Georgia-Pacific Consumer Products, LP v. Ratner

746 S.E.2d 829, 323 Ga. App. 203, 2013 Fulton County D. Rep. 2527, 2013 WL 3665544, 2013 Ga. App. LEXIS 669

• Court: Court of Appeals of Georgia
• Decided: July 16, 2013
• Docket: A13A0455
• Status: Published

Opinions

ELLINGTON, Presiding Judge.

Four Effingham County property owners¹ sued Georgia-Pacific Consumer Products, LP (“Georgia-Pacific”) for nuisance, trespass, and negligence arising out of the intermittent but continuing release of hydrogen sulfide gas onto their properties from Georgia-Pacific’s Savannah River Mill (“the mill”) in Rincon.² The plaintiffs moved the trial court to certify a class consisting of the owners of 65 additional properties neighboring the plant. After a hearing, the trial court certified the class pursuant to OCGA § 9-11-23 (c) (l).³ Georgia-Pacific contends that the trial court abused its discretion when it certified the class. We disagree and, for the reasons set forth below, we affirm.

Under OCGA § 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.

(Footnotes omitted.) Bd. of Regents of the Univ. System of Ga. v. Rux, 260 Ga. App. 760, 764 (3) (580 SE2d 559) (2003). In order to gain class certification, a plaintiff has the burden of establishing that the prerequisites of OCGA § 9-11-23 (a) have been satisfied, those being (1) numerosity, (2) commonality, (3) typicality, and (4) adequacy. See OCGA § 9-11-23 (a); see also EarthLink, Inc. v. Eaves, 293 Ga. App. 75, 76 (1) (666 SE2d 420) (2008) (“Under Georgia law, a case may proceed as a class action if all prerequisites of OCGA § 9-11-23 (a) are satisfied: numerosity, commonality, typicality, and adequacy[.]”). Additionally, the class must satisfy at least one ground under OCGA § 9-11-23 (b), which provides, in relevant part, that a case may proceed as a class action if

the prerequisites of OCGA § 9-11-23 (a) are satisfied and[ ] (1) the prosecution of separate actions would create a risk of inconsistent adjudications or would impair other parties’ ability to protect their interests; (2) the defendant has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or 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.

(Footnote omitted.) EarthLink, Inc. v. Eaves, 293 Ga. App. at 76 (1); see also OCGA § 9-11-23 (b). “[W]e review the trial court’s decision in certifying or refusing to certify a class action for an abuse of discretion.” (Citation omitted.) Rite Aid of Ga. v. Peacock, 315 Ga. App. 573 (726 SE2d 577) (2012). This Court “will not reverse the factual findings in a trial court’s class certification order unless they are clearly erroneous[.]” (Punctuation omitted.) Id. “Implicit in this deferential standard of review is a recognition of the fact-intensive basis of the certification inquiry and of the trial court’s inherent power to manage and control pending litigation.” Resource Life Ins. Co. v. Buckner, 304 Ga. App. 719, 729 (3) (698 SE2d 19) (2010).

The facts relevant to this dispute are as follows. The mill has been in operation since 1986. Since 1992, Georgia-Pacific has received complaints from neighboring property owners concerning noxious gasses emanating from the mill’s grounds, and the mill took steps to rectify the problem with some success. However, in 2006, the mill began receiving complaints about noxious odors emanating from the plant from surrounding landowners, including homeowners in a new subdivision, Mallard Pointe, located directly across the street from the mill. The plaintiffs submitted evidence of 107 odor-related complaints from 2006 through 2012, 28 of which came from the Mallard Pointe landowners. The landowners complained that the noxious gases, among other things, interfered with their ability to enjoy their properties; irritated their eyes, skin, and lungs and made them feel ill; and damaged some exterior household fixtures, primarily air conditioning equipment. Further, the landowners were concerned that continued emissions from the mill would adversely affect the value and marketability of their properties.

In response to these complaints, Georgia-Pacific identified the noxious gas as hydrogen sulfide fumes “created by the biological breakdown of living organisms necessary to [the mill’s] wastewater treatment process” and intermittently emanating from pits containing sludge produced by that process. The mill is deemed a “major source” of pollutants, including hydrogen sulfide, and must demonstrate compliance with both federal and state law in order to obtain permits to operate.⁴ To abate the problem, Georgia-Pacific admitted that it has considered closing three of the sludge pits thought to be the source of most of the hydrogen sulfide gas. Documents produced by Georgia-Pacific revealed that numerous property owners neighboring the mill have complained that the gases emanating from the plant have caused their air conditioning systems to fail. Georgia-Pacific has paid to replace or to repair air conditioning units on at least 20 homes in the area, most of which are located in the Mallard Pointe subdivision. The plaintiffs’ expert witnesses opined that the homes in the area surrounding the mill are exposed to enough hydrogen sulfide to cause corrosive damage to air conditioning units and that, indeed, evidence of such damage was found in the units inspected. Documents produced by Georgia-Pacific also demonstrated that hydrogen sulfide gas emissions could cause substantial corrosion of metal components within a half-mile of the storage area.

The named plaintiffs filed suit on December 10, 2010, and they sought certification for a class consisting of certain Georgia citizens owning property within a half-mile of a geographic point near the mill. They amended the complaint on January 13, 2012, to propose a class consisting of property owners neighboring the mill within a discrete area circumscribed by roads, railroad rights-of-way, and specific geographic coordinates. The area includes 34 residential properties and 33 parcels zoned industrial, agricultural, or other. It is undisputed that each of the properties in the area has either been exposed to the hydrogen sulfide gas to some degree or is at risk of exposure given the proximity to the mill.⁵ The mill’s environmental manager deposed that hydrogen sulfide gas can be detected up to four miles away from the plant. The property in the class area furthest from the mill’s sludge field is less than a mile away. In an affidavit offered in support of class certification, a real estate appraiser averred that, based upon his examination of the area around the mill, “the reported toxic fumes would constitute a factor impairing the value and marketability” of the properties included in the proposed class.

After a hearing, the trial court issued an order certifying the class. Although Georgia-Pacific challenges each of the court’s legal findings and contends the trial court abused its discretion in certifying the class, it did not enumerate as error any specific factual finding made by the superior court. Because the superior court’s detailed order adequately addresses the issues raised by the appellant, we adopt the court’s order certifying the class as our opinion in this case. We note that the superior court prefaced its opinion with a lengthy acknowledgment that it was undertaking a “rigorous analysis” in light of recent United States Supreme Court precedent.⁶ The following is excerpted, with modifications, from the order of the trial court.

This action asserts claims in nuisance, trespass and negligence on behalf of a class of property owners defined as follows:

All citizens of the State of Georgia who, as of November 18, 2010, owned property lying, in whole or in part, within an area of land lying in Effingham County, Georgia, and bounded as follows: On the east by a line running along the west side of the right of way of Fort Howard Road between the intersection of Fort Howard Road and Seckinger Ford Road and the south side of the right of way of the railroad line that serves the Georgia-Pacific Plant; On the north by a line running along the south side of said railroad right of way between Ford Howard Road and Rincon-Stillwell Road; On the west by a line running along the east side of the right of way of Rincon-Stillwell Road; On the south by a line running along the north side of the right of way of Bunyan Kessler Road beginning at Rincon-Stillwell Road and going in an easterly direction to a point at Latitude 32.30582649 and Longitude minus 81.21047668 and thence easterly along a straight line to the intersection of Fort Howard Road and Seckinger Ford Road. Expressly excluded from membership in the class are the above-named Defendant, its related corporations and all directors, officers and employees of the Defendant.

This class definition is unambiguous and the members of the class are readily identifiable from public records. The amended complaint asserts that the releases of hydrogen sulfide gas from the waste produced by the mill permeate the class area, have interfered with the use and enjoyment of property and have impaired the value of the properties owned by members of the proposed class.

1. OCGA § 9-11-23 (a) Analysis,

a. Numerosity

Evidence in the record supports a finding that the owners of the properties within the proposed class who are the members of the proposed class are readily identifiable and that public records identify 116 individual owners and sixteen corporate owners of the property that lies within the bounds of the proposed class area. The “impracticably of joinder... is generally presumed if a putative class amounts to more than forty individuals.” (Citations and punctuation omitted.) American Debt Foundation, Inc. v. Hodzic, 312 Ga. App. 806, 809 (1), n. 15 (720 SE2d 283) (2011). Georgia-Pacific asserts that the numerosity requirement is not met because it would be, in its view, practical to join all 116 individuals and sixteen corporate owners of property within the proposed class area in a single action. [⁷] The number of members of the proposed class meets the numerosity requirement. The case management tools afforded a trial court by OCGA § 9-11-23 make this action far more manageable as a class action than would be a mass joinder action. The Court finds that joinder of this many parties is impractical and that the numerosity of OCGA § 9-11-23 (a) (1) is met.

b. Commonality

OCGA § 9-11-23 (a) (2) requires that there be “questions of law or fact common to the class[.]” “[T]he commonality requirement does not require that all questions of law and fact be common to every member of the class. Rather, the rule requires only that resolution of the common questions affect all or a substantial number of the class members.” (Citations and punctuation omitted.) Flournoy v. Honeywell Intl., Inc., 239 FRD 696, 699 (S.D. Ga. 2006). See also Brenntag Mid South, Inc. v. Smart, 308 Ga. App. 899, 906 (2) (b) (i) (710 SE2d 569) (2011).

The record supports a finding that there are a number of issues of fact common to the class given that the claims asserted on behalf of all members of the proposed class are based upon harm allegedly caused by hydrogen sulfide gas coming from the mill. The noxious smell, toxicity, and corrosive nature of this chemical present questions of fact common to the class. Other common questions involve: (a) the safety programs implemented by Georgia-Pacific at the mill and their adequacy; (b) the materials used at the mill, including those in the landfill and sludge fields; (c) the causes and effects of toxic releases from the mill, including those from its sludge fields and landfill; (d) all factual issues relating to Georgia-Pacific’s operation of the mill, including its generation, storage and use of materials and products at the plant, including its sludge fields and landfill, and the precautions that it undertakes to prevent releases of pollutants into the environment; (e) the liability of Georgia-Pacific; (f) common affirmative defenses raised by Georgia-Pacific; (g) remedies available under Georgia law and the appropriate measure of damages; (h) the claim for expenses of litigation; and (i) the claim for exemplary damages.

The 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. The requirement for the existence of common questions of law and fact is met.

c. Typicality

OCGA § 9-11-23 (a) (3) requires that the claims asserted by the named parties and the defenses raised thereto by Georgia-Pacific be typical of the claims asserted on behalf of the class and the defenses raised by Georgia-Pacific to those claims. This requirement of typicality has been held to require a showing of, “the same unlawful acts [by the defendant] in the same method against [the] entire class.” (Citation, punctuation and footnote omitted.) Liberty Lending Svcs. Inc. v. Canada, 293 Ga. App. 731, 738 (1) (b) (668 SE2d 3) (2008). The claims asserted on behalf of the named plaintiffs are, in this case, the same as the claims asserted on behalf of the class, namely that the release of hydrogen sulfide gas has damaged their respective properties. While there may be different types of affected properties involved in this case, the basic claims of nuisance, trespass, and negligence are the same. The common proof would show the same unlawful acts by Georgia-Pacific in the same method against the entire class. Id. Thus, the requirement of typicality is met.

d. Adequacy of Representation

OCGA § 9-11-23 (a) (4) requires a finding that the “representative parties will fairly and adequately protect the interests of the class.” The focus of adequacy of representation is on class counsel. Stevens v. Thomas, 257 Ga. 645, 649 (2) (361 SE2d 800) (1987) (“The important aspects of adequate representation are whether the plaintiffs’ counsel is experienced and competent and whether plaintiffs’ interests are antagonistic to those of the class.”) (citation omitted). Georgia-Pacific has agreed that plaintiffs’ counsel will provide adequate representation. There was no showing of any antagonistic interests between those of the class representatives and the interests of the members of the proposed class. The Court finds, as a matter of fact, that the named plaintiffs and their counsel will provide adequate representation of the interests of the class.

2. OCGA § 9-11-23 (b) (3) Analysis.

Having concluded that the requirements of OCGA § 9-11-23 (a) have been met, the court now addresses the requirements of OCGA § 9-11-23 (b) (3). Under Rule 23 (b) (3) a class may be certified if the questions of law or fact predominate over individual issues and “a class action is superior to other available methods for the fair and efficient adjudication of the controversy.” OCGA § 9-11-23 (b) (3).

Factors to be considered include:

(A) [t]he interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) [t]he extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) [t]he desirability or undesirability of concentrating the litigation of the claims in the particular forum; and (D) [t]he difficulties likely to be encountered in the management of a class action.

OCGA § 9-11-23 (b) (3).

a. Predominance of Common Issues Over Individual Issues

Common issues of fact and law predominate if they have a direct impact on every class member’s effort to establish liability and on every class member’s entitlement to injunctive and monetary relief. Where, after adjudication of the classwide issues, plaintiffs must still introduce a great deal of individualized proof or argue a number of individualized legal points to establish most or all of the elements of their individual claims, such claims are not suitable for class certification under Rule 23 (b) (3).

(Citation omitted.) Liberty Lending Svcs. v. Canada, 293 Ga. App. at 739-740 (2). When determining whether common issues predominate, the proper focus is on issues of fact and law that relate to liability rather than damages. See Brenntag Mid South, Inc. v. Smart, 308 Ga. App. at 906 (2) (b) (i); see also Resource Life Ins. v. Buckner, 304 Ga. App. at 732. Thus, “[c]ommon issues may predominate when liability can be determined on a class-wide basis, even when there are some individualized damage issues.” (Citations and punctuation omitted.) In re Tri-State Crematory Litigation, 215 FRD 660, 694 (N.D. Ga. 2003). See also Sterling v. Velsicol Chem. Corp., 855 F2d 1188, 1197 (6th Cir. 1988) (“where the defendant’s liability can be determined on a class-wide basis because the cause of the disaster is a single course of conduct which is identical for each of the plaintiffs, a class action may be the best suited vehicle to resolve such a controversy’). The resolution of whether common issues predominate is a matter addressed to the discretion of the trial court. Fortis Ins. Co. v. Kahn, 299 Ga. App. 319, 323 (2) (a) (683 SE2d 4) (2009).

Here, the determination of Georgia-Pacific’s liability to class members will necessarily focus on its conduct, the toxicity and corrosiveness of hydrogen sulfide, and the legal issues flowing from the law of nuisance, trespass and negligence^⁸] Defendant argues that each affected property owner was affected in different ways and degrees, necessitating numerous individualized determinations of harm. Further, Defendant argues that each property owner would have to prove the various elements of nuisance, trespass and negligence as to their respective properties. All of this, according to Defendant, shows that individual questions of law and fact predominate over the common ones in this case. While Georgia-Pacific’s contentions have some merit as each plaintiff will have unique elements or amounts of damage, there are more significant questions that are common to the class and which predominate over the individual issues in this case. The superior court anticipated that the evidence as to liability would be presented on a class-wide basis, and would be the same for all class members. That the amount of damages may vary among class members does not defeat the predominancy of common issues as to liability. Georgia-Pacific is the sole defendant and its conduct is the only conduct at issue. The same negligent actions are alleged to have caused harm to each class member in substantially the same ways. The same types of damages are sought for every class member. The Complaint sets forth the common course of conduct alleged by the plaintiffs. Under these facts and the controlling authority cited above, the Court finds that the common issues of fact and law predominate over any individual issues.

b. Superiority

OCGA § 9-11-23 (b) (3) lists factors for a court to consider when making its determination as to whether a class action is superior to other alternative procedures to adjudicate the case.[⁹] The cost to hire experts, to conduct discovery, and to present the case for trial for an individual party owning property in the class area would be essentially the same as preparing and presenting the case for all class members. The cost of preparation of an individual claim could well exceed the potential recovery of actual damages. The efficiencies of preparation and presentation on a class-wide basis outweigh any interest of class members proceeding on an individual basis. Moreover, anyone who wishes to opt out will be given the opportunity to opt out of this class action. There is no other competing litigation of the claims presented in this action. The Superior Court of Effingham County is the logical court to adjudicate these claims. This case, as presented, should be manageable as a class action. The Court notes that counsel for plaintiffs and for Georgia-Pacific have extensive experience in representation of parties in class actions adjudicating claims brought on behalf of property owners for damage caused by releases of hazardous chemicals, and that these cases have been managed to a final conclusion. Aclass action would clearly be more manageable than dozens of separate lawsuits or mass joinder of over a hundred named plaintiffs in a single action. The use of experts, likely including an attorney, real estate agent, environmental scientist and an appraiser, giving testimony relevant to the claims of all class members is far more efficient and manageable than numerous trials for each separate property owner.

We find the trial court’s reasoning given the facts of this case reasonable and supported by competent evidence. Thus, we find no abuse of discretion in the court’s decision to certify the class.

Judgment affirmed.

Phipps, C. J., Barnes, P. J., and Miller, J., concur. Andrews, P. J., Ray and Branch, JJ., dissent.

1 Class representatives Kirbi and Aaron Ratner own a single-family residence in Mallard Crossing, in Rincon. David and Kathy McDonald own a single-family home in Mallard Pointe, Rincon.

2 The facility operates a paper mill, a power plant, a wastewater treatment facility, a landfill, and sludge fields.

3 “As soon as practicable after the commencement of an action brought as a class action, the court shall determine by order whether it is to be so maintained. An order under this subsection may be conditional, and may be altered or amended before the decision on the merits.” OCGA § 9-11-23 (c) (1).

4 See the Georgia Air Quality Act, OCGA § 12-9-1 et seq., Georgia Rules for Air Quality Control, Chapter 391-3-1, and Title V of the Clean Air Act, 42 USCS § 7401 et seq.

5 The dissent focuses on distinctions (the type of property, the length of exposure, the degree of physical damage, etc.) that may be relevant to the amount of money damages appropriate to each class member, but the nature of the injury to each member of the class is nevertheless the same. Further, the plaintiffs are not bringing claims for bodily injury and thus will not be pursuing “necessarily individualized injuries” as the dissent asserts. The defendant admitted that the release of hydrogen sulfide gas from its wastewater treatment process creates a problem for neighboring landowners; moreover, it admitted that it has taken measures to remedy the problem. That problem is essentially the same for each landowner: exposure to hydrogen sulfide gas, a corrosive and irritating pollutant.

6 The superior court, citing this Court’s opinion in Rite Aid of Ga. v. Peacock, 315 Ga. App. at 573, and the United States Supreme Court’s precedent cited therein, Wal-Mart Stores v. Dukes, _ U. S. _, _ (II) (A) (131 SCt 2541, 180 LE2d 374) (2011), wrote that a class action is “an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.” The court noted that, in order to justify a departure from “the usual rule” and establish that a case is sufficiently exceptional to warrant class treatment, “[a] party seeking class certification must affirmatively demonstrate his compliance with the Rule.” Id. at 2551. The court further noted that certification is proper only if “the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied.” The court acknowledged that the plaintiffs were required to carry their burden with “significant proof.” The court then proceeded to set forth its required factual findings and conclusions of law.

7 Georgia-Pacific’s argument that it would be permissible to join all of the putative class members as named parties in this action rather than the case proceeding as a class action could be viewed as an acknowledgment that the claims being asserted on behalf of these absent class members arise, out of the same transaction, occurrence, or series of transactions or occurrences, and raise common questions of law and fact as required for joinder of parties in a single action.

8 The common issues listed above in Division 1 (b) concerning commonality are also common issues in regard to the predominance analysis, as the legal and factual issues regarding the liability and damages caused by the mill’s hydrogen sulfide emissions to the property of the named plaintiffs are the same as the issues of liability and damage to the rest of the class.

9 OCGA § 9-11-23 (b) (3) lists the folio wing factors: “(A) The interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) The extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) The desirability or undesirability of concentrating the litigation of the claims in the particular forum; and (D) The difficulties likely to be encountered in the management of a class action.”