Neila MacQueen, one of four people who filed the lawsuit more than a decade ago, said she felt hopeless after hearing Thursday's decision from the Supreme Court of Canada.
"I feel like I have no access to justice," said MacQueen, who lives about 100 metres from the former Sydney tar ponds site.
In the lawsuit, MacQueen and other plaintiffs argued that they and hundreds of other residents were exposed to contaminants as a result of the tar ponds operation.
MacQueen and residents Joe Petitpas, Ann Ross and Iris Crawford were seeking an unspecified amount in compensation and a medical monitoring fund for contamination from the operation of the steel plant at the site between 1967 and 2000.
The Nova Scotia Court of Appeal overturned the certification of the class-action lawsuit in December 2013.
The appeal court decision came after lawyers for the provincial and federal governments argued that the provincial Supreme Court judge erred in certifying the case because there are too many differences in the individual cases for the matter to be heard as a class-action lawsuit.
The appeal court judges agreed, finding that there was too much variance in the issues affecting the class members and that a class-action suit was not the best way to proceed.
As usual, the Supreme Court of Canada did not give reasons for its decision not to hear the case.
Ray Wagner, the Halifax lawyer handling the class-action suit that included more than 400 people, said the ruling is dissatisfying.
"Nobody can be really happy when the courthouse door appears to be shut to them," said Wagner from Toronto.
"Access to our legal system to have their properties cleaned up and to deal with the fact that they've had to put up with toxic smoke for so many years is a problem. Unfortunately they're not happy with that."
Wagner said the plaintiffs have the option of filing individual lawsuits, but that is challenging.
"This is a major, major barrier for us proceeding to a conclusion," he said of the Supreme Court decision. "Whether we can get over that barrier that's been now laid before us remains to be seen."
MacQueen, 74, said she wants to keep up her legal battle. She said she has chronic bronchitis, asthma and had part of her lung removed after a bout with cancer — all of which she blames on the tar ponds.
"I will go right to the end," said MacQueen.
"If I can get some money or assistance to go ahead, I am hanging in there."
The Sydney tar ponds were comprised of pools of black muck left behind after almost a century of steelmaking at the Sydney Steel plant in Cape Breton. The pools contained one million tonnes of raw sewage, heavy metals, dioxins, PCBs and other toxins.
In August 2013, the site was cleaned up and reopened as Open Hearth Park, a 39-hectare green area that features several sports fields, walking trails and a playground.
Follow (at)AlyThomson on Twitter.Suggest a correction