Moore v. Allied Chemical Corp., Civ. A. No. 77-0379-R.
| Decision Date | 17 July 1979 |
| Docket Number | Civ. A. No. 77-0379-R. |
| Citation | 480 F. Supp. 364 |
| Court | U.S. District Court — Eastern District of Virginia |
| Parties | William P. MOORE, Plaintiff, v. ALLIED CHEMICAL CORPORATION, the Travelers Indemnity Company, and Hooker Chemicals & Plastic Corp., Defendants. |
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Edward W. Taylor, Robert M. Johnson, John H. Herbig, Harris, Tuck & Freasier, Richmond, Va., for plaintiff.
Joseph M. Spivey III, Hunton & Williams, Richmond, Va., Harry E. McCoy, Seawell, McCoy, Dalton, Hughes, Gore & Timms, Norfolk, Va., W. Carter Younger, McGuire, Woods & Battle, Richmond, Va., for defendants.
Plaintiff, a citizen of Virginia, brought this action against three defendants: Allied Chemical Company (hereinafter "Allied"), a New York corporation with its principal place of business in New Jersey; The Travelers Indemnity Company (hereinafter "Travelers"), a corporation organized in a state other than Virginia, with its principal place of business in the State of Connecticut; and Hooker Chemicals & Plastic Corp. (hereinafter "Hooker"), a New York corporation with its principal place of business in New York. Jurisdiction is based upon diversity of citizenship, 28 U.S.C. § 1332(a). The case comes before the Court on motions for summary judgment by all three defendants.
The basic history of this controversy is not in dispute. In the late 1940's, a chemist for Allied invented a compound commonly known as Kepone, or DMCP.1 Allied and others subsequently used Kepone in the manufacture of various insecticides and pesticides. Hooker was a patent owner and producer of a chemical substance known as Hexachlorocyclopentadiene (HCP), the essential toxic raw material for DMCP.
Virtually all Kepone produced in the United States was exported, because the Food and Drug Administration prohibited its use on food crops in the United States in the early 1960's. For several years several independent companies produced most of the Kepone requirements for Allied. However, in 1966 Allied decided to produce Kepone in its "Semi-Works" facility at Hopewell, Virginia. Production commenced in that year and continued until 1974.
For reasons which are in dispute, Allied eventually decided to terminate its production of Kepone and "go outside" for its Kepone requirements. On November 30, 1973, Allied executed an agreement with Life Science Products Company (hereinafter LSP) for the production of Kepone. Under the agreement, Allied agreed to provide LSP with all the necessary raw materials, including HCP, which LSP would process and convert into Kepone. Allied agreed to receive the finished product in drums supplied by Allied at LSP's plant and to pay for certain quantities of the Kepone as produced. Title to all raw materials and to the Kepone produced by LSP remained at all times in Allied Chemical.
The two principals and sole stockholders of LSP were plaintiff William P. Moore and Virgil Hundtofte. Prior to his retirement, Moore worked as an inorganic chemist for Allied for twenty-seven years. Hundtofte worked for Allied from 1965 to 1973; for three years, he was plant manager at Allied Hopewell plant.
LSP commenced operations in March 1974. Six months later, an employee of LSP complained to the Occupational Safety and Health Administration (OSHA) of excessive pesticide fumes and dust in the LSP plant. OSHA found insufficient evidence to support the charge, however, and dismissed it. In June 1975, several workers at the LSP plant became extremely ill. Investigations were conducted by OSHA and State Health Department officials. LSP ceased operations voluntarily no later than July 24, 1975. Numerous lawsuits and administrative proceedings against LSP, Moore, and Hundtofte ensued. Moore paid fines to OSHA and pleaded nolo contendere to several criminal charges in connection with the operation of the LSP plant.
Plaintiff Moore filed the complaint in this case on July 1, 1977. Seven counts are alleged. Count I alleges that Allied negligently, carelessly, and deliberately failed to warn plaintiff that DMCP was highly dangerous to exposed humans and aquatic life. Count II charges that on December 22 to 24, 1975, meetings were held between officials of Allied, Travelers and its underwriters, and Ruder & Finn (Allied's public relations firm). According to Moore, Allied and Travelers there and then did associate, agree, mutually undertake or concert together for the purpose of willfully and maliciously injuring him in his reputation, trade, and business, in violation of Va.Code Ann. § 18.2-499 (Repl.Vol.1975). In Count III, Moore alleges that Allied breached a warranty that DMCP was unlikely to cause contamination of the environment and humans. Count IV charges Allied with negligently misrepresenting and concealing from plaintiff the true facts concerning the dangers of Kepone. Count V accuses Allied of defamation in referring to plaintiff as the "world's expert" on Kepone and as the "real culprit" in the Kepone disaster. Count VI alleges that Allied and Hooker are strictly liable for their failure to warn him of possible dangers in the use of their products. Finally, Count VII alleges negligence against Travelers (which insured both Allied and LSP); that it negligently failed to warn plaintiff of the dangers of Kepone, made inspections, and rendered advice, thus lulling him into a "false sense of security."
Moore contends that he has suffered the following damages as a result of the alleged conduct of defendants: (1) loss of his reputation; (2) loss of trade, business, and profits; (3) pain, mental anguish, and suffering by reason of the sickness of his former employees and others; (4) subjection to civil lawsuits, prosecution by government agencies, and fines and penalties imposed; (5) attorney's fees; (6) injury to his credit and financial standing; (7) defamation of his character; (8) loss of earnings and diminution of his capacity to earn in the future; and (9) loss of investments.
Defendants argue that this suit is barred for a variety of reasons: the applicable statute of limitations; collateral estoppel; a previous accord, satisfaction, and release; lack of standing; lack of evidence to support the existence of a conspiracy; contributory negligence; and assumption of risk. Because all three defendants have raised the statute of limitations as a defense, the Court will examine that question first.
When jurisdiction rests on diversity of citizenship, the state statute of limitations must be applied. Sides v. Richard Machine Works, Inc., 406 F.2d 445 (4th Cir. 1969). All parties agree that the applicable limitation provision here is Va.Code Ann. § 8-24 (Repl.Vol.1957), which provides in pertinent part:
Of actions not before specified.—Every action for personal injuries shall be brought within two years next after the right to bring the same shall have accrued. Every personal action, for which no limitation is otherwise prescribed, shall be brought within five years next after the right to bring the same shall have accrued, if it be for a matter of such nature that in case a party die it can be brought by or against his representative; and, if it be for a matter not of such nature, shall be brought within one year next after the right to bring the same shall have accrued.
This action was filed on July 1, 1977. Defendants argue that the applicable period of limitations as to all seven counts of the complaint is one year, thereby barring the entire suit. Plaintiff, on the other hand, argues that the suit is not time-barred, because the applicable limitations period is either two years or five years. Due to the various arguments made by the parties, the Court will examine each count separately.
According to Count I, Allied "negligently, carelessly, deliberately and with a conscious disregard of the rights of the plaintiff and others encouraged the plaintiff to increase and continue production of DMCP, despite its corporate knowledge that DMCP was highly dangerous to exposed humans and aquatic life."
Plaintiff agrees with Allied that this cause of action occurred no later than July 24, 1975, when LSP ceased operations. However, he argues that this count advances, in reality, two causes of action: intentional or reckless infliction of emotional distress, and a breach of duty to warn. The former theory (an action for personal injuries) is subject to a two-year limitations period; the latter, five years. Under either theory, he argues, this count is not time-barred.
Virginia recognizes a cause of action for emotional distress, even when unaccompanied by physical injuries, when the following elements are shown:
One, the wrongdoer's conduct was intentional or reckless. This element is satisfied where the wrongdoer had the specific purpose of inflicting emotional distress or where he intended his specific conduct and knew or should have known that emotional distress would likely result. Two, the conduct was outrageous and intolerable in that it offends against the generally accepted standards of decency and morality. This requirement is aimed at limiting frivolous suits and avoiding litigation in situations where only bad manners and mere hurt feelings are involved. Three, there was a causal connection between the wrongdoer's conduct and the emotional distress. Four, the emotional distress was severe.
Womack v. Eldridge, 215 Va. 338, 210 S.E.2d 145, 148 (1974). Undoubtedly, an action for emotional distress is an action for personal injuries carrying a two-year limitations period. The question is whether Count I alleges such a cause of action.
The Court finds that, when liberally construed, Count I does state a cause of action for emotional distress. Inter alia, plaintiff alleges that Allied knew of the devastating physiological effects which DMCP and Kepone could have...
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