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Brown v. Saint-Gobain Performance Plastics Corp.

United States District Court, D. New Hampshire

December 6, 2017

Kevin Brown, et al.
Saint-Gobain Performance Plastics Corp., et al.


          Joseph N. Laplante United States District Judge.

         Resolution of the defendants' motions to dismiss this environmental trespass action turns on whether the plaintiffs have pleaded injuries recognized by New Hampshire law. Plaintiffs in this consolidated, putative class action allege that defendant Saint-Gobain Performance Plastics Corporation's Merrimack, New Hampshire plant released chemicals that contaminated the local groundwater.[1] They seek to recover against Saint-Gobain and the facility's general manager, Gwenael Busnel, for damages to plaintiffs' property, including diminished property value, and accrual of costs associated with monitoring for potential injuries caused by ingesting the chemicals at issue.

         The court has subject-matter jurisdiction over this action under the Class Action Fairness Act. 28 U.S.C. § 1332(d)(2)(A). The defendants move to dismiss the complaint in its entirety. They contend that the plaintiffs have not pleaded any present, physical injury to their property or their persons, and that the economic loss doctrine precludes their recovery in tort for purely economic damages. They further argue that plaintiffs have failed to plead intentional trespass and that New Hampshire law does not recognize their claims for negligent failure to warn and unjust enrichment.

         The court denies the majority of the defendants' motion. At this stage of the litigation, the property-owning plaintiffs have pleaded facts, including present, physical damage to their property and contamination of groundwater, sufficient to maintain their claims for trespass, nuisance, and negligence. The defendants' motion to dismiss the medical-monitoring plaintiffs' claims is likewise denied at this juncture. Because New Hampshire has not recognized negative unjust enrichment --that is, unjust enrichment through a defendant's failure to incur costs rather than through receipt of a benefit -- as a cause of action, however, the court dismisses the plaintiffs' unjust enrichment claim.

         I. Applicable legal standard

         A plaintiff's complaint must include “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Martinez v. Petrenko, 792 F.3d 173, 179 (1st Cir. 2015) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). This standard “demands that a party do more than suggest in conclusory terms the existence of questions of fact about the elements of a claim.” A.G. ex rel. Maddox v. Elsevier, Inc., 732 F.3d 77, 81 (1st Cir. 2013). In ruling on such a motion, the court accepts as true all well-pleaded facts set forth in the complaint and draws all reasonable inferences in the plaintiff's favor. See, e.g., Martino v. Forward Air, Inc., 609 F.3d 1, 2 (1st Cir. 2010). With the facts construed in this manner, “questions of law [are] ripe for resolution at the pleadings stage.” Simmons v. Galvin, 575 F.3d 24, 30 (1st Cir. 2009).

         II. Background

         This proposed class action arises out of the release of toxic chemicals from Saint-Gobain's manufacturing plant in Merrimack, New Hampshire. Saint-Gobain has owned and operated a plant in Merrimack since 2000.[2] Defendant Busnel has served as general manager of the plant since 2012.[3] At that location, Saint-Gobain used ammonium perflurooctonoate (AFPO), a derivative of perfluorooctanoic acid (PFOA)[4] in, for example, a process that coated woven fiberglass and other fabric with material.[5]

         In early 2016, Saint-Gobain reported the presence of elevated levels of PFOA in the municipal water supplied by the Merrimack Village District Water Works.[6] Following this report, the New Hampshire Department of Environmental Services discovered the presence of PFOA in residential wells in the vicinity of Saint-Gobain's plant and recommended that certain residents of surrounding cities and towns not drink or cook with water from those wells, or consume vegetables from gardens where PFOA-contaminated water was used.[7]

         The plaintiffs allege that Saint-Gobain released PFOA into the air, soil, and water in the vicinity of its Merrimack facility.[8] Because PFOA is water-soluble, it “can migrate readily from soil to groundwater” and, because it is biologically and chemically stable, it can “remain present in the environment long after [it is] released.”[9] The United States Environmental Protection Agency associates exposure to PFOA with increased risk for certain types of cancer, as well as other illnesses and conditions.[10]

         Plaintiffs further allege that Saint-Gobain was aware of the potential for PFOA contamination arising from its manufacturing processes in light of contamination of the public drinking water supply near its Hoosick, New York plant, which it reported to the United States Environmental Protection Agency in 2014.[11] Plaintiffs also allege that Saint-Gobain removed its operations from a plant in North Bennington, Vermont, to the Merrimack facility after Vermont imposed tighter environmental protection regulations to reduce emissions of PFOA.[12] Despite this knowledge, plaintiffs allege, Saint-Gobain failed to install systems to limit PFOA emissions from its Merrimack facility.[13]

         The plaintiffs allege that PFOA has contaminated the soil and water obtained through private wells within a certain geographic area, [14] as well as water in Merrimack and Bedford, New Hampshire, provided through the Merrimack Village District Water Works.[15] For all of those who own residential property within these geographic areas, the plaintiffs seek damages for injury to their property, including (1) diminished market value, (2) costs incurred to remediate and mitigate the contamination, and (3) loss of use and enjoyment of their property.[16]

         For all of those who resided in these geographical areas and consumed water containing defined levels of PFOA for at least one year, or were born to mothers who consumed such water, the plaintiffs seek to recover the costs of monitoring for injuries related to exposure to PFOA in light of their “significant increased risk of illness, disease or disease process . . . .”[17] The DeBlois plaintiffs, who have opted out of these classes, seek the same remedies, as well as recovery for “additional losses including, but not limited to, business losses, attorney fees for protecting their property rights in placing the water line, future water expenses and out-of-pocket expenses.”[18]

         III. Analysis

         Plaintiffs bring claims under four common-law torts: trespass, nuisance, negligence, and negligent failure to warn. They also seek to recover under the equitable doctrine of unjust enrichment. The defendants move to dismiss plaintiffs' negligence, nuisance, and trespass claims, arguing that the plaintiffs claiming property damage have not alleged any tangible damage to their property, but seek only economic damages foreclosed in tort by the economic loss doctrine or to recover for groundwater contamination, for which they have no private cause of action. Defendants further argue that the plaintiffs seeking medical monitoring have not alleged any present physical injury. Finally, they argue that the plaintiffs have failed to plead all the elements of trespass, and that plaintiffs, even on the facts construed in their favor, cannot recover under their negligent failure to warn and unjust enrichment theories.

         A. Injury to property

         Two sub-classes of plaintiffs claim injuries resulting from chemical contamination of their real property: those in the appropriate geographical areas who own property served by private wells and those in the relevant towns who own property served by the Merrimack Village District Water Works.[19] The defendants move to dismiss the negligence, trespass, and nuisance claims of these property-owning plaintiffs for failure to allege present and actual damages to their property.

         The allegations in the complaint are, as the defendants observe, fairly general. These property-owning plaintiffs allege that Saint-Gobain, through releasing toxic PFOA into nearby environs, contaminated the soil, dust, household water and household water systems, groundwater wells, air, and trees on the plaintiffs' property.[20] They also allege that the PFOA contamination “further migrated through the soil and into the groundwater that Plaintiffs and Class Members have the right to use and have used for their domestic water supply.”[21]

         As a result of this contamination, they allege, the property-owning plaintiffs have “suffered the cost of mitigating the contamination through filters and alternative water supplies, and the cost of restoring and maintaining the water” and have had to pay to remediate their properties.[22] They further claim that the value and marketability of their property has diminished as a result of the contamination.[23] Finally, they claim loss of use and enjoyment of their properties, and that they “have also suffered annoyance, discomfort, and inconvenience” due to the “contamination of their properties and water supplies . . . .”[24]

         Through these allegations, the property-owning plaintiffs have pleaded, at the very least, a compensable injury sufficient to state claims for trespass and nuisance by pleading the presence of PFOAs in the groundwater serving both private and municipal water sources. “[C]ontamination of water with chemicals having a potential to cause harm is itself an injury regardless of whether the chemicals are certain to cause the ultimate harm of which they are capable.” Energynorth Nat. Gas, Inc. v. Cont'l Ins. Co., 146 N.H. 156, 164 (2001).

         Having established that contamination of water as alleged here may amount to an injury, the question then becomes whether it amounts to an injury to the plaintiffs. In New Hampshire, as Saint-Gobain observes, “instead of absolute ownership of the groundwater beneath one's land, ‘the right of each is only to a reasonable use or management.'” In re Town of Nottingham, 153 N.H. 539, 548 (2006) (quoting Bassett v. Salisbury Mfg. Company, 43 N.H. 569, 577 (1862)). Absent such absolute ownership rights in groundwater, diminution of groundwater under a landholder's property by the State does not amount to a taking. Nottingham, 153 N.H. at 548. Similarly, “in this state lakes, large natural ponds, and navigable rivers are owned by the people, and held in trust by the state in its sovereign capacity for their use and benefit, ” giving rise to a public, not a private, right to use and benefit from them. St. Regis Paper Co. v. N.H. Water Res. Bd., 92 N.H. 164, 170 (1942) (comparing such rights to traditional riparian rights, “which are property rights and which may not be invaded or taken from the owner without compensation.”). The public nature of this right prevented the plaintiff in St. Regis from successfully challenging the State's delegation of authority over such waters to the State Water Resources Board. Id. at 170-71.

         Relying on Nottingham and St. Regis, Saint-Gobain argues that the property-holding plaintiffs cannot recover for alleged contamination of the groundwater under their properties.[25] Those plaintiffs are not, however, seeking compensation for a governmental taking, nor do they challenge the State's regulation of navigable waterways. Instead, they have pleaded an interference with their use of the groundwater under their property in light of alleged chemical contamination. The New Hampshire Supreme Court has suggested that at least “claims for diminution in value of private property, lost business expenditures and other business and economic losses resulting from [chemical] contamination properly belong to private parties, ” rather than the State as trustee of those waters. State v. Hess Corp., 161 N.H. 426, 437 (2011), as modified on denial of reconsideration (Mar. 22, 2011). Thus, under Hess, the property-owning plaintiffs have an interest sufficient to state claims at least for economic losses arising from the presence of contaminated groundwater by alleging diminished property values.[26] Insofar as damages in trespass and nuisance actions “are measured primarily by the difference between the value of the real estate before and after the defendant's wrong was committed, ” Delay Mfg. Co. v. Carey, 91 N.H. 44, 44 (1940), the plaintiffs have alleged damage sufficient to state a claim under those theories.[27] See also Soucy v. Royal, 116 N.H. 170, 172 (1976) (damages in trespass and nuisance “determined by the difference between the value of the property with and without the trespass and nuisance”).

         It is less clear that the property-owning plaintiffs have alleged physical damage to their real property sufficient to recover on a claim for negligence. “To recover for negligence, a plaintiff must show that the defendant owes a duty to the plaintiff and that the defendant's breach of that duty caused the plaintiff's injuries.” Christen v. Fiesta Shows, Inc., No. 2016-0528, 2017 WL 4400281, at *2 (N.H. Oct. 4, 2017). Saint-Gobain contends that the plaintiffs' general allegations of damage do not suffice as allegations of present, physical injury to their property sufficient to state a claim for negligence, [28]and that the economic loss doctrine precludes them from recovering in negligence for the economic losses discussed supra.[29]

         “In New Hampshire, the general rule is that ‘persons must refrain from causing personal injury and property damage to third parties, but no corresponding tort duty exists with respect to economic loss.'” Plourde Sand & Gravel Co. v. JGI E., Inc., 154 N.H. 791, 795 (2007) (quoting Ellis v. Robert C. Morris, Inc., 128 N.H. 358, 364 (1986)). Thus, “a plaintiff may not ordinarily recover in a negligence claim for purely ‘economic loss'.” Border Brook Terrace Condo. Ass'n v. Gladstone, 137 N.H. 11, 18 (1993). As the plaintiffs observe, the economic loss doctrine most commonly precludes contracting parties from recovering in tort for purely economic losses associated with that contractual relationship. See Plourde, 154 N.H. at 794 (“[W]here a plaintiff may recover economic loss under a contract, generally a cause of action in tort for purely economic loss will not lie.”). The parties dispute whether New Hampshire extends the economic loss doctrine to prohibit recovery in tort for any economic loss, even one suffered outside of a contractual relationship. The New Hampshire Supreme Court has suggested as much, see id. at 794-95, and the First Circuit Court of Appeals has concluded that New Hampshire adopted the economic loss doctrine in “its broadest form, ” under which “the doctrine reaches beyond the contractual context . . . .” Schaefer v. Indymac Mortg. Servs., 731 F.3d 98, 103-04 (1st Cir. 2013).

         But, as the plaintiffs observe, the existence of a contractual relationship governed the outcome of both of those cases. See Plourde, 154 N.H. at 798 (economic loss doctrine barred tort recovery where plaintiff's economic loss arose “solely from disappointed commercial expectations in that the plaintiff lost the anticipated profits of its contract with” a third party (quotations omitted)); Schaefer, 731 F.3d at 106 (plaintiff's negligence claims arising out of foreclosure proceedings barred by economic loss doctrine where alleged duties to provide information to plaintiff arise from mortgage agreement). It is unclear, therefore, whether the economic loss doctrine in New Hampshire would bar recovery of economic losses in a situation such as this, where the alleged losses arise from negligence outside of the context of a contractual or otherwise purely economic relationship.

         The court need not definitively resolve this question at this stage in the proceedings. The property-owning plaintiffs have pleaded not only economic damages, but also that they have suffered damage to their property through the presence of PFOA in the soil and water, requiring them to mitigate the contamination and remediate their properties. They further allege that the contamination has led to lost use and enjoyment of those properties. Though the complaint is not a model of precision and clarity, and these allegations are less than robust, [30] the court is disinclined, at this stage in the litigation, to dismiss the plaintiffs' negligence claim where they have sufficiently pleaded damages to their property to maintain claims for the common-law torts of trespass and nuisance on effectively the same factual bases.

         B. Medical monitoring damages

         Two additional sub-classes of plaintiffs seek damages in the form of costs to cover monitoring for potential medical conditions arising from their exposure to PFOA through its presence in the air and soil and through consumption of contaminated water.[31] Exposure to PFOA in this manner, the plaintiffs allege, creates a “significant increased risk of illness, disease or disease process . . . requiring an award of the cost of a program for medical monitoring for detection of such illness, disease process or disease.”[32] Saint-Gobain moves to dismiss the medical-monitoring plaintiffs' claims, [33] arguing that the lack of any present physical injury to the plaintiffs - - as compared to speculative, future injury -- precludes their recovery in tort.

         Some states allow recovery for the costs of such medical monitoring. The plaintiffs rely heavily, for example, on the Supreme Court of Appeals of West Virginia's decision that, even absent present, physical injury, “a cause of action exists under West Virginia law for the recovery of medical monitoring costs, where it can be proven that such expenses are necessary and reasonably certain to be incurred as a proximate result of a defendant's tortious conduct.” Bower v. Westinghouse Elec. Corp., 522 S.E.2d 424, 431 (W.Va. 1999). To sustain such a claim,

the plaintiff must prove that (1) he or she has, relative to the general population, been significantly exposed; (2) to a proven hazardous substance; (3) through the tortious conduct of the defendant; (4) as a proximate result of the exposure, plaintiff has suffered an increased risk of contracting a serious latent disease; (5) the increased risk of disease makes it reasonably necessary for the plaintiff to undergo periodic diagnostic medical examinations different from what would be prescribed in the absence of the exposure; and (6) monitoring procedures exist that make the early detection of a disease possible.

Id. at 432-33. Other states have likewise recognized a right to similar recovery against exposure to toxic chemicals. See, e.g., Exxon Mobil Corp. v. Albright, 71 A.3d 30, 80, (Md. 2013) (“evidence of physical injury is not required to support costs for medical surveillance”); Meyer ex rel. Coplin v. Fluor Corp., 220 S.W.3d 712, 718 (Mo. 2007) (“recovering medical monitoring damages does not require a threshold showing of present physical injury”); Potter v. Firestone Tire & Rubber Co., 863 P.2d 795, 823 (Cal. 1993) (“a reasonably certain need for medical monitoring is an item of damage for which compensation should be allowed”); Ayers v. Jackson Twp., 525 A.2d 287, 312 (N.J. 1987) (recognizing “the cost of medical surveillance [as] a compensable item of damages” in toxic tort litigation). See also Baker v. Saint-Gobain Performance Plastics Corp., 232 F.Supp.3d 233, 252-53 (N.D.N.Y. 2017) (denying motion to dismiss tort claims against Saint-Gobain seeking medical-monitoring costs as damages); Benoit v. Saint-Gobain Performance Plastics Corp., No. 116-CV-1057, 2017 WL 3316132, at *9-10 (N.D.N.Y. Aug. 2, 2017) (same). In doing so, several courts have relied, at least in part, on the conclusion of the Court of Appeals for the District of Columbia that a plaintiff “ought to be able to recover the cost for the various diagnostic examinations proximately caused by [the defendant's] negligent action.” Friends for All Children, Inc. v. Lockheed Aircraft Corp., 746 F.2d 816, 825 (D.C. Cir. 1984) (addressing claims for compensation for medical evaluations of passengers following an airplane crash).

         Still other states have rejected an expansion of negligence doctrine to encompass potential, not present, physical injury. See, e.g., Henry v. Dow Chem. Co., 701 N.W.2d 684, 691 (Mich. 2005) (economic losses incurred by paying for medical monitoring “are wholly derivative of a possible, future injury rather than an actual, present injury. A financial ‘injury' is simply not a present physical injury, and thus not cognizable under our tort system.” (emphasis original)); Lowe v. Philip Morris USA, Inc., 183 P.3d 181, 186 (Or. 2008) (“the present economic harm that defendants' actions allegedly have caused -- the cost of medical monitoring -- is not sufficient to give rise to a negligence claim”); see also Metro-N. Commuter R. Co. v. Buckley, 521 U.S. 424, 444 (1997) (declining to recognize a “separate tort claim for medical monitoring costs” for “asymptomatic plaintiffs” under the Federal Employers' Liability Act).

         Neither New Hampshire's legislature nor its Supreme Court has spoken on the question. Generally, in New Hampshire,

[t]he possibility that injury may result from an act or omission is sufficient to give the quality of negligence to the act or omission; but possibility is insufficient to impose any liability or give rise to a cause of action. . . . If, in a sense, there has been negligence, there is no cause of action unless and until there has been an injury.

White v. Schnoebelen, 91 N.H. 273, 274 (1941). In the absence of such a present, physical injury, the medical-monitoring plaintiffs in this action seek to recover for an “economic injury” -- that is, the cost of monitoring to determine whether they have an injury.[34] Such an allegation appears to conflate “[a]n allegation of ‘injury, '” which is “an instance of actionable harm, ” with “a claim for ‘damages, '” that is, “a sum of money awarded to one who has suffered an injury.” Smith v. Cote, 128 N.H. 231, 241-42 (1986). The two are distinct. Id. In so doing, the plaintiffs effectively conceded that they do not, at present have an injury.[35] And, as discussed supra, it is unclear to the court whether New Hampshire law precludes a negligence claim seeking to recover purely economic damages in an action sounding purely in tort. See supra Part III.A (discussing economic loss doctrine).

         The court is therefore considering whether to certify this question to the New Hampshire Supreme Court, and at what procedural posture such a certification would be most advantageous. See Old Republic Ins. Co. v. Stratford Ins. Co.,777 F.3d 74, 86 (1st Cir. 2015) (the court is “permitted to certify questions of law to the New Hampshire Supreme Court when questions of New Hampshire law are determinative of the case, and there is no controlling precedent from the New Hampshire ...

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