Freeman v. Grain Processing Corp.

• Decision Date: 13 June 2014
• Docket Number: No. 13–0723.,13–0723.
• Citation: 848 N.W.2d 58
• Parties: Laurie FREEMAN, Sharon Mockmore, Beccy Boysel, Gary D. Boysel, Linda L. Goreham, Gary R. Goreham, Kelcey Brackett, and Bobbie Lynn Weatherman, Appellants, v. GRAIN PROCESSING CORPORATION, Appellee.
• Court: Iowa Supreme Court

848 N.W.2d 58

Laurie FREEMAN, Sharon Mockmore, Beccy Boysel, Gary D. Boysel, Linda L. Goreham, Gary R. Goreham, Kelcey Brackett, and Bobbie Lynn Weatherman, Appellants,

v.GRAIN PROCESSING CORPORATION, Appellee.

No. 13–0723.

Supreme Court of Iowa.

June 13, 2014.

Sarah E. Siskind, Barry J. Blonien and David Baltmanis of Miner, Barnhill & Galland, P.C., Madison, Wisconsin, Andrew L. Hope of Hope Law Firm, P.L.C., West Des Moines, James C. Larew and Claire M. Diallo of Larew Law Office, Iowa City, for appellants.

Michael R. Reck, Mark McCormick, Charles F. Becker, Kelsey J. Knowles of Belin McCormick, P.C., Des Moines, Steven J. Havercamp and Eric M. Knoernschild of Stanley, Lande & Hunter, P.C., Muscatine, Joshua B. Frank and Charles A. Loughlin of Baker Botts L.L.P., Washington, D.C., for appellee.

Joshua T. Mandelbaum, Des Moines, and Howard A. Learner, Chicago, Illinois, for amici curiae Environmental Law & Policy Center and Iowa Environmental Council.

Ronald A. May of Gomez, May LLP, Davenport, James L. Huffman, Portland, Oregon, Scott A. Shepard, Chicago, Illinois, Roger E. Meiners, Arlington, Texas, and Andrew Morriss, Tuscaloosa, Alabama, for amicus curiae Property and Environment Research Center.

Sarah E. Crane of Davis Brown Law Firm, Des Moines, and Richard O. Faulk of Hollingsworth LLP, Washington, D.C., for amici curiae National Association of Manufacturers, Council of Industrial Boiler Owners, National Shooting Sports Foundation, Inc., National Mining Association, Nuclear Energy Institute, Inc., and Textile Rental Services Association of America.

APPEL, Justice.

Eight residents of Muscatine filed a lawsuit ¹ on behalf of themselves and other similarly situated Muscatine residents against Grain Processing Corporation (GPC), which operates a local corn wet milling facility. The residents claim the operations at GPC's facility cause harmful pollutants and noxious odors to invade their land, thereby diminishing the full use and enjoyment of their properties. They base their claims on common law and statutory nuisance as well as the common law torts of trespass and negligence. The residents seek certification of the lawsuit as a class action, damages for the lost use and enjoyment of their properties, punitive damages, and injunctive relief.

Prior to class certification, GPC moved for summary judgment. GPC asserted the residents' common law and statutory claims were preempted by the Federal Clean Air Act (CAA), 42 U.S.C. §§ 7401–7671q (2012). In the alternative, GPC claimed the common law claims were preempted by Iowa Code chapter 455B (2013), which is the state statutory companion to the CAA. Finally, GPC argued the issues raised by the residents amounted to political questions involving complex policy and economic issues that cannot and should not be resolved by the judicial process.

The district court granted summary judgment in favor of GPC on all three theories and dismissed the lawsuit. The residents appeal. For the reasons expressed below, we reverse the judgment of the district court and remand the case for further proceedings.

I. Factual and Procedural Background.

The eight individually named plaintiffs all reside within one and one-half miles of GPC's facility in Muscatine. They seek to represent a class described as follows: “All Muscatine residents (other than Defendant and its affiliates, parents, or subsidiaries) who have resided during the damages period within 1.5 [miles] of the perimeter of Defendant's facility located at 1600 Oregon St., Muscatine, Muscatine County, Iowa.”

According to the petition, GPC conducts corn wet milling operations at its Muscatine facility. The plaintiffs assert wet milling is a production method and process that transforms corn kernels into products for commercial and industrial use. The plaintiffs allege the corn wet milling operation at GPC's facility creates hazardous by-products and harmful chemicals, many of which are released directly into the atmosphere. The plaintiffs allege these by-products include: particulate matter, volatile organic compounds including acetaldehyde and other aldehydes, sulfur dioxide, starch, and hydrochloric acid. They assert the polluting chemicals and particles are blown from the facility onto nearby properties. They note particulate matter is visible on properties, yards, and grounds and various chemical pollutants are also present. Compounding these adverse effects, according to the plaintiffs, GPC has used, continues to use, and has failed to replace its worn and outdated technology with available technology that would eliminate or drastically reduce the pollution. The plaintiffs assert these emissions have caused them to suffer persistent irritations, discomforts, annoyances, inconveniences,and put them at risk for serious health effects.

The plaintiffs generally allege three claims against GPC: nuisance, negligence, and trespass. With regard to the nuisance claim, the plaintiffs contend GPC's use of its facility constitutes a nuisance under the common law and Iowa Code chapter 657, which provides a statutory framework for nuisance claims. They assert that GPC has operated its facility in a manner that unreasonably interferes with the reasonable use and enjoyment of their properties.

The plaintiffs also assert they have been harmed by GPC's negligence. They claim GPC failed to exercise reasonable care in its operations by causing or permitting hazardous substances to be released at the facility; failing to follow accepted industry standards with respect to maintaining its operation; failing to exercise reasonable and prudent care in their operations; and failing to implement, follow, and enforce proper operations and safety procedures. The plaintiffs further rely on res ipsa loquitor, arguing the release of the toxic substances would not ordinarily occur in the absence of GPC's negligence, and, the acts or omissions of the equipment and personnel that led to the toxic releases were under GPC's control at all relevant times.

Finally, the plaintiffs claim GPC's operations constitute a past and continuing trespass. They allege GPC, intentionally, purposefully, or with substantial knowledge that harm would result, contacted the properties of the plaintiffs and the class without their consent, resulting in the lost use and enjoyment of their properties. The plaintiffs assert GPC's contact with their properties constitutes a tortious physical intrusion on their properties.

GPC sought to bring an end to the litigation by filing a motion for summary judgment. First, GPC claimed the CAA's comprehensive regulatory framework preempted the plaintiffs' causes of action. Second, GPC claimed Iowa Code chapter 455B, which regulates emissions, preempted the plaintiffs' claims. Finally, GPC asserted the case presented a nonjusticiable political question because a lawsuit impacting facility emissions lacks judicially discoverable and manageable standards for resolving the issues.

Resisting the motion for summary judgment, the plaintiffs emphasized that under the CAA, states are allowed to impose stricter standards than those imposed by federal law. The plaintiffs noted nothing in the language of Iowa Code chapter 455B repealed chapter 657 related to nuisance claims and, in any event, their common law claims were not inconsistent or irreconcilable with chapter 455B. Finally, the plaintiffs asserted courts routinely hear complex nuisance, negligence, and trespass cases and, as a result, there was no basis in the federal political question doctrine to decline to hear the case.

The district court first considered whether the CAA preempted the plaintiffs' claims and concluded the CAA established a comprehensive regulatory scheme that displaced state law. In reaching this result, the district court noted that in American Electric Power Co. v. Connecticut (AEP), the United States Supreme Court held the CAA displaced “any federal common law right to seek abatement of carbon-dioxide emissions from fossil-fuel fired power plants.” 564 U.S. ––––, ––––, 131 S.Ct. 2527, 2537, 180 L.Ed.2d 435, 447 (2011). While the district court recognized the AEP Court did not consider the question of whether the CAA preempted state law claims, the district court cited lower federal court authority concluding the CAA also preempted state law claims. See Bell v. Cheswick Generating Station (Bell I), 903 F.Supp.2d 314, 315–16, 322 (W.D.Pa.2012) (concluding the CAA preempted state common law nuisance, negligence, trespass, and strict liability claims), rev'd734 F.3d 188, 190 (3d Cir.2013); ²Comer v. Murphy Oil USA, Inc. (Comer I), 839 F.Supp.2d 849, 865 (S.D.Miss.2012) (extending the reasoning of AEP to state law claims after characterizing them as turning on the reasonableness of emissions, a determination entrusted to Congress); United States v. EME Homer City Generation L.P., 823 F.Supp.2d 274, 297 (W.D.Pa.2011) (holding the CAA is a comprehensive regulatory scheme that preempted a common law public nuisance claim).

Adopting the reasoning of these authorities, the district court noted Congress had entrusted to the EPA and parallel state agencies the authority to regulate air emissions, and the CAA had established a method of citizen input in its rulemaking process. The district court held that to have a jury make a judgment about the reasonableness of GPC's emissions would invade the authority Congress vested in the EPA and state environmental authorities. The district court further noted GPC was already the subject of an enforcement action by state regulators under the CAA and that the plaintiffs' actions in this case would conflict with these enforcement procedures.

For largely the same reasons, the district court concluded state environmental statutes and regulations under Iowa Code chapter 455B preempted the plaintiffs' common law claims. The district court reasoned that controversies related to air emissions were to be determined by state...