The U.S. District Court for the Southern District of New York has dismissed a complaint alleging the defendants contaminated plaintiff’s water systems with per- and polyfluoroalkyl substances (“PFAS”). In a highly detailed decision, Judge Lewis J. Liman held that the plaintiff failed to state a cause of action against the chemical manufacturers under all causes of action pleaded on causation grounds and as well as a matter of substantive law.
"PFAS" are a class of “forever chemicals” used in a wide variety of industrial and commercial products, such as carpets, food packaging, cookware, and fabrics as well as name-brand chemical additives. In 2020, the New York State Department of Health's ("NYSDOH") Public Health and Health Planning Committee adopted Maximum Contaminant Levels ("MCLs") for PFOA and PFOS (subsets of PFAS) in the state’s public water systems, requiring all public water systems to test and monitor regularly and take corrective action if the water system exceeds defined levels.
Plaintiff, Suez Water New York, Inc. (“Suez”), a New York corporation, owners and operators of five public water systems, brought suit against defendant manufacturers who, in part, licensed the use of its PFAS-containing name-brand chemical additives and solutions, such as Teflon®, Viton®, and Tyvek®, to industrial manufacturers for use in their own products. Plaintiff claims these intermediary industrial manufacturers as well as end users of the finished product caused the contamination of its water systems.
As an initial note, the Court granted dismissal against defendants Corteve, Inc. and Dupon De Nemours, holding their status as successors in liability to the remaining manufacturing defendants did not subject them to personal jurisdiction. Plaintiff’s complaint was then dismissed against the manufacturing defendants pursuant to Rule 12(b)(6) for its failure to state a cause of action.
The Court began its Rule 12(b)(6) analysis by holding plaintiff's “threadbare allegations” regarding causation were fatal to all of plaintiff’s claims. Analyzing the seminal groundwater case of In re MTBE, 725 F.3d 65, (2nd Cir. 2013) the Court conceded causation is typically a question of fact for a jury, but held MTBE and its progeny were distinguishable due to the more speculative allegations of the present matter. Specifically, the Court noted plaintiff failed to allege the specific chemicals defendants sold or their market share of those chemicals, frustrating any attempt to claim defendants were a “substantial factor” in bringing about the harm as required. See e.g. In re MTBE.
The Court also noted that while there are hundreds of PFAS substances, plaintiff only had monitoring responsibility for two subset categories of those chemicals (PFOA and PFOS) and the complaint failed to allege with any specificity if those subject chemicals were sold. Instead, plaintiff alleged it was the end users who allegedly made the disposal. Indeed, there was no allegation that the intermediary manufacturers were responsible for a chemical release, which the Court found both “conspicuous and telling.” Lastly, there was no allegation that the release that allegedly occurred was in the vicinity of Suez's areas of service watersheds. Ultimately, the Court held the complaint was “bereft of any facts regarding market share, identity of customers [end users], or the location where the customers resided . . . [t0 tie] Defendant's conduct to plaintiff's alleged injury.” Even though the Court’s causation ruling was fatal to all of plaintiff’s claims, the Court also analyzed and dismissed nearly every one of plaintiff’s claims on non-causation grounds.
Regarding causes of action pleaded on nuisance grounds, Plaintiff alleged both public and private nuisance causes of action, claiming Defendants’ sales of PFAS to intermediary industrial manufacturers and the sale of those manufacturer's products to end users interfered with SUEZ's right to use and enjoy New York's natural resources. Although actions for public nuisance claims are subject to prosecution by government authority, a private citizen may claim nuisance "if it is shown that the person suffered special injury beyond that suffered by the community at large. A special injury has been defined as a “different and greater harm.” Madison Ave. Gourmet Foods, Inc. v. Finlandia Center, Inc., 96 N.Y.2d 280, (2001). However, as noted by the Court, New York follows the Restatement (Second) of Torts, whereby a defendant is liable for public or private nuisance only if it "create[d] [the] nuisance or participate[d] in the creation or maintenance thereof.” In re Nassau County Consol. MTBE Prods. Liab.
Accordingly, the Court rejected both nuisance claims, holding it was uncontested that defendants’ involvement with industrial manufacturers ended with the sale of PFAS with no allegations that industrial manufacturers told defendants how they would use or dispose of the PFAS. The Court further held defendants’ involvement with end users was even more attenuated, as defendants' only role was to introduce into the stream of commerce a lawful product that was used of and disposed of by the industrial manufacturer's customers. Given the uncontested nature of defendants’ limited involvement, the Court dismissed the claim, holding that allowing mere allegations of a defendant's knowledge of downstream effects of its product to qualify as “substantial participation” in the creation of the nuisance would expose to liability “anyone who contributed in some way or another to a nuisance . . . no matter how far removed from defendant’s lawful business practices the harm is felt." (internal citations omitted).
In dismissing plaintiff's negligence claim, the Court cited the Court of Appeals, holding a defendant generally “has no duty to control the conduct of a third person so as to prevent them from harming others, even where as a practical matter defendant can exercise such control.” Espinal v. Melville Snow Contractors, Inc. 98 N.Y.2d 136 (2002). Citing groundwater contamination cases, plaintiff argued that defendants' breached their duty due to the “foreseeable harm” to customers and third parties. The Court held this theory sound only in product defect and could not stand without proof of a defect in design, manufacture or warning, none of which were properly alleged by plaintiff. The Court further distinguished the groundwater citations as cases where defendants themselves were directly responsible for the polluting on their and neighboring land.
Plaintiff also failed to meet the requirements for its trespass claim. While a trespass claim requires only that a defendant intend its actions and not the damaging consequences of the action, the trespass must still be the “immediate or inevitable consequence” of the willful action. Scribner v. Summers, 84 FD.3d 554 (2nd Cir. 1996). In dismissing the Claim, the Court held that even by plaintiff’s very allegations, it was the conduct of the end users or intermediate manufacturers that was the “immediate” source of plaintiff's injury, and not defendants’.
The Court also dismissed plaintiff’s assertions of defendants’ liability in strict liability claims, sounding in abnormally dangerous activities, defective design, and failure to warn. As an initial matter, while New York recognizes claims against landowners who engage in “abnormally dangerous activities,” citing several cases from several New York districts, the Court held the rule does not extend to the manufacture or sale of an “unreasonably dangerous,” product or substance. See e.g. McCarthy v. Stru, Rurger, & Co., 916 F. Suupp. 366, 371 (S.D.N.Y 1996).
Plaintiff's defective design claim was also dismissed due to the complaint's failure to include a requisite safer alternative. Plaintiff's allegations that safer alternatives were known or should have been known to the manufacturer were held insufficient and conclusory. Ultimately, the Court held plaintiff's design claim was a mere “backdoor attempt” to create liability for an abnormally dangerous activity without pleading the necessary alternative for creating the same beneficial product without the accompanying risks.
Lastly, the dismissal of plaintiff's failure to warn claim is notable as the only cause of action dismissed solely on proximate cause grounds. No facts were alleged regarding how either the industrial manufacturers or end users would have responded or how harm would have been avoided by the placement of a warning on defendants’ product. Accordingly, there were no allegations leading to a reasonable inference that the failure to warn was the proximate cause of injury.
During a time of increased regulation and the government’s anticipated lowering of acceptable maximum containment levels in public water supplies, we can expect additional litigation from entities responsible for remediation. The Suez decision, however, might represent an attempt by the Courts to insure there is a good faith basis for such contamination claims against manufacturers with only an attenuated involvement with the ultimate contamination. Plaintiff has expressed an intention to amend its complaint, likely leading to further motion practice and the potential for review before the Second Circuit. Ultimately, it remains to be seen if plaintiff can marshal sufficient facts to support its theory that defendants were a substantial factor in the alleged contamination.
