Reynolds Metals Company v. Martin

• Decision Date: 20 October 1964
• Docket Number: No. 19126.,19126.
• Citation: 337 F.2d 780
• Parties: REYNOLDS METALS COMPANY, a corporation, Appellant, v. Paul MARTIN and Verla Martin, husband and wife, Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

337 F.2d 780 (1964)

REYNOLDS METALS COMPANY, a corporation, Appellant, v. Paul MARTIN and Verla Martin, husband and wife, Appellees.

No. 19126.

United States Court of Appeals Ninth Circuit.

October 20, 1964.

Fredric A. Yerke, Jr., Jean P. Lowman, H. C. Barragan, King, Miller, Anderson, Nash & Yerke, Portland, Or., Gustav B. Margraf, W. Tobin Lennon, Richmond, Va., for appellant.

Nels Peterson, Peterson, Lent & Paulson, Portland, Or., Frederick A. Cone, Belli, Ashe & Gerry, San Francisco, Cal., for appellees.

Before HAMLEY, MERRILL and BROWNING, Circuit Judges.

HAMLEY, Circuit Judge

This is an appeal from an order, and a supplemental order, denying defendant's motion to dismiss this action. This court has heretofore granted defendant's motion for permission to appeal under 28 U.S.C. § 1292(b) (1958).

The action was commenced on December 18, 1961, in the Circuit Court of the State of Oregon for the County of Multnomah. The plaintiffs, Paul Martin and Verla Martin, his wife, were citizens and residents of Oregon,¹ and defendant, Reynolds Metals Company, is a Delaware corporation.²

The original purpose of the action was to recover actual damages in the sum of three hundred thousand dollars and punitive damages in the sum of one hundred thousand dollars, by reason of the alleged contamination of plaintiff's fifteen-hundred acre cattle ranch. Such contamination, it was asserted, was caused by the emanation of fluoride fumes and particulates from defendant's nearby aluminum reduction plant at Troutdale, Oregon, during the years 1956 to 1961.³ On December 29, 1961, the action was removed to the United States District Court for the District of Oregon because of diversity of citizenship.

After pretrial proceedings had been in progress for some time the plaintiffs, on October 28, 1963, filed their second amended complaint. By that time plaintiffs were seeking actual damages in the sum of $1,428,342 and punitive damages in the sum of one million dollars. Injunctive relief against continued operation of the Troutdale plant was also sought, unless adequate controls were installed to eliminate the emanation of fluorides.

Defendants thereupon moved to dismiss the action for lack of jurisdiction over the subject matter and for failure to state a claim upon which relief can be granted. Both grounds for the motion were premised on the assertion that primary administrative jurisdiction rests with the Sanitary Authority of the State of Oregon, which has certain functions and duties with respect to air pollution pursuant to ORS 449.760 to 449.830. Because of the primary jurisdiction of that agency, defendant contended, the exercise of jurisdiction by the district court must be suspended pending administrative determination of the matters involved in the suit.

The district court denied the motion and this appeal followed.

The doctrine of primary administrative jurisdiction, unlike the rule requiring exhaustion of administrative remedies, applies where a claim is originally cognizable in the courts. It comes into play, as the Supreme Court said in United States v. Western Pac. R. Co., 352 U. S. 59, 64, 77 S.Ct. 161, 165, 1 L.Ed.2d 126:

"* * * whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body; in such a case the judicial process is suspended pending referral of such issues to the administrative body for its views."

Appellant concedes that since this is a diversity action the law of Oregon governs in determining whether the doctrine of primary administrative jurisdiction should be applied in this case. It urges that the courts of Oregon will apply the doctrine in a proper case, and that this is such a case.

While the doctrine may not have been mentioned by name in the decisions of the Supreme Court of Oregon, it appears to have been applied in at least one case. See Valley & Siletz R. R. Co. v. Flagg, 195 Or. 683, 247 P.2d 639, 654, which involved the railroad rate-making function of the Oregon Public Utilities Commissioner. We can therefore assume, and appellee does not argue to the contrary, that cases can arise in which the courts of Oregon, applying the doctrine of primary administrative jurisdiction, would suspend judicial proceedings pending referral of the issues to a state administrative body for its views.

The precise question presented, therefore, is whether the courts of Oregon would hold that effectuation of the purpose of the legislature in enacting ORS 449.760 to 449.830, requires that the Sanitary Authority should first pass on some or all of the matters in dispute.⁴

One section of the statutes in question, namely ORS 449.820, gives the Sanitary Authority power to institute suits for injunction to compel compliance with the agency's rules, regulations and orders pertaining to air pollution. The last sentence of subsection (1) of ORS 449.820 reads:

"The provisions of this section shall not prevent the maintenance of acor suits relating to private or public nuisances brought by any other person, or by the state on relation of any person without prior order of the Sanitary Authority."

The question of whether this statutory language evidenced a legislative purpose that the doctrine of primary administrative purpose should not apply with regard to the air pollution statutes, ORS 449.760 to 449.830, was before the Supreme Court of Oregon in the recent case of Diercks v. Hodgdon, Or., 390 P.2d 935. On review in that case was a decree enjoining the operator of a shingle mill from permitting smoke, cinders and ashes to invade the plaintiff's residential property, and awarding damages in the sum of three hundred dollars.

On the basis of the quoted provision of ORS 449.820(1), the court rejected the argument that the plaintiff should have instituted administrative proceedings under ORS 449.760 to 449.830, before resorting to a suit in equity. The court said (at page 936):

"ORS 449.820 specifically provides that resort to administrative abatement proceedings is not a condition precedent to relief in law or equity from public or private nuisance."

The company argues, however, that the Diercks decision is not controlling here because that case sounded in nuisance, and the provision of ORS 449.820(1) on which the court relied in Diercks refers to the maintenance of actions or suits relating to "private or public nuisances." Our case, it is contended, does not sound in nuisance, but in trespass.

The complaint in Diercks made no mention of either nuisance or trespass, but the decree which was entered referred to the grievance as a "nuisance." Likewise the Oregon Supreme Court regarded the condition caused by the invasion of the plaintiff's property by smoke, cinders and ashes emanating from the defendant's shingle mill as a "nuisance." In our case, on the other hand, the complaint refers to the contamination of the plaintiff's ranch by reason of fluorides emanating from the Troutdale plant as a "tres...