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Groundwater Contamination Litigation: Proving Groundwater Contamination Litigation: Proving And Defending Against Liability for Clean‐Up Costs

Demonstrating Nexus, Causation and Injury to Recover Damages

T d ’ f l f

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific TUES DAY, NOVEMBER 15, 2011

Today’s faculty features:

• R. Trent Taylor, Partner, McGuireWoods, Richmond, Va.

S hawn M. Collins, Partner, The Collins Law Firm, Naperville, Ill.

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Groundw ater Groundw ater Contam ination Litigation: Contam ination Litigation: Contam ination Litigation: Contam ination Litigation: Proving Liability For Proving Liability For Cl Cl U C t U C t Clean Clean-

• Up Costs

Up Costs

Shawn M. Collins Shawn M. Collins Partner – The Collins Law Firm

November 2011 Strafford Publications, Inc.

Who am I? Why do I do this Why do I do this

type of work?

Shawn M Collins Shawn M. Collins Partner The Collins Law Firm smc@collinslaw.com www.collinslaw.com (630) 527-1595

Groundwater Contamination Litigation 6

Federal and State Regulatory Federal and State Regulatory Federal and State Regulatory Federal and State Regulatory Structures Structures

RCRA

Resource Conservation and Recovery Act , 42 U.S.C. §6921 et seq. RCRA Citizens Suit provision: 42 U.S.C. §6972

CERCLA

Comprehensive Environmental Response Compensation and Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq.

Illinois Groundwater Protection Act

Chapter 415 Environmental Safety: Chapter 415 Environmental Safety: 415 ILCS 55/ 1 et seq.

Groundwater Contamination Litigation 7

I nitial Case Assessm ent: Plaintiff’s I nitial Case Assessm ent: Plaintiff’s Side Side

Are you ready for the risk? Will there be a fight about source? Can the source pay for clean-up & damages? Do you have great experts? Do you have great lead Do you have great lead plaintiffs?

Groundwater Contamination Litigation 8

The Role of the EPA The Role of the EPA The Role of the EPA The Role of the EPA

Whose side are they on? Whose side are they on? Are they doing their job? Are they doing their job? Should you pick a fight with Should you pick a fight with

them?

Groundwater Contamination Litigation 9

Recent Litigation and Trends Recent Litigation and Trends Recent Litigation and Trends Recent Litigation and Trends

$1.5 Billion verdict D

’t l t it f l

1

Don’t let it fool you

• 1. July 2011: Allison, Et Al Vs Exxonmobil Corp, Et Al,

Circuit Court for Baltimore County - Civil System, No. 03C07003809

Groundwater Contamination Litigation 10

Strategies for Proving Liability Strategies for Proving Liability Strategies for Proving Liability Strategies for Proving Liability

Ways to prove source (the “of course” test) Ways to prove source (the of course test) Getting closest to the truth: documents What did they do when they found out? De-mystifying the science

Groundwater Contamination Litigation 11

The Most I m portant Lessons I ’ve The Most I m portant Lessons I ’ve p learned learned

“You’ll never regret the case you turn down” You need to like your client You need to like your client Read every document yourself Get control of the documents Beware the role of emotions

Groundwater Contamination Litigation 12

Groundwater Contamination Litigation: Proving And Defending g g g Against Liability for Clean-Up Costs

Shawn M. Collins – The Collins Law Firm

• R. Trent Taylor – McGuireWoods LLP

www.mcguirewoods.com

Who am I?

• Trent Taylor focuses on defending complex

toxic tort and products liability cases. His experience includes representing clients in p p g class actions, MDL coordinated proceedings, nationwide mass tort litigation, and appellate cases in the substantive areas

• f toxic torts. He defends cases involving

complex scientific and medical issues, and p , has concentrated in the defense of novel claims brought by plaintiffs, including public nuisance, civil conspiracy, unjust enrichment, and deceptive trade practices. He is a frequent commentator on legal

• R. Trent Taylor

McGuireWoods LLP

q g issues, has been quoted by the New York Times, Wall Street Journal, American Lawyer, the National Law Journal, and numerous influential legal blogs, among

• thers, and was interviewed on NPR's "All

McGuireWoods LLP One James Center 901 East Cary Street Richmond, VA 23219-4030 804.775.1182 (Direct Line)

, Things Considered" on June 8, 2010, to discuss appellate issues. He is currently authoring a treatise on nuisance and trespass litigation that will be published in 2012. http://www.cap-

McGuireWoods LLP | 14 CONFIDENTIAL

804.225.5409 (Direct FAX) rtaylor@mcguirewoods.com http://www.mcguirewoods.com

p p press.com/books/isbn/9781594607714/Nuis ance+and+Trespass+Law

Common Law

McGuireWoods LLP | 15 CONFIDENTIAL

Public Nuisance

• “An offense against, or interference with the exercise of rights

common to the public.” p

McGuireWoods LLP | 16 CONFIDENTIAL

Public Nuisance

• “the interference
• the interference

must be both substantial and l unreasonable”

• “it is ‘substantial’ if it

causes significant causes significant harm and ‘unreasonable’ if its i l tilit i social utility is

• utweighed by the

gravity of the harm

McGuireWoods LLP | 17 CONFIDENTIAL

g y inflicted”

Private Nuisance

Private Nuisance: ate Nu sa ce: “a nontrespassory invasion of another’s interest in the private use and enjoyment of p j y land.” Restatement (Second) of Torts § 821D

McGuireWoods LLP | 18 CONFIDENTIAL

Trespass

• Trespass is generally defined as

Trespass is generally defined as “an invasion of the interest in the exclusive possession of land, as by entry upon it.”

• The key distinction between

trespass and nuisance is that “[a] claim of trespass contemplates actual physical entry or invasion actual physical entry or invasion, whereas nuisance liability arises merely by virtue of an activity which falls short of tangible, i i b i f concrete invasion by interferes with the use and enjoyment of land.”

McGuireWoods LLP | 19 CONFIDENTIAL

Others

• Infliction of Emotional Distress
• Infliction of Emotional Distress
• Failure to Warn
• Battery

Battery

• Fraud
• Conspiracy

p y

• Alien Tort Claims Act

McGuireWoods LLP | 20 CONFIDENTIAL

Initial Case Assessment - Defense

• Removal?
• Removal?
• Property damage or personal injury?
• Present or future injury?

j y

• Actual contamination or mere fear of it?
• What is the evidence of contamination?
• Alternative causes?
• Co-defendants – Friend or Foe?

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The Role of the EPA

McGuireWoods LLP | 22 CONFIDENTIAL

Recent Litigation and Trends

McGuireWoods LLP | 23 CONFIDENTIAL

Trend # 1 - Possibility of Big Money

McGuireWoods LLP | 24 CONFIDENTIAL

Recent Litigation

• City of New York v. Exxon Mobil Corp. (S.D. N.Y.)
• Jury awarded city $105 million in compensatory damages in Oct 2009 Court did

Jury awarded city $105 million in compensatory damages in Oct. 2009. Court did not permit punitive damages.

• The jury found that gasoline containing MTBE was a defective product and a

public nuisance because Exxon Mobil gave no warnings about the product’s dangerous propensity to contaminate groundwater. J d id d i t E d it th f t th t it f d th i ti

• Jury decided against Exxon despite the fact that it found there was pre-existing

contamination of the wells at issue (for which they subtracted $70 million).

• The damages awarded were to compensate the city for building (in the future) a

water treatment facility to treat the water for 40 years.

• Damages were awarded even though the MTBE contamination will not peak until

McGuireWoods LLP | 25 CONFIDENTIAL

Damages were awarded even though the MTBE contamination will not peak until 2033 at levels 25% of what the EPA says is the maximum safe level.

Recent Litigation

• (June 30 2011)

A Maryland jury on Friday

• (June 30, 2011) -- A Maryland jury on Friday

reportedly ordered Exxon Mobil Corp. to pay

$1 5 billion t

th 150 f ili d

$1.5 billion to more than 150 families and

businesses in Jacksonville, Md., that allegedly suffered personal and financial harm following an underground p g g gasoline leak in 2006.

McGuireWoods LLP | 26 CONFIDENTIAL

Recent Litigation

• City of Modesto vs Dow Chemical Company et al
• City of Modesto vs. Dow Chemical Company, et al.

(Case Nos. 999345 and 999643), 2006 Nat. Jury Verdict Review LEXIS 1583 Products Liability Strict Liability Negligence

• Products Liability - Strict Liability - Negligence -

Continuing Trespass - Private And Public Nuisance - Failure To Warn Consumers Of Dangers Of Chemicals I t d d I t Cit D i ki W t P iti Introduced Into City Drinking Water - Punitive Damages Claim For Disregard For Public Safety

• Result: $178,545,000 Verdict Including $

g 175,075,000 in Punitive Damages Against Three Defendants

McGuireWoods LLP | 27 CONFIDENTIAL

Recent Litigation

• $752 million

settlement amount in MDL MTBE

• $752 million – settlement amount in MDL MTBE

against various corporate defendants alleging exposure to MTBE

• $700 million – settlement amount in a suit by a class of

Alabama residents against Monsanto Co. alleging exposure to PCBs exposure to PCBs

McGuireWoods LLP | 28 CONFIDENTIAL

Recent Litigation

• Elias Atallah v Bleau Fox & Fong et al No BC330285
• Elias Atallah v. Bleau Fox & Fong, et al., No. BC330285

(Calif. Super., Los Angeles Co.) = $50 million plaintiff award

McGuireWoods LLP | 29 CONFIDENTIAL

Recent Litigation

• Claude M Royal and Virginia H Royal v Campbell
• Claude M. Royal and Virginia H. Royal v. Campbell

County, Virginia, Case No. CL05000059-00, Verdict Date: November 5, 2009

• INJURY: Devaluation of real estate from contaminated

well.

• RESULT: $ 9 000 000 (verdict)
• RESULT: $ 9,000,000 (verdict)

McGuireWoods LLP | 30 CONFIDENTIAL

Trend # 2 - Targets

• Fly/coal ash
• Fly/coal ash
• Fracking
• Uranium/Radioactive

Uranium/Radioactive

• Oil Spills

McGuireWoods LLP | 31 CONFIDENTIAL

Fly/Coal Ash

• Gayle K Queen v Constellation Power Source
• Gayle K. Queen v. Constellation Power Source

Generation Inc., Case No. 24C07009389 (Circuit Court for Baltimore City).

• A Baltimore City judge approved a $54 million

settlement after homeowners in a nearby Maryland county accused Constellation Energy Inc of county accused Constellation Energy Inc. of contaminating their wells by dumping tons of toxic coal ash into a quarry near their homes.

McGuireWoods LLP | 32 CONFIDENTIAL

Fracking

• Tucker v Southwestern Energy Co et al
• Tucker v. Southwestern Energy Co. et al.
• Filed on May 26, 2011, in federal court in Arkansas
• Seeking $6 million for named plaintiffs

Seeking $6 million for named plaintiffs

• Alleges soil, groundwater, and air contamination
• Causes of action are: (1) Strict Liability; (2) Nuisance;

y (3) Trespass; and (4) Negligence.

• Seeks class certification of all persons in AR who live
• r own property within 3 miles of a gas well
• r own property within 3 miles of a gas well
• Seeks compensatory and punitive damages, medical

monitoring, and air, soil, and groundwater monitoring

McGuireWoods LLP | 33 CONFIDENTIAL

g g g

Fracking

• Baker v Anschutz Exploration Corp
• Baker v. Anschutz Exploration Corp.
• Filed 2/11/11 in NY state court but was removed to federal court
• On behalf of nine families in Horseheads, New York near Elmira.

ll l ll

• Allege that their residential drinking water wells have become

contaminated as a result of drilling activities by defendant Anschutz and its drilling subcontractors and that their properties and fa ilies ha e beco e e

• sed to co

bustible gases to ic and families have become exposed to combustible gases, toxic sediments, and hazardous chemicals.

• Seeks $150 million in compensatory damages, punitive damages,

and future edical

• nitoring due to fear of contracting cancer

and future medical monitoring due to fear of contracting cancer.

McGuireWoods LLP | 34 CONFIDENTIAL

Fracking

• Berish v. Southwestern Energy Production Co.

Berish v. Southwestern Energy Production Co.

• Filed in PA state court on 9/14/10 on behalf of 13 families. Was removed

to federal court.

• The Plaintiffs allege that their water wells have been contaminated due to

gas drilling operations being conducted by Defendant. Also alleges that gas drilling operations being conducted by Defendant. Also alleges that the composition of fracking fluid includes hazardous chemicals that are carcinogenic and toxic. Diesel fuel and lubricating materials, also consisting of toxins, are also utilized during drilling and well operations.

• The lawsuit seeks a preliminary and permanent injunction barring

p y p j g Defendant from engaging in the acts cited by the complaint, as well as abatement of the nuisances, unlawful conduct, violations and damages created by those acts. It also seeks, among other things, compensatory damages, punitive damages, and the cost of future health monitoring. C f i (1) H d Si Cl A (2) N li (3)

• Causes of action are: (1) Hazardous Sites Cleanup Act; (2) Negligence; (3)

Private Nuisance; (4) Strict Liability; (5) Trespass; (6) Medical Monitoring

• Past MTD stage

McGuireWoods LLP | 35 CONFIDENTIAL

Fracking

• Scoma v Chesapeake Energy Corporation
• Scoma v. Chesapeake Energy Corporation
• Filed on 6/1/10 in TX state court and then removed.
• Plaintiffs have alleged that the fracking of gas wells

ll contaminated the groundwater in their water wells.

• Causes of action are: (1) Nuisance; (2) Trespass; and

(3) Negligence. ( ) g g

• Seeks compensatory and punitive damages including

loss of market value of land, emotional harm and mental anguish mental anguish.

• Also seeks a permanent injunction, precluding future

drilling and “fracking” activities near Plaintiffs’ land.

McGuireWoods LLP | 36 CONFIDENTIAL

Uranium/Radioactive

• McCormick et al. v. Halliburton, Case No. CIV-11-

1272-M (W.D. Okla) (filed Nov. 2011)

• Adkins et al v. W.R. Grace & Company et al., Case No.

2:11-cv-00173 (E.D. Tenn.) (filed June 2011) A l b k l G

• Ament, et al v. Babcock & Wilcox Power Generation

Group, Inc., et al., Case No. 2:11-cv-01381-NBF (W.D. Pa.) (filed Oct. 31, 2011) ( ) ( , )

McGuireWoods LLP | 37 CONFIDENTIAL

Oil Spills

• Castro et al v ExxonMobil Oil et al Case No 1:11 cv
• Castro et al v ExxonMobil Oil et al., Case No. 1:11-cv-

00119-RFC (D. Mont.)

• In Re: Oil Spill by the Oil Rig "Deepwater Horizon" in

p y g p the Gulf of Mexico, on April 20, 2010, Case No. 2:10- md-02179-CJB-SS (E.D. La.) (MDL 2179)

McGuireWoods LLP | 38 CONFIDENTIAL

Trend # 3 - Science getting better

• Trace elements such as manganese and arsenic are found in concentrations

potentially dangerous to human health in about one of five untreated groundwater samples taken from wells nationwide, the U.S. Geological Survey recently samples taken from wells nationwide, the U.S. Geological Survey recently reported.

• A new USGS study noted that trace elements are much more likely than other

contaminants such as pesticides and volatile organic compounds to be found at what the U.S. Environmental Protection Agency considers to be potentially hazardous levels in public private and monitoring wells hazardous levels in public, private and monitoring wells.

• Trace elements, as defined in the report, are metals and semimetallic elements

that are usually found at levels less than 1 milligram per liter in natural waters. Most trace elements enter groundwater through the weathering of rocks or human acts such as mining, construction and waste disposal, the study said. I bl ll h l d b h E A d

• “In public wells these contaminants are regulated by the [EPA], and contaminants

are removed from the water before people drink it,” USGS hydrologist and study author Joe Ayotte said in a statement. “However, trace elements could be present in water from private wells at levels that are considered to pose a risk to human health, because they aren't subject to regulations. In many cases people might not k h h h y j g y p p g even know that they have an issue.”

McGuireWoods LLP | 39 CONFIDENTIAL

Trend # 4 -- The harm alleged in environmental contamination suits is becoming more subjective and less ibl tangible

• Gates v. Rohm and Haas Co. (E.D. Pa.) – ruled that the presence of vinyl

Gates v. Rohm and Haas Co. (E.D. Pa.) ruled that the presence of vinyl chloride in the air, even if below background levels, constitutes a physical injury to property under nuisance law.

• Meyer v. Fluor Corp. (Mo.) – in nuisance class suit against lead smelter to

recover prospective medical monitoring due to harmful emissions, MO S. l l l p p g

• Ct. certified the class and held that recovery for medical monitoring is

not contingent upon the existence of a present physical injury

• State of NC v. TVA – (1) numerous social and economic harms to North

Carolinians, including lost school and work days, increased pressure on th h lth i d t d t t d t i it d th l l f ll the health industry due to extra doctor visits, and the general loss of well- being that results from chronic health problems; (2) harm to the environment including killing local vegetation, removing nutrients necessary for healthy forest growth, and degrading water quality; and (3) significant effects on visibility due to creating haze in many pristine areas significant effects on visibility due to creating haze in many pristine areas

• f wilderness in NC
• Cook et al. v. Rockwell and Dow – jury verdict of almost $1 billion based

solely on decline in property values for 13,000 plaintiffs

McGuireWoods LLP | 40 CONFIDENTIAL

In re: Tennessee Valley Authority Ash Spill Litigation Case No 3:09-cv-00009 (E D Tenn ) Litigation, Case No. 3:09-cv-00009 (E.D. Tenn.)

• “Although plaintiffs argue that exposure to the toxic
• Although plaintiffs argue that exposure to the toxic

constituents in the ash exists by virtue of the presence

• f ash in the environment, the mere existence of a

l toxin in the environment is insufficient to establish causation without proof that the individual was actually exposed to the toxin and at a level sufficient to y p cause injury or stress.”

McGuireWoods LLP | 41 CONFIDENTIAL

Trend # 5 – Use of common-law suits by governments governments

• More and more states and municipalities are filing
• More and more states and municipalities are filing

common-law claims in environmental contamination suits.

• See State of OK v. Tyson Foods, State of CA v. Sierra

Pacific Industries, State of NY v. Mirant, City of Modesto v Dow and Vulcan etc Modesto v Dow and Vulcan, etc.

McGuireWoods LLP | 42 CONFIDENTIAL

Other Trends

McGuireWoods LLP | 43 CONFIDENTIAL

Upcoming Cases to Watch

McGuireWoods LLP | 44 CONFIDENTIAL

Cook et al. v. Rockwell and Dow

• Issue: (1) Whether state substantive law controls the
• Issue: (1) Whether state substantive law controls the

standard of compensable harm in suits under the Price- Anderson Act, or whether the Act instead imposes a l l federal standard; and (2) whether, if a federal standard applies, a property owner whose land has been contaminated by radioactive plutonium, resulting in y p , g lost property value, must show some physical injury to the property beyond the contamination itself in

• rder to recover for damage to property
• rder to recover for damage to property.

McGuireWoods LLP | 45 CONFIDENTIAL

Sackett v. EPA

• When the Environmental Protection Agency believes
• When the Environmental Protection Agency believes

that a landowner is engaged in a violation of environmental laws, it may issue an administrative l l compliance order requiring the landowner to take certain actions and seek judicial enforcement of the

• rder if the landowner does not comply. May the

p y y landowner challenge the administrative compliance

• rder in court before the EPA seeks judicial

enforcement? enforcement?

McGuireWoods LLP | 46 CONFIDENTIAL

Kiobel v. Royal Dutch Petroleum

• Issue: (1) Whether the issue of corporate civil tort
• Issue: (1) Whether the issue of corporate civil tort

liability under the Alien Tort Statute, 28 U.S.C. § 1350, is a merits question or instead an issue of subject matter jurisdiction; and (2) whether corporations are immune from tort liability for violations of the law of nations such as torture, extrajudicial executions or , j genocide may instead be sued in the same manner as any other private party defendant under the ATS for such egregious violations such egregious violations.

McGuireWoods LLP | 47 CONFIDENTIAL

How Do You Defend Against Them? Strategies for Defending Against Liability Strategies for Defending Against Liability

McGuireWoods LLP | 48 CONFIDENTIAL

Documents

McGuireWoods LLP | 49 CONFIDENTIAL

Strategies for Defending Against Liability

• Documents
• Documents

– Defendants face possible massive discovery in groundwater contamination cases. – Determine known universe of relevant documents now, especially those related to conduct and knowledge – If possible institute a campaign to limit harmful If possible, institute a campaign to limit harmful documents going forward

McGuireWoods LLP | 50 CONFIDENTIAL

Science

McGuireWoods LLP | 51 CONFIDENTIAL

Strategies for Defending Against Liability

• Science
• Science

– Get a handle on the science in your litigation as quickly as possible. Cannot attack causation without knowing l the science cold. – Examine alternative causes of alleged harm

McGuireWoods LLP | 52 CONFIDENTIAL

Experts

McGuireWoods LLP | 53 CONFIDENTIAL

Strategies for Defending Against Liability

• Experts
• Experts

– Spend time to find the best experts – Lock up the key experts as quickly as possible p y p q y p

McGuireWoods LLP | 54 CONFIDENTIAL

Dispositive Motions

McGuireWoods LLP | 55 CONFIDENTIAL

Strategies for Defending Against Liability

• Be aggressive in filing dispositive motions and do not
• Be aggressive in filing dispositive motions and do not

leave arguments on the table

– Motion to Dismiss – Statute of Limitations – Include policy arguments

McGuireWoods LLP | 56 CONFIDENTIAL

Get to the heart of the matter

McGuireWoods LLP | 57 CONFIDENTIAL

Strategies for Defending Against Liability

• Individualize
• Individualize

– Do not let pltfs get away with making general, non- specific allegations of harm – Attack specific causation – Consider a motion to sever if appropriate Consider other strategies including bringing in third – Consider other strategies including bringing in third- parties

McGuireWoods LLP | 58 CONFIDENTIAL

Physical Invasion?

McGuireWoods LLP | 59 CONFIDENTIAL

Actual Injury?

McGuireWoods LLP | 60 CONFIDENTIAL

The Most Important Lessons I Have Learned

McGuireWoods LLP | 61 CONFIDENTIAL

Questions or Comments?

www.mcguirewoods.com

 M G i W d LLP  2011 McGuireWoods LLP

McGuireWoods LLP | 62 CONFIDENTIAL