Lee-Bolton v. Koppers, Inc., No. 1:10–cv–253–SPM–GRJ, 2011 WL 4056099 (N.D. Fla. June 6, 2011).

In this putative class action, a District Court in Florida denied the plaintiff’s motion to remand finding that the aggregate of all of their claims would bring the amount in controversy over $5 million.

The plaintiffs are the landowners near a wood treatment facility (“the Koppers Site”) in the city of Gainesville, Florida. (Editors’ Note: We could not find any truth to the rumor that the recent failings of the Florida Gators football team, which plays in Gainesville, could be attributed to the proximity of “The Swamp” to the Koppers Site.) The defendants operated a longstanding toxic wood treatment facility at the Koppers Site. The plaintiffs brought a class action alleging that the discharge of toxic chemicals from the facility into the surrounding soil and groundwater by the defendants and/or their predecessors had contaminated the properties located near the Koppers Site. The plaintiffs sought equitable and injunctive relief, violation of the Florida Water Quality Assurance Act, negligence, negligence per se, strict liability for ultrahazardous activities, nuisance, and trespass. 

The plaintiffs originally filed this case in the Circuit Court for the Eighth Judicial Circuit in the Alachua County, Florida. 

The defendants removed case under CAFA contending that the class consisted of over 100 members, and that the amount in controversy was in excess of $5 million. 

The plaintiffs moved to remand, which the District Court denied.

In their objections to the plaintiffs’ motion to remand, the defendants first asserted that a search of the Alachua County Property Appraiser’s (“ACPA”) records for the Affected Area discloses that there are at least 108, and potentially as many as 114, separate owners of property located in the Affected Area that are designated as available for residential use. At the very outset, the magistrate judge noted that four of the putative class members on the defendants’ list were deceased and therefore, the magistrate judge excluded them from the class members’ list.

The plaintiffs next contended that two other putative class members should be excluded from the calculation because each purportedly had timely opted out of the action. The magistrate judge, however, refused to exclude the two members from the class because potential class members in the putative class action cannot validly opt out of becoming class members until after they received the notice under Fed. R. Civ. P. 23. Similarly, the magistrate judge refused to exclude two trustees of a parcel held in trust from the putative class, as they were part of an irrevocable trust. Accordingly, the magistrate judge concluded that the defendants had met their burden of establishing that the class consisted of over 100 members.

The plaintiffs next argued that their claims put together did not cross the $5 million in controversy. The magistrate judge found that the plaintiffs’ class action complaint did not provide much detail as to their amount in controversy, other than a vague assertion that ‘this was an action for damages which exceeded $15,000. 

The defendants, in fact, came up with their conclusion based on the plaintiffs’ claims of seeking compensatory damages, including, but not limited to the difference in value of their properties but for the contamination, or in the alternative, the cost of repairs and remediation, plus the loss of use of enjoyment thereof. The defendants argued that the plaintiffs’ claims collectively would cross the CAFA threshold of $5 million in amount-in-controversy. 

The defendants’ contention made a lot of sense particularly because under Florida law each putative class member in this case, has a claim for damages in the amount at which their property has diminished in value as a result of the alleged discharge of pollutants. Pointing to the ACPA records, the defendants represented the baseline value of all the property in the affected area in aggregate was $7,722,100. The defendants contended that this figure resulted in an average value of $71,500 for each of the properties in the affected area. The magistrate judge, however, noted that in making this calculation the defendants did not account for the fact that although there may be as many as 114 putative class members there were not 114 separate properties within the affected area, as several properties have multiple owners. According to the magistrate judge’s count, there were only 87 separate parcels of property located within the affected area on the defendants list, which results in an average assessed value of $88,759.77 per property.

While the parties did not offer much law on the issue of using the aggregate value of the properties, the magistrate judge noted that Irish v. BNSF Railway Co., No. 08–cv–469–slc, 2009 WL 276519 (W.D. Wis. Feb.4, 2009) was instructive. (Editors’ Note: See CAFA law blog analysis of Irish order posted on June 22, 2009.) 

Irish involved a putative class action originally filed in state court by a number of landowners against a railroad and several individuals claiming damages to the landowners’ properties as a result of a flood that occurred in the wake of a torrential rainstorm. The defendants there removed the case to federal court under CAFA. The Irish court aggregated all of the plaintiffs’ claims and found that the amount in controversy was indeed in excess of $5 million.

The magistrate judge found that the plaintiffs’ claims, which included recovery of attorneys’ fees, equitable and injunctive relief, where the plaintiffs would seek fines up to $ 37,500 daily for each day of non-compliance, crossed the CAFA threshold requirement. Finding that the defendants had met their burden, the magistrate judge recommended denial of the plaintiffs’ motion for remand.