Feikema v. Texaco, Inc.

• Decision Date: 03 March 1994
• Docket Number: No. 93-1649,93-1649
• Citation: 16 F.3d 1408
• Parties: , 62 USLW 2462, 24 Envtl. L. Rep. 20,791 Brian FEIKEMA; Pamela Feikema; Harley Ferrell; Shirley Ferrell; Joseph Fleming; Maryann Fleming; John H. Hammond; Karen Hammond; Robert Kertscher; Nancy Kertscher; Peter Kot; Ann Kot; William I. Lowry; Rose Lowry; Mary Louise Salem, Plaintiffs-Appellants, v. TEXACO, INC.; Texaco Refining and Marketing (East), Incorporated; Saudi Refining, Inc.; Star Enterprise, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1408

16 F.3d 1408

38 ERC 1289, 62 USLW 2462, 24 Envtl.

L. Rep. 20,791

Brian FEIKEMA; Pamela Feikema; Harley Ferrell; Shirley Ferrell; Joseph Fleming; Maryann Fleming; John H Hammond; Karen Hammond; Robert Kertscher; Nancy Kertscher; Peter Kot; Ann Kot; William I. Lowry; Rose Lowry; Mary Louise Salem, Plaintiffs-Appellants, v. TEXACO, INC.; Texaco Refining and Marketing (East) Incorporated; Saudi Refining, Inc.; Star Enterprise, Defendants-Appellees.

No. 93-1649.

United States Court of Appeals Fourth Circuit.

Argued Oct. 28, 1993.

Decided March 3, 1994.

ARGUED: Mark P. Friedlander, Jr., Friedlander & Friedlander, P.C., Arlington, Virginia, for Appellants. Richard E. Wallace, Jr., Howrey & Simon, Washington, D.C., for Appellees. ON BRIEF: Mitchell E. Rapp, John L. Howard, Jr., Howrey & Simon, Washington, D.C.; John A.C. Keith, Blankingship & Keith, Fairfax, Virginia, for Appellees.

Before MURNAGHAN and NIEMEYER, Circuit Judges, and YOUNG, Senior United States District Judge for the District of Maryland, sitting by designation.

OPINION

NIEMEYER, Circuit Judge:

The question of first impression presented on this appeal is whether the Resource Conservation and Recovery Act, 42 U.S.C. Sec. 6901 et seq., or an administrative order entered pursuant to it, preempts state common law causes of action for nuisance and trespass. Several homeowners in Fairfax, Virginia, filed a complaint in March 1993 against Texaco, Inc. and Star Enterprises (collectively "Texaco"), alleging that a plume of oil which leaked from a nearby petroleum distribution terminal owned by Texaco damaged and continues to damage their properties. The complaint requested injunctive relief and demanded damages in an unspecified amount. The district court dismissed the complaint on preemption grounds, and the homeowners appealed. Concluding that the claims for injunctive relief are preempted but that claims for state law damages are not, we vacate the judgment and remand the case for further proceedings consistent with this opinion.

I

Texaco owns and operates a petroleum distribution terminal located at 3800 Pickett Road in Fairfax, Virginia. The terminal, also known as the Tank Farm, consists of office and warehouse facilities, a truck loading rack, nine aboveground storage tanks with a total storage capacity of over 17 million gallons, and eleven underground storage tanks with a total capacity of 40,000 gallons. The Tank Farm is located above a "recharge" area of an aquifer, which is a major underground water source for nearby creeks and streams. It is also near residential properties owned by the homeowners in this case and by others.

Plaintiffs allege that over the course of many years beginning prior to December of 1988, petroleum products, consisting of diesel fuel, aviation fuel and gasoline, leaked into the soil and groundwater at the Tank Farm and the surrounding land, and an oil plume began moving toward the properties of the homeowners. Some constituent parts of these petroleum products are toxic and, under certain conditions, constitute a health hazard. Sometime in September 1990, visible petroleum products appeared in Crook Branch Creek which flows near and along the homeowners' properties. The Virginia State Water Control Board ("the State Board") investigated the leak. Pursuant to the direction of the State Board, Texaco conducted tests on the tanks and the lines, installed on-site and off-site monitoring wells and installed an oil recovery trench along a portion of the Tank Farm. Although almost 7,000 gallons of oil were recovered by these means, the State Board concluded that leaking was continuing and that the appropriate control or elimination of such release had not been implemented. In May 1991, the State Board requested that the United States Environmental Protection Agency (the "EPA") assume responsibility for investigating the oil leak and recovering the released products. In response, the EPA created an interagency task force to take further steps.

Proceeding under the authority granted by section 311(c) of the Clean Water Act, 33 U.S.C. Sec. 1321(c), section 1431 of the Safe Drinking Water Act, 42 U.S.C. Sec. 300i, and section 7003 of the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. Sec. 6973, the EPA conducted an investigation, held a hearing, and negotiated an administrative consent order (the "Consent Order") with Texaco, which was entered on September 23, 1991. The EPA found, as a basis for the Consent Order, that if proper measures were not implemented, petroleum would continue to move under the Tank Farm with the natural ground water flow and would migrate to and enter sanitary and storm sewer pipes, eventually entering the basements of residences in the immediate vicinity of the Tank Farm. The EPA also determined that the plume might present an imminent and substantial endangerment to health or the environment within the meaning of section 7003(a) of the RCRA, 42 U.S.C. Sec. 6973(a).

The Consent Order required Texaco to place booms on Crook Branch Creek to contain the oily sheen on the surface, and to use sorbent to collect and clean up the oil. The EPA also ordered Texaco to excavate and remove soils contaminated with oil, to operate an emergency measures pumping system, and to monitor weekly wells and storm sewers for the presence of oil. In addition, the EPA put forth an "Emergency Measures Plan," requiring Texaco, inter alia, to develop an appropriate corrective actions plan to eliminate the leaks; to submit this plan to EPA for review and approval; and to implement EPA-approved corrective actions under an EPA-approved schedule. While the order addressed measures to eliminate the causes of the leaking and to neutralize the adverse effects of the oil plume, it recognized that the response action might not address all contamination and that additional long-term measures might be required. The order was scheduled to terminate when its directives were met to the EPA's satisfaction. Since the entry of the order, Texaco has undertaken the corrective steps as required, and there is no evidence in the record that it is not complying with the terms of the order, which still remains in effect.

In March 1993, the homeowners filed a complaint against Texaco under the district court's diversity jurisdiction, alleging claims for nuisance and trespass under Virginia common law. ^* In their complaint, the homeowners alleged that "even under a Consent Order with and under the direction of the Environmental Protection Agency," Texaco has failed to remedy the leaking, and that they "have had, and continue to be threatened with actual petroleum pollution from the Tank Farm in the soils of the creeks on or near their property." The complaint further alleged that the pollution confronts them with a nuisance that "threatens the destruction of their property and danger to their health," and that "direct and actual pollution of the creek beds and the flow of globules of free phase hydrocarbons under their property constitute a trespass" upon their properties. The homeowners requested permanent injunctive relief for greater remedial measures than those included in the Consent Order, and they demanded "such damages, interest and costs to which the Plaintiffs may be justly entitled."

On Texaco's motion to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6), the district court dismissed the action on preemption grounds. The court stated:

I think the injunctive relief of the type the plaintiffs seek here would conflict with and frustrate probably the purpose of Congress in its EPA remediation efforts under the RCRA. Even though the plaintiffs do not purport to bring their action under that, I think that Act and the action taken here with the remediation effort and order preempts this field, and I think that any injunction I would issue would conflict with that.

This appeal followed.

II

We must address preliminarily Texaco's contention that the district court lacked subject matter jurisdiction because the homeowners, in invoking diversity jurisdiction, only alleged the jurisdictional amount in the aggregate, without attributing damages of over $50,000 to each plaintiff as required by law. See 28 U.S.C. Sec. 1332. The complaint in this case alleged that eight properties, with a total value in excess of $2.5 million, were at stake, seven of which are owned by married couples and one by an individual. In their memorandum opposing Texaco's motion to dismiss, the homeowners, relying on Eagle v. American Telephone & Telegraph Co., 769 F.2d 541 (9th Cir.1985), cert. denied, 475 U.S. 1084, 106 S.Ct. 1465, 89 L.Ed.2d 721 (1986), argued that they shared a "common and undivided claim" which could be asserted with one damage amount for purposes of satisfying the diversity statute's jurisdictional amount. Alternatively, the homeowners stated that if the court were to find that their claims are not undivided, "Plaintiffs, by this response, move the Court to allow for an interlineation amendment of [their] Complaint" to demand $312,500 for each couple owning property and $156,250 for the individual property owner. The district court never addressed this motion because it dismissed the complaint on preemption grounds. Since we hold that not all of the homeowners' claims are preempted, we must now address the jurisdictional question.

We agree with Texaco that diversity jurisdiction has not been adequately pleaded. It is fundamental that each plaintiff must demonstrate the jurisdictional basis and allege the necessary amount in controversy. See Schlesinger v. Councilman, 420 U.S. 738, 744 n. 9, 95 S.Ct. 1300, 1306, 43 L.Ed.2d 591 (1975). While the claims of the several plaintiffs do arise from a single cause, they are not undivided claims with respect to the several properties. Hence, the complaint as it now reads does not adequately plead jurisdiction.

Nevertheless, because the defect is in form only...