative Oil Co., which is a defendant along with Cenex in Kruger’s lawsuit, said that the company is committed to safety and that it provides information to its LP gas customers. Peterson said instructions weren’t properly followed in Kruger’s case; Kruger was lighting the pilot light, for instance, though literature recommends letting a professional do it.

McEwen said Kruger never received the warning literature.

A flash, then pain

Kruger, a construction worker, had come home sticky with debris from tearing shingles off a roof that afternoon in June 2002.

He headed straight for the basement shower in the old white farmhouse. Only cold water poured out.

He turned off the water heater’s propane gas valve and scrounged up a match. He waited a few minutes. Rubbed match against flint.

A bright orange flash knocked him off his feet.

For a split second, he was motionless: “It was like, ‘What happened?’” he recalled. Then he was screaming in terror.

He crawled from his basement and outside, then rolled on the grass to put out the flames. He got in his pickup truck and drove to his nearest neighbor to call for help. When he found nobody home, he drove to a friend’s house a mile away. When nobody responded to his knocks, he kicked in the door in desperation and headed for the phone.

“My house exploded!” he told the 911 operator.

He got off the phone quickly because he wanted desperately to jump in his friend’s shower to cool the hot sting. The cold water provided little relief.

He’d told the 911 operator where his burning house was but remembered that he hadn’t said where he was, so he dialed again.

How much warning?

The arguments that will be raised in Kruger’s lawsuit illuminate the debate about how much warning is reasonable.

McEwen, Kruger’s attorney, has worked on similar suits in 27 other cases nationwide over the past five years, carving out a niche for himself as a propane plaintiffs attorney and securing more than $48 million in the settlements of 18 suits, he said. Three suits yielded nothing. The rest are in the court system.

McEwen said the propane industry could do more to promote safety awareness to its customers, such as training delivery people to tell customers about gas detectors and odor fade. The industry could put more safety tips in ad campaigns and could refuse to deliver propane unless people have detectors in their homes, he suggested.

The Propane Education & Research Council is embarking on a new safety education campaign, trying to make sure people remember advice they receive about using propane, a council spokesman said.

Minneapolis propane defense attorney Russ Melton said the industry sometimes settles suits rather than go to trial because tragedy often trumps fact with juries.

“Burn cases are many times settled because of emotional issues,” said Melton, who has defended against dozens of suits. “It comes down to, ‘Well, they got hurt; somebody’s gotta pay.’”

While propane companies do recommend using gas detectors, they don’t emphasize it enough, said attorney Don Beattie, who has handled dozens of cases against the industry. “They do it in a sly way, and the sly way is put it in the fine print. . . so when they get sued they can say, ‘We told them to get a gas detector and they chose not to,’” Beattie said.

But industry representatives say that gas detectors aren’t foolproof and that they don’t want people to rely solely on them. Like smoke detectors, propane detectors will sound an alarm only if propane reaches them. And because propane is heavier than air, it often sinks to low spots in a house. Though detectors are supposed to be placed low, fugitive propane may not reach the detector.

If detectors were the answer, regulators would have made them mandatory, said Bill Mahre, a consultant who has worked in the propane industry for decades and has testified for Melton’s clients.

Pain ahead

Kruger said it pains him to think that the explosion at his farmhouse could have been prevented. He hadn’t thought much about such accidents before. Now the scars on his face, neck and hands make him think about it all the time.

On Polaroids the hospital took right after the explosion, his face appears puffy, his torso and arms bright red with burns, his hands blackened.

Weeks later, he woke up in a hospital in Sioux Falls, S.D. Doctors had kept him in a long, drug-induced coma while they performed six or seven surgeries, tearing off skin to prevent infection and grafting skin from other parts of his body to cover the burns.

The explosion was just the start of the pain.

He had to learn how to stand and walk. He still wears special compression clothes to keep his skin from scarring too much, tightening and making it harder to move. He has trouble buttoning his shirts.

His skin no longer regulates his body temperature as well as it used to – the winter chill stings him, summer sun burns – so he can’t spend as much time hunting, playing golf and working outside.

“There’s a lot of things I used to be able to do that I can’t do ….lt’ S frustrating,” he said matter-of-factly as he sat at the kitchen table in his mother’s house.

“You take for granted everything you have,” he said. “I don’t anymore.”

AT A GLANCE: Propane safety

Tips:

- Take it seriously: If you smell propane, no matter how strong or weak the smell, treat it as
a serious leak. Do not smoke or use open flames, operate light switches, or use your
phone. Get everyone out of the building. Use your neighbor’s phone to call a trained service
person and the fire department.

- Sniff down low: Propane is heavier than air. To check whether there is a leak using the sniff test, get down on your hands and knees and sniff close to the floor.

- Get a detector: Avoid relying solely on your sense of smell by installing propane gas detectors, but also be aware that gas may not reach the detector.

- Call a professional: Call your propane dealer to service your system regularly and to help with problems. Fire statistics show that a high number of propane flash fires are associated with attempts to repair gas appliances or to relight pilot lights.

Cautions:

- Hard to smell: Under rare conditions, the chemical odorant that gives propane its distinctive smell can fade or diminish. Other conditions such as sinus congestion and prolonged exposure to the odorant in propane may prevent you from smelling a leak.

- Detectors aren’t foolproof: Be aware that gas detectors are only an aid. If you smell any gas at all, take precautions even if your gas detector is not sounding an alarm.

Source: ConocoPhillips Co.

AT A GLANCE: Be safe in fish houses

Propane is widely used in fish houses across the state, according to the Minnesota

Propane Gas Association. The group offers these safety tips:

- Indoor heaters: To prevent carbon monoxide poisoning or oxygen loss, use only heaters that are approved for indoor use, and make sure fish houses have adequate fresh air.

- Propane outside: Keep propane cylinders outside.

- Follow instructions: Follow manufacturers’ installation recommendations and check connections for leaks.

Copyright 2003 – Star Tribune: Newspaper of the Twin Cities