Freeman v. Blue Ridge Paper Products, Inc.

• Decision Date: 25 January 2007
• Docket Number: No. E2006-00293-COA-R3-CV.,E2006-00293-COA-R3-CV.
• Citation: 229 S.W.3d 694
• Parties: Beth FREEMAN, individually and on behalf of all others similarly situated, v. BLUE RIDGE PAPER PRODUCTS, INC.
• Court: Tennessee Court of Appeals

229 S.W.3d 694

Beth FREEMAN, individually and on behalf of all others similarly situated, v. BLUE RIDGE PAPER PRODUCTS, INC.

No. E2006-00293-COA-R3-CV.

Court of Appeals of Tennessee, Eastern Section, at Knoxville.

November 7, 2006 Session.

January 25, 2007.

Permission to Appeal Denied by Supreme Court June 25, 2007.

W. Kyle Carpenter and Robert L. Vance, Knoxville, Tennessee, for appellant.

Gordon Ball and Thomas S. Scott, Jr., Knoxville, Tennessee, for appellee.

OPINION

HERSCHEL PICKENS FRANKS, P.J., delivered the opinion of the court, in which D. MICHAEL SWINEY, J., and SHARON G. LEE, J., joined.

In this class action, the jury returned a verdict for plaintiff's class which the Trial Judge approved. Defendant appealed and we affirm the Trial Court's Judgment.

In this action sustained by the Trial Court as a class action, a jury returned a verdict awarding two million dollars in aggregate damages against defendant, which was approved by the Trial Judge. Defendant has appealed.

Background

Blue Ridge Paper Products, Inc. ("Blue Ridge") owns and operates a pulp and paper mill (the "Mill") in Canton, North Carolina, which is located on the Pigeon River. Under Blue Ridge's management, the Mill discharges compounds into the Pigeon River, including aluminum, arsenic, barium, boron, chloroform, iron, lead, magnesium, manganese, mercury, nickel, nitrate, nitrogen, oil and grease, phenol, surfactants, sulfate, titanium, and zinc. Plaintiff Freeman has lived along the Pigeon River since 1930, and on April 15, 2003, filed the Complaint against Blue Ridge in the Circuit Court for Cocke County. She brought the action on behalf of herself and "all individuals who own or owned real property adjoining and/or abutting the Pigeon River in Cocke County, Tennessee from the period beginning June 1, 1999 until the present." The class consists of approximately 300 individuals.

The Complaint alleged that defendant's pollutants have "substantially diminished the quality of the waters, environment, and resources downstream of and along the Pigeon River in Cocke County . . . thereby causing a private nuisance, and damaging all persons who own land abutting or adjacent to the Pigeon River in Cocke County, Tennessee." Defendant filed numerous defenses, but on November 20, 3003, the Circuit Court after a hearing on the Motion for Class Certification, held that plaintiff had satisfied the requirements of Rule 23 of the Tennessee Rules of Civil Procedure, and certified the class pursuant to Rule 23.02(3).¹ Following the evidentiary hearing, and during closing argument, plaintiff's counsel told the jury that he wished he could have brought the lawsuit on behalf of the entire county and that it was up to the jury to act as "the conscience of the community." Defense counsel objected to this statement, and although the Circuit Court did not expressly tell the jury that they are not the conscience of the community, the Court's jury instructions included statements instructing the jury to base their decision exclusively upon the evidence.²

On August 17, 2005, the jury returned a verdict, awarding two million dollars in aggregate damages, but did not award any punitive damages. On September 2, 2005, the Circuit Court entered a Judgment in accordance with the jury verdict. An appeal followed to this Court.

These issues are raised on appeal:

A. Whether the Circuit Court erred in certifying this lawsuit as a class action?

B. Whether the Circuit Court erred in submitting the question of damages to the jury on a class wide basis?

C. Whether the Circuit Court erred in admitting the expert testimony of James Kite and Dr. John McElligott?

D. Whether the Circuit Court erred in allowing the jury to consider "fear of chemicals?"

E. Whether the plaintiff's counsel made an improper closing argument necessitating a new trial?

F. Whether the Circuit Court erred in entering judgment for the class on the jury's verdict?

Analysis and Judgment on the Issues

Tenn. R. Civ. P. 23 governs class action certifications. The party seeking class certification must show that all four of the prerequisites listed in Rule 23.01 are satisfied and at least one of the three circumstances listed in Rule 23.02 exists. Hamilton v. Gibson County Utility Dist., 845 S.W.2d 218, 225 (Tenn.Ct.App.1992). The Circuit Court certified this action as a Rule 23.02(3) class action after finding that the Plaintiff satisfied the requirements of the Rules. Blue Ridge argues that the Court erred because the requirements of Rules 23.01(3) and 23.02(3) are not satisfied, and that certification violated its constitutional right to due process.

"[T]he determination of whether an action should proceed as a class action is a matter which is left to the sound discretion of the trial judge. Only upon a finding of an abuse of that discretion should the trial judge's decision be modified on appeal." Meighan v. U.S. Sprint Communications Co., 924 S.W.2d 632, 637 (Tenn.1996). Thus, such a decision will only be modified if it was inconsistent with the substantial weight of the evidence or resulted from the trial court's misinterpretation or misapplication of controlling legal principles. White v. Vanderbilt University, 21 S.W.3d 215, 223 (Tenn.Ct.App.1999). If reasonable judicial minds could differ as to the decision's soundness, the decision must stand. Id.

Regarding the prerequisites in Rule 23.01, Blue Ridge argues that plaintiff failed to satisfy the "typicality" requirement of Rule 23.01(3). It raises no issue as to the other three prerequisites. Rule 23.01(3) states, "One or more members of a class may sue or be sued as representative parties on behalf of all only if . . . (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class. . . ." Tenn. R. Civ. P. 23.01(3) (2005). "[A] plaintiff's claim is typical if it arises from the same event or practice or course of conduct that gives rise to the claims of other class members, and if his or her claims are based on the same legal theory." In re Am. Med. Sys., Inc., 75 F.3d 1069, 1082 (6th Cir.1996); see also Senter v. General Motors Corp., 532 F.2d 511, 525 n. 31 (6th Cir.1976) ("To be typical, a representative's claim need not always involve the same facts or law, provided there is a common element of fact or law.").³ Plaintiff's claim and the claims of the other class members all arise from the same course of conduct, i.e., Blue Ridge discharging pollutants into the Pigeon River. Additionally, Freeman's claim and the claims of the other class members are all based on the same legal theory, i.e., common law nuisance as governed by North Carolina substantive law.⁴

Nevertheless, Blue Ridge argues that plaintiff has not satisfied the typicality element, and reasons that the plaintiff and the other landowners do not use their property for the same purposes; and the evidence introduced by the plaintiff that Blue Ridge's conduct interferes with the use and enjoyment of her property does not necessarily prove that Blue Ridge's conduct interferes with any other landowner's use and enjoyment of his or her property. Numerous Federal cases, however, have rejected similar arguments and found typicality under analogous circumstances. Mejdrech v. Met-Coil Sys. Corp., 319 F.3d 910 (7th Cir.2003); Cook v. Rockwell Int'l Corp., 151 F.R.D. 378 (D.Colo. 1993); Yslava v. Hughes Aircraft Co., 845 F.Supp. 705 (D.Ariz.1993); Boggs v. Divested Atomic Corp., 141 F.R.D. 58 (S.D.Ohio 1991); and Bates v. Tenco Servs., Inc., 132 F.R.D. 160 (D.S.C.1990). But Blue Ridge relies heavily upon Sprague v. General Motors Corp., 133 F.3d 388 (6th Cir.1998), a case distinguishable on its facts. In Sprague, a purported class of 50,000 early retirees alleged that the defendant violated the Employee Retirement Income Security Act of 1974 by denying lifetime health care benefits. Id. at 392-93. The early retirees proceeded on a bilateral contract theory and an estoppel theory. Id. at 396. The Sixth Circuit Court of Appeals concluded that "the named plaintiffs could not advance the interests of the entire early retiree class" because "[e]ach claim . . . depended on each individual's particular interactions with GM-and these . . . varied from person to person"; therefore, typicality did not exist.

Typicality did not exist in Sprague because the named plaintiffs' claims and the class members' claims arose from different courses of conduct—approximately 50,000 separate interactions between GM and individual early retirees. In addition, the named plaintiffs and class members did not share the same legal rights, as their rights were defined by a myriad of different contractual terms and representations. By contrast, Freeman's claim and the class members' claims arose from the same course of conduct, i.e., Blue Ridge discharging pollutants into the Pigeon River. Plaintiff and the class members also share the same legal rights, i.e., "the right of [the waters'] flow past [their] lands for ordinary domestic, manufacturing, and other lawful purposes, without injurious or prejudicial interference by an upper proprietor." Biddix v. Henredon Furniture Indus., 76 N.C.App. 30, 331 S.E.2d 717, 721 (1985) (quoting Smith v. Morganton, 187 N.C. 801, 123 S.E. 88, 89 (1924)). We hold that Freeman could advance the interests of the class members and satisfy the typicality element.

The Circuit Court treated this case as a Rule 23.02(3) class action, and Blue Ridge argues that this treatment was inappropriate because Freeman failed to satisfy the requirements of the Rule. The Rule provides:

An action may be maintainable as a class action if the prerequisites of 23.01 are satisfied, and in addition:

. . . . .

(3) the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient...