Ebert v. Gen. Mills, Inc.

• Decision Date: 20 May 2016
• Docket Number: No. 15–1735.,15–1735.
• Citation: 823 F.3d 472
• Parties: Karl EBERT; Carol Krauze; Jackie Milbrandt, individually and on behalf of all persons similarly situated, Plaintiffs–Appellees v. GENERAL MILLS, INC., Defendant–Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

823 F.3d 472

Karl EBERT; Carol Krauze; Jackie Milbrandt, individually and on behalf of all persons similarly situated, Plaintiffs–Appellees

v.GENERAL MILLS, INC., Defendant–Appellant.

No. 15–1735.

United States Court of Appeals, Eighth Circuit.

Submitted: Oct. 21, 2015.

Filed: May 20, 2016.

Aaron Daniel Van Oort, argued, Jerry Blackwell, Benjamin Winters Hulse, Emily A. Ambrose, on the brief, Minneapolis, MN, for Defendant–Appellant.

Michael Damon Hayes, argued, Norman B. Berger, Chicago, IL, Mark Handley Thieroff, John Gordon Rudd, Jr., Anne T. Regan, Minneapolis, MN, Edward J. Manzke, Shawn Michael Collins, Naperville, IL, on the brief, for Plaintiffs–Appellees.

Before WOLLMAN, BEAM, and GRUENDER, Circuit Judges.

BEAM

, Circuit Judge.

General Mills, Inc., challenges the district court's grant of class certification in this environmental-contamination lawsuit.¹ Plaintiffs, all owners of residential properties in a particular neighborhood in Minneapolis, Minnesota, sued General Mills, alleging General Mills caused the chemical substance trichloroethylene (TCE) to be released onto the ground and into the environment at a former General Mills facility, located within the same neighborhood. The plaintiffs claim that as a result of this contamination, TCE vapors migrated into the surrounding residential area, threatening the health of the residents and diminishing the value of their property. Finding the requisites of Federal Rule of Civil Procedure 23

satisfied, the district court certified a proposed class. Because the class lacks the requisite commonality and cohesiveness to satisfy Rule 23, we reverse.

I. BACKGROUND

General Mills owned and operated an industrial facility in the Como neighborhood of Minneapolis from approximately 1930 to 1977. In 1977, Henkel Corporation purchased the property from General Mills. From 1947 to 1962, General Mills disposed of as much as one-thousand gallons of hazardous substances per year by burying it in perforated drums in the ground at the General Mills facility. In December 1980, Congress passed the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), which required current and former owners of facilities at which chemicals were used to notify the Environmental Protection Agency (EPA) of suspected onsite disposal so EPA could identify and inventory hazardous sites and prioritize them on a national list for cleanup. Under this rubric, without admitting liability, General Mills, in 1984, signed a Consent Order and Remedial Action Plan with the Minnesota Pollution Control Agency (MPCA) in which it agreed, in part, to address TCE presence, if any, in groundwater below and near the facility. Accordingly, for nearly thirty years, General Mills participated in groundwater clean-up and remediation efforts in the Como neighborhood under the direction of, and in conjunction with, the federal government and the State of Minnesota.

In late 2011, in cooperation with the MPCA, General Mills began to evaluate the potential for migration of TCE in the form of vapor from shallow groundwater to the soil above. After discovering TCE in soil vapor in October 2013, General Mills modified the consent order with the MPCA to address the investigation and mitigation of vapor risk near the facility. Under that plan, General Mills contractors sampled soil gas beneath building foundations (“sub-slab sampling”) and discovered variation among properties. Wherever the TCE concentration in sub-slab vapor exceeded a particular threshold, General Mills installed vapor mitigation systems (VMSs) to prevent TCE intrusion into the building above. As noted by the district court, according to one of General Mills' experts, 327 homes in the Como neighborhood have had soil vapor testing and do not have detectable TCE concentrations. General Mills installed VMSs in 118 homes in the Como neighborhood.

In this action, Plaintiffs allege that in the past, “over the course of many years,” General Mills released TCE onto the ground and into the environment surrounding its former facility and that now the TCE, in the form of vapors, is threatening home and business owners in the Como neighborhood. The chemical's presence, say the plaintiffs, has decreased the neighborhood's property values.

The plaintiffs first learned of the TCE vapor contamination at issue in this suit in 2013, and each of the named plaintiffs received customized VMSs. Seeking to represent a class consisting of “all persons and non-governmental entities that own residential property within the ‘Class Area,’ ” these residents assert five legal claims: (1) violation of CERCLA; (2) common law negligence; (3) private nuisance; (4) willful and wanton misconduct; and (5) violation of the Resource Conservation and Recovery Act (RCRA). According to the district court, Plaintiffs “appear[ed] to seek certification of only the following narrow issues: (1) whether [General Mills] is liable to owners of the properties in the defined Class Area; and (2) whether injunctive relief is warranted to compel comprehensive remediation.” Plaintiffs voluntarily excluded any personal injury claims and seek in this action only property damages and injunctive relief not relating to personal-injury claims.

The district court granted class certification after analyzing the Rule 23

factors,² and additionally denied General Mills' motion to exclude two of the plaintiffs' expert witnesses. In its certification order the district court took painstaking steps to delineate not only the issues to be determined, but the parties included in the class. The court bifurcated the action into two phases, limiting the issue to be determined at each phase (first liability, then damages) and specifically excluded all individual class members “who have a physical injury as a result of [General Mills'] conduct.” This was an attempt to avoid potential issues of res judicata and claim-splitting for those class members who do not litigate personal injury claims. General Mills challenges all of the district court's rulings on appeal. Stated very generally, General Mills contends that the exceedingly complex issues of injury and causation unique to each of the proposed plaintiffs in this class defeat considerations required for class certification (e.g., commonality, numerosity, typicality, adequacy, predominance, fairness) under Rule 23

.

II. DISCUSSION

A class action serves to conserve the resources of the court and the parties by permitting an issue that may affect every class member to be litigated in an economical fashion. Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 155, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982)

. Rule 23 governs class certification and states that “[t]o be certified as a class, plaintiffs must meet all of the requirements of Rule 23(a) and must satisfy one of the three subsections of Rule 23(b).” In re St. Jude Med., Inc., 425 F.3d 1116, 1119 (8th Cir.2005). Here, the district court certified both a Rule 23(b)(2) class for possible declaratory or injunctive relief and a Rule 23(b)(3) class for possible money damages, and did so in a “hybrid” fashion, bifurcating the action in two phases: “the first phase [to] address[ ] the issue of liability under Rule 23(b)(2) ; and the second phase [to] address [ ] the damages issue under the procedure for Rule 23(b)(3) once liability is determined to exist.” “In order to obtain class certification, a plaintiff has the burden of showing that the class should be certified and that the requirements of Rule 23 are met.” Luiken v. Domino's Pizza, LLC, 705 F.3d 370, 372 (8th Cir.2013) (quoting Coleman v. Watt, 40 F.3d 255, 258 (8th Cir.1994) ).

The parties describe this case very differently and these varying views drive each of their arguments on class certification. General Mills focuses intently on the vast differences between the class plaintiffs on the issues of injury, causation, and damages. In response to General Mills' continued focus on the fact that many of the proposed class plaintiffs may not have any injury-in-fact, plaintiffs claim that they have all suffered the same injury (i.e., that General Mills contaminated this geographic area) such that there is commonality and the injurious conduct is the same, no matter that the resulting injurious effects (damages) are diverse. According to the class, they brought this suit to require General Mills to clean up its contamination and “[t]he jury's finding in the classwide trial concerning the geographical scope of contamination caused by General Mills will resolve all liability issues for Plaintiffs and the entire class.” Accordingly, the class frames their claims as solely involving questions about General Mills' initial wrongdoing.

A. Standard of Review

“The district court has ‘broad discretion to decide whether certification is appropriate.’ ” Smith v. ConocoPhillips Pipe Line Co., 801 F.3d 921, 925 (8th Cir.2015)

(quoting Prof'l Firefighters Ass'n of Omaha, Local 385 v. Zalewski, 678 F.3d 640, 645 (8th Cir.2012) ). “We will nonetheless reverse a certification where there has been an abuse of discretion or an error of law.” Id. Further, the district court's factual findings underlying the certification ruling are reviewed under the “clearly erroneous” standard. Blades v. Monsanto Co., 400 F.3d 562, 566 (8th Cir.2005).

B. Commonality Under Rule 23

Under Rule 23(a)

, a district court may certify a class only if it “is satisfied, after a rigorous analysis,” that the four threshold requirements are met: numerosity of plaintiffs, commonality of legal or factual questions, typicality of the named plaintiff's claims or defenses, and adequacy of representation by class counsel. Falcon, 457 U.S. at 161, 102 S.Ct. 2364 ; Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 613–15, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997). In this case, the district court held there was no dispute regarding numerosity and commonality, and thus reviewed only the remaining factors of typicality (Rule 23(a)(3) ) and...