Toxic Tort Litigation Blog : Toxic Tort Lawyer & Attorney : Epstein Becker Green Law Firm : Product Liability, Contamination, Pollution

Guest Blogger ANDREA J. LAWRENCE is a Senior Counsel at Epstein Becker & Green in New York.  She provides legal advice and counsel to clients in the real estate industry. Andrea has extensive commercial litigation experience, and has provided legal representation to real estate companies, landlords, developers, property management companies, and commercial tenants  She recently published an article about bed bug litigation in the New York Real Estate Journal.  Despite some recent highly publicized bedbug personal injury litigation involving prominent New York hotels, Andrea concludes on the basis of a recent New York appellate case, that bedbug cases may not fare well in a commercial setting. 

Many people don't necessarily associate bedbugs with other environmentally hazardous conditions such as toxic mold or oil contamination. However, the reemergence of bedbugs in this country has created unsafe and hazardous living conditions, and has spawned a recent spate of lawsuits throughout the United States. Just recently in New York, the Appellate Division, First Department, shed some light on the issue of liability in the sale of an apartment building with an alleged bedbug infestation. In 85-87 Pitt St., LLC v 85-87 Pitt St. Realty Corp., 83 A.D.2d 446, 921 N.Y.S.2d 40 (1st Dep't 2011), the appellate court upheld a lower court dismissal of a lawsuit, where a buyer sought damages from a seller after its purchase of a residential apartment building with a prior bedbug infestation. The Appellate Division affirmed the lower court's dismissal of the case, predicated upon the contract clause setting forth that the buyer had accepted the building "as is" after having had an opportunity for inspection, as well as the merger clause contained therein that extinguished any claims arising from the seller's alleged misrepresentations concerning bedbugs. Thus, at least in this jurisdiction, there is not much legal recourse for purchasers of buildings, or even apartment units, with a bedbug history, where such relief is precluded by contract.

 The lesson to be learned from this case is simple – in the course of a buyer’s due diligence in today’s market, it should search building records for reports of a bed bug (or any insect/vermin) infestation, and may want to conduct its own physical inspection with an exterminator to uncover any such infestation, past or present. Moreover, should a buyer wish to have some safeguard against this issue, it should insist on a clause within the contract of sale whereby the seller proffers a representation about the presence or absence of bedbugs so as to be enforceable. 
 

Consumer Reports, among others, reported this week that the International Agency for Research on Cancer ("IARC"), which is part of the World Health Organization ("WHO"), has classified low-level radiation from cell phones as "possibly carcinogenic to humans" based on limited evidence linking cell phone use to glioma, a type of brain cancer.  Although Consumer Reports concluded in its article that IARC's action was based on "limited evidence" and doesn't "convincingly" link typical cell phone use with cancer, an American public that often skims only headlines of articles, may be susceptible to appeals of sympathy by plaintiff lawyers representing long-time cell phone users with brain cancers.  Throughout the 1980's the utility industry battled spurious claims, premised upon junk science, that electromagnetic field radiation was responsible for "cancer clusters" of child leukemias and other dreaded diseases.  Although virtually every major EMF toxic tort claim was successfully defended by industry over a period of years, tens of millions of dollars was spent defending these lawsuits, which were brought in courts all  across the country.  As in the case of low dose radiation from cell phone use, there were  millions of millions of potential plaintiffs in the EMF cases and all of the prospective utility industry defendants had deep pockets. Following issuance of the IARC release, a spokeswoman for the Federal Communications Commission ("FCC") stated that FCC currently requires that all cell phones meet safety standards based upon the advice of federal health and safety agencies.  Moreover, according to the National Cancer Institute's Surveillance Epidemiology and End Results Program ("SEER"), the incidence of brain cancer in the United States has actually declined over recent years as cell phone use has skyrocketed.  Despite these reassuring pronouncements, well-heeled plaintiff lawyers may bring some cases as trial balloons to test industry resolve based upon other equally ambiguous pronouncements, such as the contention that cell phone use can affect "brain function".  As in the cases brought against chemical manufacturers in the 1980's,  which alleged that chemicals cause generic  "immune system dysfunction", enterprising plaintiffs may attribute any number of injuries to purported "brain function" impacts.  Hopefully, courts will continue to exercise their gatekeeper roles to maintain some semblance of scientific rigor in the courtroom to exclude inconclusive science  if these cases are brought. 

On November 6, 2009, we reported here concernining a case of first impression brought by the Ecological Rights Foundation ("ERF") in federal court in California.  In her decision, dated March 31, 2011, the Hon. Saundra Brown Armstrong, sitting in the United States District Court for the Northern District of California (Oakland Division), dismissed ERF's  environmental claims brought  against Pacific Gas & Electric (“PG&E”) and Pacific Bell Telephone (“Pacific Bell”).  The Ecological Rights Foundation alleged that the Defendants’ wooden utility and telephone poles were pressure treated with an oil-based pentachlorophenol preservative which was “oozing” to the surface and being washed off of the Poles, thereby contaminating San Francisco Bay and adjacent waterways.  As a result of the migration of this material over time from the Poles into the soils, ERF alleged that “dioxin-like” compounds were released into the environment placing surrounding homeowners, commercial fisherman and the general public at significant risk.  As a practical matter, if ERF had prevailed, PG&E and Pacific Bell may have had to replace tens of thousands of Poles throughout California. 

In dismissing the case, which was brought pursuant to the Clean Water Act (“CWA”) and the Resource Conservation and Recovery Act (“RCRA”), the Court examined the required showings under each statute.  The CWA distinguishes between point and nonpoint sources.  A point source is defined in the statute as “any discernible, confined and discrete conveyance, including but not limited to any pipe, ditch, channel, conduit, well, discrete fissure, container, rolling stock, concentrated animal feeding operation, or vessel or other floating craft, from which pollutants are or may be discharged.”  All other sources of pollution are characterized as “nonpoint sources.”  To succeed, ERF had to demonstrate that the Defendants’ discharges were point source discharges. 

In dismissing the CWA claim, the Court held that “point and nonpoint sources are not distinguished by the kind of pollution they create or by activity causing the pollution, but rather by whether the pollution reaches the water through a confined, discrete conveyance.”

The key issue in the analysis of ERF’s RCRA claim was whether the chemical preservatives used on the Poles qualified as a “solid waste” within the meaning of RCRA.  The term “solid waste” is statutorily defined as “discarded material.”  Although not defined by statute, EPA regulations specify that “discarded material” includes any material that is “abandoned.”  ERF alleged that solid waste was disposed of into the environment when the chemical preservative leaked, spilled or dripped from the Poles due to rain, and when dust impregnated with the chemical is blown into the air during dry seasons.  In dismissing the RCRA claim, the Court held that the “flaw in plaintiff’s theory of disposal is that in this case, there is no allegation that Defendants engaged in any conduct that resulted in the discharge of the chemical preservative. To the contrary, Plaintiff merely alleges that the purported contamination is the result of natural forces – mainly, rain and wind… Such allegations, on their face, are insufficient to establish that Defendants engaged in the ‘disposal’ of hazardous waste under § 6972(a)(1)(B).”  The Court rejected Plaintiff’s theory that the “passive” spilling or leaking of materials from a place of containment into the environment constitutes “disposal” of solid waste.  In so holding, the Court distinguished prior cases that found that leakage fromgasoline USTs may be actionable under RCRA.  The UST holdings are only applicable to situations where the discharge of hazardous waste leaked or spilled from a container intended to hold the waste.  In contrast, the Court found that “the Poles are not containers; but rather, they were used to suspend wires for the transmission of electricity for PG&E and data for Pacific Bell.”  Thus, liability under RCRA ¶ 7002 did not attach based on the “discharge” of chemical preservatives from the Poles attributable to natural forces, such as rain and wind.

On January 28, 2010, the Louisiana Court of Appeal, Fourth Circuit, affirmed the New Orleans  trial court’s denial of class certification in a series of putative class actions involving alleged exposure to Normally Occurring Radioactive Material (“NORM”) on industrial property located in , Louisiana, which had been used for oilfield pipe and equipment cleaning operations for over forty years. Although class certification was rejected on multiple grounds, the decision relied in large part upon the Louisiana Supreme Court’s landmark decision in Ford v. Murphy Oil USA, Inc., 703 S.2d 542, which involved alleged exposures from hazardous materials from several distinct sources. As in Ford, the class action failed because the Harvey plaintiffs alleged toxic exposures as a result of pipe cleaning activity on the non-contiguous property of three separate and distinct landowners – Rathborne, Grefer and ITCO – over a forty-six year period, with varying amounts of pipe cleaning taking place at different times in different locations (in almost checkerboard pattern) by different companies. Ford stands for the proposition that only mass torts arising from a single common cause or disaster are appropriate for class certification.

How did pipe cleaning cause the alleged NORM exposure? Pipe cleaning involves the mechanical reaming of the inside of oilfield pipe to remove scale or crust that builds up on the interior of the tubing to the point where the scale impedes the flow of oil up the pipe. The scale, formed from natural elements, gradually clogs the pipes that are inserted deep into the ground during the course of petroleum production. At some point, it was determined that the scale inside the pipe contained material determined to be radioactive, with varying half-lives (time for half of the atoms of a radioactive substance to decay), which is called “NORM” or “TERM,” an acronym referring to Technologically Enhanced Radioactive Material. When precisely the oil industry knew or should have known that pipe cleaning could result in occupational exposure to NORM is hotly disputed. The plaintiffs allege that over the decades this pipe cleaning occurred in Harvey, “toxic dust” (NORM/TERM) was deposited in their neighborhoods and was the source of various diseases and illnesses.

What I find interesting about the Fourth Circuit’s opinion is its rejection of the trial court’s determination that the plaintiffs failed to satisfy the numerosity requirement of the Louisiana Class Action Statute, which was a primary basis for the trial court’s denial of class certification. The trial court  found that there was not sufficient numerosity because so many potential class members had already opted out, citing other lawsuits in which 3,748 individuals, a large percentage of the putative class, were involved. These so-called opt-outs were represented by several outspoken plaintiff lawyers, who did not want to see a class certified. The Fourth Circuit ruled that it was premature to opt out of a class before it was certified. A plaintiff could not opt out of a class that did not yet exist. Therefore, the Fourth Circuit found that the numerosity requirement had been met. However,  the Fourth Circuit held that sufficient commonality for class certification was not present. In addition, the Fourth Circuit held that the broad diversity of the diseases and ailments of the plaintiffs underscored the inadequacy of the class representatives representation, leading the court to conclude that there was no typicality. The Harvey TERM plaintiffs complained of diseases ranging from common cold symptoms to reproductive problems and many different forms of cancer.  The plaintiffs' strategy at both the trial court and appellate level was to argue that the court should not be required to conduct a rigorous analysis of whether the facts satisfied the class action requirements.  Plaintiffs argued that the trial court confused a motion to certify a class with a trial on the merits, essentially asserting that it had made too many "factual findings".  However, the Fourth Circuit soundly rejected this argument, citing the Louisiana Supreme Court's decision inBrooks v. Union Pacific Railroad Co., 2008-2035, *6, 2009 WL 1425972 (La. 05/22/09), which recognized the "essentially factual basis of the certification inquiry and of the district court's inherent power to manage and control pending litigation."  Brooks, 08-2035 at p. 11, 13 So 3d at 554

According to recent reports in the Greenwich Time, Greenwich, CT state legislators are proposing a bill that would prohibit building cell towers within 750 feet of a school or day care because of a perceived health risk from electromagnetic radiation. However, some Cos Cob, CT residents believe that the cell towers should not be permitted within 5,000 feet of any schools, day cares and elderly homes due to health concerns. Reportedly, the cell tower bill has been proposed by Rep. Fred Camillo, R-151st District, and supported by fellow Reps. Livvy Floren, R-149th District, Lile Gibbons, R-250th District, and Sen. L. Scott Frantz, R-136th District. There is no good evidence that attending school near a cell tower, such as the one proposed, creates a health risk. During the 1980’s, some plaintiff lawyers ballyhooed electromagnetic field (“EMF”) litigation as the “new asbestos.” A series of well-funded EMF trials were litigated against various electric utility companies around the United States in the 1990’s. After the presentation of the scientific evidence, judges and juries uniformly rejected plaintiff health claims. The Centers for Disease Control (“CDC”) website contains a great deal of reliable scientific information concerning health effects from radiation exposure from cell towers, cell phones, microwave ovens and hair dryers. According to the CDC, the risk is extremely low. The low frequency radiation that those fields emit may have a biological effect, but do not cause adverse health effects, according to the website of the World Health Organization (“WHO”), which has devoted years of study on EMFs. So what is a biological effect? WHO’s literature explains that “biological effects” may include “listening to music, reading a book, eating an apple or playing tennis,” none of which cause health effects. WHO's conclusion is that there is no health risk to the EMF radiation to which the public is exposed. Thus, contrary to popular hysteria, there is no evidence that proximity to EMFs can “fry” a person’s brain or cause cancer. If our legislators are going to propose EMF safety precautions, they should base their proposals on strong science rather than fear. The "dose" or exposure from cell tower EMFs can be measured and quantified. Once that “exposure” is known, it is then necessary to look to the scientific literature to evaluate the likelihood of a health risk from that exposure. If EMF radiation posed a health risk to everyone living near a cell tower, it is a no-brainer that all cell towers should be dismantled--not just those near schools and day cares and homes for the elderly. The cell tower issue has always been about diminution of property value and aesthetics; it is not about our health! 
 

BNA Toxics Law Reporter reports that on August 3, 2009, the First Circuit affirmed the dismissal of the American Chemistry Council ("ACC"), formerly known as the Chemical Manufacturers Association, in a case arising from a plaintiff's long-term exposure to vinyl chloride. The First Circuit's decision in June Taylor et al v. ACC, et al is attached. The ACC is the chemical industry's trade association.  The ACC has been effective in improving the image of the chemical industry in the United States and in promoting safety and environmental initiatives within its membership.  The family of Claude Taylor alleged in federal district court in Massachusetts that ACC, along with several chemical manufacturers, should be found liable for failure to warn, conspiracy and fraud for helping to produce false and misleading warnings that were adopted by the PVC industry.  The plaintiff focused on an ACC publication entitled, "Chemical Safety Data Sheet SD-56", which was first published in 1954 and later revised in 1972, claiming that the publication downplayed the danger of VC exposure.  In upholding the trial court's dismissal of the claims against the ACC, the First Circuit held that there was no evidence that the trade association had the "unlawful intent" necessary to establish "substantial assistance liability" under MA law.  The court held that it would have been necessary for plaintiff to prove that ACC was aware of Monsanto's tortious conduct and that it intended to assist or encourage that conduct.  The wide dissemination of SD-56 within the industry was not sufficient to support the claim that the ACC was aware that Monsanto was incorporating SD-56 into its own literature.  ACC's lawyer, Tim Couglin of Thompson Hine, successfully convinced the appeals court that: (1) ACC did not provide "substantial assistance" to Monsanto; (2) ACC had no knowledge of Monsanto's activities; and (3) there was no record evidence to support the underlying conspiracy claim. 

Trade associations do not manufacture or market products, but they have been the targets of toxic tort and product liability plaintiffs nonetheless.  The threshold issue in these cases is whether the association owed a duty of care to the plaintiff.  In cases in which the trade association is alleged to have promulgated a safety standard, the issue often comes down to the degree of control the trade association has over its members.  In the absence of control, the trade association is not as likely to be held liable for failure to warn.  What about a trade association that endorses products?  If a plaintiff's injury is due to a defect in a product bearing the "Good Housekeeping Seal of Approval", for example, is the association potentially liable?  One California court replied in the affirmative if it could be demonstrated that the association obtained economic gain from the endorsement and encouraged the public to purchase the product, and that  the plaintiff relied on the representation to his detriment.  Courts appear to recognize that it is not in the public interest to hold trade associations liable for injuries to remote plaintiffs in tort litigation.  The AAA might rank hotels on the basis of service and cleanliness.  Should the AAA be subject to liability for injuries allegedly resulting from its failing to warn its members that a hotel was located in a bad neighborhood?

Innis Arden Country Club is a well-run country club located on beautiful acreage in Old Greenwich, CT. that has operated for over 100 years. Close friends of mine are members--the food is good, the golfers congenial, and laughing children run barefoot across the pool deck in good weather.  Club members had been stunned to learn in 2004 that PCB contamination had been discovered on the golf course property, not far from where an industrial company, Pitney Bowes, had once conducted operations on an adjacent parcel in Stamford.  The country club's environmental consultants determined that Pitney Bowes was the source of the contamination, which Pitney Bowes denied, and that PCBs from the Pitney Bowes property had migrated by way of storm water and surface water runoff to Innis Arden.  What no one could dispute was that the country club had not placed the PCBs on the golf course--it was what CERCLA characterizes as an "innocent landowner". On June 26, 2009, the federal district court in Connecticut dismissed Innis Arden's complaint prior to trial and affirmed a prior sanctions award against the country club. Innis Arden Golf Club v. Pitney Bowes, Inc. et al. Case No. 3:06 cv 1352 (JBA), 2009 U.S. Dist. LEXIS 54135.  Something had gone terribly wrong!  But what?

Pitney Bowes retained Hunton and Williams, a law firm with a strong reputation in environmental litigation to defend the case.  In a July 2009 Client Alert, the law firm attributed Innis Arden's dismissal to its consultant having destroyed the key evidence that allegedly linked the PCB's at the country club to their client.  Without being able to perform tests on the actual soil samples the consultant had taken, Pitney Bowes would be unable to refute the consultant's claim that the PCB's on the golf course were identical to PCB's identified on the Pitney Bowes' site, it alleged.  As the Alert points out, the Court's spoliation ruling is a strong reminder of the obligations of parties and their experts to impose a litigation hold and to ensure that tangible evidence, such as as a soil sample taken to the lab for testing, is preserved.  Central to the court's ruling was that the soil sampling in question had been undertaken in preparation for litigation.  As the Magistrate Judge had earlier ruled "......counsel was actively involved in the investigation and analysis of the samples in preparation for legal action......"  Sanctions were awarded even though the Court concluded that Innis Arden had not intended to destroy evidence or to disadvantage Pitney Bowes.  In the Bow Tie Law Blog, the author opines that Innis Arden's "toxic mess" was created in part by deposition testimony that made it clear to the Court that plaintiff had taken no steps to prevent the destruction of electronic and tangible evidence as early as 2005, by which time it was clear that plaintiff recognized the importance of that evidence in its future litigation. 

By the time  the spoliation sanctions issue came before Judge Atherton on a motion for reconsideration, Innis Arden was in even deeper trouble.  The Magistrate Judge had also awarded sanctions against Innis Arden for discovery abuses--the most egregious that the Magistrate Judge had seen during over twenty years on the federal bench.  Worse, Judge Atherton concluded after hearing Daubert motions that Innis Arden's trial experts were not sufficiently reliable to be permitted to testify at trial.  On the basis of that ruling, she granted summary judgment to the defendants and dismissed the plaintiff's complaint.  At the end of the day, the Court did not have to reconsider the Magistrate Judge's spoliation ruling because the issue was now moot!  Still the "innocent landowner", Innis Arden's complaint has been dismissed and may yet have to pay the defendants' sanctions for discovery abuses.