Energy Dept. Drops Appeal of Fernald Lawsuit

CINCINNATI —  The Energy Department has removed one hurdle to a $78-million settlement with neighbors of the Fernald uranium processing plant, and revealed another obstacle--the fact that no funds are available to pay it.

The government announced Friday night it was dropping its appeal of the settlement with 14,000 people who live around the southwest Ohio plant. They sought the payment for alleged emotional distress and loss of property values because of radiation releases from the plant.

But Stephen A. Wakefield, chief counsel for the Energy Department, said the Justice Department had advised him that he could not pay the $78 million from a federal contingency fund, as planned, because the lawsuit was not brought against the government.

The original lawsuit targeted National Lead of Ohio Inc., which ran the plant under federal contract until 1985. But the company’s operating contract with the Energy Department shielded it from liability in such cases.

The department will have to ask Congress for a special appropriation to cover the settlement, Wakefield said. Payments probably will be made in installments, he said.