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July 14, 2015 Practice Points

Ninth Circuit Adheres to Narrow Interpretation of "Local Single Event" Exception

In a 2–1 decision, the court narrowly construed the exception to apply only where all claims arise from a single event or happening rather than from a continuing set of circumstances

by Ruben F. Reyna

In a recent decision, the Ninth Circuit Court of Appeals held that a suit brought against Boeing and its environmental remediation contractor over alleged groundwater contamination that occurred over the course of 40 years does not fall under the “local single event” exception to federal jurisdiction under the Class Action Fairness Act (CAFA). In a 2–1 decision, the Ninth Circuit narrowly construed the exception to apply only where all claims arise from a single event or happening rather than from a continuing set of circumstances. Allen v. The Boeing Co., No. 2:14-cv-00596 (9th Cir. Apr. 27, 2015).

More than 100 Washington residents filed suit in state court, alleging that for 40 years Boeing’s Auburn Plant discharged hazardous chemicals into their groundwater and that Boeing and Boeing’s environmental remediation contractor, Landau Associates, failed to properly investigate, remediate, clean up, or warn of the contamination.

Boeing removed the case to the U.S. District Court for the Western District of Washington, invoking diversity jurisdiction and arguing that the case was a “mass action” under CAFA—which generally gives federal courts jurisdiction over class actions involving more than 100 class members or “mass actions” involving more than 100 plaintiffs.

The district court remanded the case back to state court, holding that CAFA’s local single event exception—which provides that the term “mass action” does not include a case where “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”—applied.

The Ninth Circuit vacated the district court’s remand order. Adhering to its previous interpretation of CAFA’s local single event exception in Nevada v. Bank of America Corp., 672 F.3d 661 (9th Cir. 2012), the court strictly construed the exception to apply only where all claims arise from a single happening that gives rise to the claims of all plaintiffs. In reaching its decision, the court observed that a broad interpretation of the local single event exception would render portions of CAFA redundant and is not supported by legislative history. The court further noted that even if the local single event exception could be interpreted to cover one continuing activity or tort, it would still not apply to this case because plaintiffs sought relief from at least two separate activities by two distinct defendants: Boeing’s 40-year groundwater contamination and Landau’s negligent failure to remediate that contamination.

The court recognized that the Third Circuit Court of Appeals took a contrary position with respect to the local single event exception. In Abraham v. St. Croix Renaissance Group L.L.L.P., the court found that a refinery’s release of hazardous materials over the course of more than a decade constituted an “event or occurrence” under CAFA, stating that the ordinary meaning of those words “do not commonly or necessarily refer in every instance to what transpired at an isolated moment in time.” 719 F.3d 270 (3d Cir. 2013).

The Ninth Circuit’s narrow interpretation of the local single event exception may have broad implications for environmental “mass actions” because they typically do not occur as a result of a single happening but instead from numerous releases spanning a period of time. Of course, with the circuit court split, the Supreme Court may yet weigh in.

Ruben F. Reyna is an associate with Sedgwick LLC in Washington, D.C.

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