Olden v. LaFarge Corp.

Decision Date07 September 2004
Docket NumberNo. 02-1148.,02-1148.
Citation383 F.3d 495
PartiesJulie OLDEN, Richard Hunter, Wilbur Bleau, and all others similarly situated, Plaintiffs-Appellees, v. LaFARGE CORP., Defendant-Appellant.
CourtU.S. Court of Appeals — Sixth Circuit

Appeal from the United States District Court for the Eastern District of Michigan, David M. Lawson, J Steven D. Liddle (argued), David R. Dubin (briefed), Macuga & Liddle, Detroit, MI, for Plaintiffs-Appellees.

Lawrence T. Hoyle, Jr. (argued and briefed), Hoyle, Fickler, Herschel & Mathes, Philadelphia, PA, Arlene Fickler (briefed), Hoyle, Morris & Kerr, Philadelphia, PA, for Defendant-Appellant.

Before MARTIN, CLAY, and CUDAHY, Circuit Judges.*


CUDAHY, Circuit Judge.

Julie Olden, Richard Hunter and Wilbur Bleau represent a class of 3,600 persons who owned single family residences in Alpena, Michigan, from April 19, 1996 to the present, and who allege personal and property damage caused by toxic pollutants originating from a cement manufacturing plant belonging to the defendant Lafarge Corporation. They have brought a class action against Lafarge for current and future personal and real property damages, diminution in property value and various detrimental health effects caused by the emission of toxic pollutants. The district court granted in part and denied in part Lafarge's motion to dismiss and granted the plaintiffs' motion to certify the class action. In this appeal, we are called upon to decide whether the plaintiffs' class action against the nation's largest cement plant is solid. In answering this weighty question, we must also decide for the first time in this circuit whether Zahn v. Int'l Paper Co., 414 U.S. 291, 301, 94 S.Ct. 505, 38 L.Ed.2d 511 (1973), has been overruled by 28 U.S.C. § 1367.


In the northeast section of Alpena, Michigan, Lafarge's cement manufacturing complex, consisting of a limestone rock quarry and a cement manufacturing plant, covers a full square mile. See App. at 368-70, 431. It is the largest cement manufacturing plant in the nation and has been owned and operated by Lafarge since 1987. Id. at 787 (noting that "the Lafarge plant is the largest cement plant in North America"). The plaintiffs allege that throughout Lafarge's ownership and operation of the plant, it has continuously and systematically disregarded "proper procedure and maintenance of its equipment that would prevent the emission of air contaminants into the surrounding community." Olden Br. At 6. As a result, Alpena residents submitted numerous complaints to the Michigan Department of Environmental Quality (MDEQ). Id. at 6-7. In 1994, the MDEQ and Lafarge entered into a consent decree, in part, to remedy Lafarge's emission of air contaminants. App. at 301-27. However, Lafarge violated the terms of the decree resulting in the accrual of over $5.4 million in stipulated penalties as of May of 2003. Id. at 219-22. In 2000, the consent decree was amended, requiring Lafarge's further compliance with statutory air pollution requirements. Id. at 435-62.

The plaintiffs claim that in the process of making cement, the Lafarge plant produces hazardous toxic waste and creates emissions with hazardous by-products. Id. at 12 (Cplt.¶¶ 17-18). The class has alleged that release of the air contaminants from the Lafarge plant interferes with the use and enjoyment of their real and personal property and has caused or will cause diminution in the market value of this property. Id. at 13 (Cplt.¶¶ 20A, 21). For example, the cement dust emitted by the plant has penetrated into the siding on houses, killed rose bushes and left a white film over houses and vehicles in Alpena. Id. at 280, 282-83. Additionally, hydrochloric acid, a byproduct of the cement manufacturing process, has degraded roofs, piping, concrete and the aluminum windows and doors of some homes. Id. at 289.

In addition to property damage caused by emissions, the plaintiffs claim to have been exposed to numerous carcinogenic, mutagenic, and teratogenic toxic substances. Id. at 6 (Cplt.¶¶ 24-25). Such toxins allegedly cause the plaintiffs and their unborn children an increased risk of cancer, impaired immunological function, birth defects and developmental abnormalities, all of which are potentially life threatening and warrant continued medical monitoring. Id. at 6-7 (Cplt.¶¶ 26-27). Additionally, the plaintiffs claim agony, anxiety, distress, embarrassment, humiliation, mental anguish, suffering and other related nervous conditions, psychological disorders and emotional consequences. Id. at 18 (Cplt.¶ 47).

On April 19, 1999, the plaintiffs filed suit against Lafarge, alleging that the emissions trespassed on their property (Count II), created a nuisance (Count III) and arose from Lafarge's negligence or gross negligence (Count IV). Id. at 15-21 (Cplt.¶¶ 29-51). The plaintiffs seek compensatory damages for physical and mental illnesses caused by the pollution and for the purchase of equipment to clean and remove emitted substances from their property. The plaintiffs also seek exemplary and punitive damages, as well as an injunction requiring Lafarge to: (a) fund a medical monitoring program (Count I); (b) repair any damage to the plaintiffs' property; (c) improve the operation of the plant to eliminate emissions; and (d) refrain from allowing emitted substances to be deposited on the plaintiffs' property. Id. at 14, 19-21.

On September 25, 2000, the plaintiffs moved to certify their class action. Appx. at 39. On October 26, 2000, Lafarge filed a combined motion to dismiss under Fed. R. Civ. P 12(b)(1) (lack of subject matter jurisdiction); 12(b)(6) (failure to state a claim), and to deny class certification, arguing that the plaintiffs did not meet the requirements of Fed.R.Civ.P. 23(a) (numerosity, typicality and adequacy of class representation); 23(b)(2) (individualized money damages overwhelm the requested injunctive relief); and 23(b)(3) (individuality of interests, manageability of the action, etc.). Appx. 328-29. In an order dated October 24, 2001, the district court granted in part and denied in part Lafarge's motion to dismiss and granted the plaintiffs' motion to certify the class action. See Olden v. LaFarge, 203 F.R.D. 254, 258 (E.D.Mich.2001). With regard to subject matter jurisdiction, the district court held that the supplemental jurisdiction statute confers subject matter jurisdiction over claims by putative class members that do not entail $75,000 in controversy, but that form part of the same case or controversy as the claims by other class members which exceed the jurisdictional amount. With respect to Lafarge's 12(b)(6) motion, the court held that the plaintiffs failed to state a claim for trespass under Michigan law but that the plaintiffs stated valid state law claims for nuisance and negligence. Id. at 264-67, 271. Finally, the district court also held that class certification was appropriate under Fed.R.Civ.P. 23(b)(2) and (3). Id. at 271. On appeal, Lafarge challenges only the district court's decision with respect to subject matter jurisdiction and class certification.


We have jurisdiction over this interlocutory appeal pursuant to Federal Rule of Civil Procedure 23(f). According to Rule 23(f), "[a] Court of appeals may in its discretion permit an appeal from an order of a district court granting or denying class action certification...." Fed.R.Civ.P. 23(f). The question of subject matter jurisdiction is a prerequisite to class certification and is therefore properly raised in this Rule 23(f) appeal. See In re Lorazepam & Clorazepate Antitrust Litig., 289 F.3d 98, 108 (D.C.Cir.2002) (noting that, unlike the question of antitrust standing, the question of constitutional standing would be properly raised in a Rule 23(f) appeal). Moreover, we have an independent obligation to ensure that subject matter jurisdiction exists. See United States v. Hays, 515 U.S. 737, 742, 115 S.Ct. 2431, 132 L.Ed.2d 635 (1995); FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 230-31, 110 S.Ct. 596, 107 L.Ed.2d 603 (1990). Therefore, we begin by addressing the issue of subject matter jurisdiction and will then address class certification.

1. Subject Matter Jurisdiction

The plaintiffs argue that the court's jurisdiction is proper under the diversity statute, which grants district courts "original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs" and is between diverse parties. 28 U.S.C. § 1332(a). The issue raised in this case is whether each individual class member in a diversity class action must meet the $75,000 amount in controversy requirement, or whether the plaintiffs may aggregate their damages. To say that this question has been thoroughly examined is an understatement. See Allapattah Servs., Inc. v. Exxon Corp., 362 F.3d 739 (11th Cir.2004) (Tjoflat, J., dissenting) (compiling cases and articles). In fact, one of my law clerks was asked to answer this very question on a civil procedure exam in 1999. Unfortunately, however, he does not recall the answer, so we must review the issue de novo. See COB Clearinghouse Corp. v. Aetna U.S. Healthcare, Inc., 362 F.3d 877, 880 (6th Cir.2004) (quoting Joelson v. United States, 86 F.3d 1413, 1416 (6th Cir.1996) ("We review a district court's decision to grant a motion to dismiss for lack of subject matter jurisdiction de novo.")).

If only the parties had asked us this question twenty years ago (or any time between 1973-1990), our discussion would be brief because the Supreme Court had made the answer plain. See Zahn v. Int'l Paper Co., 414 U.S. 291, 301, 94 S.Ct. 505, 38 L.Ed.2d 511 (1973). In Zahn, four named plaintiffs brought a class action on behalf of approximately 200 lakefront property owners and lessees, seeking compensation for damages to their property rights, allegedly...

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