Citing Dukes, Mich. Judge Bars Class In Dow Dioxin Suit

A Michigan judge on Monday refused to recertify a class of property owners accusing Dow Chemical Co. of negligently releasing dioxin into a river floodplain, citing the U.S. Supreme Court's recent decision in Wal-Mart Stores Inc. v. Dukes.

A law firm representing Dow said Tuesday that visiting Judge Leopold Borrello's ruling in Saginaw County Circuit Court was the first to apply the Supreme Court's decision, which toughened class action certification standards, in the context of an environmental mass tort.

Judge Borrello said that, in light of Dukes, certification had to be denied because the plaintiffs failed establish the commonality requirement for class certification, noting "the absence of a 'glue' to hold all of the plaintiffs' claims together."

"The only common question in the present case is whether defendant released dioxin into the Tittabawassee River flood plain," Judge Borrello said.

In June, the Supreme Court overturned certification of a class of 1.5 million current and former female Wal-Mart employees in the largest sex discrimination case in U.S. history in a decision that attorneys said raised the bar for bringing classwide claims and will force plaintiffs to narrow their class definitions.

A 5-4 majority ruled that the plaintiffs had not cleared the hurdle for class certification under Federal Rule of Civil Procedure 23(a)(2), which requires parties to prove that the claims of putative class members share common questions of law or fact. All nine justices rejected certification under a separate section of the class action rule, Rule 23(b)(2), which is designed for cases primarily seeking injunctive or declaratory relief.

In the present litigation, Gary and Kathy Henry sought to represent a class of more than 3,000 property owners claiming that dioxin contamination had hurt the value of their homes and other properties, according to Kirkland & Ellis LLP, one of the firms that represented Dow in the case.

Dow has operated a plant on the banks of the Tittabawassee River in Midland, Mich., for more than a century, where it has produced products including styrene, mustard gas, Saran Wrap, Styrofoam, Agent Orange and various pesticides, according to a prior Michigan Supreme Court opinion in the case in 2009.

In 2000, soil sample testing by General Motors Corp. near the Tittabawassee and Saginaw rivers revealed the presence of dioxin, a synthetic chemical that could cause health problems including cancer, liver disease and birth defects, the state Supreme Court opinion said.

The following year, the Michigan Department of Environmental Quality confirmed the presence of the chemical in the Tittabawassee River floodplain, and further investigations indicated that the Dow plant was the likely source, according to the opinion.

The Saginaw County court in 2005 granted the plaintiffs class certification after finding they had met the requirements of numerosity, commonality, typicality, adequacy and superiority under Michigan Court Rule 3.501(A)(1).

However, the state Supreme Court eventually determined that the lower court may have conducted an insufficient analysis and remanded the matter for the court to clarify its reasoning on the typicality and adequacy requirements, also allowing it to reconsider the other prerequisites as well.

Kirkland & Ellis said the judge initially reconfirmed the 2005 findings on numerosity, commonality and superiority, but Dow sought reconsideration based on Dukes and other developments.

Judge Borrello on Monday reviewed the findings in Dukes that commonality requires a plaintiff to show that class members have suffered the same injury, not just a violation of the same provision of law.

According to the high court, such claims depend on a common contention and "a common contention does not occur in an intentional discrimination case unless there is a link to bind the discriminatory decisions together," Judge Borrello said.

The judge said that even assuming that Dow negligently released dioxin and that it contaminated the plaintiffs' properties, any injuries involved "highly individualized factual inquiries" covering the characteristics of the dioxin contamination for each property, different remediation needs and the fact that some of the properties have been sold.

The plaintiffs nuisance claims also required such individualized inquiries, Judge Borrello said, adding that "The individual plaintiffs in the present case use and enjoy their property in myriad ways."

"In sum, because of the need for such highly individualized factual inquiries, plaintiffs cannot show that there is a common contention that is capable of classwide resolution," the judge said.

An attorney for Dow, Doug Kurtenbach of Kirkland & Ellis, said Tuesday that many such environmental cases involve nuisance claims, and while Dukes involved discrimination claims under Title VII of the Civil Rights Act of 1964, one could almost read the opinion substituting nuisance for Title VII and the full force of the court's reasoning would apply to those claims as well.

"As the Supreme Court indicated in Dukes, there are many ways to prove Title VII claims, but that does not mean that everyone who has a Title VII claim would prove it the same way, and the same exact principle applies to these environmental nuisance claims," Kurtenbach said.

An attorney for the plaintiffs, Norman E. Siegel of Stueve Siegel Hanson LLP, said Tuesday that the ruling was contrary to the U.S. Supreme Court's decision in Smith v. Bayer Corp., arguing that if a state court develops its own jurisprudence surrounding class certification, that should apply.

Dow is represented by Doug Kurtenbach and Nader Boulos of Kirkland & Ellis LLP, Kathleen Lang and Phillip DeRosier of Dickinson Wright PLC, and John Decker of Braun Kendrick Finkbeiner PLC.

The plaintiffs are represented by the Woody Law Firm PC, Trogan & Trogan PC, Stueve Siegel Hanson LLP and Spencer Fane Britt & Browne LLP.

The case is Henry v. Dow Chemical Co., case number 03-47775, in the Circuit Court for the County of Saginaw, Mich.

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