9th Circ. Says Boeing Pollution Row Belongs In Federal Court

The Ninth Circuit on Monday said a suit targeting The Boeing Co. and its environmental-remediation contractor Landau Associates Inc. over alleged groundwater contamination from a Washington-based plant belongs in federal court, reversing an order sending the dispute to a state court.

In a 2-1 decision, the Ninth Circuit rejected U.S. District Judge Ricardo S. Martinez’s finding that a suit brought by the owners and residents of allegedly polluted land falls within the Class Action Fairness Act’s local single event exception to federal jurisdiction, breaking with other circuit courts’ interpretation of CAFA’s terms.

“With due respect to the Third Circuit, we do not agree with its definition of ‘event or occurrence’ as that term is used in CAFA,” the ruling noted. “We find that such a broad definition renders portions of CAFA redundant and is not supported by legislative history … even if ‘event or occurrence’ could be interpreted to cover one continuing activity or tort, plaintiffs in this case seek relief from at least two distinct activities.”

But despite its ruling on jurisdiction, the court affirmed Judge Martinez’s rejection of Boeing’s argument that Landau was fraudulently joined in a bid to defeat complete diversity in the suit. Boeing, the Ninth Circuit said, did not present “discrete and indisputable” evidence that would preclude the plaintiffs from recovering damages against the provider of environmental engineering and remediation services.

More than 100 residents of Algona, Washington, filed suit in November 2013, according to court records, claiming the aerospace giant discharged hazardous chemicals into the groundwater and contaminated their properties for more than 40 years from its Auburn aircraft parts manufacturing plant. The plaintiffs failed to serve their initial complaint and filed an amended complaint in April 2014.

The plaintiffs claim that Boeing's cleanup efforts with Landau began in 2002 and were directed by the Washington State Department of Ecology. But Landau’s efforts, they alleged, contributed to further movement of the pollution onto their properties.

Boeing removed the action to the U.S. District Court for the Western District of Washington in April 2014, arguing it was a mass action under CAFA and invoking diversity jurisdiction.

However, in September 2014, the district court remanded the case to state court, agreeing with the plaintiffs that the removal was improper under CAFA's single-event exemption. That prompted Boeing to appeal.

A Boeing representative said in a statement that the company was pleased with Monday's decision and will continue to defend against the suit.

“We are pleased that the Ninth Circuit Court of Appeals has agreed with Boeing and returned the case to federal court, where it belongs," the representative said. "Contrary to the plaintiffs’ allegations, Boeing has been conducting thorough investigation and cleanup activities under the direction of the Washington State Department of Ecology to identify and address any potential soil and groundwater impacts from our Auburn plant. We are cooperating fully with government authorities in this effort. The allegations in the lawsuit have no merit and we intend to vigorously defend against these claims.”

Counsel for the plaintiffs was not immediately available for comment on Monday.

U.S. Circuit Judges Michael Daly Hawkins, Johnnie B. Rawlinson, and Consuelo M. Callahan sat on the panel for the Ninth Circuit.

Boeing is represented in-house by Michael S. Paisner as well as Devin A. DeBacker and Michael F. Williams of Kirkland & Ellis LLP and Jeffrey M. Hanson of Perkins Coie LLP.

The plaintiffs are represented by David N. Bigelow, Robert W. Finnerty and Thomas V. Girardi of Girardi & Keese, Thomas Vertetis of Pfau Cochran Vertetis Amala PLLC, and James S. Rogers of the Law Offices of James S. Rogers.

The case is Allen et al. v. The Boeing Co., case number 15-35162, in the U.S. Court of Appeals for the Ninth Circuit.

REPRINTED WITH PERMISSION FROM THE APRIL 27, 2015 EDITION OF LAW360 © 2015 PORTFOLIO MEDIA INC. ALL RIGHTS RESERVED. FURTHER DUPLICATION WITHOUT PERMISSION IS PROHIBITED. WWW.LAW360.COM