William Liebhart v. SPX Corporation
Opinion
William and Nancy Liebhart together own three houses on the same block in Watertown, Wisconsin. Besides a few other houses, the rest of the block was previously occupied by an abandoned transformer factory, last owned by SPX Corporation. In 2014, SPX demolished the building with the assistance of TRC Environmental Corporation and Apollo Dismantling Services (collectively, "the defendants"). The Liebharts allege that dust and debris containing toxic chemicals migrated onto their properties, contaminating their yards and jeopardizing their health and the health of their tenants.
The Liebharts sued under federal statutes authorizing private rights of action for environmental contamination. They also brought various state-law claims. Following discovery and the submission of expert witness reports, the district court denied the Liebharts' motion for partial summary judgment and granted summary judgment to the defendants with costs. Although the district court adequately evaluated the expert witnesses and did not abuse its discretion in its procedural decisions, the court set the bar unnecessarily high for the plaintiffs to show a violation of the applicable federal statutes. For that reason, we vacate the district court's judgment and remand for reconsideration.
I. BACKGROUND
The factory dates to the 1920s and was used to manufacture various industrial equipment. Most relevant to our purpose, the factory manufactured power transformers containing polychlorinated biphenyls
*955
(PCBs), a carcinogenic chemical banned by the Environmental Protection Agency in 1979.
See
Polychlorinated Biphenyls (PCBs) Manufacturing, Processing, Distribution in Commerce, and Use Prohibitions,
But even with all the products and manufacturing equipment removed, PCB contaminants remained in the facility. In 2009, SPX retained TRC and another company (not named as a defendant in this suit) to study the property and determine the extent and precise location of any PCB contamination. Those studies revealed that the concrete floor of the factory was generally contaminated, with concentrated amounts located in specific areas throughout the site.
Several years went by. In 2014, SPX decided to move ahead with the demolition, retaining Apollo to conduct the work and TRC to supervise the project. That November, the defendants timely proposed a self-implementing cleanup plan to the EPA, as required by
The Liebharts filed a complaint with the local government in February. They also collected a dust-covered sample of snow from their yard and placed it in a mason jar. Soon thereafter, a representative of the Wisconsin Department of Natural Resources ("DNR") contacted the defendants about the Liebharts' concerns. In April, TRC collected samples of the surface soil (roughly down to eight inches below ground) on both the industrial and residential properties. Sure enough, the properties tested positive for the presence of PCBs. In August, the Liebharts vacated the property on advice of their physician to avoid further exposure to the chemicals. Frustrated with the lack of action, William Liebhart had the snow sample tested for PCBs. Although the sample did, in fact, contain PCBs, the irregular manner of collection and storage spoiled the sample, and the laboratory declined to endorse the results with any confidence.
In September 2015, SPX submitted a plan to remediate the contamination to the DNR. In turn, the Liebharts sued in federal district court in October. The complaint sought injunctive relief under both the Resource Conservation and Recovery Act (RCRA),
During discovery, the Liebharts submitted to further testing for PCBs both in their yard and inside their home. They also underwent blood testing. Although the external surveys revealed a more comprehensive picture of the extent to which the soil on the Liebharts' properties contained PCBs, the internal sampling and blood tests were both negative for contamination. The Liebharts later learned in October 2017 that the defendants allegedly buried some of the concrete remains on-site rather than removing them to a toxic waste dump as required by the EPA-approved clean-up plan.
*956 The parties prepared and submitted the reports of the expert witnesses who were to testify at trial. Among those, three are pertinent to our discussion. First, the Liebharts submitted a report by John Woodyard, a licensed professional engineer. His report included a description of standard methods used when demolishing PCB-contaminated buildings and an analysis of the purported ways in which the defendants deviated from those practices, thereby causing the contamination of the residences. The Liebharts' second expert was Dr. David Carpenter, a public health physician who opined on ways in which the Liebharts might have been exposed to PCBs and the potential health effects of continuing exposure. He concluded that "there is no 'safe' level of exposure to PCBs that does not increase the risk of disease." Finally, the defendants submitted a report prepared by Dr. Russell Keenan, a toxicologist who analyzed the survey data and determined that it was impossible to determine whether the presence of PCBs on the Liebharts' property was due to the recent demolition or to runoff that occurred over the last several decades.
In December 2017, the Liebharts moved for partial summary judgment on the issue of causation, reserving the issue of damages for a jury trial. The defendants cross-moved for summary judgment; they also filed a motion to exclude the testimony of plaintiffs' experts Woodyard and Carpenter under Fed. R. Evid. 702. In February 2018, after those motions were fully briefed to the court, the Liebharts sought leave to amend their complaint. In light of the information they obtained through discovery regarding the burial of concrete on the property, they intended to allege separate RCRA and TSCA violations and seek an enlargement of the proposed injunction to include removal of that material.
The district court issued its decisions on March 30. First, the court granted in part the defendants' motion to exclude the plaintiffs' expert witness reports. The court explained that Woodyard's report was "equivocal" as to the issue of causation; it hedged on whether the contaminants came from demolition or from runoff during the preceding decades.
See
Liebhart v. SPX Corp.
, No. 16-cv-700-jdp,
Although the court admitted the vast majority of Dr. Carpenter's report, it struck Carpenter's conclusion that "there is no 'safe' level of exposure to PCBs that does not increase the risk of disease" as unsupported by the medical studies he cited. Id. at *5. In doing so, the court pointed to the absence of PCBs inside the Liebharts' home and in their blood, suggesting that the Liebharts had not actually been exposed to PCBs and so could not have suffered harm. Id. at *5-6.
With that expert testimony off the table, the district court concluded that the Liebharts failed to present any admissible evidence to support their RCRA and TSCA claims. The remaining photos and videos certainly showed dust migrating onto the Liebharts' property, but there was no reliable evidence proving that the dust contained PCBs. Given that any PCBs detected *957 in the soil may have been there prior to the demolition, the lack of evidence doomed the Liebharts' case. The court denied partial summary judgment to the plaintiffs, granted summary judgment to the defendants on the federal claims, and dismissed the state-law claims without prejudice.
The district court also denied the Liebharts' petition for leave to amend their complaint on two grounds. First, although the court acknowledged that the plaintiffs discovered the factual basis for the new counts over a year after filing the initial complaint, it also noted that they took an additional four months thereafter to seek leave to amend. During that intervening period, the parties had submitted and briefed their motions for summary judgment, and the trial date was fast approaching. It found their petition untimely. Second, the district court determined that the new claims were futile under both statutes' advance-notice requirements.
The plaintiffs immediately appealed. Several months after the judgment, the clerk of the district court imposed costs on the Liebharts in the amount of $46,320.02. The Liebharts separately appealed that decision. We consolidated the two appeals and now consider them together.
II. ANALYSIS
The Liebharts raise five issues for our consideration. First, they argue that the district court erred in excluding the opinions of expert witnesses Woodyard in full and Carpenter in part. As part of that argument, they allege that the district court failed to apply the same stringent standard to the defendants' expert Keenan. Second, they contend that summary judgment was inappropriate because, even absent the testimony of their expert witnesses, they submitted adequate photographic and scientific evidence to state a valid claim under RCRA and TSCA. Third, they challenge the district court's denial of injunctive relief in light of deficiencies they have identified in SPX's state-approved clean-up plan. Fourth, they argue that the district court abused its discretion in denying leave to amend their complaint. Finally, they challenge the imposition of costs.
But there's a larger issue looming in the background. The district court's opinion operates under the assumption that RCRA plaintiffs must demonstrate "an imminent and substantial danger with evidence of health problems they have already suffered."
Liebhart
,
A. RCRA Requires Only that Harm "May" Be Imminent
The question of how much harm a plaintiff must prove to make out a
prima facie
violation of RCRA has led to much discussion among the circuits. We have yet to tackle that issue head on, so the district court necessarily had to look elsewhere for guidance. Passed in 1976, "RCRA is a comprehensive environmental statute that empowers [the] EPA to regulate hazardous wastes from cradle to grave."
City of Chicago v. Envtl. Def. Fund
,
Although the EPA has the primary responsibility for enforcing the law, the statute, "like other environmental laws, ... contains a citizen suit provision, § 6972, which permits private citizens to enforce its provisions in some circumstances."
any person may commence a civil action on his own behalf ... against any person, ... including ... any past or present owner or operator of a treatment, storage, or disposal facility, who has contributed or who is contributing to the past or present handling, storage, treatment, transportation, or disposal of any solid or hazardous waste which may present an imminent and substantial endangerment to health or the environment.
The critical question in this case is how to determine whether alleged contamination "may present an imminent and substantial endangerment to health." § 6972(a)(1)(b). We touched on this question only briefly in
Albany Bank & Trust Co. v. Exxon Mobil Corp.
,
But our sister circuits have engaged with this question in great depth. In the first major case interpreting the provision, the Third Circuit emphasized that the statute "enhanced the courts' traditional equitable powers by authorizing the issuance of injunctions when there is but a risk of harm, a more lenient standard than the traditional requirement of threatened irreparable harm."
United States v. Price
,
In the subsequent decades, several other circuits adopted and further developed the same interpretation of § 6972.
See
Mallinckrodt
,
The district court therefore used an incorrect legal standard to evaluate the Liebharts' argument that PCBs from the demolition may present an imminent and substantial danger to their health and that of their tenants. It did not cite any of the cases we listed above, but instead relied on a single district court decision from a circuit that has not yet addressed the issue.
See
Liebhart
,
That error undercuts several of the reasons the district court gave for rejecting the Liebharts' RCRA claim. For example, the district court cursorily adopted a passing statement we made over twenty-five years ago that "[t]he [EPA's] accepted safe level of PCBs in the environment is fifty parts per million,"
That's especially true when the standard is taken out of context. The district court relied on
Cincinnati Ins. Co.
to support its contention that contamination below the threshold level of fifty parts per million ("ppm") does not qualify as a regulatory violation, thereby contradicting Woodyard's opinion regarding safe levels of PCBs and providing the grounds for excluding it. In that case, we evaluated whether an insurance company was required to indemnify its insured for damages arising out of PCB contamination at
*960
an industrial site. The EPA had identified the insured as potentially liable under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA),
But that regulation, still in effect today, identifies industrial equipment and other wastes contaminated at levels above fifty ppm and requires special procedures for their storage and disposal. It does not unequivocally state that PCBs concentrated at levels lower than fifty ppm are safe for human exposure. Neither
Cincinnati Ins. Co.
nor the EPA regulation stand for the proposition that PCBs concentrated at forty-nine ppm
on residential property
do not present a substantial endangerment to the health of the residents. That is especially apparent when we consider that the same set of regulations distinguishes between low and high-occupancy areas and requires that, in high-occupancy areas, bulk PCB remediation waste, such as soil, be cleaned up to levels of concentration at or below one ppm. § 761.61(a)(4)(i)(A). Section 761.3 confirms that the term "high-occupancy area" includes residences.
See also
§ 761.123 (regulating spills of PCBs concentrated at fifty ppm or greater but emphasizing that "[t]he concentration of PCBs spilled is determined by the PCB concentration in the material spilled as opposed to the concentration of PCBs in the material onto which the PCBs were spilled"). "Proof of contamination in excess of [agency] standards may support a finding of liability, and may alone suffice for liability in some cases, but its required use is without justification in the statute."
Interfaith
,
This is not to say that all the plaintiffs must do is to show some bit of soil on their property that tests positive for PCBs above one ppm (or even above the purported lower Wisconsin DNR standard, which the defendants seem to have acknowledged in their state-approved clean-up plan). Of course, there must be accompanying evidence that establishes some connection between the existing contaminants and some imminent and substantial endangerment to health.
1
But the Liebharts attempted to provide such evidence, and the district court held the bar higher than necessary under RCRA's standard. In criticizing expert witness Carpenter's statement that "there is no 'safe' level of exposure to PCBs that does not increase the risk of disease," the district court rejected Carpenter's citation to studies showing the general risks of PCB exposure because "the Liebharts do not cite any evidence that they
have
been exposed to PCBs."
Liebhart
,
*961
As we noted in
Albany Bank
, "[i]mminence does not require an existing harm, only an ongoing threat of future harm."
B. TSCA Likewise Requires No Heightened Showing
TSCA authorizes a separate, private cause of action allowing "any person [to] commence a civil action ... against any person ... who is alleged to be in violation of ... any rule promulgated under" the Act.
The purported violation was based on
But the district court seems to have overlooked the following sentence in the regulation, which directs that "[t]he concentration of PCBs spilled is determined by the PCB concentration in the material spilled as opposed to the concentration of the material onto which the PCBs were spilled."
C. The District Court Should Reconsider the Remaining Issues on Remand
Now that we have clarified the standard the plaintiffs must meet, we turn to the remaining procedural issues the Liebharts have asked to us to address.
1. The District Court did not Abuse Its Discretion in Excluding Woodyard's Testimony
"The summary-judgment decision here turned [in large part] on the district court's conclusion that [the] expert testimony was inadmissible. Whether the district court applied the appropriate legal framework for evaluating expert testimony is reviewed
de novo
, but the court's choice of relevant factors within that framework and its ultimate conclusion as to admissibility are reviewed for abuse of discretion."
Lees v. Carthage College
,
The district court was well within its discretion to exclude the proffered testimony of expert witness Woodyard. Beyond the problem that the plaintiffs seemed to have waived this issue in the district court by failing to engage with the defendants' arguments in their motion to strike the testimony, Woodyard's analysis suffers from a critical flaw that stems from the way in which the parties have framed this lawsuit. The district court briefly noted in its opinion that "both sides assume that none of the defendants can be held liable for any PCB contamination on the Liebharts' property that occurred before the demolition began, so the court will make the same assumption."
Liebhart
,
But because the Liebharts restricted their claims to PCBs that allegedly migrated onto their property via the dust from the 2015 demolition, they necessarily excluded claims resulting from PCBs that may have gotten onto their property during the previous century. The district court correctly noted that Woodyard's expert opinion could not distinguish between these two alternatives, as both sets of contaminants originated from the same source. There was even evidence showing that PCBs existed in the soil beneath the Liebharts' asphalt driveway-Woodyard could not explain how that might have occurred as the result of dust blowing in the wind as opposed to seepage over the *963 course of years before any demolition occurred.
Perhaps the Liebharts decided to frame their claims in this way because they wanted to go after defendants TRC and Apollo, who would not be liable for what happened before demolition. Or perhaps some element of their state-law claims, which we have not addressed, required them to constrict the scope. They did not explain their reasoning to us (or it seems, to the district court). But the distinction makes it difficult for Woodyard to make his case, given that he did not "adequately account[ ] for obvious alternative explanations."
Gopalratnam v. Hewlett-Packard Co.
,
2. The District Court Should Reconsider Its Denial of Injunctive Relief
The district court denied injunctive relief to the Liebharts because the defendants had already agreed to a clean-up plan that had been approved by the Wisconsin DNR. We review that decision for an abuse of discretion.
See AMI
Int'l, Inc. v. Datacard Corp.
As we mentioned above, RCRA authorizes district courts to issue either mandatory or prohibitory injunctions, while TSCA authorizes only prohibitory injunctions. "[I]t is appropriate 'to give great deference to the district court's decision as to the precise equitable relief necessary in a particular case.' "
Bowes v. Ind. Sec. of State
,
Considering SPX's decision to formulate a clean-up plan and obtain approval from the state agency, the district court determined that there was no need for separate, federally-supervised remediation. It reached that conclusion even while assuming that the defendants were in violation of either RCRA or TSCA, despite the fact it found no such violation. Other courts have determined that the existence of a parallel plan of remediation supervised by the state does not necessarily prevent a federal district court from granting an injunction if it finds the state agency's actions to be insufficient to remedy the violation of federal law.
See, e.g.,
Interfaith
,
*964
Here, the district court determined that SPX's existing plan was sufficient and that the Liebharts had not "identif[ied] any way that SPX's plan [was] deficient or violate[d] federal law."
Liebhart
,
However, in light of the legal standards we outlined above, we ask the district court to reconsider its decision to deny injunctive relief on remand. Because the bar for establishing an imminent and substantial danger is lower than the district court believed when evaluating the request for an injunction, it would be prudent to reassess whether the DNR-approved plan adequately remedies harms that may come within RCRA's scope.
See
LAJIM
,
3. The District Court did not Abuse Its Discretion in Denying Leave to Amend the Complaint.
We review a denial of leave to amend a complaint for abuse of discretion.
Life Plans, Inc. v. Sec. Life of Denver Ins. Co.
,
We begin with the question of futility. Both statutes contain advance-notice requirements that citizen plaintiffs must observe prior to filing RCRA or TSCA suits. They require those plaintiffs to notify the EPA 60-90 days in advance of filing the complaint.
The notice provisions serve two purposes. "First, notice allows Government agencies to take responsibility for enforcing environmental regulations, thus obviating the need for citizen suits.... Second, notice gives the alleged violator 'an opportunity to bring itself into complete compliance with the Act[s] and thus likewise render unnecessary a citizen suit.' "
*965
Hallstrom v. Tillamook Cty.
,
But an error in the futility analysis alone does not necessarily constitute an abuse of discretion on the whole. In addition to futility, the district court cited undue delay and prejudice in its decision to deny leave to amend. "[D]elay by itself is normally an insufficient reason to deny a motion for leave to amend. Delay must be coupled with some other reason. Typically, that reason ... is prejudice to the non-moving party."
Dubicz v. Commonwealth Edison Co.
,
In response, the Liebharts contend that there was no undue prejudice to the defendants: by the time they filed their motion, five weeks of discovery still remained. We disagree. While the district court's explanation of prejudice was fairly short, even if the district court had failed to articulate a finding of prejudice altogether, we might still "affirm providing that 'the prejudice that would result from such amendment was apparent.' "
Park v. City of Chicago
,
On the contrary, in
Life Plans
, we found no undue delay when a plaintiff promptly moved to amend its complaint just ten days after learning of the factual basis for its new count during discovery.
III. CONCLUSION
Although the district court properly exercised its discretion on the various evidentiary and procedural issues the plaintiffs have raised, its analysis on the merits was narrower than the statutes demand. It may reach the same conclusions on reconsideration, but the parties should have another opportunity to litigate whether a substantial and imminent endangerment to health exists in this case under the standards we have outlined. We therefore VACATE the order of the district court and REMAND for further proceedings consistent with this opinion. 3
On appeal, the Liebharts contend that there is no separate requirement for expert witness testimony because the photos and videos they have submitted into evidence suffice to prove their RCRA claim. The defendants push back on that argument, insisting that many of the issues are beyond the competence of lay fact-finders and require the assistance of experts to address.
See, e.g.,
C.W. ex rel. Wood v. Textron, Inc.
,
The district court determined that the Liebharts waived this claim by failing to engage the defendants' argument that there was no "ongoing violation." But the court chose to analyze the merits of the claim regardless of waiver and reached its conclusion on an alternative basis. We likewise set aside the issue of waiver to reach the district court's merits analysis.
The Liebharts also challenge the taxation of costs against them by the clerk of the district court. Because we vacate the district court's judgment, we assume that the imposition of costs is automatically vacated and so do not reach that issue. The clerk of the district court is free to reassess costs on remand as the case proceeds.
Reference
- Full Case Name
- William LIEBHART & Nancy Liebhart, Plaintiffs-Appellants, v. SPX CORPORATION, TRC Environmental Corporation, & Apollo Dismantling Services, Inc. Defendants-Appellees.
- Cited By
- 49 cases
- Status
- Published