Stern’s Gamble on the Buffalo Creek Case

Stern’s Gamble on the Buffalo Creek Case

        Working on a law suit is like playing poker. One must be able to read the other players and make calculated risks. You win some, you lose some. It’s all a gamble. In 1972, an impoundment dam owned by Pittston Oil Company burst flooding the entire valley and killing 125 people and injuring over 1000. The town hired the law firm of Arnold & Porter to take on this huge lawsuit against a major oil company in the state of West Virginia which is basically run by oil companies and pro-corporation. However, the law suit became just more than suing a company for basic losses such as houses, electronics, property, etc. It turned into a fight over the degree to which each plaintiff suffered mentally following the disaster. Such a claim was hard to prove when there wasn’t the term of PTSD in the Medical Dictionary. Stern gambled his luck through the trial in regards to these claims and risked the entire lawsuit to prove a point that there’s more to a disaster than just compensating those for their physical losses. The people of the Valley will have this flood with them for the rest of their lives and no amount of money will replace those they lost.

        His first major gamble was when he decided to take on this law suit pro bono before even knowing the extent of the damage over in Buffalo Creek. He had been going nowhere with his work at Arnold & Porter and knew he needed something to keep him motivated and attentive to his job. Additionally, this was a chance for him to get out of Washington and work with a whole new demographic. This was a mentally challenging case for him and he had a feeling this could make or break his career. If he decided against taking this trial, the survivors’ committee would have contacted another law firm to represent them and they would have had to settle for a lot less than Stern could get them in the end which was $13.5; a whole lot more than what Pittston was originally offering the plaintiffs post-disaster. Whatever lawyer they would’ve chosen would have also settled at the first settlement discussion with Staker knowing they would get some sort of percentage of the settlement. The survivors’ committee ultimately struck gold when they stumbled about Gerald Stern as he’s a lawyer that not only cared about the case at hand, but also the victims of those whom were there and those who were absent for the disaster but lost friends and family in the flood. Additionally, Stern was further encouraged to take on this case when Paul Porter told him, “When in doubt, do the right thing.”, which in turn, solidified his decision to take on a case of this magnitude. It was unknown to Stern at that point whether taking this risk was a good or bad thing, but it was surely the right thing to do.

        One of the biggest gambles Stern made on this case was whether he had enough of a case to attempt to “pierce the corporate veil”. Piercing the corporate veil is when someone decides to sue a corporation’s shareholder for injuries caused by the corporation. In this case, Stern decided it was in the best interest of the plaintiffs to sue Pittston Company as opposed to Buffalo Mining Company as they were the sole shareholder. The only valid way to sue Pittston under these pretenses were if they used diversity of citizenship between Pittston and the West Virginia plaintiffs. By doing so, Stern decided to gamble and rely solely on diversity of citizenship in hopes of being able to convince the court of the need to piece the Buffalo Mining Company’s corporate veil. If they hadn’t made this the original basis for their lawsuit, they might not have moved forward in the case and made a significant amount of additional discoveries that caused their later success. Luckily, they ended up with Judge Hall on the case as Judge Christie passed away and somehow landed a judge that was sympathetic with their claims and later moved forward in the lawsuit. If they had been unlucky and got another judge on the case before or after Christie’s passing, their claims might not have been valid and they would have had to forego this entire lawsuit and take the original settlement West Virginia was offering to the victims.