The Ninth Circuit’s recent decision in Allen v. The Boeing Company may pave the way for removal of more mass tort claims to federal court. Allen held that an environmental mass tort occurring over many years is removable under the Class Action Fairness Act (CAFA), finding the “local single event” rule did not apply.
In Allen, over 100 Washington state residents filed a state court complaint, alleging that for 40 years, defendants Boeing and Landau contaminated their groundwater and did not properly investigate, remediate, clean up, or warn of the contamination. Boeing removed the action to federal court, arguing that federal jurisdiction existed under CAFA because the case qualified as a “mass action.” Mass actions are defined under CAFA as claims of 100 or more persons, proposed to be tried jointly, and involving a common question of law or fact. CAFA allows defendants to remove mass actions from state court to federal court, even if the traditional requirements for federal jurisdiction are not met.
However, an important exception to federal jurisdiction under CAFA is the “local single exception” rule. It states that claims are not considered mass actions when “all of the claims in the action arise from an event or occurrence in the state in which the action was filed, and that allegedly resulted in injuries in that state or in states contiguous to that state.” The Allen plaintiffs argued the alleged groundwater contamination was such an “event or occurrence,” and therefore their claims belonged in state court.
But the Ninth Circuit rejected the plaintiffs’ argument, narrowly construing the words “event or occurrence” to apply only where all claims arise from a single event, such as a single chemical spill. The Ninth Circuit’s decision directly conflicts with the Third Circuit’s interpretation of “event or occurrence.” The Third Circuit found that a refinery’s release of hazardous materials over the course of more than a decade constituted an “event or occurrence” under CAFA, and therefore sent the case back to state court, noting the ordinary meaning of those words “is not always limited to something that happened at a particular moment in time.”
The Ninth Circuit noted: “The legislative history draws the line between a one-time chemical spill and a continuing course of pollution, contamination, or conduct that occurs over a period of years,” finding that cases alleging a “continuous course of pollution” are properly removed to federal court under CAFA.
Allen’s interpretation of CAFA’s “event or occurrence” exception is important because most claims of environmental contamination do not occur as a result of a singular happening, but instead, as in Allen, from numerous releases spanning a period of time. The Allen decision (a 2 to 1 holding) creates a circuit split between the Ninth Circuit and the Third Circuit, and is also inconsistent with Fifth Circuit law. The Allen plaintiffs have not yet sought review by the U.S. Supreme Court.
Watch the Ninth Circuit oral argument here: http://www.ca9.uscourts.gov/media/view_video.php?pk_vid=0000007425