Hydrogen Sulfide Could Be The Smell Of Death For Environmental Class Actions In Georgia

An environmental nuisance case focused on Georgia-Pacific’s Savannah River Mill in Rincon, Georgia, has become a dispute with serious and far-reaching implications: whether plaintiffs should be allowed to use class action litigation as a vehicle to sue large corporations for, depending on your perspective, the redress of massive injuries caused by profiteering conglomerates or for theoretical damages that pressure good corporate citizens into windfall settlements that deprive them of money better spent on job creation, product development, and lowering consumer prices. Georgia-Pacific Consumer Prods., LP v. Ratner, now pending before the Georgia Supreme Court, has caught the attention of not only local organizations but national groups such as the Chamber of Commerce of the United States of America and the Product Liability Advisory Council, Inc. (PLAC), both of which have submitted amicus curiae briefs in the case. Both sides point to fundamental legal rights in jeopardy: Georgia-Pacific and several amici allege that class certification in the case would deprive them of due process by forcing them to abandon plaintiff-specific defenses, while plaintiff class members argue that decertification would effectively bar them from the courthouse altogether.

The Supreme Court heard oral arguments in Ratner on Feb. 17, 2014, and will likely issue a ruling in the case this summer. The Court must decide whether to overturn the Court of Appeals of Georgia’s decision to affirm certification of a class of property owners in the vicinity of the Mill who complain that their homes are devalued by hydrogen sulfide fumes emanating from the mill. The opinion will represent the first statement by the Court on class action certification since the United States Supreme Court’s ruling in Wal-Mart Stores, Inc. v. Dukes raised the bar for plaintiffs seeking certification.

According to the Plaintiffs, Georgia-Pacific seeks a decision that will “… drastically alter the prerequisites to class certification by redefining commonality to mean duplication, by redefining typicality to mean identity and by redefining predominance to mean uniformity.” Georgia-Pacific, on the other hand, argues that if the Court of Appeals decision is affirmed, “every industrial facility in Georgia — even those, like the Mill, that abide by environmental rules — may be targeted in a class action brought by few disgruntled neighbors, including those who moved in years after operations began.” Writing as amicus curiae in support of Georgia-Pacific, PLAC sounds an even greater alarm: “If the Court of Appeals’ decision is allowed to stand, it will send a message that Georgia’s courts are open to class actions that will be rejected elsewhere, encouraging the filing of more class actions in Georgia, regardless of merit, and driving up costs for manufacturers and consumer alike, to the detriment of the State’s economy.”

The Ratner Class

The class certified in Ratner is defined geographically, consisting of property owners within a discreet vicinity of the Mill circumscribed by roads and other landmarks. The area includes 34 residential properties and 33 industrial, agricultural or other zoned parcels. The class primarily complains about gases from the Mill. They claim hydrogen sulfide fumes produced by the biological breakdown of living organisms, which is part of the Mill’s wastewater treatment process, as well as from pits containing sludge produced by the Mill, infiltrate their neighborhoods and homes.

Georgia’s nuisance statute and its common law interpretation allow for just about every type of relief, from injunctions to monetary damages for personal injuries, loss of use and enjoyment of property and for the diminution in property value. Importantly, the Plaintiff class in Ratner seeks only damages to compensate them for the diminution in their property values. However, the record is replete with claims of personal injuries resulting from the emissions from the Mill, which the Plaintiffs say support their claims for diminution of their property values. This is important because a chief point of disagreement in this case and class actions generally is whether individualized proof of damages prevents class certification. Proving diminution of property value is far easier on a class basis than personal injury damages. In support of their damages, the class offered testimony of an expert real estate appraiser who testified that “the reported toxic fumes would constitute a factor in paring the value and marketability” of the properties in the area of the class.

The Court of Appeals’ Debate Over Commonality

“Under O.C.G.A. § 9-11-23, a class action is authorized if the members of the class share a common right and common questions of law or fact predominate over individual questions of law or fact. The character of the right sought to be enforced may be common although the facts may be different as to each member of the alleged class.” In order to certify a class, a plaintiff must establish numerosity, commonality, typicality and adequacy pursuant to O.C.G.A. § 9-11-23(a). Further, the plaintiff must satisfy at least one prerequisite set out in O.C.G.A. § 9-11-23(b), which provides as follows:

(1) the prosecution of separate actions would create a risk of inconsistent adjudications or would impair other parties’ ability to protect their interest; (2) the defendant has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or the declaratory relief with respect to the whole class; or (3) questions of law or fact common to members of the class predominate over any questions affecting only individual members, and a class action is superior to other available methods for the fair and efficient adjudication of the controversy.”

The Court of Appeals was split four to three on whether these standards had been satisfied in Ratner. The Ratner majority found the proposed class of property owners satisfied those standards. The numerosity and adequacy of representation requirements are not expected to be an issue before the Supreme Court. However, the frequently intertwined commonality and typicality requirements stirred up some debate. The majority concluded that

[T]he trial of a single case or the trial of this case on a class wide basis would involve many of the same witnesses, same documents and same testimony and would require resolution of the same issues of both law and fact. Some number of individualized questions will almost assuredly be presented. However, the prevailing common questions make this matter appropriate for resolution as a class action.

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