General Mills owned and operated an industrial facility in Minneapolis from 1930 to 1977. From 1947 to 1962, the company disposed of hundreds of gallons of hazardous substances each year by burying them in perforated drums in the ground at the facility. In 1984, General Mills signed a consent order and remedial action plan with the Minnesota Pollution Control Agency (MPCA). Without admitting liability, the company agreed to address any TCE presence in the groundwater beneath and near the facility. For nearly 30 years, General Mills participated in groundwater cleanup and remediation efforts in the neighborhood under the direction of federal and state authorities.
In 2011, General Mills began to evaluate the potential for TCE vapor migration from the groundwater to the soil. In 2013, General Mills discovered TCE in soil vapor and, under a revised consent order with the MPCA, investigated the migration risk to nearby homes. General Mills conducted sub-slab sampling and discovered that the TCE concentration varied among the properties. When the TCE concentration exceeded a specific threshold, General Mills installed a vapor mitigation system (VMS) to prevent TCE from contaminating the building above. General Mills installed VMSs in 118 homes. According to General Mills’ experts, however, 327 other homes had no detectible TCE concentrations.
The District Court Proceedings
Several neighborhood residents then brought a class action against General Mills on behalf of themselves and a putative class of property owners within a defined “class area.” The plaintiffs asserted five claims: (1) violation of the Comprehensive Environmental Response, Compensation, and Liability Act, (2) violation of the Resource Conservation and Recovery Act, (3) private nuisance, (4) common law negligence, and (5) willful and wanton misconduct.
In an attempt to reduce the number of individualized issues and thereby increase the chances of certifying a class, the plaintiffs excluded personal injury claims from the putative class. The plaintiffs sought only property damages and declaratory and injunctive relief requiring General Mills to remediate the properties. The plaintiffs sought certification of two issues: (1) whether General Mills was liable to property owners within the class area, and (2) whether injunctive relief was warranted to “compel comprehensive remediation.”
The district court certified a class for declaratory and injunctive relief under Federal Rule of Civil Procedure 23(b)(2), and a class for damages under Rule 23(b)(3). Class actions under Rule 23(b)(2) or (b)(3) both require satisfaction of the four elements of Rule 23(a): that the class is so numerous that joinder of all members is impracticable (“numerosity”); that there are questions of law or fact common to the class (“commonality”); that the named plaintiffs’ claims are typical of those of the class (“typicality”); and that the named plaintiffs will fairly and adequately represent the class (“adequacy”).
Rule 23 sets out additional requirements for Rule 23(b)(2) and (b)(3) classes. Class representatives seeking to certify a Rule 23(b)(2) class for injunctive and declaratory relief must prove the four elements of Rule 23(a) and also demonstrate that “the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief . . . is appropriate respecting the class as a whole” and that the claims of the class are “cohesive.” Class plaintiffs seeking to certify a Rule 23(b)(3) class for damages must prove the four elements of Rule 23(a) and also demonstrate that common questions of law or fact “predominate” over common issues and that a class action is “superior” to other available methods for the fair and efficient adjudication of the controversy.
The district court bifurcated the action into two phases: first, determining General Mills’ liability under Rule 23(b)(2), and then, if General Mills were found liable, determining damages under Rule 23(b)(3). The district court stated that “questions on individualized exposure” would not be addressed as part of the class claims.
The Eighth Circuit’s Decision
The Eighth Circuit reversed and remanded, holding that individualized issues predominated and that the class claims were not cohesive. First, with respect to the Rule 23(b)(3) class for money damages, the Eighth Circuit determined that individualized issues predominated because, to resolve claims of liability, the district court would have to analyze whether General Mills caused the alleged vapor contamination and subsequent damage on eachindividual property. According to the Eighth Circuit:
[T]here likely will be a property-by-property assessment of additional upgradient (or other) sources of contamination, whether unique conditions and features of the property create the potential for vapor intrusion, whether (and to what extent) the groundwater beneath a property is contaminated, whether mitigation has occurred at the property, or whether each individual plaintiff acquired the property prior to or after the alleged diminution in value. . . . These [individualized issues] will still need to be resolved household by household even if a determination can be made class-wide on the fact and extent of General Mills’ role in the contamination, which determination is problematic.
Ebert, 823 F.3d at 479. The Eighth Circuit also took issue with the district court’s attempt to limit the effect of individualized issues through bifurcation:
[I]t is the deliberate limiting of issues by this district court in this case that is problematic. . . . Here, by bifurcating the case and narrowing the question for which certification was sought, the district court limited the issues and essentially manufactured a case that would satisfy the Rule 23(b)(3) predominance inquiry. . . . The district court’s narrowing and separating of the issues ultimately unravels and undoes any efficiencies gained by the class proceeding because many individual issues will require trial.
Id. Second, the Eighth Circuit held that the claims lacked the cohesiveness needed to proceed as a class under Rule 23(b)(2) because the issues were “highly individualized.” The court concluded that “[r]emediation efforts on each of the affected properties, should they be awarded, will be unique.” Id. at 481. The court cited as one example the fact that the results of the TCE soil vapor sampling varied by property.
Ebert reminds us that class action requirements, like cohesiveness of claims and predominance of common issues, can be difficult to establish in the environmental context because issues of liability, causation, and damages are individualized. Facts will often vary among plaintiffs in class environmental claims because releases of contaminants, by nature, are nonlinear and affect particular people and properties differently.
Keywords: environmental litigation, environmental contamination, trichloroethylene, TCE, class certification, Federal Rule of Civil Procedure 23, bifurcation
Aphrodite Kokolis is a partner and Alex Garel-Frantzen is an associate with Schiff Hardin LLP in its Chicago, Illinois, office.