Coffey v. Freeport-McMoran Copper & Gold Inc.

• Decision Date: 27 April 2009
• Docket Number: No. CIV-08-0640-HE.,CIV-08-0640-HE.
• Citation: 623 F.Supp.2d 1257
• Court: U.S. District Court — Western District of Oklahoma
• Parties: Bob COFFEY, et al., Plaintiffs, v. FREEPORT-McMORAN COPPER & GOLD INC., et al., Defendants.

623 F.Supp.2d 1257

Bob COFFEY, et al., Plaintiffs, v. FREEPORT-McMORAN COPPER & GOLD INC., et al., Defendants.

No. CIV-08-0640-HE.

United States District Court, W.D. Oklahoma.

April 27, 2009.

COPYRIGHT MATERIAL OMITTED

Andrew M. Ihrig, Ihrig Law Firm-Stillwater, Stillwater, OK, Benjamin L. Barnes, Micky Walsh, Beeler Walsh & Walsh PLLC, Oklahoma City, OK, John C. Hull, Keith L. Langston, Kristen J. Pauls, Nelson J. Roach, Bradley Earl Beckworth, Nix Patterson & Roach LLP, Daingerfield, TX, for Plaintiffs.

Emily P. Blackwell, Lewis C. Sutherland, Morgan L. Copeland, Vinson & Elkins, Houston, TX, Reid E. Robison, Timothy

J. Bomhoff, McAfee & Taft, Klahoma City, OK, Kevin E. O'Malley, Michael K. Kennedy, Raymond K. Ramella, Wm Charles Thomson, Gallagher & Kennedy PA, Phoenix, AZ, for Defendants.

ORDER

JOE HEATON, District Judge.

Plaintiffs, Oklahoma citizens, filed this class action in state court asserting nuisance, trespass, strict liability and unjust enrichment claims, based on the defendants' alleged contamination of their property through operation of the Blackwell Zinc Smelter in Blackwell, Oklahoma. The defendants are Blackwell Zinc Company, Inc. ("BZC"), the company that operated the smelter, its parent companies and their successor corporations—Freeport-McMoRan Copper & Gold, Inc., Phelps Dodge Corp., Cyprus Amax Minerals Co., and Amax, Inc.,—the Blackwell Industrial Authority ("BIA"), and BNSF Railway Co. The defendants removed the case, asserting jurisdiction under the Class Action Fairness Act of 2005 ("CAFA"), the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"),¹ and 28 U.S.C. § 1442(a)(1), federal officer removal.² The plaintiffs have filed a motion to remand, contending the court lacks subject matter jurisdiction.

BACKGROUND³

BZC owned and operated a smelter, used to refine zinc and cadmium ore concentrates, in Blackwell, Oklahoma from 1916 until 1974. In 1974, it dismantled the facility and donated the land to the Blackwell Industrial Authority ("BIA").⁴ The BIA developed the property as an industrial park. Currently known as the Blackwell Industrial Park, the site⁵ consists of approximately 160 acres located one-half mile west of downtown Blackwell.

In 1992 the Environmental Protection Agency ("EPA") indicated Blackwell might be designated a Superfund site and placed on the National Priorities List if investigation and remedial efforts did not begin. That year BZC, the BIA and the City of Blackwell entered into a Consent Agreement and Final Order with the Oklahoma State Department of Health "to characterize and remediate the environmental contamination at the old Smelter site and on city property." Petition, ¶ 12. Two years later, in 1994, the Oklahoma Department of Environmental Quality ("ODEQ")⁶ and the EPA entered into a Memorandum of Understanding ("MOU")⁷ regarding remedial action to be taken in response to the release of hazardous substances at the Blackwell Zinc Site ("Site").⁸ The purpose of the MOU was to "ensure prompt CERCLA-Quality Cleanup of the Site," but conserve EPA resources by allowing ODEQ to develop and implement a remediation plan for the Site.

The MOU required ODEQ to submit drafts of its proposed Plan, Decision Document,⁹ and Remedial Design to the EPA for its review and comment, present to the EPA the procedures selected to complete the Remedial Design/Remedial Action ("RD/RA"), submit written quarterly and yearly progress reports, and arrange for EPA representatives to have access to the Site. The MOU provided that "[i]f, at any time, EPA determines that ODEQ is overseeing or conducting remedial action, at the Site, which is inconsistent with CERCLA, or the NCP, or which is not a CERCLA-Quality Cleanup, this MOU shall terminate." MOU, p. 10.¹⁰ See Notice of Removal, Exhibit C, Record of Decision Document ("ROD"), p. 7 ("EPA agreed to not make a final determination to list the Site on the National Priorities List (NPL) as long as the pilot project proceeds in a timely manner and achieves CERCLA quality results.").

The Site was divided into three operable units—the Soil Remediation Unit ("SRU"), the Ecological Remediation Unit ("ERU") and the Ground Water Remediation Unit ("GRU")—to allow soil remediation to proceed in advance of the other units. The SRU dealt "with soil contamination in residential, recreational, and commercial/industrial areas on the site." ROD, p. 1. The ERU included "areas subject to ecological risk-based remediation goals," such as grasslands, riparian areas, and streams. The GRU pertained to contaminated groundwater.¹¹

In April, 1996, ODEQ issued its Record of Decision, which specified the remediation plan for the SRU. Remediation efforts began, principally consisting of soil removal and the capping in place of impacted soil. In July, 2001, the Final Remedial Action Completion Report ("Final Report") for the SRU was issued, which documented that "the construction of the remedy as prescribed within the Final Remedial Design Report, Blackwell Zinc Site Soil Remediation Unit, Blackwell, Oklahoma, PTI, May 1999 was substantially complete in 1999 with final completion in 2000." Notice of Removal, Exhibit E, Second Five-Year Review Report ("Second Report"), p. iii. The Second Report, dated April, 2008, states that BZC had undertaken a second residential soil sampling program and that "[t]hrough May 2008, access agreements for over 3,400 properties had been obtained and sampling is in progress. Based on results, some properties will require cleanup. Cleanup will begin in May 2008." Id. The Report also states that:

Construction is complete for those properties within the SRU that were identified and addressed prior to ODEQ's approval of the FRACR.¹² Additional properties are currently being evaluated under a supplemental soil sampling program. With respect to those additional properties, the remediation status is "under construction."

Id. at p. iv.

In April, 2008, the plaintiffs filed this class action in state court, asserting state common law claims and seeking both monetary and equitable relief.¹³ The defendants removed the case, asserting three bases for federal jurisdiction: CAFA, CERCLA and federal officer.

CAFA

CAFA "extends the subject matter jurisdiction of the federal courts to encompass putative class actions in which at least one plaintiff class member is diverse from one defendant and where the amount in controversy exceeds $5 million." Weber v. Mobil Oil Corp., 506 F.3d 1311, 1313 (10th Cir.2007). "In enacting CAFA, Congress was responding to what it perceived as abusive practices by plaintiffs and their attorneys in litigating major interstate class actions in state courts, which had `harmed class members with legitimate claims and defendants that ha[d] acted responsibly,' `adversely affected interstate commerce,' and `undermined public respect for our judicial system.'" Amoche v. Guarantee Trust Life Ins. Co., 556 F.3d 41, 47 (1st Cir.2009) (quoting CAFA, Pub.L. No. 109-2, § 2(a), 119 Stat. 4, 4 (2005)). Although "CAFA's language favors federal jurisdiction over class actions," Evans v. Walter Indus., Inc., 449 F.3d 1159, 1163 (11th Cir.2006), Congress "did not give federal courts jurisdiction over all class actions, specifically excluding those consisting of `primarily local matters.'" Johnson v. Advance America, 549 F.3d 932, 938 (4th Cir.2008), citing Sen. Rep. No. 109-14, at 6 (2005), U.S.Code Cong. & Admin.News 2005, at 3, 7. The plaintiffs argue that their lawsuit constitutes a "truly local dispute," which falls within the "local controversy" exception to CAFA. That exception provides in relevant part:

"A district court shall decline to exercise jurisdiction ...—

(A)(i) over a class action in which—

(I) greater than two-thirds of the members of all proposed plaintiff classes in the aggregate are citizens of the State in which the action was originally filed;

(II) at least 1 defendant is a defendant— (aa) from whom significant relief is sought by members of the plaintiff class;

(bb) whose alleged conduct forms a significant basis for the claims asserted by the proposed plaintiff class; and

(cc) who is a citizen of the State in which the action was originally filed; and

(III) principal injuries resulting from the alleged conduct or any related conduct of each defendant were incurred in the State in which the action was originally filed; and

(ii) during the 3-year period preceding the filing of that class action, no other class action has been filed asserting the same or similar factual allegations against any of the defendants on behalf of the same or other persons."¹⁴

28 U.S.C. § 1332(d)(4)(A). While the defendants must establish under CAFA that the amount in controversy and minimal diversity requirements are met, Amoche, 556 F.3d at 48, the plaintiffs bear the burden of proving that one of the exceptions to federal jurisdiction applies. Evans, 449 F.3d at 1164-65.

There is no dispute here that the defendants have met their initial burden of showing the existence of diversity jurisdiction under CAFA. See 28 U.S.C. § 1332(d)(2). The question is whether the plaintiffs have met their burden to establish an applicable exception. In particular, have the plaintiffs satisfied the "significant defendant" prong of the local controversy exception? See generally Evans, 449 F.3d at 1163 ("CAFA's legislative history suggests that Congress intended the local controversy exception to be a narrow one, with all doubts resolved `in favor of exercising jurisdiction over the case.'") (quoting S.Rep. No. 109-14 at 42, U.S.Code Cong. & Admin. News 3, 40). For the exception to apply, the proposed class must seek significant relief from an instate defendant whose conduct forms a significant basis for their claims. The plaintiffs argue that both Blackwell Zinc Company ("BZC") and the Blackwell Industrial Authority ("BIA") are "significant defendants."

BZC

The initial question is whether BZC is...