Class Action Certification of Environmental Contamination Mass Torts in the Wake of Dukes, Behrend and Amgen

In Parko v. Shell Oil,[1] the citizens of the Village of Roxana, filed suit against the operators of a nearby refinery, some dating back nearly a century, including Shell Oil Company and Conoco Phillips.[2] The district court certified a plaintiff class seeking damages for common law nuisance and damages for loss of property value allegedly caused by the groundwater contamination beneath their homes.[3] Specifically, the plaintiffs alleged that benzene and other contaminates had leaked from the plant into the groundwater beneath their homes, causing a drop in property value, though this groundwater was not the plaintiffs’ water supply.  The operator-defendants contested certification at the district court, raising arguments as to numerosity, commonality and predominance, as affirmative requirements for class certification under Federal Rule 23.[4]

I. Commonality

For the commonality requirement to be satisfied there must be “questions of law or fact common to the class.”[5] Addressing this requirement, Judge Posner doubted if the plaintiff class had even “identified a common issue.”[6] He noted that the plaintiff’s expert intended to measure contaminant levels in the groundwater beneath the plaintiff’s property, “even though their water supply doesn’t come from groundwater…” and nothing suggested that the village obtained its water elsewhere due to the contamination.[7]Judge Posner further speculated that “if the expert’s evidence is rejected,” then the plaintiffs would have “no basis for the claim that the benzene levels in the groundwater are the common cause of the loss of property values[.]”[8] To Judge Posner, contaminated groundwater alone—i.e. with no additional contamination to drinking water, was akin to “many things commonly found in soil beneath rural or suburban houses that homeowners would very much like not to enter their homes (such as earthworms, fungi, ants, beetles, slugs, radon, chemical residues, thousands of different types of microbe- and groundwater)[.]”[9]Absent an expert opinion to the contrary, whether a person finds an earthworm or benzene underneath their back yard, so long as it remains in the ground it “should not affect property values.”[10]

According to Judge Posner, if the defendants’ counterargument was correct, “there is no common issue, only individual issues that will vary from homeowner to homeowner[.]”[11] In his view, these variances, based on the presence of contaminated groundwater, and the identity of the polluter, and the contaminant concentration, and if the contaminant’s presence even affected the plaintiff’s property value, would be[12] “difficult” to questions to answer in a class action and “must be engaged by the district judge before he can make a responsible determination of whether to certify a class.”[13]

II. Predominance

The predominance requirement is satisfied where “questions of law or fact common to class members predominate over any questions affecting only individual members.”[14] Judge Posner framed the inquiry as one of analyzing the qualitative, not quantitative importance of the issue to the class, specifically, whether “individual questions…overwhelm questions common to the class”[15] and the proposed class is “sufficiently cohesive to warrant adjudication by representation.”[16] In his view, the qualitative importance of the common issue must be one that will “greatly simplify the litigation to judgment or settlement” so as to justify the “complications, unwieldiness, the delay and the danger” of class treatment.[17]

Applying these precepts, Posner noted that the alleged contamination was spread over a ninety-year time frame and involved other potential polluters. He was unwilling to “assume” that “every class member has experienced the same diminution in the value of his property even if everyone has experienced the same level of contamination.”[18] Further, there was such a “variance in property values” that it was “less likely…that contamination would affect the value of all or most properties by the same amount of money or the same percentage of market value.”[19]

In Judge Posner’s view, the district court treated “predominance as a pleading requirement.”[20]Here, the “judge should have investigated the realism of the plaintiff’s injury and damage model in light of the defendants’ counterarguments[.]”[21]

III. From Disfavored to Disallowed

This case paints a grim picture for plaintiff class actions bringing toxic torts due to generational environmental contamination. Historically, class action treatment of mass torts has been disfavored.[22] In nearly all of such cases, similar individualized damages issues will likely be present. It is difficult to conceive of a case where a defendant will not point to another probable source for the contamination, and where the plaintiff class has all suffered the same level of exposure causing the same loss in property value.

Even if this rare common question is found, which has some bulwark against the predominance of an individualized damages inquiry, the class action plaintiff must be prepared to present a comprehensive theory of the case, with expert witness support at the certification stage. Judge Posner opined that other causes of property value loss could be the “housing bubble collapse” and “the ensuring financial crisis.”[23] This individualized damages determination simply predominated over the common question.

While the knee-jerk reaction would be to fault the plaintiff for not putting forth an expert to provide a damages model that isolated the presence of benzene and its effect on property value from a loss in property value attributable to other causes, such as the housing bubble collapse, such a maneuver would have likely been unsuccessful. The plaintiff cannot simply draft a theory of the case, supported by expert opinion that seeks to prevent the defendant from presenting available individual defenses.[24]

Given the nature of the claim and the issues that the district court must address prior to certification, it is unlikely that the plaintiffs in these cases will be able to identify a “common contention…capable of class wide resolution…that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.”[25] In these generational toxic tort cases brought by victim communities, there is little likelihood that such a common question exists.

Had certification been upheld in Parko the common issue would have been whether the “defendants failure to contain petroleum byproduct at the refinery resulted in contamination to Roxana property.”[26]Assuming the plaintiffs prevailed on this common issue, the court would then have faced the exact same individualized inquiry into each plaintiff’s case described as “unworkable” pre-certification. Nearly each plaintiff-property owner would have needed a separate trial to prove causation and damages, though the common issue was resolved in her or her favor.

IV.   Conclusion

This case illustrates the hurdles now faced for representative adjudication. The commonality and predominance hurdles have become too high to surmount in the mass tort context. Even where the cause is a singular event, rather than generational exposure, causation and damages will likely involve an individualized damages inquiry that predominates over the common class-wide question.  Perhaps segregation of plaintiffs into sub-classes will save the toxic tort class action, provided any such class structure is strongly supported by expert opinions and the theory of liability or damages methodology eliminates individualized defenses.  It seems clear than under this application of current law, representative adjudication of mass torts is no longer simply disfavored, it is all but disallowed.


Preferred citation: Brian Lindsey, Earthworms as to Benzene, as Disfavored as to Disallowed: Class Action Certification of Environmental Contamination Mass Torts in the Wake of Dukes, Behrend and Amgen, LSU J. Energy L. & Res. Currents (April 9, 2014), http://sites.law.lsu.edu/jelrblog/?p=458.

[1] 739 F.3d 1083 (7th Cir. 2014).

[2] Parko, 739 F.3d at 1084.

[3] Id.

[4] Fed. R. Civ. Proc. 23.

[5] Fed. R. Civ. Proc. art. 23 (a)(2).

[6] Parko, 739 F.3d at 1086.

[7] Parko, 739 F.3d at 1085.  To Judge Posner, contaminated groundwater, not linked to the drinking water supply, was akin to “many things commonly found in soil beneath rural or suburban houses that homeowners would very much like not to enter their homes (such as earthworms, fungi, ants, beetles, slugs, radon, chemical residues, thousands of different types of microbe- and groundwater)…”  Id.

[8] Id. at 1086.

[9] Id.

[10] Id.

[11] Id.

[12] Id. at 1087.

[13] Id.

[14] Fed. R. Civ. Proc. art. 23 (b)(3).

[15] Id. (quoting Amgen v Conn. Retirement Plans & Trust Funds, 133 S.Ct. 1184, 1196 (2013)).

[16] Id. (quoting Achem Products, Inc. v Windsor, 521 U.S. 591, 623 (1997).

[17] Id.

[18] Id. at 1086.

[19] Id.

[20] Parko, 739 F.3d at 1086.

[21] Id.

[22] See, e.g., Castano v. The American Tobacco Co., 84 F.3d 734, 746 (5th Cir. 1996).

[23] Parko, at 1086.

[24] Wal-Mart, 131 S.Ct. at 2561.

[25] Wal-Mart, 131 S.Ct. at 2545.

[26] Parko, 739 F.3d at 1085.


 

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