Gardner v. LaFarge Corp

294 F. App'x 210
CourtCourt of Appeals for the Sixth Circuit
DecidedSeptember 18, 2008
Docket07-1953
StatusUnpublished
Cited by23 cases

This text of 294 F. App'x 210 (Gardner v. LaFarge Corp) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gardner v. LaFarge Corp, 294 F. App'x 210 (6th Cir. 2008).

Opinion

ROGERS, Circuit Judge.

The appellants in this case are some members of a class of plaintiffs who sued the defendant, LaFarge Corporation, because of pollution emitted by its portland cement plant in Alpena, Michigan. After the defendants had unsuccessfully appealed the district court’s class certification decision, the class counsel and the defendant entered into settlement negotiations. The class counsel and defendants came to an agreement whereby the defendant would pay the class members $1,900,000, while also spending $700,000 on capital improvements to reduce pollution. The appellants (hereinafter, the “Objectors”) objected to this proposed settlement and asked the district court to reject it. In turn, the class counsel asked the court to remove the class representatives — who all objected to the settlement — and replace them with new class representatives. The district court granted the motion to substitute new class representatives, although the court refused to approve the settlement because it impermissibly required those who had previously opted out of the litigation to do so again. Soon after the rejection of the first proposed settlement agreement, the parties submitted a revised settlement agreement that resolved the opt-out issue, but was otherwise substantially identical to the first settlement agreement. The Objectors filed objections yet again, but the district court overruled those objections and approved the settlement. On appeal, the Objectors contend that the revised settlement agreement should not have been approved because it is not fair, reasonable, and adequate. They also argue that the original class representatives should not have been removed as class representatives, and that the district court should have awarded fees and costs to Objectors’ counsel. Although the fairness, reasonableness, and adequacy of the settlement is a close call, and this court might not approve the settlement if it were evaluating the issue de novo, the highly deferential standard of review requires affirmance of the district court’s decision to approve the settlement. Likewise, the district court’s decisions to replace the original class representatives and deny fees and costs to the Objectors’ counsel must also be affirmed.

I.

The cement plant in question manufactures cement from limestone, sand, fly ash, *212 gypsum, and iron. These raw materials are blended together after having been dried and ground into powder. Afterward, the mixture is heated to a high temperature in kilns fueled by coal and petroleum coke. This transforms the mixture into hard nodules called clinker. After the clinker is cooled and ground into powder, it is combined with gypsum to produce cement. This process results in the release of substantial amounts of particulate into the air. Some of this pollution is composed of toxic substances, such as mercury.

In 1994, LaFarge entered into a consent judgment with the State of Michigan concerning the plant’s pollution. Nevertheless, the plant continued emitting pollution. Between 1996 and 1999, the Michigan Department of Environmental Quality (“MDEQ”) determined that the plant committed numerous violations of the consent judgment that resulted in stipulated penalties of $5.4 million. These penalties do not appear to have stopped the pollution though. In 2005 — six years after this lawsuit was filed — the plant emitted 802,119 pounds of EPA Toxic Release Inventory air pollutants. The plant also emitted high levels of mercury during that year. According to MDEQ, the plant emitted 520 pounds of mercury into the air during 2005, and LaFarge’s own monitoring shows that the plant emitted between 422 and 555 pounds of mercury during that year. MDEQ records indicate that this was the second largest source of mercury emissions in Michigan in 2005. Of the mercury emitted from the plant, approximately 85%-90% was in the oxidized gaseous form, which, according to the affidavit of the Objectors’ expert, was especially harmful because it is water soluble and therefore “much more biologically available for toxic action.” The Objectors’ expert has also attested to the fact that oxidized mercury not only has more dangerous properties than other forms of mercury, but is a particular concern for the resident of Alpena because it is deposited closer to its source than other forms of mercury.

On April 19, 1999, a putative class action complaint was filed against LaFarge. The complaint named Julie Olden, Richard Hunter, and Wilbur Bleau as the putative class representatives, and it alleged four causes of action: (1).a medical monitoring claim; (2) trespass; (3) nuisance; and (4) negligence. 2 The class alleged that they had suffered personal injury and property damage as a result of the cement kiln dust that was produced and emitted during the manufacturing process. The class also claimed to have suffered similar injuries due to the emission of toxic by-products that resulted from the burning of hazardous waste in the kilns.

On October 24, 2001, the case was certified as a class action. See Olden v. La-Farge Corp., 203 F.R.D. 254 (E.D.Mich. 2001). The class was defined as “all owners of single family residences in the City of Alpena whose persons or property was damaged by toxic pollutants and contaminants which originated from the Lafarge [sic] cement manufacturing facility located in Alpena, Michigan.” Id. at 271. The class certification was appealed to the Sixth Circuit. Before the appeal was heard, however, the two parties went to mediation. The mediator — who was a former chief judge of the Wayne County (Michigan) Circuit Court — concluded that a settlement of $1.8 million would be fair and reasonable. Nevertheless, the parties were not able to come to an agreement, and the appeals process continued. The class certification decision was affirmed by *213 the Sixth Circuit in Olden v. LaFarge Corp., 383 F.3d 495 (6th Cir.2004), and the Supreme Court denied certiorari in La-Farge Corp. v. Olden, 545 U.S. 1152, 125 S.Ct. 2990,162 L.Ed.2d 910 (2005).

Almost immediately after the Supreme Court’s denial of certiorari, the parties entered into settlement negotiations. The class counsel had no expert opinions, nor had they engaged in formal discovery. Nevertheless, the class counsel — -who had been involved in many environmental class actions, but had never taken one to trial— reached a proposed settlement with La-Farge. The proposed settlement agreement called for a total settlement value of $2.6 million, and it redefined the class as:

All of those natural persons residing within the City of Alpena, Michigan, at any time between April 19, 1996, and the date of this Agreement, together with all of those natural persons or entities (including but not limited to propri-etorships, unincorporated associations, partnerships, institutions, business and professional corporations, not-for-profit corporations, trusts, and their successors in title or interest) owning residential property within the City of Alpena, Michigan, at any time between April 19, 1996, and the date of this Agreement.

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Bluebook (online)
294 F. App'x 210, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gardner-v-lafarge-corp-ca6-2008.