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From Products Liability Law Daily, February 11, 2014

Negligence claims survive against appliance maker that dumped cancer-causing chemicals into air and ground

By Pamela C. Maloney, J.D.

Negligence claims by residents in the vicinity of an appliance company’s manufacturing plant alleged sufficient facts to raise a question as to whether the manufacturer had breached its duty of care and whether that breach was the proximate cause of their injuries to survive a motion to dismiss, a federal court in Ohio determined. However, the residents’ claims based on strict liability and ultra-hazardous activities, reckless conduct, trespass, continuing nuisance and fraud were dismissed, along with their property damages claims and claims for punitive damages (Brown v. Whirlpool Corp., February 10, 2014, Carr, J.).

Background. Fifty-eight residents of Sandusky County, Ohio, alleged that during its manufacturing processing, Whirlpool Corporation (Whirlpool) used a type of paint that, when combusted, produced much greater air pollution with a much higher amount of volatile organic compounds (VOCs), some of which were known or suspected carcinogens. In addition, the residents alleged that the smoke stacks through which Whirlpool emitted the combusted paint were too short to place the VOCs and other toxins at a level where they would not fall on the city in which the manufacturing plant was located and that the smoke-stack system lacked regenerative thermal oxidizers. Finally, the residents alleged that Whirlpool dumped toxic waste at a number of sites near its manufacturing plant. As a result of Whirlpool’s activities, the residents alleged that pollutants, carcinogens, and VOCs were emitted into the air and seeped into the ground water and, as a result, the residents and/or their children developed cancer, disabilities, and other injuries. The residents also claimed that the activities caused property damage in the form of reduced property values. The residents filed claims against Whirlpool for negligence, strict liability and ultra-hazardous activities, reckless conduct, trespass, continuing nuisance, and fraud.

Negligence claims. After determining that there was no dispute that Whirlpool owed the residents a duty of care, the court went on to find that the residents adequately alleged that Whirlpool breached this duty of care by releasing suspected and known carcinogens into the air. The residents cited an Ohio EPA study which found “unacceptable” amounts of a known carcinogen coming from the manufacturing plant as well as a federal government testing of the soil which confirmed the presence of toxic substances and the results of ground soil testing by a federal agency with showed high levels of PCBs, a class of known carcinogens.

The court went on to determine that the complaint contained allegations that plausibly established both general and specific causation. The allegations stated that Whirlpool either emitted into the air, or released into the ground, numerous known or suspected carcinogens. The plausible inference from these allegations was that one or more of those chemicals, either singly or in reaction with others, could cause cancer. The residents also alleged a mechanism—airborne emissions from the plant and airborne transmission from the dump sites—that exposed individual residents to those cancer-causing substances. These allegations were sufficient at this stage in the proceeding to state a claim for negligence and Whirlpool failed to cite any authority to support its argument that the residents were required to allege general and specific causation with a higher degree of specificity.

Strict Liability/ultra-hazardous activities claims. Although the residents alleged that Whirlpool’s manufacturing processes, including the disposal of VOCs and other chemicals, were ultra-hazardous activities and that Whirlpool had disposed of the chemicals in a dangerous way so as to “kill” the residents’ children, the residents alleged no facts supporting either of these conclusions. The complaint was silent as to why these activities were ultra-hazardous and did not include allegations that Whirlpool could not, under any circumstances, safely dispose of the chemicals generated during the manufacturing process. 

Property damages claims. The residents also claimed that Whirlpool’s negligent disposal of its manufacturing waste caused “a significant loss of property values and stigma to the residents’ property.” Agreeing with Whirlpool, the court found that Ohio law does not permit damages for diminished property values caused by environmental stigma. Under Ohio law, damages are only available if there was actual, physical damage to property, and a decrease in the value of property solely as a result of public perception or fear of contamination from a neighboring property does not constitute compensable damages. Furthermore, the complaint did not specify the type of damage caused to the residents’ properties or the extent of such damages, nor did it explain what caused the alleged drop in property values other than the non-compensable environmental stigma. Thus, the residents’ claim for property damages was dismissed.

Punitive damages claims. Alleging that Whirlpool had demonstrated a conscious disregard for the rights and safety of the Sandusky County residents and the rest of the public, the residents claimed that Whirlpool must pay punitive damages. However, Ohio does not recognize a stand-alone cause of action for punitive damages; instead, there must be an award of compensatory damages in order for a plaintiff to receive punitive damages. Therefore, the court dismissed the residents’ punitive damages claims, explaining that should they prove their negligence claims and introduce evidence warranting punitive damages, the residents would not be precluded from recovering punitive damages.

Class certification. The court denied the residents’ request to pursue their property damage claims in a class action. The residents defined the class as “all similarly-situated residents of Sandusky County who have lost their property values because of the tortious conduct by Whirlpool.” Having determined that the property damage claims—claims for negligence, trespass, continuing nuisance, and strict liability/ultra-hazardous activity—were legally deficient, the court concluded that the residents could not pursue those claims on a class-wide basis.

Other tort claims. The court dismissed the remaining tort claims for the following reasons:

  1. Trespass. The residents failed to allege that Whirlpool’s dumping and emitting practices contaminated their property, that the levels of benzaldehyde found in the six homes tested caused substantial damages, and that the residents had a possessory interest in their property when the alleged trespass occurred.

  2. Continuing nuisance. The residents’ allegations concerned Whirlpool’s past dumping and emitting practices rather than ongoing tortious activities and failed to allege that their damages were related to the use of their land, as required to state a nuisance claim.

  3. Reckless conduct. Ohio law did not recognize a stand-alone cause of action for recklessness; instead, it reflects a level of intent that can be used to negate certain defenses.

  4. Fraud. The residents failed to identify the speaker of the alleged misrepresentations, and the group published doctrine was not relevant because it was limited to written statements. In addition, the complaint failed to allege with particularity when or where Whirlpool made the false statements.

  5. Reliance. The residents could not have relied on false statements made by Whirlpool when it denied knowing of PCB contamination at Whirlpool Park, one of the dumping sites, because the statements were made after the residents contracted their various illnesses and after some decedents’ deaths. In addition, Whirlpool had sold the land on which the park was located before making the allegedly false statements.

The case number is 3:13CV1092.

Attorneys: Alan W. Mortensen (Dewsnup King & Olsen) for Warren Brown. Karen A. Crawford (Nelson, Mullins, Riley & Scarborough) for Whirlpool Corp.

Companies: Whirlpool Corp.

MainStory: TopStory DesignManufacturingNews DamagesNews ClassActLitigationNews ChemicalNews OhioNews

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