Nuisance Class Fails for Unascertainable Class Definition
Senior US District Judge W. Harold Albritton recently issued an opinion in a nuisance case that once again reminds us of the importance of having a class that is capable of objective, ascertainable definition at the outset of the litigation. See Benefield v. International Paper Co., Civ. A. No. 2:09cv232-WHA, Slip op. (M.D. Ala. Oct. 20, 2010).
In Benefield, the plaintiffs alleged that the defendant's paper mill had discharged hazardous substances over the course of many years, resulting in property damage to properties within a two-mile radius of the facility. The class was defined as all people who, as of the date of the filing of the Complaint, owned real property located within two miles of the facility which was contaminated by what was released from the defendant's facility and who suffered as a result a diminution in property value of $100 or more. Slip op. at 2. There were a number of exclusions, including people who suffered personal injuries and people who were litigants or class members in other similar cases.
The court denied class certification, beginning its analysis with the problems with the class definition. Establishing that each property was contaminated would require individualized proof, the court concluded, as would determining whether the property value was diminished by more than $100. Slip op. at 7-8. Although the court ultimately concluded -- unlike many other courts -- that the admissibility of expert testimony was not ripe for adjudication at the class certification stage, the court focused on the weaknesses in the plaintiffs' experts' blanket conclusions and ill-conceived methodologies in rejecting the class definition:
In short, while the Plaintiffs have argued, correctly, that this court should not engage in any merits determination in determining whether the class should be certified, the Plaintiffs have asked the court to find facts, based on disputed evidence, to determine who is in the class. The court concludes, therefore, that it is not administratively feasible for the court to determine whether a particular individual meets the class definition.
Slip op. at 8 (citation omitted). The court also noted that the exclusions carved out of the class definition also presented their own problems: "That [personal injury] exclusion will require a determination of which people within the geographic area who own residential property also have personal injuries caused by releases from the Facility, which itself poses causation issues, and therefore makes the class definition improper." Id. at 9.
The court went on to consider the standing of one plaintiff, who could not establish by deed or will that he actually had an ownership interest in his property. The court concluded that he lacked standing to assert claims on behalf of property owners. (He had asserted some damage to personal property as well, but the court indicated that this presented typicality/adequacy of representation problems, although it might cure his personal standing problem.)
The other plaintiff presented multiple typicality and adequacy problems. First, he jointly owned his property with his wife, and his wife was the plaintiff in a similar action that had been carved out of the class definition. Moreover, after filing the class certification motion, plaintiff filed an amended complaint that asserted claims for public nuisance, private nuisance, and fraud. Yet he did not seek class certification for those claims. This led the court to conclude that his adequacy was "undermined by the pendency of those claims." Slip op. at 15 ("because Johnson's claims are factually the same as only some of the putative class, he is pursuing some damages not sought by the entire class, and he apparently seeks to recover on theories not asserted on behalf of the entire class, his claims are not typical, and he is not an adequate class representative").
In analyzing the predominance requirement of Rule 23(b)(3), the court observed that the claims for public nuisance, private nuisance, abnormally dangerous activity, and fraud likely would require "highly individualized determinations." Slip op. at 19. Moreover, there were significant individualized damages issues that -- when combined with the individualized causation issues -- counseled against certification. Id. at 21.
The court also found the superiority requirement lacking, particularly in light of the other actions already pending.
Benefield is a good reminder that how one defines the class -- and who is excluded from the class -- matters, and can prove fatal to a putative class action.
