Chance v. BP Chemicals, Inc., 95-970

• Decision Date: 30 October 1996
• Docket Number: No. 95-970,95-970
• Parties: , 65 USLW 2368 CHANCE et al., Appellants, v. BP CHEMICALS, INC., Appellee, et al.
• Court: Ohio Supreme Court

Page 17

77 Ohio St.3d 17

670 N.E.2d 985, 65 USLW 2368

CHANCE et al., Appellants, v. BP CHEMICALS, INC., Appellee, et al.

No. 95-970.

Supreme Court of Ohio.

Submitted May 8, 1996.

Decided Oct. 30, 1996.

This litigation commenced on July 17, 1991, when the named plaintiffs-appellants, Rose M. Chance, Eliza Avery, and Bessie Shadwick, filed a complaint in the Court of Common Pleas of Cuyahoga County on behalf of those whose interests in real property had allegedly been injured by the described operation of a chemical refining plant operated by defendant-appellee BP Chemicals, Inc. in Lima, Ohio. Appellants' claims focused on appellee's practice of disposing of hazardous waste byproducts from the manufacture of industrial chemicals through the use of "deepwell" injection technology. Appellants in essence claimed that the "injectate" placed under the surface of appellee's property by appellee had laterally migrated to be below the surface of appellants' properties and that the migration violated their rights as property owners.

Appellants sought recovery for trespass, nuisance, negligence, strict liability, and fraudulent concealment. The complaint prayed for one billion dollars in general and punitive damages and included a request for injunctive relief. Appellee answered the complaint on October 24, 1991, and denied that appellants were entitled to recovery.

On June 17, 1992, appellants moved for class certification and filed a memorandum in support, stating that the controversy was particularly appropriate for resolution as a class action and urging that all requirements for class certification were met. On July 30, 1992, appellants moved for a ruling on their class certification motion before the court entertained a motion for summary judgment to be filed by appellee, arguing that the case could be certified without an evidentiary hearing. Appellants did not make any suggestion in this motion as to how the class should be described if the court did grant class certification.

On July 31, 1992, appellee filed a motion for summary judgment with a supporting brief. Appellee stated in the brief that deepwell injection is used by companies and governmental entities throughout the country and the world to place waste liquids thousands of feet deep into the earth, under thick layers of nonporous rock. Appellee claimed that the injectate at the Lima location is ninety-five percent water, approximately four percent dissolved salt and approximately one percent organics, and that the injectate disperses into the native fluid (connate brine) that naturally exists in the geologic rock formations where the injecting is done.

Appellee stated that it had three active deepwells at its Lima site, with the oldest well having been used continuously since 1968. Appellee stated that it operated the three injection wells pursuant to permits and regulatory practices of both the Ohio and United States Environmental Protection Agencies and argued that the wells were safe and the technology behind them effective. Among the reasons listed by appellee for its position that summary judgment was appropriate were that appellee had not violated a duty owed to appellants, that no injectate had migrated under appellants' properties, that appellants had no damages, and that some of the claims advanced by appellants were unavailable as a matter of law.

Appellants' response to the summary judgment motion, filed on September 30, 1992, stated their positions that what appellee was injecting was actually dangerous toxic waste and that the waste had migrated away from the property owned by appellee for a distance of approximately four to five miles in all directions. Appellants stated that extreme pressures were used by appellee to inject the waste into the rocks beneath the area. Appellants claimed that appellee had damaged the substrata of appellants' properties, that the substrata had been made unusable for other purposes, such as oil or gas extraction, and that their property values had been lowered by the deepwell injection. Among the arguments made in support of their case was that appellee was being unjustly enriched by using appellants' properties to dispose of toxins that would cost more to dispose of in some other way, so that appellants deserved a part of appellee's profits in return for the use of their properties.

On December 2, 1992, after the trial court had heard oral arguments on the summary judgment motion, the court ruled in favor of appellee on appellants' claim for punitive damages and on appellants' claim for intentional or negligent infliction of emotional distress. The court denied summary judgment to appellee on appellants' other claims.

The trial court held a pretrial conference on March 23, 1993 and set the trial date for November 3, 1993. The trial court set due dates for the parties to file briefs on issues relating to certification of the class. In a series of filings by each side, the parties made arguments to the trial court concerning how the class action was to be conducted. Many of these arguments concerned the possibility of bifurcating the action, so that whether appellee was liable would be determined first, and if liability was found, then damages would be quantified at a later time. Appellants generally opposed bifurcating the action in this way, although they did indicate at one point their amenability to a form of bifurcation that would include delaying determination of damages until after the extent of migration had been resolved. Appellee argued in favor of bifurcation of liability and damages.

The issue of the extent of the lateral migration of the injectate was vigorously contested by the parties at all stages throughout the litigation, and both sides presented extensive arguments based on expert testimony to support their respective positions on the extent of the lateral migration. The extent of migration was a particularly crucial factor in appellants' case, in that their theory of recovery was predicated upon the presence of injectate below the surface of their properties and the violation of property rights due to the presence of that injectate. Appellee continued to assert that there was no liability regardless of the extent of migration and argued that bifurcation was appropriate because if it prevailed on the liability question there would be no need for further proceedings.

Appellants, on May 27, 1993, moved to amend their complaint to add a request for a judgment declaring that appellants owned everything below the surface of their properties, including the geologic formations into which the injectate was allegedly going, and further declaring that they had the right to exclude appellee from using their properties. The motion to amend was denied by the trial court.

On August 9, 1993, the trial court issued its class certification order. The court certified a class "for purposes of a trial on the issues of where the injectate is located and whether there is liability to any member of the class." The certification order made no mention of how or when the amount and distribution of damages would be determined if liability were found.

In addition to setting forth the issues for trial, the trial court's certification order also defined the class: "The class consists of persons owning real property, as of the date the complaint was filed, within the following limits around the three deepwells at BP Chemicals' facility in Lima Ohio: 4.88 miles west of well 2; 4.58 miles north of well 3; 3.25 miles east of well 1; and 3.05 miles south of wells 2 and 1." The trial court adopted this class definition from an opinion of one of appellants' experts regarding his conclusions on the distances the injectate had migrated.

On September 23, 1993, the trial court issued an order requiring appellants' counsel to mail notice of the class action to identifiable class members by October 6, 1993, and to publish notice by the same date in The Lima News. The order provided that class members would have until October 27, 1993, to opt out of the class by mailing a request for exclusion to appellants' counsel.

The parties disagree over whether appellants had requested that their expert's opinion of the extent of the migration be used to define the class. In any event, appellants' attorneys did not initially object to the class definition, but later encountered problems when they prepared to send notices to members of the class using this class definition. Because the defined area did not directly correspond to any mailing list that could be practically compiled, appellants came to realize that some people would surely receive notices who should not. Also, because no map was included as part of the class description, there would be confusion about who was in the allegedly affected area.

The trial court journalized an entry on October 5, 1993, which approved the parties' agreement that the mailing date of the class notice would be extended to October 8, 1993, and the appellants' counsel published the notice and accomplished the mailing before that date, with notices apparently sent to in excess of 20,000 people on October 7, 1993. Those property owners not wishing to be involved sent in requests to opt out of the class, which were filed with the court.

Plaintiff-appellant Mary Virginia Rauch, a member of the described class, received a class notice. Appellant Rauch did not return an exclusion request, but instead filed a document denominated a "motion to intervene" with the trial court. In this document, appellant Rauch claimed that she needed additional time to decide whether to intervene, opt out, or remain as a passive class member, arguing that the time period set by the trial court for sending in exclusion requests was too short. The trial court denied appellant Rauch's motion in an entry journalized on November 4, 1993.

A final pretrial conference was held on October 27, 1993. At that time, ...