Schwartzman v. Atchison, Topeka & Santa Fe Ry.

• Court: U.S. District Court — District of New Mexico
• Writing for the Court: Peter J. Adang, Peter J. Adang, P.C., Albuquerque, NM, for defendant
• Citation: Schwartzman v. Atchison, Topeka & Santa Fe Ry., 842 F. Supp. 475 (D. N.M. 1993)
• Decision Date: 03 December 1993
• Docket Number: Civ. No. 93-0307 JB.
• Parties: SCHWARTZMAN, INC., Plaintiff, v. ATCHISON, TOPEKA & SANTA FE RAILWAY CO., Defendant.

842 F. Supp. 475

SCHWARTZMAN, INC., Plaintiff, v. ATCHISON, TOPEKA & SANTA FE RAILWAY CO., Defendant.

Civ. No. 93-0307 JB.

United States District Court, D. New Mexico.

December 3, 1993.

John M. Eaves, David V. Halliburton, Eaves, Bardacke & Baugh, P.A., Albuquerque, NM, for plaintiff.

Peter J. Adang, Peter J. Adang, P.C., Albuquerque, NM, for defendant.

MEMORANDUM OPINION AND ORDER

BURCIAGA, Chief Judge.

THIS MATTER is before the Court on Defendant's August 12, 1993 motion to dismiss count VII (strict liability claim) of Plaintiff's complaint. Having reviewed the pleadings, the relevant law, and having heard the arguments of counsel, the Court finds Defendant's motion is not well taken and is denied.

I. BACKGROUND

Plaintiff owns land in the South Valley area of Bernalillo County. Defendant owns a wood treatment and preservation facility adjacent to Plaintiff's property. From 1908 to 1972, Defendant used this facility to treat and preserve wooden railroad ties. On February 15, 1993, Plaintiff filed a complaint, subsequently removed to federal court, alleging Defendant improperly stored and disposed chemical waste which contaminated the groundwater and rendered Plaintiff's adjacent property unmarketable.

Plaintiff advances numerous theories of recovery. In count VII of its complaint, Plaintiff alleges Defendant's storage and disposal of hazardous waste was an abnormally dangerous activity under the Restatement (Second) of Torts §§ 519-520 (1977), thus warranting the imposition of strict liability. Defendant moved to dismiss count VII on the grounds that New Mexico law does not recognize the imposition of strict liability for activities other than those involving the detonation of explosives.

II. ANALYSIS

For the purposes of a motion to dismiss, the material allegations of the complaint must be accepted as true. Franklin v. Meredith, 386 F.2d 958, 959 (10th Cir.1967). Dismissal is appropriate only if "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957). The Court must construe the pleadings liberally and if any possibility of relief exists, the claim should not be dismissed. Gas-a-Car, Inc. v. American Petrofina, Inc., 484 F.2d 1102, 1107 (10th Cir. 1973).

A federal court sitting in diversity must apply the law of the forum state. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188 (1938). Particularly, the federal court should look to the state supreme court's most recent statement of applicable law, Southwest Forest Industries, Inc. v. Sutton, 868 F.2d 352, 354 (10th Cir.1989), cert. denied, 494 U.S. 1017, 110 S.Ct. 1320, 108 L.Ed.2d 496 (1990), and if unavailing, to any state intermediate court's pronouncements. Daigle v. Shell Oil Co., 972 F.2d 1527, 1543 (10th Cir.1992). In predicting how the New Mexico Supreme Court would rule in this case, this Court is guided by "policies underlying the applicable legal principles, and the doctrinal trends indicated by these policies." Weiss v. United States, 787 F.2d 518, 525 (10th Cir.1986) (citation omitted).

The Restatement (Second) of Torts §§ 519-520 (1977) sets forth the doctrine of strict liability for abnormally dangerous activities. It is beyond dispute that "New Mexico has adopted the rule of absolute liability for ultrahazardous activities given by Restatement, Torts §§ 519, 520...." First National Bank v. Nor-Am Agricultural Products, Inc., 88 N.M. 74, 79, 537 P.2d 682, 687 (Ct.App.), cert. denied, 88 N.M. 29, 536 P.2d 1085 (1975). Section 519 states the general principle that one who carries on an abnormally dangerous activity is liable for any harm caused, despite the exercise of utmost care to prevent the harm. Section 520 provides six factors a court must consider in assessing whether a given activity is abnormally dangerous.¹

New Mexico first recognized the doctrine of strict liability for abnormally dangerous activities in Thigpen v. Skousen & Hise, 64 N.M. 290, 294-95, 327 P.2d 802, 805 (1958). The New Mexico Supreme Court affirmed the imposition of strict liability upon one who conducted blasting. Id. Subsequently, New Mexico courts have never extended the doctrine of strict liability outside the blasting context. From this observation, Defendant argues the doctrine of strict liability in New Mexico is confined to blasting. Defendant also cites Saiz v. Belen School District, 113 N.M. 387, 397, 827 P.2d 102, 112 (1992), in which the New Mexico Supreme Court wrote, in dicta, "Application of the ultrahazardous activity doctrine has been restricted in our decisions to the use of explosives in blasting." Id. See also Ruiz v. Southern Pacific Transportation Co., 97 N.M. 194, 200, 638 P.2d 406, 412 (Ct.App.1981) ("New Mexico has not yet recognized the theory of a landowner's strict liability except in cases where his activity has involved the use of explosives.").

However, earlier case law reveals New Mexico courts have not entirely halted development of strict liability doctrine and have at least analyzed the activity at issue under section 520 of the Restatement. The Court agrees with Judge Mechem's holding in Schwartzman, Inc. v. General Elec. Co., et al., Civ. No. 93-0027 M (D.N.M. October 19, 1993), a companion suit filed by Plaintiff in this district: "The New Mexico Supreme Court has not foreclosed expansion of the strict liability doctrine where the § 520 criteria are met." Id. at 5.

In First National Bank v. Nor-Am Agricultural Products, Inc., 88 N.M. 74, 79, 537 P.2d 682, 687 (Ct.App.), cert. denied, 88 N.M. 29, 536 P.2d 1085 (1975), the New Mexico Court of Appeals faced the issue of whether the treatment of grain with the hazardous chemical Panogen was an ultrahazardous activity. Noting the common usage of Panogen and the ability to limit the risk of harm through the use of warnings, the court declined to impose strict liability. Id. In Rodgers v. City of Loving, 91 N.M. 306, 307, 573 P.2d 240, 241 (Ct.App.1977), the Court of Appeals refused to characterize large-scale burning of dead leaves and grass as abnormally dangerous. The court wrote, "Even if we were to apply the rule of strict liability ... the instant situation does not present one of the factors necessary for the imposition: `inability to eliminate the risk by the exercise of reasonable care.'" Id. In Otero v. Burgess, 84 N.M. 575, 579, 505 P.2d 1251, 1255 (Ct.App.), cert. denied, 84 N.M. 560, 505 P.2d 1236 (1973), the Court of Appeals recognized the possibility for the imposition of strict liability upon one who stored explosives in an inappropriate place.

In addition, these cases reveal that New Mexico courts, subsequent to Thigpen, have yet to confront a factual situation presenting a persuasive strict liability claim. With one exception, Gutierrez v. Rio Rancho Estates, Inc., 93 N.M. 755, 605 P.2d 1154 (1980),² the activities at issue in past cases were not at all susceptible to the abnormally dangerous classification. See Nor-Am, 88 N.M. at 79, 537 P.2d at 687 (commonly used seed disinfectant); Rodgers, 91 N.M. at 307, 573 P.2d at 241 (burning of dead leaves); Ruiz, 97 N.M. at 196, 638 P.2d at 408 (maintenance of a railroad crossing). Therefore, the New Mexico Supreme Court's statement in Saiz, "Application of the ultrahazardous activity doctrine has been restricted in New Mexico decisions to the use of explosives in blasting," 113 N.M. at 397, 827 P.2d at 112, must be construed merely as an historical observation, not a substantive limitation on strict liability doctrine. The court, by this dicta, did not, and could not have intended to, forever freeze the development of strict liability doctrine in New Mexico. That "New Mexico has not yet recognized the theory of a landowner's strict liability except in blasting cases," Ruiz, 97 N.M. at 200, 638 P.2d at 412, does not necessarily mean that New Mexico will never recognize strict liability outside the blasting context.

Defendant's contention that only blasting is an abnormally dangerous activity in New Mexico renders the six factors of the Restatement superfluous. The assessment of whether a given activity is abnormally dangerous under the Restatement is a particularized, case-specific inquiry for the Court. See Restatement (Second) of Torts § 520 cmt. f (1977) ("Because of the interplay of these various factors, it is not possible to reduce abnormally dangerous activities to an exact definition."); Otero v. Burgess, 84 N.M. 575, 579, 505 P.2d 1251, 1255 (Ct.App.) (strict liability for the storage of explosives depends on the inappropriateness of the activity where maintained), cert. denied, 84 N.M. 560, 505 P.2d 1236 (1973). All blasting is not necessarily abnormally dangerous, dependent on the surrounding locale. Restatement (Second) of Torts § 520 cmt. j (1977). Likewise, activities other than blasting may or may not be abnormally dangerous, dependent upon an evaluation of the circumstances of the case at hand through application of the six Restatement factors.

In a case similar to the case at bar, the Tenth Circuit addressed the issue of whether Colorado common law recognizes strict liability for the generation, storage, treatment and disposal of hazardous waste. Daigle v. Shell Oil Co., 972 F.2d 1527, 1543-44 (10th Cir. 1992). The defendant argued for limited applicability of strict liability in Colorado, citing a Colorado Court of Appeals opinion which stated, "In Colorado, strict liability for ultrahazardous activities has been imposed only in cases involving blasting with dynamite and impounding of waters." Forrest v. Imperial Distrib. Services, 712 P.2d 488, 491 (Colo. App.1985), rev'd on other grounds, 741 P.2d 1251 (Colo.1987). The Tenth Circuit did not view this historical observation in Forrest "as a foreclosure of the strict liability for the generation, treatment, storage and disposal of every conceivable type of...