Sunday, May 8, 2016

Smith v. ConocoPhillips Pipe Line Co.

Opinion handed down September 15, 2015
        Smith, the named plaintiff in a putative class action, sued ConocoPhillips Pipe Line Co. (“Conoco”) for a petroleum leak seeking injunctive relief and damages resulting therefrom.[1]  Conoco removed to federal court, and the U.S. District Court for the Eastern District of Missouri denied Conoco’s motion to disqualify the class’s experts, granting Smith’s motion to certify the class.  Conoco appealed both decisions.[2]  The U.S. Court of Appeals for the Eighth Circuit ultimately ruled the class did not meet the commonality requirement under Missouri law.[3]
I.  Facts and Holding
        Conoco owns and operates a pipeline running through West Alton, Missouri.[4]  The pipeline leaked in 1963 and was shortly thereafter repaired, but the contamination was not contained or remedied.[5]  In 2002, contaminants stemming from the leak were discovered in a home in the area, which was subsequently purchased by Conoco, and fenced in the surrounding area and demolished the house.[6]  Testing on the contamination found in the home showed the presence of the toxic chemical benzene, an additive and carcinogen found in gasoline, at three times greater than the allowable limit.[7]  In 2006, Conoco demolished more homes in the area, removed approximately 4000 cubic yards of soil and set up monitoring wells.[8]  In addition, after discussions with the Missouri Department of Natural Resources, Conoco began providing bottled water for about fifty residents in the area living within a range of 0.25 and 1.1 miles.[9] 
        Conoco’s actions led to the filing of a putative class action in 2011 by nearby landowners, claiming the contamination site constituted a nuisance and alleging negligence on the part of Conoco, seeking injunctive relief and damages.[10]  In addition, the class alleged Conoco unreasonably used the land and diminished their property values to which they also sought money damages and injunctive relief, asking Conoco to eliminate the area of petroleum and conduct further testing for contamination.[11] 
        Plaintiffs presented two expert witnesses who claimed lead contamination is pulled downward by gravity, at which point it begins to spread and shift.[12]  Plaintiff’s experts adduced the contamination plume in West Alton grew considerably larger over time and thus it would likely have affected properties outside the contamination zone.[13]   In 2011, Plaintiffs conducted tests of their drinking water, which produced no chemicals of concern in the samples.[14]  Conoco’s expert claimed the company used a monitored natural attenuation process in which “biodegeneration and other processes reduce[d] the concentration of pollutants in soil and groundwater over time.”[15] 
        The class was certified by the district court on the theory that additional pockets of contamination likely existed within the area.[16]  In certifying the class, the district court relied heavily on evidence the monitoring wells operated by Conoco contained contaminants and that pollutants continued to fluctuate and shift underground.[17]  Lastly, the court concluded their certification was justified and warranted because the focus of the class was on the 0.25-mile circular area around the original contamination site.[18]
II.  Legal Background
        In order for a court to certify a class action, it must first determine that the class meets the “four threshold requirements” of numerosity, commonality, typicality, and adequacy of representation.[19]  The biggest hurdle to class certification in this case centered on the commonality requirement.  To show commonality, the plaintiffs must “demonstrate that the class members have suffered the same injury.”[20] 
Plaintiffs also based their action against Conoco on violations of nuisance and negligence.  Under Missouri law, nuisance is “the unreasonable, unusual, or unnatural use of one’s property so that it substantially impairs the right of another to peacefully enjoy his property.”[21]
III.  Instant Decision
        The court ultimately concluded that the plaintiffs’ claims regarding the contamination affecting their property values by invading and interfering with their enjoyment of their land were unfounded.[22]  In its ruling, the court relied heavily on the persuasive authority of other state courts and circuit courts in construing the common law nuisance definition, ruling plaintiffs failed to assert sufficient harm due to the leak.[23]
        First, the Eighth Circuit specifically noted the chemicals identified at the site of the initial spill had not appeared in the tests done at the homes of class members, and that the presence on a single property of chemicals connected to the spill resulting from Conoco’s leak could not prove actual contamination existed on the class land.[24]  
        Second, Plaintiffs contended that Missouri law did not require physical invasion in order to establish a claim for common law nuisance, noting the Supreme Court of Missouri concluded nuisance was not a subject for formulaic determination and instead was dependent on the circumstances of each case.[25]  In assessing Plaintiffs’ allegations, the court considered ample persuasive authority from other courts.  First, the court noted under Virginia nuisance law, the U.S. Court of Appeals for the Fourth Circuit did not consider the likelihood contamination might spread and diminish property values as enough to overcome the nuisance requirement that a nuisance be visible or capable of detection physically on plaintiff’s property.[26]  In addition, under Mississippi law, the U.S. Court of Appeals for the Fifth Circuit determined, in a case involving the dumping of waste materials, that in order to show a nuisance, evidence was required to show harmful levels of a toxic hazard in plaintiff’s well water.[27]  The court also noted a Michigan Supreme Court case where “plaintiffs seeking compensation for a decline in property value caused by unfounded perception of underground contamination” could not make out a nuisance claim under state law.[28]  Similar results were issued under Kansas law,[29] Utah law,[30] and Ohio law.[31] 
        Lastly, the court held it was an abuse of discretion to certify the class because of the absence of a showing that class members were commonly affected by contamination on their properties, and it thus reversed the order issued by the district court.[32]
IV.  Comment
        Smith stands as a decision that reinforces the premise that the commonality requirement continues to be the hardest of the elements of Rule of Civil Procedure 23 for plaintiffs to establish.  In order to show commonality amongst a collection of plaintiffs, a showing of an actual harm needs to be made, as the mere potential of a future harm will not suffice.  In this particular instance, the mere prospect that plaintiffs might someday have their homes contaminated by chemicals stemming from a leak was simply not enough for the court to certify the class.
– Nicholas Leslie

[1] Smith v. ConocoPhillips Pipe Line Co., 801 F.3d 921, 921 (8th Cir. 2015).
[2] Id.
[3] Id.
[4] Id. at 922.
[5] Id.
[6] Id.
[7] Id. at 923.
[8] Id.
[9] Id.
[10] Id. at 922-23.
[11] Id.
[12] Id. at 923-24.
[13] Id. at 924.
[14] Id.
[15] Id.
[16] Id. at 922-23.
[17] Id. at 924-25.
[18] Id. at 925.
[19] Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 613-15 (1997).
[20] Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011).
[21] Frank v. Environmental Sanitation Mgmt., Inc. 687 S.W.2d 876, 880 (Mo. 1985).
[22] Smith v. ConocoPhillips Pipe Line Co., 801 F.3d 921, 927 (8th Cir. 2015).
[23] Id.
[24] Id.
[25] Frank v. Environmental Sanitation Mgmt., Inc. 687 S.W.2d 876, 881 (Mo. 1985).
[26] Adams v. Star Enter., 51 F.3d 417, 422-23 (4th Cir. 1995).
[27] Berry v. Armstrong Rubber Co., 989 F.2d 822, 828–29 (5th Cir.1993).
[28] Adkins v. Thomas Solvent Co., 487 N.W.2d 715, 717 (Mich. 1992).
[29] Smith v. Kan. Gas Serv. Co., 169 P.3d 1052 (Kan. 2007).
[30] Walker Drug Co., Inc. v. La Sal Oil Co., 972 P.2d 1238, 1244 (Utah 1998).
[31] Chance v. BP Chem., Inc., 670 N.E.2d 985, 990 (Ohio 1996).
[32] Id.