Abednego v. Alcoa Inc., et al, No. 10-009, 2011 WL 941569, (D. V.I. Mar. 17, 2011).

Environmental tort actions are meant to stay in state court, says the District Court of the Virgin Islands.

Some 2,000 individual plaintiffs filed a complaint in the Superior Court of the U.S. Virgin Islands, claiming that they were injured when various hazardous substances were released from an alumina refinery on St. Croix as a result of Hurricane Georges. 

The defendants removed the action, arguing that federal subject matter jurisdiction existed under the “mass action” provision of CAFA, 28 U.S.C. § 1332(d)(11). “Mass action” is defined as “any civil action . . . in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact, except that jurisdiction shall exist only over those plaintiffs whose claims in a mass action satisfy the jurisdictional amount requirements under subsection (a).” 28 U.S.C. §1332(d)(11)(B)(i).  

The plaintiffs filed a motion to remand, arguing that the “event or occurrence” exception applied, as CAFA excludes from the definition of mass action any case 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.” 28 U.S.C. §1332(d)(11)(B)(ii)(I).  

Although the district court noted that the action met many of the criteria of a “mass action,” it ultimately was not convinced by the defendants’ argument that the plaintiffs had alleged a series of hazardous releases that should not fall within the “event or occurrence” exception. 

The defendants cited several cases to support their argument. First, in Galstaldi v. Sunvest Communities USA, LLC, 256 F.R.D. 673, 677 (2009), the court found that the fraudulent sale of condominium units “to hundreds of individuals around the country over a period of one and one half years” did not qualify as “an event or occurrence.” (Editors’ Note: See the CAFA Law Blog analysis of Galstaldi posted on May 27, 2009). 

Similarly, in Cooper v. R.J. Reynolds Tobacco Corp., 586 F. Supp. 2d 1312, 1316 (M.D. Fla. 2008), the court found that the injuries asserted by 700,000 Florida smokers were not single events or occurrences occurring solely in Florida or states contiguous to Florida. (Editors’ Note: See the CAFA Law Blog analysis of Cooper posted on September 9, 2009). 

In Lafalier v. Cinnabar Serv. Co., 2010 U.S. Dist. LEXIS 36215, *14-17 (N.D. Ok. Apr. 13, 2010), 207 plaintiffs alleged fraud by insurance companies in the wake of a tornado, and the court held that the individual decisions to deny coverage, etc. constituted a “series of potentially related events.” (Editors’ Note: See the CAFA Law Blog analysis of Lafalier posted on August 4, 2010). And in Aburto v. Midland Credit Mgmt., Inc., 2009 U.S. Dist. LEXIS 67467, *14 (N.D. Tex. July 27, 2009), the court noted that each of the 154 plaintiffs had previously been sued in separate lawsuits by the defendant collection agency. (Editors’ Note: See the CAFA Law Blog analysis of Aburto posted on April 18, 2010.)

Conversely, the plaintiffs cited Mobley v. Cerro Flow Products, 2010 U.S. Dist. LEXIS 524, *8-*11 (S.D. Ill. Jan. 5, 2010), where the court found that claims for personal injuries and property damage from improper disposal of toxic chemicals from three sites over many decades was excepted from CAFA’s definition of a “mass action.” 

The court agreed with the plaintiffs’ argument, noting that “this is not a products liability or an insurance case,” and that the “claims here are quite different from the circumstances set forth in the cases cited by the defendants.” The court held that the “plain meaning” of CAFA’s mass action exception “encompassed” the action, noting that “all injuries alleged . . . resulted from personal and property exposure to hazardous substances released on St. Croix as a result of that one hurricane.” 

The court found persuasive the Senate Judiciary Committee Report’s discussion of the “event or occurrence” exception: “The purpose of this exception was to allow cases involving environmental torts such as a chemical spill to remain in state court if both the event and the injuries were truly local, even though there are some out-of-state defendants. By contrast, this exception would not apply to a product liability or insurance case. The sale of a product to different people does not qualify as an event.” S. Rep. 109-14, at 47 (2005).

Thus, the court concluded, the plaintiffs’ action did not qualify as a mass action under CAFA because all the claims arose “from a single event or occurrence, that is, a hurricane,” and it remanded the action to the Superior Court of the U.S. Virgin Islands.