Displacement

Washington Federal Court Finds Nuisance Claims Displaced by CERCLA

Expanding the reach of the federal displacement doctrine and the U.S. Supreme Court’s decision in AEP v. Connecticut, a federal district court for the first time held that the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) displaces the federal common law of nuisance in claims alleging damages caused by releases of hazardous substances. See Anderson v. Teck Metals, Ltd., No. CV-13-420 (E.D. Wash. Jan. 5, 2015). This ruling follows on a 2011 U.S. Supreme Court holding that regulation of greenhouse gases under the Clean Air Act displaces federal nuisance claims arising from the effects of climate change. See AEP v. Connecticut, 131 S. Ct. 2527 (2011).

Plaintiffs in Anderson filed a putative class action in 2013, alleging among other claims, that Defendant’s smelter in British Columbia caused injuries in the Upper Columbia River Region of Washington. Defendant moved to dismiss all claims under Federal Rule 12(b)(6). 

After making an initial finding that Plaintiffs had standing to bring the federal nuisance claims, the court concluded that CERCLA displaced any claims that Plaintiffs may have. The court explained that a statute displaces federal common law when Congress has enacted legislation addressing the issue presented by a claim.

The particular issue, in this case, was “liability for the release and threatened release of hazardous substances.” Id. at 12. Even though Plaintiffs’ claims alleged personal injuries, which CERCLA does not address, the court followed the Ninth Circuit’s opinion in Native Village of Kivalina v. ExxonMobil Corp., 696 F.3d 849 (9th Cir. 2012), which concluded that “the type of remedy asserted is not relevant to the applicability of the doctrine of displacement.” Id. (quoting Kivalina, 696 F.3d at 857). Accordingly, the court found the fact that CERCLA does not provide a damages remedy for personal injuries to be “irrelevant” to its displacement analysis and dismissed the federal common law claims. The court declined to dismiss some of Plaintiffs’ state law claims, including those seeking to impose strict liability.

Statute of Repose

North Carolina’s Amended Repose Law Fails to Save Barred Toxic Tort Claim

Notwithstanding the intent of the North Carolina legislature, a federal court ruled that the state’s recently amended law exempting groundwater contamination suits from a 10-year statute of repose did not save a latent toxic tort action. See Stahle v. CTS Corporation, No. 1:14-cv-00048-MOC-DLH (W.D.N.C. Dec. 4, 2004).

North Carolina amended its repose laws in 2014 in the wake of CTS Corp. v. Waldburger, 134 S.Ct. 2175 (2014), in which the United States Supreme Court found that Section 309 of CERCLA, which preempts a state “statute of limitations,” does not also preempt North Carolina’s statute of repose. In the wake of Waldburger, North Carolina amended its laws to provide that the statute of repose does not “bar an action for personal injury, or property damages caused or contributed to by … the consumption, exposure, or use of water supplied from groundwater contaminated by a hazardous substance.” N.C. Gen. Stat. Ann. § 130A-26.3.

The amendments sought to save an action brought by military personnel at Camp Lejeune, whose claims stemmed from alleged injuries outside the 10-year repose window. Despite the state legislature’s efforts, the Eleventh Circuit, in a separate action last year (Bryant v. United States, 768 F.3d 1378 (11th Cir. 2014)), found that the law did not overcome the bar imposed by the statute of repose because it did not contain a “latent disease” exception. The Circuit court also found that the statutory exemption could only be applied prospectively because it was a substantive amendment, not a clarification.

The Plaintiff in the instant action, who claimed he developed leukemia after eating fish from a pond allegedly contaminated with toxic solvents from Defendant’s facility, argued that his claims were of the type the Legislature intended to allow. The district court agreed with the Eleventh Circuit opinion and held that the amended law did not contain an exception for latent diseases and that the statutory exemption was a substantive amendment that could only be applied prospectively. Thus, the district court dismissed Plaintiff’s claims. 

Class Actions

High Court Finds Plausible Showing of Amount in Controversy Sufficient to Remove Action

In a decision that may make it somewhat easier for defendants to remove putative class actions from state to federal court, the U.S. Supreme Court ruled that defendants in such cases do not need to offer evidence in their notices of removal proving that the amount in controversy exceeds the jurisdictional threshold. See Dart Cherokee Basin Operating Co. v. Owens, No. 13-719 (Dec. 15, 2014).

The case involved a putative class action filed in Kansas state court alleging that Defendants underpaid royalties owed under oil and gas leases. Defendants sought to remove the case to federal court by asserting that the district court had diversity jurisdiction under the Class Action Fairness Act of 2005 (CAFA). Diversity jurisdiction under CAFA requires a class with more than 100 members, minimal diversity, and an amount in controversy exceeding $5 million. 28 U.S.C. § 1332(d)(2). Defendants’ notice of removal stated that any alleged underpayments to the putative class totaled more than $8.2 million. Plaintiff argued that the case should be remanded because the notice of removal contained no evidence showing that the amount in controversy exceeded the jurisdictional amount. Defendants responded with a declaration from a company executive containing a detailed damages calculation. The district court interpreted controlling law to require proof of the amount in controversy in the notice itself and remanded to state court. Plaintiff petitioned the Tenth Circuit for permission to appeal, but that court denied review and rehearing en banc.

In a 5-4 decision, the justices ruled that a “notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold.” Dart Cherokee, Slip Op. at 7. The Court first examined the history of the federal statute governing removal, concluding that Congress intended the statute to set a liberal standard similar to that required for pleadings in federal court. Under such a liberal standard, the Court ruled evidence is only required in the event a plaintiff or the judge calls into question the amount in controversy alleged in the notice of removal. The four dissenting Justices argued that a procedural defect in the case should have prevented the Court from reaching the merits.

Arkansas Federal Court Denies Class Certification in Property Damage Suit

Exemplifying the reluctance of many courts to allow toxic tort cases to proceed as class actions, a federal judge in Arkansas denied certification of a putative class of neighboring landowners who claimed the Defendant’s failure to adequately remediate contamination damaged their property values. See Day v. Whirlpool Corp., Case No. 2:13-CV-02164 (W.D. Ark. Dec. 3, 2014). 

Whirlpool Corporation discovered the presence of elevated concentrations of trichloroethylene (TCE) in the soil and groundwater of its Fort Smith, Arkansas manufacturing plants in the 1980s, and subsequently agreed to investigate and remediate impacted groundwater at the northern portion of its facility. Further investigations revealed that the TCE plume extended beyond the Whirlpool facility. As a result, in 2013, the County assessor reduced the tax value of multiple properties located atop of or proximate to the plume.

Plaintiff filed suit in state court, asserting tort and statutory claims, and Whirlpool promptly removed the action to the Western District of Arkansas. Plaintiff then filed an amended complaint, joined by an additional plaintiff class representative, and a joint motion to certify and approve a class settlement. 

The court denied class certification, finding among other issues that Plaintiffs had not shown that the putative subclass members are so numerous that joinder would be impractical. Specifically, Plaintiffs identified a total of 104 properties impacted by TCE contamination but did not identify the number of property owners in each putative subclass. The court also expressed doubts as to whether a class action would be more efficient than individual suits, noting that many individuals had opted out of the class and already were involved in separate litigation in the same forum. Because the court failed to certify the class, it declined to further analyze the proposed class settlement agreement.

Experts

Louisiana Federal Court Excludes “Every Exposure” Testimony

Adding to the growing body of case law that rejects the so-called “every exposure” theory, a federal court in Louisiana has excluded specific causation opinions of a plaintiffs’ expert who relied on the theory, finding that such a “one-size fits all” approach is not reliable expert testimony. See Comardelle v. Pennsylvania Gen. Ins. Co., No. 13-6555 (E.D. La. January 5, 2015).

Plaintiffs, survivors of the decedent, alleged the decedent contracted mesothelioma and lung cancer from exposure to asbestos and asbestos-containing products in the workplace, including an adhesive made and sold by Amchem, Inc. Plaintiffs sought to call an expert who would testify that the Amchem adhesive was a substantial contributing factor to the development of decedent’s mesothelioma, in that every exposure to asbestos would have contributed to the illness. Amchem moved to exclude such specific-causation opinion testimony, as well as any other expert testimony that relies on an “every exposure” theory, arguing such testimony does not pass muster under Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharms, Inc., 509 U.S. 579 (U.S. 1993).

The court agreed that Plaintiffs’ expert sought to offer a theory based on “every exposure” to asbestos, and was not tied to the specific facts and circumstances of any of decedent’s exposures. Plaintiffs’ expert opined in his expert report that all inhaled asbestos fibers had the potential to lead to mesothelioma and lung cancer. Citing several recent district court opinions that rejected a causation opinion based on the “every exposure” theory, the court found that the expert’s testimony was not reliable and was inadmissible for the purposes of establishing specific causation.

Damages

Missouri Federal Court Cuts Claims in Pipeline Property Damage Action

Underscoring the need for plaintiffs to show concrete proof of harm in suits alleging property damage, a federal district court dismissed a suit alleging that an oil pipeline contaminated farmland in Missouri. See Henke v. ARCO Midcon, L.L.C., No. 4:10cv00086 (E.D. Mo. Jan. 5, 2015).

Plaintiffs, owners of a 77-acre parcel, filed a putative class action alleging that a pipeline running across the northern edge of their property caused petroleum contamination on approximately half an acre of land. Plaintiffs’ suit, which alleged nuisance, trespass, and negligence claims, principally relied on leak records that did not identify the parcels where leaks occurred, as well as an expert affidavit asserting that Plaintiffs’ property may have lost value due to the presence of oil contamination.

In granting Defendant’s summary judgment motion, the court found that Plaintiffs’ affidavit, which included “speculation that the property may be diminished in value in the event of a future sale of different use,” was insufficient to show Plaintiffs had suffered a legally recognized injury to support a nuisance claim. Henke, Slip Op. at 11. The court further opined that Plaintiffs would have needed to have shown some interference with the property’s use for farming, a need for remediation, or at least that they had concrete plans to sell the land to show actual harm in support of a negligence claim.

Moreover, the court found the record was devoid of any evidence to establish that the Defendant owed a duty to Plaintiffs that it had breached. The court also briefly disposed of Plaintiffs’ trespass claims on the basis that Plaintiffs completely failed to show that Defendant engaged in any intentional act causing harm to the property.

Case Management

Eleventh Circuit Reinstates Groundwater Contamination Case Dismissed on Lone Pine Order

In a case that may provide some plaintiffs with protection from early Lone Pine orders, the Eleventh Circuit reversed a trial court’s dismissal of a groundwater contamination case for failure to sufficiently state claims after the trial court’s Lone Pine order. See Adinolfe v. United Technologies Corp., No. 12-16396 (11^th Cir. Oct. 6, 2014). 

The case involved two consolidated toxic tort cases in which hundreds of property owners brought Florida common law and statutory claims against Defendant for personal injury and property damages stemming from alleged groundwater contamination at Defendant’s manufacturing plant. The trial court granted Defendant’s motion for Lone Pine orders, which required Plaintiffs to adequately demonstrate a prima facie basis for the allegations in their complaint. After an initial dismissal without prejudice that allowed Plaintiffs to file amended complaints, the court ultimately dismissed the entire action with prejudice. 

The Eleventh Circuit reversed and noted that during the briefing and a hearing on Defendant’s motion to dismiss Plaintiffs’ complaint, the parties repeatedly engaged in arguments over the content and sufficiency of Plaintiffs’ factual filings in response to the order, thereby straying from the four corners of the pleadings.

The Eleventh Circuit held it was inappropriate for the trial court to require Plaintiffs to provide factual support for their claims before the court determined whether those claims survived a motion to dismiss, finding that such an exercise effectively transformed a motion to dismiss into a motion for summary judgment without notice to the parties and an opportunity for mutual discovery. To allow the trial court to do so, the Eleventh Circuit continued, would be to impose a heightened pleading standard – “something the [U.S.] Supreme Court has frowned on.” Adinolfe, Slip Op. at 12.

Beveridge & Diamond's Toxic Tort and Environmental Tort practice group defends large companies in virtually all industries against toxic tort and product liability claims involving a wide range of chemicals and related substances, including metals such as arsenic, lead, and mercury. While the majority of clients tend to be in oil, chemicals, and manufacturing, we represent any type of company with actual or potential exposure to toxic tort liability or product liability. For more information, contact the authors.