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CAFA Law Blog Information, cases and insights regarding the Class Action Fairness Act of 2005

Trouble in Paradise? Emissions Of Hazardous Materials Has An Impact On CAFA Mass Action Jurisdiction As Well

Posted in Case Summaries

Abraham v. St. Croix Renaissance Group, L.L.L.P., 2012 WL 60998502 (D.V.I. Dec. 7, 2012).

I’ve got 2 tickets to Paradise. Won’t you pack your bags, we’ll leave tonight! Well, if Paradise is St. Croix, then Eddie Money may want to read this case before going.

While remanding the action to the state court, a District Court in the Virgin Islands held that an environmental tort constitutes “an event or occurrence” for the purpose of the CAFA mass action exception, notwithstanding the fact that the contamination allegedly occurred over a long period of time.

The plaintiffs brought an action against St. Croix Renaissance Group (“SCRG”) claiming personal injury and property damage arising out of the alleged emission of hazardous materials including bauxite residue, coal dust, and friable asbestos from SCRG’s property on St. Croix into the adjoining neighborhoods over a period of years.

The plaintiffs alleged that SCRG maintained an abnormally dangerous condition; its conduct constituted a nuisance as well as negligence; and its actions resulted in intentional and negligent infliction of emotional distress. The plaintiffs sought compensatory, punitive damages, and injunctive relief.

SCRG removed the action to the District Court pursuant to CAFA.

The plaintiffs sought remand to state court, which the District Court granted.

The plaintiffs relied on the CAFA mass action exception found in 28 U.S.C. §1332(d) (11)(B)(ii)(I) for civil actions in which – all of the claims in the action arise from an event or occurrence in the State in which the action was filed, and that allegedly resulted in injuries in that State or in States contiguous to that State. The plaintiffs maintained that all the claims arose from “an event or occurrence” in the Virgin Islands and that all injuries resulted there.

SCRG argued that the exception did not apply because there was more than one event or occurrence, which took place over a number of years. The plaintiffs contended that, since 1995 when Hurricane Marilyn struck and continuously thereafter, the bauxite residue blew over the neighboring areas causing personal injuries and property damage. Additionally, the plaintiffs alleged that they had been exposed to friable asbestos emanating from SCRG’s property. The asbestos was said to have been present in the buildings left by the preceding owners, and SCRG had done nothing to contain this toxic material since it became the owner of the property in 2002.

The Court thus noted that the question presented was whether the allegations as pled in the complaint, concerning the continual release of hazardous material over a period of years, fit within the meaning of an event or occurrence as set forth in § 1332(d)(11)(B)(ii)(I).

The Court noted that in Abednego v. Alcoa, 2011 U.S. Dist. LEXIS 27892 (D.V.I. Mar. 17, 2011) the court opined that the personal injury and property damage claims arose out of a single “event or occurrence,” specifically Hurricane Georges, and the action fit within the exception to jurisdiction under §1332(d)(11)(B)(ii)(I) of CAFA. (Editors’ Note: See CAFA Law Blog analysis of Abednego posted on February 27, 2012).

Further, in Allen v. Monsanto Co., 2010 U.S. Dist. LEXIS 144703 (N.D. Fla. Feb. 1, 2010), the court held that an environmental tort constituted “an event or occurrence” for purposes of the CAFA mass action exception, notwithstanding the fact that the contamination allegedly occurred over a long period of time. Also, the Senate Judiciary Committee Report on CAFA stated that the purpose of the “event or occurrence” exception was to allow cases involving environmental torts to remain in state court if both the event and the injuries were truly local, despite out-of-state defendants. (Editors’ Note: Yeaa! Another court looked at the legislative history of CAFA. We wish more would do so!)

The Court stated that the present action, like Abednego and Allen, involved an environmental tort. The Court opined that an “event,” as used in CAFA, encompassed a continuing tort, which results in a regular or continuous release of toxic or hazardous chemicals where there is no superseding occurrence or significant interruption that breaks the chain of causation. The Court remarked that a very narrow interpretation of the word “event,” as advocated by SCRG, would undermine the intent of Congress to allow the state or territorial courts to adjudicate claims involving truly localized environmental torts with localized injuries. The Court thus stated that the allegations in the plaintiffs’ complaint clearly fit within the meaning of an “event” as found in CAFA. The complaint did not qualify as a mass action because all the claims arose from an event or occurrence, that is, the continuous release of toxic substances from a single facility located in the Virgin Islands where the resulting injuries were confined to the Virgin Islands.

Accordingly, the District Court remanded the action to the state court.

By:  Kimberly Higginbotham