Toxic Tort and Product Liability Quarterly
Experts
Issuing an opinion that could lower the bar for proving toxic tort causation, the Michigan Court of Appeals held that direct expert testimony may not be necessary to prove causation in a toxic tort case and that a plaintiff may rely on circumstantial evidence and reasonable inferences to withstand summary judgment. See Lowery v. Enbridge Energy LP, No. 319199 (Mich. Ct. App. Apr. 2, 2015).
Plaintiff lived in close proximity to the Kalamazoo River, which was affected by a spill from an oil pipeline in July 2010. Plaintiff alleged that following exposure to toxic fumes from the oil spill, he experienced severe migraines, coughing and vomiting before suffering a ruptured gastric artery and being admitted to the hospital in August 2010. Plaintiff’s medical expert, basing his opinion on a review of only the Plaintiff’s hospital records and no direct examination of the Plaintiff, testified that the fumes from the spill caused the headaches, coughing, and vomiting, and that violent coughing and vomiting led to the rupture of the artery. The trial court granted partial summary judgment in favor of the Plaintiff regarding the Defendant’s negligent operation of the oil pipeline. However, the court granted partial summary judgment in favor of Defendant because Plaintiff had not shown a sufficient causal link between the spill and ruptured artery.
Reviewing whether the Defendant’s negligence was the proximate cause of the Plaintiff’s ruptured artery, the Michigan Court of Appeals reversed the trial court’s grant of partial summary judgment to the Defendant, holding that direct expert testimony is not required to prove causation in a toxic tort case. Plaintiffs can prove their case through circumstantial evidence and reasonable inferences. The Court held that there was a strong enough connection to infer that the fumes caused the ruptured artery, noting that the Plaintiff’s symptoms arose immediately after the oil spill. The Court concedes that there are other plausible explanations for the injury, but that this only lends weight to the idea that there are genuine issues of material fact that a jury must resolve, and thus summary judgment is inappropriate.
Underscoring the importance of the distinction between a product and its component parts, a federal court in Louisiana refused to allow expert testimony that exposure to gasoline caused acute myeloid leukemia (AML) in a former gas station attendant and mechanic. See Burst v. Shell Oil Co., No. 14-209 (E.D. La. June 9, 2015). Plaintiff claimed Defendant gasoline manufacturers negligently manufactured and sold gasoline containing benzene and failed to warn foreseeable users of the health hazards from that gasoline.
Plaintiff offered Dr. Robert Harrison, a medical doctor to testify that benzene causes AML, and that benzene caused Plaintiff’s husband to develop AML. Defendants moved to exclude Dr. Harrison’s testimony as unreliable and irrelevant. The Court granted Defendants’ motion, finding that, although the link between benzene and AML is well established, the expert failed to connect gasoline, the product at issue in this case, to AML.
The Court noted the expert claimed to have used a methodology that involved “identify[ing] all relevant studies.” Burst slip op. at *4. Yet the expert did not cite a single study evaluating any connections between gasoline exposure and AML. Instead, he relied on benzene-specific studies, and made “no attempt to demonstrate why benzene-specific studies can reliably support the conclusion that gasoline can cause AML.” Id. at *5. Moreover, the Court noted that reputable studies had been published that did not find a causal connection between gasoline and AML. This, the Court held, left too big of a gap between the available data and the expert’s conclusions, rendering the expert’s opinion unreliable.
Product Liability
An Ohio federal district court gave E.I. DuPont de Nemours and Co. a partial victory in litigation over ammonium perfluorooctanoate (C-8) drinking water contamination in Ohio and West Virginia by granting partial summary judgment on several of Plaintiffs’ product liability and consumer protection claims. See In re E.I. DuPont de Nemours and Co., No. 2:13-md-2433 (S.D. Ohio July 6, 2015). Plaintiffs —who asserted various product liability, conspiracy, consumer protection, and other tort and statutory claims under Ohio and West Virginia law—allege C-8 discharges from DuPont’s Washington Works plant, where DuPont used C-8 manufactured elsewhere to manufacture Teflon, contaminated their drinking water. E.I. DuPont, slip op. at 1-2. Plaintiffs’ actions had been consolidated for pre-trial purposes in multi-district litigation (MDL).
DuPont moved for global summary judgment as to all Plaintiffs in all the MDL cases and cited to the claims of several specific Plaintiffs as representative of those DuPont faces across the MDL. The Court, however, limited its rulings only to the Plaintiffs that DuPont specifically identified in its briefing, granting DuPont’s motion in part as to them and noting that its Opinion would be instructive in other cases in the MDL.
The Court rejected Plaintiffs’ product liability claims because, the Court held, the Plaintiffs at issue did not make any allegations tying their injuries to DuPont’s manufacture of C-8. DuPont did not manufacture C-8 during the relevant time period; it used C-8 manufactured by others. Likewise, those Plaintiffs’ state consumer protection law claims failed because the claims hinged on whether DuPont sold, or otherwise induced Plaintiffs to buy, contaminated drinking water. The court found that “[e]ven a broad interpretation of the term ‘seller’ [could not] transform DuPont into a seller of drinking water.” Id. at 14.
The Court also granted DuPont’s motion as to the following claims:
- Conspiracy, because those claims were based on the product liability and consumer protection claims the Court had just dismissed.
- Trespass on the person, because no such claim is available under Ohio or West Virginia law.
- Ultrahazardous or abnormally dangerous activity, because DuPont’s activities were neither ultrahazardous nor abnormally dangerous.
- Negligence per se, because the Court found no private right of action under Ohio or West Virginia law, or the federal Resource Conservation and Recovery Act, for damage to groundwater.
The court denied DuPont’s motion on Plaintiffs’ conscious pain and suffering claims, holding that it can be a separate cause of action from wrongful death. Id. at 21. The court also found disputed fact issues as to whether DuPont knew that releasing C-8 “would bring about harmful or offensive conduct” and therefore denied DuPont’s motion on Plaintiffs’ battery claims. Id. at 25.
District Court Limits Nuisance Claims Against Chemical Manufacturer in Elk River Spill
Finding only public interests at issue from contamination of public drinking water supplies, a West Virginia federal court dismissed a private nuisance claim, but not a public nuisance claim against a chemical manufacturer. See Good v. American Water Works Co., No. CIV-A-2:14-01374 (S.D.W.V. June 4, 2015). Defendant Eastman Chemical Company was the manufacturer and distributor of a chemical, Crude MCHM, used in the coal industry and released from a Freedom Industries, Inc. facility near Charleston, West Virginia in January 2014.
Plaintiffs are a putative class of some 300,000 residents whose water service was interrupted when Crude MCHM entered the Elk River and contaminated the public drinking water supply. Plaintiffs contend Eastman is liable for damages for public and private nuisance, among other claims, based on its alleged failure to warn of the dangers of Crude MCHM and its allegedly negligent sale of the chemical to the facility at issue. Eastman moved to dismiss these and other common law claims. The Court granted in part Eastman’s motion, dismissing the private nuisance claims.
On private nuisance, the Court granted Eastman’s motion because “the presence of the pollutants in the public water supply will not support a private nuisance claim.” Good slip op. at *8 (citation omitted). The Court found the only interest invaded here was that of the public generally, which by definition is not a private nuisance.
On public nuisance, Eastman argued Plaintiffs cannot allege they suffered a special injury, as required under West Virginia law. The Court, citing a dearth of authority defining special injury, allowed the claim to go forward but expressed doubt the evidence would support a public nuisance claim.
Class Actions
Creating a Circuit split, the Ninth Circuit held that a tort case against a Washington corporation did not fall under the so-called “local event” exception to the Class Action Fairness Act (CAFA) and, therefore, had been properly removed to Federal District Court. See Allen v. Boeing, D.C. No. 2:14-cv-00596-RSM (9th Cir. Apr. 27, 2015). The court interpreted the local event exception to apply only to single happenings, not to a continuing activity or action.
Plaintiffs own land near a Washington Boeing manufacturing plant that allegedly had been releasing hazardous chemicals contaminating groundwater in the area. The Plaintiffs claimed that they had incurred property damages as a result of this contamination and asserted claims of negligence, nuisance, and trespass against both Boeing, for groundwater contamination over a 40-year period, and Boeing’s environmental consulting company, Landau, for failing to adequately remediate the contamination.
CAFA, which was designed to allow for removal of many class actions to federal court, has an exception for cases where “all of the claims in the action arise from an event or occurrence in the state” and the alleged harms are also contained within the state. Id. at 7–8. In its analysis in Boeing, the Ninth Circuit explicitly diverged from the Third Circuit’s reading of this local event exception, which was that an “event” under the exception could be a series of interconnected events or occurrences. Instead, the Ninth Circuit interpreted the exception narrowly, limiting the exception to a single, isolated event, like a chemical spill. To support its interpretation, the court looked to the plain meaning of the words “event” and “occurrence,” the meaning of the exception within the greater CAFA statute, and also to legislative history suggesting that only single tortious events were meant to fall under the exception.
The court’s narrow interpretation of the local event exception means that more mass tort actions will be removable to federal court, at least within the Ninth Circuit. In addition, given the contrary interpretation by the Third Circuit, the chances are now greater that the Supreme Court may choose to weigh in on this issue.
Deep-Well Injection
Oklahoma Supreme Court Finds Subject Matter Jurisdiction Over Earthquake Claims
Potentially opening the door for litigation that seeks to tie deep-well injection of hydraulic fracturing flowback and other wastewater to damage caused by earthquakes, the Oklahoma Supreme Court unanimously held that state district courts have jurisdiction to hear such complaints. Ladra v. New Dominion, LLC, 2015 OK 53 (Okla. 2015).
In 2011, Plaintiff Ladra was watching television at home with her family when a nearby earthquake made her home shake. Rock facing from her chimney shook loose and struck her, causing injuries to her legs and knees. Plaintiff sued the operators of wastewater injection wells near her home, alleging that the operation of their wells caused the earthquake near her home and was the proximate cause of her injuries. The district court dismissed the case, holding that the Oklahoma Corporation Commission (OCC) had exclusive jurisdiction over cases tied to oil and gas operations.
In reversing the district court’s dismissal, the Oklahoma Supreme Court found that the OCC’s exclusive jurisdiction “is limited to the resolution of public rights” and does not intrude upon the district court’s jurisdiction over “disputes between two or more private persons.” Id. at ¶ 10. The Court distinguished between the OCC’s exclusive jurisdiction to “regulate oil and gas exploration and production activities” and the district court’s jurisdiction to “afford a remedy to those whose common law rights have been infringed by either the violation of these regulations or otherwise." Id. at ¶ 12. The Court’s ruling only addressed jurisdiction, and expressly stated that it contained no decision on the sufficiency of Plaintiff’s claim.
Damages
In a decision that may reopen the door to significant damages in a California soil and groundwater contamination suit, the Ninth Circuit reversed a trial court’s dismissal of the City of San Diego’s restoration and real estate damages claims stemming from petroleum releases. People of the State of Calif. v. Kinder Morgan Energy Partners, No. 13-55297 (May 21, 2015). The Ninth Circuit’s decision revived Plaintiffs’ claims for some $250 million in damages.
Plaintiffs allege Defendants are responsible for petroleum that leaked into soil and groundwater, including an aquifer beneath San Diego’s Qualcomm Stadium. Plaintiffs’ expert based his restoration damages assessment on the assumption that restoration to background conditions was the proper cleanup standard. This, the trial court found, rendered the expert’s opinion irrelevant and unreliable. The Ninth Circuit disagreed, finding that any fault in the expert’s assumptions on baseline conditions goes to weight and impeachability, not admissibility.
The trial court also found Plaintiffs’ assessment of real estate damages of the stadium property was impermissibly based on the hypothetical highest and best use of the property, finding instead the proper measure of such damages is the rental value of the property as it exists as a stadium. The Ninth Circuit, though, held that California law permits real estate damages arising from nuisance and trespass to be proved based on a hypothetical higher use of the property. Plaintiffs, in this case, argued that could include mixed-use developments, thereby allowing for a significantly larger potential damages award.
Parent Liability
West Virginia Federal Court Finds Personal Jurisdiction Over Out-of-State Parent Company in Elk River Spill
In a ruling that could broaden parent company exposure to suit in West Virginia, the Southern District of West Virginia found that it had personal jurisdiction over the out-of-state parent company of an in-state water company in a putative toxic tort class action arising from the January 2014 chemical release at Freedom Industries, Inc. See Good v. American Water Works Co., 2015 WL 1600761, CV No. 2:14–01374 (S.D.W. Va. Apr. 9, 2015). The Court found jurisdiction because Plaintiffs had sufficiently alleged that, notwithstanding any current independence from its subsidiary, the foreign parent corporation had sufficient involvement in the negligent design of a water supply system more than 45 years ago.
Plaintiffs brought state tort claims against both West-Virginia American Water Company and its parent American Water Works Company Inc., alleging damages from negligence in the design and implementation of WV American’s drinking water procurement and treatment system. Id. at *1. American moved to dismiss for lack of personal jurisdiction.
The Court denied the motion. The Court looked to Plaintiffs’ complaint, which cited a state public service commission order from 1969 and the testimony of an American director during the initial design phase of the 46-year-old water system to allege that American had a close relationship with its West Virginia subsidiary at the time the water facility was negligently designed. This, the Court held, was sufficient involvement to support personal jurisdiction over American.
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.
