Leichling v. Honeywell Int'l, Inc.

• Decision Date: 02 December 2016
• Docket Number: No. 15-2263,15-2263
• Citation: 842 F.3d 848
• Parties: Janet D. Leichling, individually, surviving spouse, and Personal Representative of the Estate of John G. Leichling; Dawn M. Rose, surviving daughter of John G. Leichling; Gregory A. Leichling, surviving son of John G. Leichling; Catherine L. Timms, surviving daughter of John G. Leichling; Helen Catterton, surviving daughter of John G. Leichling; John R. Leichling, surviving son of John G. Leichling, Plaintiffs–Appellants, v. Honeywell International, Inc., Defendant - Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

842 F.3d 848

Janet D. Leichling, individually, surviving spouse, and Personal Representative of the Estate of John G. Leichling; Dawn M. Rose, surviving daughter of John G. Leichling; Gregory A. Leichling, surviving son of John G. Leichling; Catherine L. Timms, surviving daughter of John G. Leichling; Helen Catterton, surviving daughter of John G. Leichling; John R. Leichling, surviving son of John G. Leichling, Plaintiffs–Appellants,

v.Honeywell International, Inc., Defendant - Appellee.

No. 15-2263

United States Court of Appeals, Fourth Circuit.

Argued: October 25, 2016

Decided: December 2, 2016

ARGUED: Jeffrey John Utermohle, LAW OFFICES OF PETER G. ANGELOS, P.C., Baltimore, Maryland, for Appellants. Michael David Daneker, ARNOLD & PORTER LLP, Washington, D.C., for Appellee. ON BRIEF: Gary J. Ignatowski, Patrick A. Ciociola, LAW OFFICES OF PETER G. ANGELOS, P.C., Baltimore, Maryland, for Appellants. Anne P. Davis, Eric A. Rey, Allyson Himelfarb, ARNOLD & PORTER LLP, Washington, D.C., for Appellee.

Before AGEE, DIAZ, and THACKER, Circuit Judges.

Affirmed by published opinion. Judge Thacker wrote the opinion, in which Judge Agee and Judge Diaz joined.

THACKER, Circuit Judge:

The survivors of John R. Leichling sued Honeywell International, Inc., alleging that Mr. Leichling's fatal lung cancer resulted from exposure to toxins during his employment at the Dundalk Marine Terminal in Baltimore, Maryland, where Honeywell operates a chemical manufacturing plant. Decades earlier, Honeywell began using chemical refuse to create a landmass on which the Marine Terminal later sat. The district court dismissed the suit pursuant to Maryland's 20-year statute of repose, which bars untimely claims for injuries resulting from a "defective and unsafe condition of an improvement to real property." Md. Code Ann., Cts. & Jud. Proc. § 5–108(a). The court reasoned that, because the refuse filled otherwise aquatic areas and allowed development of the Marine Terminal, it was an improvement to real property. This appeal followed and, for the reasons below, we affirm.

I.

A.¹

From 1854 through 1985, Honeywell International, Inc. ("Appellee") manufactured chromium, a heavy metal, at a plant in an area now known as Harbor Point in Baltimore, Maryland.² This operation produced as much as 100,000 tons of waste per year, including chromium ore processing residues ("COPR"). COPR contains hexavalent chromium, which the Environmental Protection Agency classifies as a powerful carcinogen. Hexavalent chromium is water soluble and thus may spread through surface water, groundwater, and drinking water, and exposure may also occur through dust and dirt. The complaint states Appellee knew of the dangers associated with COPR as early as the 1930s.

Beginning in the 1940s, Appellee stockpiled COPR waste for extended periods at and around docks, piers, wharves, and other work areas at Harbor Point. During the same period, Appellee owned 85 acres of land adjacent to the Dundalk Marine Terminal. The following decade, Appellee began using COPR waste and other material as fill to expand this area.

In 1967, the Maryland Port Authority bought Appellee's 85-acre property and used it to expand the Marine Terminal.³ The contract between Appellee and the Port Authority required Appellee to deposit in the Marine Terminal any COPR fill Appellee produced at its Baltimore plant, aside from quantities Appellee required for its own use, or pay the Port Authority for failing to do so. The Port Authority continued to utilize COPR fill for the Marine Terminal expansion until 1976.

B.

The survivors of John R. Leichling ("Appellants") brought various tort claims against Appellee in the Circuit Court for Baltimore City, Maryland, asserting Mr. Leichling's 2012 death from lung cancer resulted from COPR exposure during his employment as a longshoreman from 1973 through 2001 at the Dundalk Marine Terminal.

Appellee removed the case to the United States District Court for the District of Maryland and moved to dismiss, arguing Maryland's statute of repose bars Appellants' claims and, alternatively, Appellants fail to state plausible claims for relief. While the motion was pending, Appellants filed a Second Amended Complaint, to which Appellee responded via reply brief rather than a second motion to dismiss. The district court agreed with Appellee, holding Maryland's statute of repose bars Appellants' claims. The district court thus dismissed the claims with prejudice and this appeal followed.

II.

Dismissal under Federal Rule of Civil Procedure 12(b)(6) is subject to de novo review. SeeKing v. Rubenstein, 825 F.3d 206, 214 (4th Cir. 2016). An affirmative defense permits 12(b)(6) dismissal if the face of the complaint includes all necessary facts for the defense to prevail. SeeGoodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007). A court passing on a motion to dismiss may consider attachments to a complaint or the motion to dismiss if "integral to the complaint and authentic." Philips v. Pitt Cty. Mem'l Hosp., 572 F.3d 176, 180 (4th Cir. 2009). Because this is a diversity case, Maryland law applies. See28 U.S.C. § 1652 ; Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938).

III.

In the 1960s and 1970s, the demise of privity of contract as a defense and the introduction of the discovery rule increased liability for defective or unsafe conditions in improvements to real property. SeeRose v. Fox Pool Corp., 335 Md. 351, 643 A.2d 906, 912–13 (1994). In response, states enacted statutes protecting those who would be particularly susceptible to claims arising from such improvements; Maryland's statute of repose is one such statute. See id. The statute provides, with limited exceptions,

no cause of action for damages accrues and a person may not seek contribution or indemnity for damages incurred when wrongful death, personal injury, or injury to real or personal property resulting from the defective and unsafe condition of an improvement to real property occurs more than 20 years after the date the entire improvement first becomes available for its intended use.

Md. Code Ann., Cts. & Jud. Proc. § 5–108(a). After courts applied the statute to bar claims against asbestos manufacturers, the Maryland General Assembly adopted an amendment to exclude asbestos from the protection of the statute of repose. This exception was adopted only after "considerable debate within the legislature." Rose, 643 A.2d at 914 (discussing § 5–108(d)(1) ).

Otherwise, the statute bars suits in which (1) a plaintiff's alleged injuries resulted from an "alleged defective and unsafe condition of ‘an improvement to real property’ "; and (2) 20 years have elapsed "since the ‘entire improvement first be[came] available for its intended use.’ " Rose, 643 A.2d at 910 (alteration in original) (quoting § 5–108(a) ). Here, Appellants only challenge the district court's analysis of the first prong.

To determine whether an item is an "improvement," courts apply a "common sense" test, which defines an improvement as

[a] valuable addition made to property (usually real estate) or an amelioration in its condition, amounting to more than mere repairs or replacement, costing labor or capital, and intended to enhance its value, beauty or utility or to adapt it for new or further purposes. Generally has reference to buildings, but may also include any permanent structure or other development, such as a street, sidewalks, sewers, utilities, etc. An expenditure to extend the useful life of an asset or to improve its performance over that of the original asset. Such expenditures are capitalized as part of the asset's cost.

Rose, 643 A.2d at 918 (alteration in original) (quoting Black's Law Dictionary 757 (6th ed. 1990)). In making this determination, courts consider "the nature of the addition or betterment, its permanence and relationship to the land and its occupants, and its effect on the value and use of the property." Id.(citing Allentown Plaza v. Suburban Propane, 43 Md.App. 337, 405 A.2d 326, 332 (1979) ).

Courts should not "artificially extract each component from an improvement to real property and view it in isolation."

Hickman, ex rel. Hickman v. Carven, 366 Md. 362, 784 A.2d 31, 38 (2001) (quoting Hilliard v. Lummus Co., 834 F.2d 1352, 1356 (7th Cir. 1987) ). Instead, an item may be "an improvement if it is an integral component of a project that itself would qualify as an improvement." Id.⁴ For example, in Hickman, ex rel. Hickman v. Carven, the Maryland Court of Appeals held that the statute of repose did not bar claims of residential subdivision lot owners against subdivision developers for demolishing a burial site. Seeid. at 38–39. The court reasoned that, though the developers may have removed the burial site while developing the land, doing so was not only unnecessary for development but also illegal and thus not an integral component of development. See id. Conversely, Rose applied the statute to bar a swimmer's claims for injuries against a pool manufacturer because the pool was "a permanent addition, excavated and built into the real property, which enhances the value of the entire premises." 643 A.2d at 918.⁵

Here, like the district court, we are satisfied that Appellee's use of COPR to expand and develop the Dundalk Marine Terminal is—if not an improvement to real property standing alone—at least an integral component of the project. SeeHickman, 784 A.2d at 38.

Appellants argue against this conclusion, stating, "Honeywell's toxic dumping made the area unsuitable for human use and development because it posed a tremendous and known threat to human health and the environment." Appellants' Br. 13 (emphasis in original). But neither the statute's text nor its legislative history support this theory as grounds for rendering the statute inapplicable. The language of the statute does not except hazardous conditions, much less known hazardous conditions. Indeed, such an exception would swallow the...