Cal Appeals Ct Revives VI Toxic Tort Case

In the latest installment of the saga involving the infamous Ujima Village Apartment complex that was abandoned because of vapor intrusion from a former petroleum storage facility, a California appeals court ruled in Doris Alexander v. ExxonMobil, 2013 Cal. App. LEXIS 768 (Ct. App.-2nd Dist. 9/24/13) that a trial court improperly dismissed a group of plaintiffs on the grounds that their claims were barred by the statute of limitations.

We previously discussed an earlier ruling in this litigation involving a negligence claim brought by the Ujima Village residents against an environmental consultant for failing to identify health risks associated with the former oil storage facility that had operated at the property from 1924 to 1968. Because the plaintiffs did not have any contractual relationship with the consultant and were not the intended beneficiaries of the environmental report, the court said that the consultant did not have a duty to the residents that could have been breached. A detailed discussion of the facts in this case and the ruling in favor of the consultant is available here.

Over 700 plaintiffs filed a complaint in 2010 for injuries resulting from their exposure to the petroleum contamination. The complaint was amended several times to include new parties. The defendants sought to dismiss the complaint (a “demurrer” in California pleading parlance) on statute of limitations grounds. The defendants contended that the plaintiffs knew or should have known of their claims at least by 2007 which more than two years before the first suit was first filed in April of 2010.

The trial court tentatively agreed with the defendants but gave the plaintiffs an opportunity to offer proof of their claims in the form of written statements known as “Cottle” declarations in California. The defendants then repeated their motion to dismiss, pointing to the following statements in the complaint:

  • residents were aware that the complex was located a on a former oil tank farm and that repeated  environmental investigations had been performed between 1992 and 2009;
  • the government agencies held several meetings with residents in 2007 to discuss the reasons for the proposed closure of the complex;
  • the Housing Authority sent a letter to residents on May 1, 2007 that referenced “environmental concerns”, and
  • An Ujima resident expressed health concerns to the Housing Authority in 2007 regarding the contamination.

The government defendants said these facts unequivocally demonstrated that Plaintiffs had been apprised of the environmental conditions at the site, and were on inquiry notice of any potential claims. Exxon argued it was “inconceivable” that Plaintiffs could have lived at the complex and not realized that the testing occurred. Exxon also argued that any resident who had received a copy of the May 1, 2007 letter or attended any meeting referencing environmental remediation was, at that point, necessarily on notice of their claims.

The trial court ruled plaintiffs knew or should have known of the environmental contamination in 2007, and that, as a matter of law, such knowledge was sufficient to trigger their statute of limitations period under the state “discovery rule.” The judge dismissed the claims of approximately 100 residents with prejudice but allowed other plaintiffs to file an amended complaint.  The court also dismissed 15 plaintiffs’ claims against the County for failing to file a timely government claim letter as mandated by state law.

On appeal, the residents argued there was a question of fact if the information they possessed in 2007 would have caused a reasonably prudent person to suspect that the contamination posed a risk to their health, thereby triggering their duty to investigate and the statute of limitations. The defendants responded that once the residents were formally advised of the environmental contamination in 2007, they had a duty as a matter of law to begin investigating their claims and would have discovered their claims more than two years before they filed suit.

The court found that the allegations and Cottle declarations did not lead to a single conclusion that the 2007 notices should have caused the plaintiffs to suspect the contamination  posed a risk to their health. The court noted that the May 2007 Housing Authority letter merely referenced “environmental concerns” as one of several reasons why the complex was to be closed. Moreover, the court said that the letter did not explain the nature of the unspecified “environmental concerns” or provide any additional facts about the issue. Furthermore, the court observed that portions of the letter warned residents that they might lose their rights to federal relocation assistance if they moved from complex before receiving a formal notice of eligibility and stated in bold, underlined print that residents should not move from the premises until receiving such a notice. As a result, the court concluded a trier of fact might legitimately infer that a letter from a government entity telling residents to stay in their homes until further notice was not, standing alone, sufficient to raise a suspicion that unspecified “environmental concerns” posed a risk to their health or safety.

Similarly, the court found that more than one legitimate inference can be drawn from the fact that appellants’ attended the 2007 community meeting where which they were notified of the contamination. The said that the defendants did not dispute that the speakers at these meetings, which included representatives from state housing authorities, told residents the contamination posed no risk to their health. Thus, the court said it could not, as a matter of law, hold that individuals who attended the meeting should have suspected that the contaminants were capable of causing personal injuries. Had the residents been notified in 2007 that the contamination could potentially pose a risk to their health, or that authorities were still investigating that possibility, the court said it was possible closer question.

Thus, the court held that the trial judge erred in rejecting residents’ claim of delayed discovery based solely on the fact that they received notice of the contamination in 2007. The court said that the defendants might uncover evidence during discovery some or all of the appellants actually suspected the contamination was capable of causing them personal harm, or otherwise possessed additional information that put them on inquiry notice of such facts in 2007.

As an interesting aside, a Regional Water Board sent a letter to the county health department in November 2011 if a health assessment had been performed or if one was contemplated. The letter explained that the Regional Boards “do not have the legal jurisdiction to address possible health impacts associated with past activities at the Site.”

In some respects, the Ujima Village Apartments litigation is similar to another California case, Avila v. Willits Envtl. Remediation Trust, 633 F.3d 828 (9th Cir. 2011). There, the Court of Appeals for the Ninth Circuit reversed a trial court ruling that found plaintiffs could not invoke the delayed discovery rule because of news stories in the local media. The court allowed a sub-set of plaintiffs to continue to pursue their lawsuit though most of those plaintiffs were unable to prove their case.

Finally, Ujima Village is one of three high profile cases involving vapor intrusion from a former petroleum storage terminal or refinery. The two others are the Carousel neighborhood in Carson, California (click here for figure showing subdivision and former terminal) and Roxana, Illinois (click here for a figure depicting plume). There was also a regional plume associated with a former refinery in Brooklyn, New York (see map). Remember these cases the next time someone says that vapor intrusion is not a concern for petroleum contamination.

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