Patrick Blanks v. Fluor Corporation
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Opinion
In the Missouri Court of Appeals Eastern District DIVISION FOUR
PATRICK BLANKS, et al., ) No. ED97810 ) Respondents, ) Appeal from the Circuit Court ) of the City of St. Louis vs. ) ) Honorable Dennis M. Schaumann FLUOR CORPORATION, et al., ) ) Appellants. ) Filed: June 17, 2014
“Our Tigger.” That is what Austin Manning’s parents called him when he was a
little boy, because he bounced around like Tigger from the classic tale, Winnie the Pooh.
He never sat still for more than a second. At the time, the family thought it was cute.
Little did they know of the problems to come.
As Austin grew older, he had numerous problems. When Austin started school,
he had trouble with simple things like writing his name. He was always behind. He
needed directions to be repeated over and over again. He could not grasp even the
simplest of concepts. And he could not sit still long enough to do anything without
constant supervision. From early on, Austin was easily distracted. He could not
complete a task. He talked too much, he fidgeted, and he disrupted his classroom. He
struggled in reading and math, and repeated second grade. Austin played Little League,
but not well. Rather than attentively playing his position, he would often just sit down at
his outfield position and play in the grass. At home, Austin was restless, disorganized, and had difficulty doing his chores. He was forgetful. He procrastinated. He was quick
to anger and often argued with adults. The hyperactivity exhibited in his toddler years
continued as he grew older. He had difficulty planning or engaging in leisure activities
quietly. He interrupted or intruded on others. He had difficulty waiting for his turn. He
was always on the go and acted as if driven by a motor. Unbeknownst to Austin’s
family, Austin had been exposed to high levels of lead and suffered from lead poisoning,
all caused by lead emitted from the smelter in his town.
Austin is not alone. Other children from his town have suffered the same plight.
The present action involves sixteen children who all suffered lead poisoning while living
in Herculaneum during their early childhood. The children’s parents, unsuspecting and
unknowing at first, eventually learned that their children had been poisoned. They sued
the partners of The Doe Run Company partnership, which owned and operated the
Herculaneum lead smelter from 1986 to 1994. Framed by the children’s lawyers as the
age-old conflict of business profits versus human safety, the children alleged the
partnership negligently allowed them to be exposed to lead. After a landmark trial lasting
some thirteen weeks, the jury awarded the children millions of dollars, both in actual and
punitive damages.
The partners have appealed, alleging a host of errors. Before addressing those
legal questions, however, we return to Herculaneum, to recount the lives of the children
and their unsuspecting parents, and the actions of an industry giant that allowed the
children to be exposed to lead, forever affecting the children. 1
1 We set forth the facts in the light most favorable to the jury’s verdict. Hayes v. Price, 313 S.W.3d 645, 648 (Mo. banc 2010). We pause here to address the children’s two motions that are pending before this Court. The children first move to dismiss the defendants’ appeal for repeated violations of Rule 84.04, the rule of appellate procedure that sets forth the requirements for an appellant’s brief. The children allege
2 The Children
The sixteen children who suffered lead poisoning in this case are: Preston
Alexander, Patrick Blanks, Bryan Bolden, Tiffany Bolden, Nathan Davis, Gabe Farmer,
Sydney Fisher, Heather Glaze, Jeremy Halbrook, Matthew Heilig, Austin Manning, Jesse
Miller, Jonathan Miller, Ashley Shanks, Lauren Shanks, and Isaiah Yates. Some of the
children were born in Herculaneum. Some are even second-, third-, and fourth-
generation residents of the town. Others moved there as infants or young children.
When asked to describe Herculaneum as that town existed prior to 1994, the parents of
these children painted a portrait of small-town America. They described “Herky” as a
numerous violations, ranging from an improper statement of facts to improper points relied on, to inadequate citations to the record. The allegations contained in the children’s 74-page motion are largely meritorious. The most egregious of defendants’ violations, and the one that most affected the disposition of this appeal, is the defendants’ statement of facts. Rule 84.04(c) requires that an appellant’s fact statement be a “fair and concise statement of the facts relevant to the questions presented for determination without argument.” “The primary purpose of the statement of facts is to afford an immediate, accurate, complete and unbiased understanding of the facts of the case.” Kent v. Charlie Chicken, II, Inc., 972 S.W.2d 513, 515 (Mo. App. E.D. 1998). Defendants’ statement violates the rule’s requirements and falls woefully short of fulfilling its essential purpose. Defendants present a statement of facts entirely biased in their favor, while ignoring and excluding the facts that support the verdict. An appellant must provide the facts in the light most favorable to the verdict, not simply recount appellant’s version of the facts presented at trial. In re Marriage of Weinshenker, 177 S.W.3d 859, 862 (Mo. App. E.D. 2005). Emphasizing facts favorable to the appellant and omitting others essential to the respondent does not substantially comply with Rule 84.04. Rothschild v. Roloff Trucking, 238 S.W.3d 700, 702 (Mo. App. E.D. 2007). Defendants also repeatedly misstate the evidence. And their fact statement is inappropriately riddled with inflammatory language as well as disparaging remarks about the trial judge, which we find entirely unjustified. Further, while the parties may be intimately acquainted with the context of their litigation, the matter is new to this Court. It is not this Court’s duty or place to comb through the record, ferreting out facts, to gain an understanding of the case. Yet, this is exactly the position in which defendants placed this Court. The record on appeal consists of transcripts totaling over 12,000 pages and a legal file that exceeds 6,600 pages. The parties also filed over 1,400 exhibits with this Court. The defendants’ failure to provide an adequate statement of facts resulted in the waste of judicial resources and added an inordinate amount of time to the disposition of this appeal. Compliance with the briefing requirements is required, not only so the appellant may give notice of the precise matters at issue, but also so that unnecessary burdens are not imposed on the appellate court and to ensure that appellate courts do not become advocates for the appellant. Thornton v. City of Kirkwood, 161 S.W.3d 916, 919 (Mo. App. E.D. 2005). Failure to comply with Rule 84.04 preserves nothing for review and warrants dismissal of the appeal. Culley v. Royal Oaks Chrysler Jeep, Inc., 216 S.W.3d 235, 236 (Mo. App. E.D. 2007). An inadequate statement of facts is grounds for dismissal. See Washington v. Blackburn, 286 S.W.3d 818, 820 (Mo.App. E.D. 2009). Given the gravity of this case, however, we have elected to exercise our discretion to review the case, choosing instead to deal with the defendants’ violations as they arise, in the body of our opinion. We therefore deny the children’s motion. The children also request that this Court sanction defendant Fluor under Rule 84.19 for its conduct in knowingly presenting false and materially misrepresented facts to this Court. We likewise deny that motion.
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In the Missouri Court of Appeals Eastern District DIVISION FOUR
PATRICK BLANKS, et al., ) No. ED97810 ) Respondents, ) Appeal from the Circuit Court ) of the City of St. Louis vs. ) ) Honorable Dennis M. Schaumann FLUOR CORPORATION, et al., ) ) Appellants. ) Filed: June 17, 2014
“Our Tigger.” That is what Austin Manning’s parents called him when he was a
little boy, because he bounced around like Tigger from the classic tale, Winnie the Pooh.
He never sat still for more than a second. At the time, the family thought it was cute.
Little did they know of the problems to come.
As Austin grew older, he had numerous problems. When Austin started school,
he had trouble with simple things like writing his name. He was always behind. He
needed directions to be repeated over and over again. He could not grasp even the
simplest of concepts. And he could not sit still long enough to do anything without
constant supervision. From early on, Austin was easily distracted. He could not
complete a task. He talked too much, he fidgeted, and he disrupted his classroom. He
struggled in reading and math, and repeated second grade. Austin played Little League,
but not well. Rather than attentively playing his position, he would often just sit down at
his outfield position and play in the grass. At home, Austin was restless, disorganized, and had difficulty doing his chores. He was forgetful. He procrastinated. He was quick
to anger and often argued with adults. The hyperactivity exhibited in his toddler years
continued as he grew older. He had difficulty planning or engaging in leisure activities
quietly. He interrupted or intruded on others. He had difficulty waiting for his turn. He
was always on the go and acted as if driven by a motor. Unbeknownst to Austin’s
family, Austin had been exposed to high levels of lead and suffered from lead poisoning,
all caused by lead emitted from the smelter in his town.
Austin is not alone. Other children from his town have suffered the same plight.
The present action involves sixteen children who all suffered lead poisoning while living
in Herculaneum during their early childhood. The children’s parents, unsuspecting and
unknowing at first, eventually learned that their children had been poisoned. They sued
the partners of The Doe Run Company partnership, which owned and operated the
Herculaneum lead smelter from 1986 to 1994. Framed by the children’s lawyers as the
age-old conflict of business profits versus human safety, the children alleged the
partnership negligently allowed them to be exposed to lead. After a landmark trial lasting
some thirteen weeks, the jury awarded the children millions of dollars, both in actual and
punitive damages.
The partners have appealed, alleging a host of errors. Before addressing those
legal questions, however, we return to Herculaneum, to recount the lives of the children
and their unsuspecting parents, and the actions of an industry giant that allowed the
children to be exposed to lead, forever affecting the children. 1
1 We set forth the facts in the light most favorable to the jury’s verdict. Hayes v. Price, 313 S.W.3d 645, 648 (Mo. banc 2010). We pause here to address the children’s two motions that are pending before this Court. The children first move to dismiss the defendants’ appeal for repeated violations of Rule 84.04, the rule of appellate procedure that sets forth the requirements for an appellant’s brief. The children allege
2 The Children
The sixteen children who suffered lead poisoning in this case are: Preston
Alexander, Patrick Blanks, Bryan Bolden, Tiffany Bolden, Nathan Davis, Gabe Farmer,
Sydney Fisher, Heather Glaze, Jeremy Halbrook, Matthew Heilig, Austin Manning, Jesse
Miller, Jonathan Miller, Ashley Shanks, Lauren Shanks, and Isaiah Yates. Some of the
children were born in Herculaneum. Some are even second-, third-, and fourth-
generation residents of the town. Others moved there as infants or young children.
When asked to describe Herculaneum as that town existed prior to 1994, the parents of
these children painted a portrait of small-town America. They described “Herky” as a
numerous violations, ranging from an improper statement of facts to improper points relied on, to inadequate citations to the record. The allegations contained in the children’s 74-page motion are largely meritorious. The most egregious of defendants’ violations, and the one that most affected the disposition of this appeal, is the defendants’ statement of facts. Rule 84.04(c) requires that an appellant’s fact statement be a “fair and concise statement of the facts relevant to the questions presented for determination without argument.” “The primary purpose of the statement of facts is to afford an immediate, accurate, complete and unbiased understanding of the facts of the case.” Kent v. Charlie Chicken, II, Inc., 972 S.W.2d 513, 515 (Mo. App. E.D. 1998). Defendants’ statement violates the rule’s requirements and falls woefully short of fulfilling its essential purpose. Defendants present a statement of facts entirely biased in their favor, while ignoring and excluding the facts that support the verdict. An appellant must provide the facts in the light most favorable to the verdict, not simply recount appellant’s version of the facts presented at trial. In re Marriage of Weinshenker, 177 S.W.3d 859, 862 (Mo. App. E.D. 2005). Emphasizing facts favorable to the appellant and omitting others essential to the respondent does not substantially comply with Rule 84.04. Rothschild v. Roloff Trucking, 238 S.W.3d 700, 702 (Mo. App. E.D. 2007). Defendants also repeatedly misstate the evidence. And their fact statement is inappropriately riddled with inflammatory language as well as disparaging remarks about the trial judge, which we find entirely unjustified. Further, while the parties may be intimately acquainted with the context of their litigation, the matter is new to this Court. It is not this Court’s duty or place to comb through the record, ferreting out facts, to gain an understanding of the case. Yet, this is exactly the position in which defendants placed this Court. The record on appeal consists of transcripts totaling over 12,000 pages and a legal file that exceeds 6,600 pages. The parties also filed over 1,400 exhibits with this Court. The defendants’ failure to provide an adequate statement of facts resulted in the waste of judicial resources and added an inordinate amount of time to the disposition of this appeal. Compliance with the briefing requirements is required, not only so the appellant may give notice of the precise matters at issue, but also so that unnecessary burdens are not imposed on the appellate court and to ensure that appellate courts do not become advocates for the appellant. Thornton v. City of Kirkwood, 161 S.W.3d 916, 919 (Mo. App. E.D. 2005). Failure to comply with Rule 84.04 preserves nothing for review and warrants dismissal of the appeal. Culley v. Royal Oaks Chrysler Jeep, Inc., 216 S.W.3d 235, 236 (Mo. App. E.D. 2007). An inadequate statement of facts is grounds for dismissal. See Washington v. Blackburn, 286 S.W.3d 818, 820 (Mo.App. E.D. 2009). Given the gravity of this case, however, we have elected to exercise our discretion to review the case, choosing instead to deal with the defendants’ violations as they arise, in the body of our opinion. We therefore deny the children’s motion. The children also request that this Court sanction defendant Fluor under Rule 84.19 for its conduct in knowingly presenting false and materially misrepresented facts to this Court. We likewise deny that motion.
3 friendly, close-knit community, where everyone knew everyone else, and doors went
unlocked. Children spent their days playing outside. They rode their bikes in the streets
around the smelter. They fished near the dam behind the smelter, and even played on the
smelter’s slag pile. Families frequently took walks past the smelter. They gardened and
worked in their yards. They barbequed and threw birthday parties for their children in
their backyards.
In their early years, the children explored their world. For instance, Austin
Manning loved to play in the dirt with his Tonka trucks and Hot Wheels. He built
racetracks in the dirt. Before he was old enough to play with his trucks, he would play on
blankets in the yard. Jeremy Halbrook also liked to play in the dirt with his dump truck.
Preston Alexander played outside in his sandbox, played ball in his yard, and enjoyed
Easter egg hunts. Jesse Miller crawled around and sat in the yard with his mother,
picking grass. Isaiah Yates, when just in diapers, crawled around in his yard, picking up
sticks. Patrick Blanks played with his shovels and buckets for hours in the dirt in his
backyard. Each fall, Gabe Farmer played in the leaves in his yard. Sydney Fisher, from
the time she was an infant, spent a lot of time in her yard. She played on the ground,
played with her dog, and when she was older, she played on her swing set. She could see
the smelter’s smokestack from her yard.
The children here all lived very close to the lead smelter. Some lived directly
across the street; all lived within several blocks of the smelter. The parents universally
noted that smoke emanated from the smelter and settled like smog over the town several
times a week. The smog had a strong sulfur odor; it burnt people’s eyes and had a
“horrible” taste. As one parent related, “You could taste it, you could feel it, you could
4 see it.” The families also noted the enormous amount of dust that collected in their
homes. Those who moved to the area noted that Herculaneum was dustier than other
places where they had lived, and that their homes were harder to keep clean. Moreover,
the dust was not like “normal” dust or dirt, but instead was dark gray or black in
appearance and felt gritty. The families dusted and vacuumed each and every day. Even
with that, they could not remove all the dust from their homes.
Despite all this, the parents gave the smog, the dust, and the smelter little or no
thought. They knew the smelter existed – you could not miss it. Isaiah Yates’s parents,
in particular, hauntingly recalled having no concerns about the smelter. They moved to
Herculaneum in January of 1990, two years prior to Isaiah’s birth. They were looking for
a starter home and a good place to raise their children. They were pleased to find the
house in Herculaneum, in a neighborhood full of kids, with the school nearby, just a
block down the street. They were aware of the smelter but were not worried, especially
since the school was located so close to the smelter. They presumed that if there was a
problem with the smelter, something would be said, and nothing ever was. Indeed, Mrs.
Shanks’s depiction, stated in rather blunt, matter-of-fact terms, aptly summarizes the
parents’ feelings: “There was a smelter. It was there. It was safe.”
Unbeknownst to the parents, the air they breathed, the streets and dirt alleys they
walked on, and the homes and yards they lived in were all contaminated with lead. The
parents testified that prior to 1994, during the partnership period, no one from the smelter
ever warned them of the danger their children faced. No one ever told them that lead
from the smelter was poisoning their children.
5 “Just can’t seem to get it together.” This is how Patrick Blanks describes himself.
Born in July of 1990, Patrick was very flighty as a young child – he just could not stay
still. Once in school, he disobeyed, he talked back, and he disrupted his classroom. He
would not sit down and listen. Patrick was diagnosed with Attention Deficit
Hyperactivity Disorder (ADHD) and placed on Ritalin, which helped a bit. Nevertheless,
even though Patrick was a bit more calm and obedient, his troubles persisted. He could
not focus on the task at hand. And he was impulsive and aggressive. He started kicking
his classmates’ chairs. And when about ten years old, he hit one of his classmates,
breaking the classmate’s jaw. Patrick ended up in juvenile detention. He got into another
fight several years later, and ended up in juvenile detention again. At this point, Patrick
dropped out of school. As a young adult, Patrick still has attention problems and does not
follow through. He would like to return to school to train as an electrician. Patrick’s
grandmother, though encouraging, has her reservations. She does not think Patrick can
work as an electrician because he cannot focus and is forgetful.
“Always different.” This is Melissa Alexander’s description of her son Preston.
Melissa was pregnant with Preston while living in Herculaneum. She gave birth to
Preston in 1989. Preston’s problems began when he was three or four years old. He
started crying at night, complaining about his legs cramping. This went on continuously,
and got so bad that Preston’s father had to wrap warm towels around Preston’s legs to
comfort him. Preston also complained about severe stomach-aches. As a young child,
Preston was always very hyperactive. He was temperamental and would throw fits. He
was a very angry child and always wanted to fight. He talked back, did not listen to his
parents, and constantly got into trouble. In school, Preston had an unpredictable
6 personality and was known as the school bully. He had a short temper with his coaches
in high school. Preston was always behind in his schoolwork. He spent hours each night,
just trying to finish his homework. He could not stay focused. He still has difficulties
today as an adult. A year prior to trial, Preston was employed by a company that
delivered equipment to construction jobs. Preston had difficulties at his job, learning,
understanding, and being able to fulfill his job duties. A coworker described Preston as
being “slow” and “in a daze.” They always had to tell him what to do, and they had to
constantly watch him so that he did not fall over construction work or wander into traffic.
“Like a mummy.” This is how Jeremy Halbrook felt when taking medication to
treat his ADHD. Born in 1984, and a resident of Herculaneum as of 1986, Jeremy as a
child had trouble sitting still, following through with tasks, and completing assignments
on time. He was jittery and anxious. This all affected his ability to do his schoolwork.
Jeremy was a very poor student and struggled from the beginning. He had difficulty
understanding the material. He could not concentrate and often forgot what he had just
read. He needed much direction to complete a simple assignment. He was impulsive and
was easily distracted. He could not stay seated in class, he spoke impulsively, and he hit
his classmates. Jeremy had difficulty getting along with others. He was angry and could
be mean. He got into verbal fights and inappropriately teased his classmates. He had few
friends in high school.
Jeremy was diagnosed with ADHD when in the third grade. The doctor placed
him on Ritalin to treat his symptoms. While on the drug, Jeremy would not eat. He had
no emotions. A change in medication helped slightly – Jeremy would at least talk. Still,
he was still very quiet, withdrawn, and “just not who he really was.” He was still fidgety
7 and did not complete his schoolwork on time. Jeremy began treatment with a
homeopathic doctor when in 6th grade, which slightly helped his hyperactivity – he could
at least sit still a little bit. However, despite this, Jeremy continued to struggle. Indeed,
he still struggles today. He has problems with attention and cannot focus and complete a
task without someone coaching him. His mind wanders. He toils with his finances and
gets help paying his bills. He likely could not pay them without help. He has low self-
esteem, little to no interest in life events, and does not like being around a lot of people.
These are just a few of the children’s stories. With no disrespect intended, we cite
just these illustrative examples instead of setting out the particulars of each child’s
troubled development. Taken together, the stories tell the same tale. When young, the
children were very active, very “busy,” and would never sit still. As they grew older, this
hyperactivity continued. Jesse Miller, for example, when eleven years old, was
extremely hyperactive – talking, walking, and practically running. “I’ve never seen one
quite like this,” exclaimed one expert. Jesse’s mother remarked that he took up seventy-
five percent of her time. Further problems with memory, concentration, and
comprehension emerged and became evident when the children started school. They had
difficulty staying on task and were easily distracted. Jonathan Miller’s mother, for
instance, said that she could ask Jonathan to take out the trash, and if he did not
immediately do so, he would still be sitting a minute or so later because he had forgotten
what she had asked. Similarly, Bryan Bolden would get halfway out with the trash, then
forget what he was doing and not finish the task. Nathan Davis, though physically able,
tried to play football in high school, but could not remember the plays. The children all
had difficulty keeping up with their schoolwork. They fidgeted and disrupted the class.
8 They had difficulty grasping concepts and had to be told things several times over in
order to understand the material. As Gabe Farmer’s mother explained: “You would just
go over and over and over, and he was somewhere else. All he did was daydream.” The
children spent twice as long on their homework as their friends, just to be able to
complete their assignments. Many needed tutoring or special classes. Five of the sixteen
children repeated grades. All of this took a toll on the children. Isaiah Yates, for
instance, came home from school crying every day because he could not keep up with his
schoolwork and felt “stupid.”
A number of children also have behavioral and social problems. They are quick
to anger. Matthew Heilig, for instance, gets very angry and takes his anger out on
furniture and walls, to the point of putting holes in the walls. Ashley Shanks complains
of being irritable and angry. Several children have become defiant, others disrespectful.
Several were suspended from school. Several, like Jeremy Halbrook and Matthew
Heilig, have trouble getting along with others and avoid large groups. A number also
suffer from depression and low self-esteem.
The children’s problems persist in young adulthood. Problems with memory and
concentration continue. Several of the children have tried to attend college, only to fail.
Ashley Shanks, for example, has dropped out of three colleges. She cannot hold down a
job and has many unfinished projects at home, all because of her inability to concentrate.
Despite very much wanting a college education, Gabe Farmer simply could not complete
his studies. After three semesters, Gabe had a grade point average of 0.22, and dropped
out. In daily life, Gabe forgets to pay bills. His roommate helps out, and according to
Gabe’s mother, it would be a disaster for Gabe to live on his own. The children, like
9 Preston, need constant supervision. For instance, Nathan Davis, who works at a company
that builds refrigerators, often drifts away, and coworkers have to tell him every day what
to do. Heather Glaze “zones out” at work and coworkers have to repeatedly tell her work
duties. She is inattentive and fails to complete assigned tasks. She is often disrespectful
and is sometimes difficult to get along with. Her coworkers tend to walk on egg-shells
around her. Self-esteem problems continue as well. Nathan Davis, for example, gets
upset over little things. He once broke down at work – crying, sweating, and pulling his
hair out, unable to speak – when a coworker told him he was a slow worker. Lauren
Shanks has severe anxiety. One time, while driving, she pulled to the side of the road,
called her mother, franticly crying, because she had so many things going on her life that
she did not know what to do. Her mother remarked that Lauren “is not managing well.”
Lead: Sources of Exposure and the Effects of Lead Poisoning
All sixteen children were eventually diagnosed as having elevated levels of lead
in their bodies – or in short, lead poisoning. Lead enters the body principally through
ingestion and inhalation. The lead is then absorbed into the bloodstream and distributed
to all body tissues. Exposure to lead can cause a myriad of serious and devastating
effects in young children. This is so because the most crucial and rapid time for brain
growth and development is during the last trimester of pregnancy and the first five to
seven years after birth. 2 “Holes in the brain” – this is how their expert described the
brains of children who are exposed to lead at levels suffered by the children. With such
elevated levels of lead, a child suffers significant brain loss in the very portions of the
brain responsible for reasoning, attention, short- and long-term memory, motor function,
2 The children all lived in Herculaneum and were exposed to lead at some point from their time in utero to when they were six years of age.
10 integration of function, and sensation. 3 This significant loss of brain tissue has grave
implications. Lead in children can cause cognitive and neuropsychological problems,
learning disabilities, mental retardation, decreased intelligence, IQ loss, 4 attention deficit
hyperactivity disorder (ADHD), 5 as well as psychiatric and behavior problems.
Furthermore, lead can cause nervous system and kidney damage, asthma, hearing loss,
decreased muscle and bone growth, poor muscle coordination, convulsions, seizures, and
even death.
Exposure to lead as a child can also lead to many problems in adulthood.
Exposure to lead puts one at an increased risk of hypertension (high blood pressure),
which can lead to strokes. Lead can also cause numerous problems during pregnancies.
Women with significant amounts of stored lead in their body have an increased risk of
problems with pregnancy, including premature birth, spontaneous abortion, toxemia, as
well as problems with metabolism and blood pressure. Also, lead affects the fetus. Lead
present in the mother’s body crosses the placenta to the fetus in a proportionate amount.
A child at birth will have essentially the same blood lead level as the mother. Moreover,
a mother’s blood lead level rises during pregnancy because lead stored in the mother’s
bone migrates into the bloodstream, further increasing the exposure and lead levels of the
fetus. Lead in a fetus can cause significant harm, including brain damage or death. In 3 One study has shown up to a 1.2 percent brain loss in those exposed to lead levels of 5 micrograms per deciliter or above. The children’s levels in this case were all much higher than five. 4 Dr. George Rodgers, testifying on the children’s behalf, noted that it is broadly accepted by the scientific community, since the early-to-mid 1970s, that lead causes IQ loss. On average, one loses one IQ point for every three to five micrograms of lead in their blood. For example, if one has a blood level of twenty, then it is estimated that the person has lost somewhere between four and seven IQ points. According to Dr. Rodgers, several papers published in the last ten years estimate a higher loss – that one loses seven IQ points in the first ten micrograms per deciliter of lead. In other words, if a child’s lead level is ten, that child has lost seven IQ points. 5 As recently as the mid-to-late 1980s, Attention Deficit Disorder (ADD) and ADHD were two separate diagnoses under the DSM – the diagnostic statistical manual, an important guidebook that sets out criteria for diagnoses of psychological disorders. ADD had no hyperactivity; ADHD did. Now there is a single diagnosis – ADHD, in three types: primarily inattentive, primarily hyperactive-impulsive, and combined.
11 particular, lead prevents the growth and maturation of the nervous system and causes
dissolution or loss of brain tissue in the growing fetus.
Exposure to lead may occur from a variety of sources. In years past, lead-based
paints and lead in gasoline were common sources of exposure. The United States
government, however, banned lead from paint and gasoline in the late 1970s, and so
exposure to lead from these sources has greatly decreased. While lead-based paint may
still be present in older homes, the more common sources of lead exposure now are lead-
containing air emissions, contaminated ground water, and contaminated soil. In
Herculaneum, the children’s exposure to lead came from the air and contaminated soil;
contaminated water was not an issue.
Lead levels in children who live in lead-laden environments fluctuate over time.
Typically, lead levels will start to rise when children begin to crawl, around six months to
one year in age. No longer immobile, children are now down on the floor, in the dust,
and they start putting anything and everything in their mouth as they explore their world.
Lead levels reach a peak during the toddler years – at 18 to 36 months. Children at this
age are more active, but they lack the discrimination to avoid things that might be
harmful. They are now able to walk, unattended by family members, and they still put
things in their mouth, not knowing any better. Children at this age also have rapid
respiration rates, and they absorb nearly all the lead they breathe into their bloodstream.
All of this increases the amount of lead young children take into their bodies.
Once children reach the age of four or five, they generally are more
discriminating and stop putting everything into their mouth. And their respiration rates
decrease. Thus, their intake of lead declines, and correspondingly, their blood lead levels
12 begin to decline. But, this does not mean that the lead has left the body and is gone.
Quite the contrary. Lead gets stored in bone and soft tissues – the kidneys, heart, liver,
and most especially the brain – and it remains there for years, slowly leaching over time.
While the half-life of lead in the bloodstream is generally about a month, the half-life of
lead stored in the brain is about two years. 6 The half-life of lead in bone is more than
twenty-five years. Levels decrease at a slower rate in those who are living in an
environment where they are being constantly re-exposed to lead. And the lead continues
to cause harm while stored in tissue. Put bluntly, the lead programs cells to die.
CDC Levels of Concern
Childhood lead poisoning has long been a problem in this country. Over the
years, the Center for Disease Control (CDC) has set “levels of concern” regarding blood
lead levels. According to the CDC, a “level of concern” is a level that should trigger
public-health actions. In 1985, the CDC set a level of concern at 25, adjusted down from
30. 7 In 1991, the CDC lowered the level of concern to 10. The CDC also issued
guidelines in 1991 stating that the presence of a large proportion of children with blood
lead levels in the range of 10-14 should trigger community-wide activities to prevent lead
poisoning.
The level of concern is not a level below which children are safe. Although some
mistakenly think of the level as a level of safety, the CDC has never considered the levels
of concern to be levels below which there is no toxicity. Dr. George Rodgers, a
pediatrician, toxicologist, and member of the CDC Advisory Committee on Childhood
6 “Half-life” of lead means the length of time it takes to get rid of half of the amount of lead. 7 The blood lead levels here, and throughout the opinion, are expressed in terms of micrograms of lead per deciliter of blood (µg/dL).
13 Lead Poisoning, explained that it has been long known – for more than thirty years – that
lead has toxicity well below the levels of concern. Toxic effects even occur at very low
levels of lead. In short, there is no safe level of lead.
Children’s Lead Levels
Once they were tested, the sixteen children all had high levels of lead. Test
results from the early 1990s show the children with blood lead levels anywhere from 9 to
24. Studies show that during the time period of 1988 to 1991, the mean blood lead level
in the country, for children ages one to five years of age, was 2.8. For the time period of
1991 to 1994, the mean level was essentially the same, at 2.7. The sixteen children’s
levels far exceeded these means. Gabe Farmer, for example, tested at nearly five times
the national average. Jeremy Halbrook tested at six times, and Bryan Bolden tested at ten
times the national average.
Some of the children were tested in 1992; the majority were tested in 1994 and
1995. By this time, many of the children were past their toddler years, and thus past the
age of peak lead levels. Still, their levels far exceeded the national average. Dr. Rodgers
explained that those children would have had even higher levels when younger. Gabe
Farmer, for example, had a likely peak level of 31.2. Jeremy Halbrook had a likely peak
level of 25.2. The children’s exposure histories and test results, provided by Dr. Rodgers,
appear in Appendix A.
ADHD and the Children’s Diagnoses
All sixteen children were diagnosed with ADHD, as well as loss of IQ due to their
exposure to lead. Their complete diagnoses appear in Appendix B. ADHD is a
neurological, neuropsychiatric disease. Essentially, a person with ADHD does not have
14 the ability to pay attention adequately to function in academic, social, and workplace
settings. The salient features of ADHD are inattention, hyperactivity, and impulsivity.
Those with inattention fail to give close attention. They tend to daydream. They are
disorganized and forgetful. They often get distracted by extraneous stimuli and lose
focus. They have difficulty sustaining attention in tasks or play activities. Those with
hyperactivity are very fidgety and very restless. They are always on the go, and are
described as being “driven by a motor.” Those with the impulsivity aspect of ADHD
tend to act first before they think. They are incapable of considering the consequences of
their actions. The most common, pervasive type of ADHD is the combined type, where
an individual experiences all three features – inattention, hyperactivity, and impulsivity.
This form of ADHD is the most impairing. Ten of the children here were diagnosed with
this type of ADHD.
Several medications attempt to temper the symptoms of ADHD. As seen with
Jeremy Halbrook, however, those medications come with significant side effects. They
can cause one to feel like a zombie, and to have a loss of appetite, leading to significant
weight loss.
ADHD is a lifelong problem. Over seventy percent of those with ADHD never
outgrow the disorder. The hyperactivity and impulsivity may decrease as one becomes
an adult. The inattention, however, never gets better for most. Rarely are these people
successful. ADHD affects one’s life pervasively. Those with ADHD struggle in school,
they struggle at work, and they struggle to have meaningful relationships.
ADHD never occurs in isolation. A number of other disorders, such as
depression, anxiety, oppositional defiant disorder, obsessive-compulsive disorder,
15 mood/bipolar disorder, and antisocial personality, occur together with ADHD. These
disorders, like ADHD, impair a person’s performance in school and in the workplace, and
affect a person’s relationships. The disorders can be crippling, to the point of rendering a
person unable to function.
Ten to thirty percent of patients with ADHD have depression. Compared to the
general population of those who do not have ADHD, those with ADHD have three to six
times more depression, three to six times more alcohol and drug abuse, three to six times
more divorce or separation, three to six times more automobile accidents, and three to six
times more suicide attempts and suicides. Ten to thirty percent of those with ADHD also
have anxiety. They become very anxious that they cannot concentrate, finish projects, or
be as productive as desired. They describe themselves as feeling all wound up like a
rubber band, tight as a drum. Anxiety often occurs with depression.
Fifty percent of those with ADHD have oppositional defiant disorder – a rejection
of authority. They do not submit to authority, and want things their way. Twenty to forty
percent of those with ADHD have an obsessive-compulsive disorder. Those with ADHD
have an increased risk of a mood or bipolar disorder, described as the roller-coaster ride
of emotions. An antisocial personality is yet another example of a neuropsychiatric
disorder experienced by those with ADHD. Such a person is unable to interact with and
respond to others in normal fashion. They may be confrontational, and they may become
agitated and irritated with others, with or without provocation. As a result of not being
able to connect or interact well with others, they are withdrawn and shy, and often
become socially ostracized. In their judgment, it is safer for them to be shy and
16 withdrawn than to risk the sociological and emotional consequences of not being able to
connect with people.
Carl Hansen, a vocational rehabilitation counselor, testified specifically about
ADHD’S effect on a person in the labor market. He noted that those with ADHD rank
“significantly lower” in occupational status. They are less likely to attend college and, if
attending, are less likely to graduate. They receive poor job performance ratings and are
more likely to be fired. They use more sick leave and have a higher risk of workplace
accidents than those who do not suffer from ADHD. They quit jobs impulsively and
have chronic unemployment problems. Over the course of their career, those with
ADHD will lose a significant amount of time in the labor market – ranging from fifteen
to thirty percent of work time lost – due to their disorder. Dr. Hansen opined that the
children here would be unlikely to receive a college degree, and that all had suffered a
significant loss in earning capacity, ranging anywhere from nine thousand to twenty-five
thousand dollars per year, depending on the child’s circumstances.
Physicians testified that the ADHD and the other conditions suffered by the
children in this case were permanent and serious, and were caused by the children’s
exposure to lead emanating from the smelter.
Children Sue the Doe Run Company Partnership
The children sued the partners of the Doe Run Company partnership for
negligently exposing them to lead. The children alleged numerous and wide-ranging acts
of commission and omission by the partners. 8 In sum, the children alleged the
partnership knew of the lead contamination present and occurring in the community, and
8 In particular, the children pleaded defendants were negligent in one or more of the following respects:
17 knew of the danger and the harm lead posed, but sacrificed the health of children for
greater profits. The children sought compensation for their injuries, as well as punitive
damages. Several parents explained why they sued. Matthew Heilig’s mother said it was
“heartbreaking” to see her son the way he was. Ashley and Lauren Shanks’s mother
noted that for years Doe Run knowingly poisoned her children. Isaiah Yates’s father
sued because his son was poisoned and because the company showed indifference and
put fault at his feet. Austin Manning’s mother put it bluntly. She brought suit because
(a) Permitted lead and other harmful metals and substances to be mined, generated, smelted, processed, released, dumped, deposited and placed into the air and deposited onto the land when defendants knew, or by the exercise of ordinary care should have known, that the mining, generating, smelting, releasing, dumping, depositing, handling, storing, treating, transporting, loading, unloading and disposing of such toxic substances was dangerous and harmful to the public, and more particularly, plaintiffs; (b) Failed to adequately and properly monitor and control the emissions and release of lead, metals and toxic substances into the air and environment by failing to report and act, or to timely report and act, upon instrument readings and warnings, and by utilizing, and knew or should have known of the utilization of, equipment and instruments which were altered and not adequate or proper and/or which were not adequately or properly calibrated or fit or suitable for use; (c) Doe Run defendants failed to adequately and properly supervise the safe mining, generating, smelting, releasing, dumping, depositing, handling, storing, treating, transporting, loading, unloading and disposing of the aforedescribed lead, metals and other substances; (d) Doe Run defendants failed to adequately and properly control the mining, generating, smelting, releasing, dumping, depositing, handling, storing, treating, transporting, loading, unloading and disposing of the aforedescribed lead, metals and other substances; (e) Doe Run defendants failed to adequately and properly contain the mining, generating, smelting, releasing, dumping, depositing, handling, storing, treating, transporting, loading, unloading and disposing of the aforedescribed lead, metals and other substances; (f) Failed to warn, or to adequately warn, the public, and more particularly plaintiffs, and children, parents, school administrators, church officials and residents of Herculaneum, of the dangers, hazards, and risks of exposure to lead, metals and substances mined, generated, smelted, processed, released, dumped, deposited, handled, stored, treated, transported, loaded, unloaded and disposed of by defendants; (g) Doe Run defendants mined, generated, smelted, processed, released, dumped, deposited, handled, stored, treated, transported, loaded, unloaded and disposed of the lead, metals, and substances aforedescribed in a harmful and dangerous manner; (h) Doe Run defendants violated environmental standards, statutes and regulations, including but not limited to: section 643.151 Revised Statutes of Missouri stating that it is unlawful to pollute the air; 10 CSR 10-6.010 entitled “Ambient Air Quality Standards,: and 10 CSR 10-6.120 entitled “Restrictions of Emissions of Lead From Primary Lead Smelter- Refinery Installations.”
18 her son suffered from being poisoned, and because “[n]obody should make money off of
kids suffering.”
The Smelter & The Doe Run Company Partnership
At the time the children sued, the Herculaneum smelter had been in operation for
over one hundred years, processing lead ore concentrates into purified lead. 9 St. Joseph
Lead Company, later named St. Joe Minerals Corporation, owned and ran the smelter
until 1986, at which time the newly-formed Doe Run Company partnership assumed
ownership and operation of the smelter. This general partnership, with various different
partners, owned and ran the smelter for eight years, from November of 1986 until March
of 1994. The current action is against three of the partners from this partnership period:
Fluor Corporation, A.T. Massey Coal Company, and Doe Run Investment Holding
Corporation (DRIH). 10 The children advanced two theories of liability. They first sued
each defendant separately, seeking to hold each defendant liable based on the defendant’s
and the partnership’s negligence during the time each defendant was a partner. The
children sued Fluor on an additional “domination” theory, seeking to hold Fluor liable
because of its complete and pervasive control of its subsidiaries that were partners in the
Doe Run partnership.
9 In March of 1864, during the Civil War, a group of New York investors founded the St. Joseph Lead Company, a mining company and predecessor to The Doe Run Company. The company’s original lead mine and smelter operations were located at Bonne Terre, Missouri. In 1886, the trustees approved local management’s proposal to form a small company, to establish a mine on Doe Run Creek. Around 1890, this company began extensive drilling in the vicinity of Flat River, now Park Hills, Missouri, and discovered a rich body of ore. Construction of the Herculaneum smelter followed in 1892. The smelter operated continuously for the next 121 years. A source outside our record reports that operation at the smelter ceased and the smelter closed at the end of 2013. Leah Thorsen, Smelter’s Closure is End of Era in Herculaneum, St. Louis Post-Dispatch, December 15, 2013. We mention this for the reader’s benefit. Obviously, we do not consider matters outside the record in our consideration of this appeal. 10 In all, the children sued eight entities; they proceeded to trial against only three: Fluor, Massey, and DRIH. Massey is now known as Appalachia Holding Company.
19 The Doe Run partnership conducted a lead business of wide-ranging proportions
and on a far-reaching scale, both nationally and globally. When forming the partnership,
the partners combined their respective lead businesses, and contributed a number of their
assets, including the Herculaneum smelter to the partnership. The resulting partnership
owned and controlled many of the lead mines in Missouri, as well as the Herculaneum
and the Buick smelters – two major smelters in southern Missouri. 11
The two original partners of the Doe Run partnership were Homestake Lead
Company of Missouri and St. Joe, a wholly-owned subsidiary of Fluor. 12 Over the life of
the partnership, the two original partners transferred or sold all or part of their interest in
the partnership. The transfers on the St. Joe side of the partnership were all to various
subsidiaries within the Fluor corporate family. Fluor purchased Homestake’s entire
interest in the partnership in 1990. The particulars of the partnership history – when and
how the various partners came into the partnership – are not especially relevant. More
important is the fact that the three defendants were partners at some point during the
partnership, and that various subsidiaries of Fluor were partners during the entirety of the
partnership. The children contend Fluor so dominated its subsidiaries that Fluor
effectively was a partner, and therefore liable, for the entire duration of the partnership.
In order to complete the Herculaneum story, we set forth a brief recitation of the
partnership’s historical background in Appendix C.
11 The Buick smelter was located in Boss, Dent County, Missouri. Generally, smelters are classified as either “primary” or “secondary” smelters. A “secondary” smelter is one that smelts scrap metal and materials rather than ore from the ground. Smelters like the one at Herculaneum that smelt ore are referred to as “primary smelters.” The decision where to base primary smelting operations – at Herculaneum or at Buick – was one of the early decisions confronted by the new partnership. The Buick smelter was located in a relatively unpopulated area. The partnership chose Herculaneum, however, because of the amount of lead that could be smelted there. Internal documents expressly note the choice was profit-driven. 12 Fluor had acquired St. Joe in 1981.
20 Fluor’s Influence over Partnership
A partnership committee ran the partnership until 1990. 13 Initially, the St. Joe
representatives on the partnership committee were St. Joe employees. That soon
changed. By February of 1988, St. Joe had appointed three high-ranking Fluor officials
to be its representatives. 14 The insertion of Fluor personnel into partnership committee
roles, while not improper, signaled a change in Fluor’s involvement with the partnership.
Although not a partner until 1990, Fluor was extensively involved in partnership affairs
prior to that time, to the exclusion of named partners St. Joe, Massey, and DRIH. Fluor
was repeatedly referred to as being a partner, its approval was needed for partnership
projects, and it received partnership cash distributions. Once Fluor purchased
Homestake’s partnership interest in 1990, and even after Fluor transferred its partnership
interest to a wholly-owned subsidiary, Fluor considered and represented the Doe Run
partnership as “100% Fluor.” Fluor treated Doe Run as a corporate subsidiary, and
continued to be extensively, if not exclusively, involved in running the partnership. We
provide a summary of Fluor’s influence over the partnership in Appendix D.
Smelting Process & Emissions
Missouri probably has the best lead ore in the world. A large deposit of high-
grade lead ore is located in southeastern Missouri. The essential business of the
Herculaneum smelter was to process that ore into purified lead. The smelting process is a
multi-step process, which begins at the mine site. Once the ore is brought to the surface
13 The partnership committee stopped meeting and ceased to exist in 1990. See Appendix D for further details. 14 The three Fluor officials appointed to the partnership committee were: Leslie McCraw, then president of Fluor; Robert Guyett, the chief financial officer; and Vincent Kontny, a high-ranking officer and later president of Fluor.
21 of the mine, workers grind it up to a fine consistency, somewhere between the
consistency of table salt and baby powder. Workers then run this ground-up rock through
a chemical process, which separates out the lead from rocks and other materials, to form
lead concentrate. Workers dry the lead concentrate to a consistency of wet beach sand
and then load the concentrate into trucks or rail cars for shipment to the smelter.
The high-grade lead ore in Missouri is actually lead sulfide by constitution. The
smelting process removes the sulfur and other trace metals present in the ore, in order to
produce pure lead. Once the lead concentrate arrives at the smelter, it is dumped out of
the trucks or rail cars. Smelter workers then load the material onto a conveyor-belt
system, which moves the material through the smelter. The lead concentrate is first
conveyed into the sinter plant building. There, the lead concentrate goes into a sinter
machine, which heats up the concentrate to a very high temperature, burning off the
sulfur. 15 During this process, the lead concentrate partially melts and becomes fused
together. This fused-together material, called sinter, is broken up into fist-sized material,
and then conveyed over and fed into the blast furnace. The blast furnace turns the sinter
material into a molten, metallic form. The molten material that comes out of the blast
furnace is still not pure lead, however. Trace metals and other organic materials, such as
copper, zinc, cadmium, and arsenic, are still present. To separate and remove those trace
metals, the molten lead is placed into a kettle and run through a refining process. In the
end, one has purified lead.
One word concisely describes the smelting process: dusty. Or better yet, two
words: extremely dusty. Lead-containing dust is everywhere throughout the entire
15 The burnt-off sulfur is in the form of sulfur dioxide, which has a very strong odor. This is what the residents smelled in the community.
22 smelting process. And once that dust gets into the air, it disperses into the surrounding
community.
Emissions from smelters are divided into two general categories: point-source
emissions and fugitive emissions. Point-source emissions are those that are captured, put
through some sort of collection device or system, and then sent up and discharged out a
chimney, called a stack. Fugitive emissions are everything else – those emissions that are
not captured and sent up the stack, but rather escape the facility to the nearby community
in any other manner. Fugitive emissions come from any number of sources at the
smelter. For instance, unloading the lead concentrate when it first arrives at the smelter
may stir up and release dust into the air. To unload lead concentrate from a rail car, a
large machine takes that car, tips it upside down, and then shakes out the concentrate.
Although lead concentrate is usually moist, it dries out on hot days, and thus when the
rail car is tipped over, dust goes everywhere. An individual rail car typically holds one
hundred tons of concentrate. Workers unload the rail cars in an open, unenclosed area,
across the street from where people live. Another source of fugitive emissions is the
conveyor belt, which during the partnership period was not fully enclosed. The sinter
plant and blast furnace are large sources of fugitive emissions. The sinter plant building
is also not totally enclosed. The building has four walls, but its top is completely open.
The sintering machine operates at 1500 degrees or more, so the building is designed to
draw the hot air up and out of the building through the open top. It is common for lead
dust to be everywhere in the sinter plant, and so the air that escapes is full of lead dust.
The same scenario is repeated in the blast furnace. The roof on the blast furnace is also
open, the room is extremely dusty, and the air that escapes is full of lead dust. Fugitive
23 emissions also originate from slag piles and other open areas on the grounds where dust
settles. 16 The movement of vehicles in and out of the plant, kicking up dust, is yet
another source of fugitive emissions.
Fugitive emissions were primarily responsible for the lead contamination faced by
the children. A model predicted that up to ninety percent of the lead contamination
within one mile of the Herculaneum smelter came from fugitive emissions. As explained
at trial, lead-containing fugitive emissions settle relatively quickly and relatively close to
the smelter. Fugitive emissions, unlike the point-source emissions from the stack,
generally originate at a low height above the ground, and disperse without velocity
behind them. 17 Without height and velocity, the impact of the fugitive sources tends to
be much closer to the facility. Furthermore, lead sinks. Lead particles are very heavy
and quite dense, and therefore descend to the ground fairly quickly.
Lead dust emitted from the Herculaneum smelter readily contaminated homes and
yards in the nearby neighborhoods. Lead dust settled on the streets and soil, and blew
into the homes through open doors and windows. Moreover, if not blown away or
washed away with the rain, lead accumulates, forever remaining lead – it never changes
into any other element.
16 Slag is the by-product material from the smelting process. Although waste material, slag still contains lead that was not recovered during the smelting process. The slag at the Herculaneum smelter was gathered into piles. Dust can blow off those piles. Additionally, in years past, before 1981, the slag was ground up into a gravel or sand-like material and used as road base, and spread on icy roads for traction. Over time, the material on and in the roads would break down further and eventually settle as dust in people’s yards. 17 Point-source (stack) emissions and fugitive emissions disperse and settle in different ways. Stacks tend to be directed in an upward direction, so the emissions have a velocity behind them in order to go straight out of the stack. Furthermore, stacks are high and thus disperse the toxic chemicals into the atmosphere at a high elevation. Emissions from stacks, therefore, disperse and settle a distance away from the plant.
24 Increase in Production
Production at the Herculaneum smelter increased forty percent between 1981 and
1989. In 1988, the smelter produced 236,000 tons of lead, yielding a net income of 60
million dollars for Doe Run. Lead production reached a record high in 1989, with the
smelter producing an “impressive” amount – 248,572 tons – of lead. By 1989, the
Herculaneum smelter was the largest lead smelter in North America, and one of the
largest in the world. 18 This increased production coincided with an increase in market
prices and profitability.
The increased production produced a staggering amount of emissions. In 1987
alone, the Herculaneum smelter emitted 179 tons of lead emissions. Of this, 98 tons were
fugitive emissions that poured out into the surrounding neighborhood. The smelter
emitted the same or similar amounts of fugitive emissions every year in the 1980s.
Ninety-eight tons is equivalent to approximately four or five tractor-trailer truck loads of
lead dust.
It was during this time period of increased, record-high production and increased
market prices, that Doe Run came under growing pressure from regulatory agencies to
reduce emissions of hazardous materials from the Herculaneum smelter.
National Ambient Air Quality Standards
The United States Congress in 1970 enacted the Clean Air Act, which required
the Environmental Protection Agency (EPA) to set national ambient air standards –
regulatory limits – for certain pollutants. 19 In 1978, the EPA set the maximum
18 Fluor issued a press release in May of 1990, in which it stated that Doe Run, as the largest fully- integrated lead producer in North America, had approximately 60% of the total U.S. market. 19 Officially, these standards are called National Ambient Air Quality Standards.
25 permissible air concentration of lead at 1.5 micrograms of lead per cubic meter of air,
averaged over a quarterly period. The EPA required smelters to meet this 1.5 level at the
fence-line of their facilities. The fence-line is the boundary of the facility – the line
between the smelter property and the surrounding neighborhood. The EPA adopted this
particular 1.5 level to protect the health of those most sensitive to lead exposure,
particularly young children. Doe Run and the smelter never met this national 1.5
standard at any point during the partnership period.
Lead Industry: Knowledge of Dangers & Fight against Regulations
Testimony at trial confirmed that the lead industry has long known the dangers to
children posed by lead. In the early 1900s, journal articles around the world recounted
studies of children who had been poisoned by lead paint. In 1908, at a time when child
labor was quite common, National Lead banned children from working in leaded areas of
their plants. 20 The lead industry has also long known that smelters’ emissions pose a
danger to surrounding communities. In early days, farmers sued smelters when their
cows died after ingesting grass covered with lead and other toxins emitted from the
smelters.
The Herculaneum smelter and its ownership groups have long been an integral
part of the lead industry. In 1928, various lead producers and users formed the Lead
Industries Association (LIA), a trade association designed to ensure that members’ lead
products remained shielded from public attack and from competition. 21 High-ranking
20 National Lead operated lead mines and smelters, and produced pigment for paint. 21 The LIA represented a whole series of industries, such as smelters, paint manufacturers, and battery makers, that depended upon or sold lead.
26 executives from the Herculaneum smelter were directly involved in the association from
its inception. This involvement continued into the partnership period. 22
The lead industry’s fight against regulation is equally longstanding. From the
1920s all the way through the partnership period, the lead industry has continuously,
consistently, and aggressively fought any attack on lead – be it from medical studies,
negative publicity, or proposed regulatory actions. 23 The industry’s efforts included a
“full frontal assault” in the late 1970s on the EPA’s proposed ambient air standard. The
association’s environmental committee met specially in 1977 and devised an all-out
public-relations effort in opposition to the planned regulations, to convince the regulators
and the public that the proposed standard would be costly for the industry and would
likely hurt local economies by jeopardizing employment and the tax base. The industry
challenged the proposed ambient air standard even though the industry knew the standard
22 The first president of LIA was also president of the St. Joseph Lead Company, which operated the smelter. He was replaced in the late 1940s by another executive from St. Joseph. The secretary of the association during the twenties, thirties, and forties was also from St. Joseph. This involvement in the association’s leadership continued into the partnership period. Jeffrey Zelms, president of Doe Run, served as president and chairman of the LIA during the partnership period. Daniel Vornberg, the partnership’s director of environmental affairs, served on the association’s environmental health committee throughout the 1980s and early 1990s. The partnership itself, upon formation in October of 1986, agreed that the company become a member and participate in the LIA. 23 The association’s efforts were numerous and wide-ranging. From the beginning, they approached legislators who were concerned about lead and asked them not to pass legislation. They visited and challenged physicians who claimed that their young patients had been poisoned by lead, insisting that the physicians were mistaken and that what they were seeing was not really lead poisoning. The association even threatened physicians with libel suits if the physicians persisted in their claim that children were being poisoned by lead. In one famous example from 1943, the association threatened Dr. Byers of Boston with a million-dollar suit. Byers, a Harvard physician, had published a widely-publicized article about children who were poisoned by lead and had permanent damage. In that report, Dr. Byers stated that hyperactivity and attention problems were a lasting legacy of having ingested lead. Dr. Byers felt so threatened by the association that he did not publish another article about lead for ten years. The association, from its inception, was also active on the public-relations front. In the 1930s, the association ran a massive promotional campaign to promote the use of lead paint and shape public opinion in favor of lead paint, even though numerous medical articles showed that children were being poisoned by lead paint. The lead industry strenuously opposed efforts to remove lead from paint and gasoline at every turn, from as early as the 1920s. They argued that the movement to remove the lead was in response to researchers who did not understand the social, economic, or health effects of low-level lead exposures. Indeed, by claiming that it could not be shown that lead posed a long-term danger, the industry managed to get lead back in gasoline after a two-year ban in the 1920s. The industry’s opposition persisted for 50-60 years, until the late 1970s and early 1980s, when lead was finally removed from paint and gasoline.
27 was selected to protect children, and that mounting evidence showed that children were
developing problems at very low levels of lead exposure.
Then came the Needleman report. Dr. Herbert Needleman, an eminent physician,
released a very critical study in 1979 that put to rest the idea that lead could be used
safely. Dr. David Rosner, a public-health expert, characterized Needleman’s study as
very damaging and important because it convincingly demonstrated that lead was
dangerous at much lower levels than previously realized. According to Dr. Rosner, the
industry was outraged. The study undermined the industry’s arguments that exposure to
lead was from some other source, such as lead paint, and that lead was a problem of the
past. The industry also feared that evidence of low-level damage meant that the
government might lower the ambient lead level even further and take lead out of
gasoline.
In fact, the government did require the removal of lead from gasoline. And once
all lead was removed from gasoline, lead in the air declined. And then, as airborne lead
declined, so did the lead content of children’s blood. All of this demonstrated that
reducing lead in air effectively protected children. Dan Vornberg, the environmental
manager at St. Joe and later director of environmental affairs for the Doe Run
partnership, bemoaned these results, writing, “The most difficult data to deal with will be
a study which has been represented to show that children’s blood levels are dropping in
strict correspondence to air lead decrease and gasoline phase down.”
Despite mounting evidence of the dangers and detrimental effects of lead, even at
low levels, the industry continued its fight. In 1983, the association discussed a three-
year public-relations campaign to try and raise lead’s “pitiful” image. The proposed
28 campaign came on the heels of a plethora of articles reporting the dangers of low-level
lead, and at a time when, in Dan Vornberg’s words, multimillion-dollar lawsuits were
“mushrooming” and anti-lead regulations were “epidemic.” The lead industry’s fight
against regulation and its challenge to the conclusion that children were being affected by
lead continued into the partnership period. In 1987, the partnership, along with other
industry allies, sponsored research to create uncertainty and call into question the
scientific consensus on the dangers of lead established by Dr. Needleman and other
scientists. Ultimately, researchers funded by the lead industry published a series of
articles stating that lead did not cause neurobehavioral problems in children.
The EPA re-evaluates the ambient air quality standard for lead every five years.
The agency first revisited the lead standard in 1983, and considered lowering the level
below 1.5. In 1987, the agency considered lowering the standard to 0.5. The lead
industry fought the EPA at every turn. Doe Run especially opposed lowering the
standard. In writing about the standard and Doe Run’s strategy, Dan Vornberg noted a
half-billion dollar cost to primary smelters should the EPA implement a 0.5 standard.
Based on the proposed cost, and what it saw as a “minimal” reduction in blood lead
levels from the measures, Doe Run suggested the following alternative approach:
The approach suggests that in lieu of the 0.5, if you meet the 1.5 standard, you take other steps ONLY if the blood leads of the children in the community are elevated. If a survey shows no problem, then nothing further is required. If specific children are elevated, then specific steps should be taken to help them – buy out, resodding, education on cleaning, etc.
This could prevent very large expenditures for air pollution control equipment and broad scale soil cleanup where there are no public health problems.
29 “Canaries in the coal mine” is how Dr. Rosner characterized Doe Run’s proposed
strategy. He explained that Doe Run was essentially going to use the children as guinea
pigs to find out whether or not a problem existed. Waiting for the children to be injured,
according to Rosner, was bad public-health policy and immoral. Dr. Rosner explained
that the proper public-health approach was to make sure that children did not get
poisoned in the first place, because lead poisoning is permanent. You do not recover.
Doe Run should have been looking for ways to prevent the lead exposure, and making
sure the children were not injured.
Evidence of the detrimental effects of lead continued to accumulate in the late
1980s. A study, published in The New England Journal of Medicine in 1988, indicated
that no clear threshold may exist below which mental development is not adversely
affected. A memo circulated throughout the lead industry, reporting on recent studies,
stated: “As little as one-tenth ppm lead exposure can impair mental development in
newborns. This damage is believed to be permanent.” A study published in 1990,
reported in both The New England Journal of Medicine and reprinted in The Los Angeles
Times with the headline “Lead Exposure May Be Permanent, Study Finds,” noted that
childhood exposure to high lead levels resulted in inferior performance, such as failure to
graduate from high school, increased absenteeism, reading disabilities, and low scores on
tests measuring vocabulary, grammatical reasoning, fine motor skills, and hand-eye
coordination. The study concluded that exposure to lead in childhood was associated
with deficits in central nervous system functioning that persist into young adulthood.
High-ranking Doe Run officials received copies of all these studies.
30 After years of insisting that lead was safe, the industry changed its public message
in 1990. Jeffrey Zelms, then president of Doe Run and chairman of the LIA, in testimony
before the Senate oversight committee as chairman of the LIA, recognized that lead was a
toxic material. Dr. Rosner explained that LIA’s express recognition of lead as a toxic
material was a very new position. Until this point in time, Rosner explained, the LIA had
denied virtually every attempt to identify lead as a toxic material, except in very, very
high doses. The industry acknowledged they had, in some sense, lost the scientific battle.
The industry could no longer provide alternative theories why children were developing
lead poisoning. And so the industry switched approaches, and began explaining away the
problems with lead as a problem from the past. According to Rosner, the industry
blamed the dangers to children on past events, and argued that the industry had reformed
its ways and was now safe, and therefore should not be held responsible. Rosner
remarked on the irony, that in touting the industry’s advances and increased
environmental awareness, the industry tried to take credit for what had been imposed on
them – the removal of lead from paint and gasoline – measures they had opposed at every
turn.
Despite having publicly acknowledged that lead was toxic, the industry
nevertheless continued its fight against regulation. They still advanced the notion that
lead production involved little danger to the community. The lead industry knew in 1990
that 45% of children living around smelters in the country had blood lead levels over 10,
yet the industry persisted in fighting any changes in the ambient air standard or in the
CDC’s level of concern. The industry viewed the EPA’s proposed revision of the air
standard downward to 0.5 to be of only marginal benefit to the few people who lived in
31 very close proximity to lead facilities and of no benefit whatsoever to the efforts to
reduce blood lead concentrations across the country. In the industry’s view, only 150
children would be minimally aided by revising the ambient air standard. The EPA
ultimately did not change the standard. Continuous opposition by the lead industry
created enough confusion and obfuscation that the EPA was never able to revise the
standard. The lead industry also pressured the CDC to not adopt a new, lower level of
concern. The industry argued that the potential effects of blood lead levels in the 10-15
range remained subject to scientific debate. And thus, because of this uncertainty, the
CDC should retain the then-current level of concern, which was 25. According to Dr.
Rosner, the industry’s argument was all too familiar. Dating back to the 1920s, whenever
faced with detrimental news or information, the industry argued that controversy still
existed, all in an attempt to stave off further regulation. But, as Rosner explained, by the
early 1990s, no scientific debate existed about the detrimental effects of blood lead levels
in the 10-15 range. The only debate was that which the lead industry tried to foment.
State Implementation Plan
Now let us turn to Herculaneum. The Clean Air Act required the state of
Missouri to develop a plan – called a state implementation plan – for reducing the amount
of lead in the air to meet the national standard. Responsibility for preparing Missouri’s
plans fell to the Missouri Department of Natural Resources (DNR). DNR officials
worked with the lead industry in Missouri, including the Herculaneum smelter, to gather
data, identify their emissions, determine ambient air levels, and then formulate an
attainment plan.
32 Air monitors placed around Herculaneum all showed excessive amounts of lead in
the air. Officials completed a five-year implementation plan for Herculaneum in 1981.
The plan called for a series of control measures designed by the DNR and EPA to reduce
airborne lead levels. Initially, the implementation plan required the Herculaneum smelter
to meet the national 1.5 standard by 1984. The smelter later received a two-year
extension of this deadline. Dan Vornberg wrote in 1985 that it was “unlikely” that the
Herculaneum smelter could meet the national standard by 1986, or “at any time” under
the current regulations. And indeed, the smelter did not meet the national standard in
1986. In fact, Doe Run and the smelter never met the national 1.5 standard at any point
during the partnership period. Mr. Vornberg never told the EPA, the DNR, or the
community that he thought the smelter could never meet the standard.
Violations
The DNR eventually cited Doe Run and the smelter in June of 1989, for
impermissible air lead levels. In fact, Doe Run was cited by two different regulatory
agencies in the late 1980s for lead-related violations: first by OSHA, in 1988, and then
by DNR, in 1989. 24 OSHA cited Doe Run for violating nearly every section of the
OSHA lead standard. OSHA issued 55 citations in all, representing some 300 instances.
The citations covered four major areas: record-keeping, failure to abate, medical removal,
and willful noncompliance with standards. 25 OSHA levied one of the highest fines in the
24 OSHA is the federal Occupational Safety and Health Administration. 25 Among the violations were: exposing employees to lead up to seventy-one times over the permissible exposure limit; providing improper respirators; failing to implement engineering and work practice controls to reduce and maintain employee exposure; failing to establish and/or implement written compliance programs to reduce lead exposure to permissible levels; failing to adequately monitor; failing to provide for cleaning and/or disposal of protective clothing, and the improper cleaning of that clothing on other occasions; failing to clean surfaces of accumulated lead, and improperly doing so on other occasions; failing to prevent cross-contamination between work and street clothes; failing to timely notify employees
33 history of the agency – nearly 2.8 million dollars. Just over a year later, in June of 1989,
the DNR issued a notice of violation to Doe Run and the Herculaneum smelter, for
violating the national 1.5 standard. The DNR required Doe Run to pay a penalty, which
Doe Run succeeded in getting reduced by half. The DNR also required Doe Run to
submit a revised implementation plan that promised installation of control equipment or
reduced production levels necessary to meet the national standard. By this time,
regulators believed it urgent that the smelter comply with environmental standards,
especially the national ambient air standard. The EPA asserted that Doe Run’s
Herculaneum smelter was one of the top ten polluters in Missouri. Indeed, in 1989, the
entire St. Louis region exceeded the national 1.5 standard simply because of the
Herculaneum smelter.
The partnership, like the lead industry in general, was concerned about the impact
of regulations and the proposed downward revisions of the ambient air standard. The
children presented evidence showing the partnership’s disdain for regulations, with Doe
Run officials developing strategies to get around requirements they deemed “excessive”
and “draconian.” As with the lead industry in general, the partnership disagreed with the
1.5 ambient air standard – even to the point of arguing it should not apply to them. The
partnership believed the “unachievable” air lead standards jeopardized the world-wide
competitiveness of the U.S. lead-smelting industry. Yet Doe Run knew that if it did not
improve its airborne lead emissions, regulators would likely order them to comply with
the national standard, without regard to the economics or feasibility of the order. At a
time of high market prices and record-level production, the partnership committee
of high blood lead levels, and failing to promptly remove those employees with high levels of lead in their blood.
34 worried that regulators would draft a plan that Doe Run could not “afford,” and that EPA
intervention would result in the smelter’s closure. The regulatory pressures to reduce
emissions came at a time when Fluor expressed a desire, in October of 1989, for the
partnership to be a “low-cost producer.” 26
Ultimately, partnership officials and the DNR fashioned a new implementation
plan that committed Doe Run to eight projects designed to bring the plant into
compliance with the national standard by December of 1993. For example, the DNR
ordered the partnership to install a new sinter plant system to reduce the levels of
airborne lead emissions in the Herculaneum area. Doe Run expected revisions to the
sinter plant to eliminate 78% of the fugitive emissions. By 1989, Doe Run knew what its
emissions were, where those emissions were coming from, and they clearly knew that the
smelter violated the national standard. Despite this, the partnership delayed. Despite
promises of eight to ten million dollars in environmental controls, the partnership
committee postponed authorization for expenditures and equipment upgrades.
Air Contamination in Herculaneum & The Fence-Line Monitor
We next consider the air and soil contamination in Herculaneum. To measure the
amount of ambient airborne lead and determine the smelter’s compliance with the
26 Some mention should be made that as early as April 1989, Fluor considered selling its interest in the partnership. A potential buyer visited the site in June of 1989. Allegedly, Doe Run decreased production to make the site more appealing, and the partnership withheld environmental material from the potential buyer. The partnership also looked into the economics of shutting down the smelter. Officials knew that the shutdown and cleanup of the Bunker Hill facility in Idaho cost 100 million dollars. Doe Run officials, however, believed they could shut down and clean up the Herculaneum smelter for as little as $20 million dollars, provided the community “didn’t turn on [them] at the eleventh hour and demand a pristine clean job.” Officials at this time assumed the Herculaneum smelter would operate for another twelve to fifteen years, and believed that in the end they could “cut a deal” with the EPA for the orderly run-out and shut- down of the smelter.
35 national ambient air standard, officials placed monitors at various locations throughout
the town. To comply, a facility must comply everywhere, even at the point of maximum
ambient air concentration. An air-pollution control expert explained that the maximum
ambient air concentration will tell the facility what could secure its compliance. He
further explained that to find the maximum concentration of fugitive emissions from a
facility, one should look at the fence-line first, and then work out from there. Typically, a
fence-line monitor will be the monitor with the most fugitive emissions.
But no official fence-line monitor existed at the Herculaneum smelter until 1992.
Prior to this time, the closest monitor to the smelter was located at the high school, about
one-half mile away. Moreover, smelter officials – both before and during the partnership
period – resisted efforts to place a fence-line monitor.
Indeed, smelter officials opposed a fence-line monitor from the inception of the
national ambient air quality standards. In completing the smelter’s implementation plan
in 1982, state regulators requested a monitor be placed across the street from the smelter,
just northwest of the plant, at a point where, according to models, the maximum ambient
air concentration of lead would result from fugitive emissions from the plant. Dan
Vornberg, then St. Joe’s environmental manager, expressly rejected this request on
numerous grounds, including the fact that management was somewhat concerned about
that sector because it was so close to some of the process emissions, and because
management believed the standard to be unreasonable and much more stringent than
necessary to protect public health. Vornberg also refused the request because no public-
health problems existed in the community due to lead emissions from the smelter.
Notably, Vornberg acknowledged that liability and the possibility of community legal
36 action were major reasons for not wanting a public record of any data well above the
national standard.
Opposition to a fence-line monitor carried forward well into the partnership
period. In December of 1986, Dan Vornberg, by now Doe Run’s director of
environmental affairs, and his coworker, Jim Lanzafame, noted that Doe Run might be
able to avoid placement of the fence-line monitor if they could fence off certain areas
from the public where maximum levels would be found. In May of 1988, Lanzafame
stated that Doe Run was “still adamant about not installing the fence-line monitor until
after the controls were in place.”
Smelter officials knew fence-line readings would far exceed the national standard.
To begin, after the EPA established the national lead ambient air standard, environmental
officers from the smelter toured other smelters in the country and learned of the smelters’
problems in meeting the national standard. For instance, upon touring the Bunker Hill
smelter in Idaho, Dan Vornberg learned that the Bunker Hill smelter had a fence-line
monitor that averaged well above the national standard. Bunker Hill personnel expressed
little hope of their fence-line monitor ever reaching the national 1.5 standard.
Beyond this, the smelter in 1979 had privately placed its own monitor across the
street from the smelter, at a building it owned, referred to as the environmental building.
The monitor at this building was at or very near the proposed location for the northwest
monitor – near the smelter and significantly closer to the plant than the high-school
monitor, or any other monitor being used and reported to the state of Missouri and the
EPA. The readings from this private fence-line monitor far exceeded the national
standard. In October and November of 1979, shortly after the EPA established the
37 national standard, the quarterly average ambient air level of lead at the private fence-line
monitor was 32.3, more than twenty times the national standard of allowable ambient
lead. The average for the entire 1979 calendar year was 16.6, more than ten times the
national standard. In 1981 and 1982, Dan Vornberg conceded that the data from this
private monitor was “unacceptable.”
Smelter officials convinced the DNR to use the high-school monitor as the closest
official monitor, and in late 1986, the EPA agreed to “passively support” this location for
demonstrating attainment of the federal standard, despite the fact that models indicated
that maximum levels would be at the old environmental building. A true fence-line
monitoring station was not established until the fall of 1992, when the EPA and the DNR
forced the partnership to install a monitor closer than the high school. The first level at
this location, at the end of 1992, was 5.5. By this time, the smelter had installed some
air-emission control equipment. The level would likely have been higher before the
equipment was installed. Even with the equipment in place, the levels were more than
three times the national standard and allowable limit of 1.5.
Soil Contamination
The smelter contaminated not only the air in Herculaneum, but also the soil.
In 1984 and 1985, smelter officials, under Dan Vornberg’s leadership, conducted
lead testing on dust and surface soil samples taken from areas around the smelter, such as
streets and under swing sets, where children were known to play. The levels were high
throughout the community. Analysis of the samples revealed lead levels ranging from a
low of 50 ppm to a high of 9250 ppm. 27 To place these levels in context, the EPA in
27 The levels of lead in soil are measured in terms of “ppm,” meaning parts per million.
38 1989 set the soil cleanup level for superfund sites at 500-1000 ppm, meaning the EPA
required removal and replacement of soils containing levels of lead greater than 500 ppm.
Smelter officials plotted the results on a map and then divided the town into four pie-
shaped sectors around the plant, centered on the smelter stack. The average lead values
in each sector, for the area within one-half mile of the stack, were all very high: 1458
ppm for sector A; 2258 for sector B; 2239 for sector C; and 1822 for sector D. As to the
particular children involved in this lawsuit, levels are available for locations at or
near the homes of eight of the children. Those levels ranged from 1010 to 4720.28
Although these particular children were born, and resided at these locations after this
testing was conducted, Dr. Rodney J. O’Connor, a chemist with expertise in
environmental chemistry and chemical safety, explained that lead in soil never really
leaves. The only way lead leaves a site is by blowing away in the wind, dissolving and
washing away in water runoff, or by being dug up. Otherwise, the lead remains and
accumulates.
Dr. O’Connor characterized all these levels as being “very high.” He noted that
scientific papers dating back to at least the 1970s showed that lead in soil could be
dangerous. He further noted that, according to those papers, the levels of lead seen in the
1985 testing would be deemed dangerous. Dr. O’Connor observed that, as of the 1980s,
it was widely known that soil levels in excess of 3000 ppm were unsafe. He further 28 In particular, analysis revealed the following levels:
CHILD LEVEL (ppm) Preston Alexander 1360 Bryan and Tiffany Bolden 1820 Gabe Farmer (age 3-6) 4720 Gabe Farmer (age 7) 2010 Ashley and Lauren Shanks 2010 Isaiah Yates 1010
39 explained that by 1994, soil lead levels over 2000 ppm were also undisputedly considered
unsafe.
Doe Run officials knew of the soil results by at least December 1987, when the
results were summarized in a memo directed to president Jeffrey Zelms, copied to Fluor’s
general counsel, and forwarded to Doe Run’s director of environmental affairs, Dan
Vornberg. The memo also noted the levels at which the EPA was requiring soil removal
and replacement at superfund sites. We find no evidence that the partnership informed
either the EPA or the residents of Herculaneum of these soil test results.
The partnership conducted another soil test in 1990. This time, instead of testing
known play sites, as previously done in 1985, the partnership randomly selected one out
of every three houses within a half mile of the smelter for testing. The partnership
believed that testing every third yard would provide a sufficient measure of the lead
levels present in the neighborhood. They assumed that surrounding yards would have
similar lead concentrations to the ones tested.
Dan Vornberg admitted the partnership expected the levels to be high. And they
were. The tests revealed average soil lead concentrations ranging from a low of 15.5
ppm to a high of 10,150 ppm. Of eighty-five yards tested, only sixteen came back with
levels under 1000, and only three of those results were under 500 ppm. The other sixty-
nine yards had levels above 1000 ppm, and forty-two of those yards had levels above
40 2000. 29 As to the particular children involved in this suit, testing was conducted at or
near the homes of five of the children. The levels ranged from 1132 to 4488 ppm. 30
The partnership was less than forthcoming with these results. Isaiah Yates’s
father specifically testified that no one ever told him what the soil levels were in his area.
Gary Walker, environmental officer for Doe Run, who characterized the results as “fairly
high,” stated that Doe Run sent the results back to the specific residents whose yards had
been tested. But, as to those residents whose yards were not tested, Doe Run relied on
the residents to talk to their neighbors, or to attend a community meeting to learn of the
results.
29 In all, the test results showed:
AVERAGE NUMBER OF LEVEL OF LEAD HOMES (ppm) 0-1000 16 1000 – 2000 27 2000 – 3000 17 3000 – 4000 15 4000 – 5000 5 5000 – 6000 2 6000 – 7000 0 7000 – 8000 0 8000 – 9000 2 9000 – 10,000 0 Over 10,000 1
30 Specifically, testing revealed the following levels:
CHILD LEVEL (ppm) RESIDENCE & SAMPLE LOCATION Patrick Blanks 1858 Lived at 406 Burris; sample from 411 Burris Nathan Davis 4488 Lived at 774 Circle; sample from 773 Circle Gabe Farmer 1132 Lived at 375 Mott; sample from 371 Mott Heather Glaze 3462 Lived at 925 S. Main; sample from 929 S. Main Jeremy Halbrook 2527 Sample taken from Halbrook yard
41 Blood Tests
In 1984, the smelter conducted community-wide blood testing of children living
around the smelter. The average blood lead level was over 15 for children living within a
half-mile of the smelter. Several children had levels above 25, and one child had a level
of 34.
No further community-wide screening was performed until 1992. Dr. Rodgers,
again a pediatrician, toxicologist, and member of the CDC Advisory Committee on
Childhood Lead Poisoning, called this lack of screening entirely inappropriate. He
explained that the children around the smelter were a particularly high-risk population
that should have been screened frequently and intensely – even yearly. He noted that by
1985, it was known that children who lived next to lead smelters tended to have high
blood lead levels. CDC guidelines issued in 1985 classified children from nine months to
six years old who lived near a lead smelter as a high-priority group for lead screening,
and recommended yearly testing. Dan Vornberg, Doe Run’s director of environmental
affairs, acknowledged that he knew in January of 1985 that the CDC regarded children
living near lead smelters as a high-priority group for screening, but explained that the
CDC guidelines were directed to health agencies. According to Vornberg, Doe Run
officials did not view themselves as having an annual duty to run a blood lead program.
Moreover, with but “a few” above the 25 level of concern, Doe Run considered the
community a “normal community” by EPA guidelines and thus, in its view, screening
was not called for. They would recommend testing if anyone called in to the smelter to
talk about the issue, but Doe Run did not go out in the community, knock on doors, and
tell residents that they wanted to monitor blood levels.
42 When asked if Doe Run informed the people in the first half mile that the average
blood lead level in the area was above the level of concern, Mr. Vornberg stated that they
“put that in a paper.” He could not say, however, if the people that lived across the street
read that published scientific paper. And Doe Run held no public meetings at the time.
When asked how the Halbrooks, who in 1986 moved virtually across the street from the
smelter, were supposed to know about a published study, Vornberg replied: “Well, the
community was very aware of this issue. You’d think you’d be talking to neighbors,
talking to school officials, their alderman.”
“We weren’t set up at that time,” Vornberg stated, as another reason why Doe
Run did not perform further blood monitoring between 1985 and 1992. Yet, in 1986
alone, Doe Run regularly screened about 400 employees at the smelter. Doe Run had
equipment onsite and employed a phlebotomist full-time to draw blood. Mr. Vornberg
ultimately acknowledged that Doe Run had the ability to do the screening. He also
acknowledged that Doe Run got a good response when the company performed the
community-wide screenings in 1984 and 1992, due to a team of people knocking on
doors and taking the blood samples in the residents’ homes. But, he said, he never
thought about sending out Doe Run’s full-time phlebotomist to do the same thing each
year.
Partnership Actions: What did they do? What did they fail to do?
We come now, to the heart of this case. What was Doe Run’s responsibility to the
children of Herculaneum? And knowing the extent of contamination and the effects of
lead on children, what did the Doe Run partnership do and what did they fail to do?
43 Professor James Fisher, a marketing and business ethics professor, opined that a
company such as Doe Run has a responsibility, in dealing with their neighbors and the
general public, “to do no harm, to communicate honestly, and even openly, and to not use
[their] knowledge to disadvantage the public….” Doe Run, itself, in 1993, represented to
the community that “[a] company has an obligation to be a good neighbor….” and that
the “health of every member of the community is one of our major priorities.” According
to the children, however, Doe Run was anything but a good neighbor. They contend the
partnership’s efforts were insufficient, and that the partnership withheld information,
even to the point of deceit, all to protect and enhance their bottom line. The partnership
knew substantial contamination existed in the community. They knew they were not in
compliance with federal standards and that they were continuing to contaminate the
community. They knew the harm that lead posed to children. Yet the partnership
continually reassured the parents of Herculaneum that they had nothing to worry about –
their children were safe. In sum, the partnership contaminated, concealed, delayed, and
deceived.
Fence-line Monitor
We return to the fence-line monitor. Not only did the partnership oppose
placement of an official fence-line monitor, and not only did the partnership know well
that the levels recorded at their private fence-line monitor were exceedingly high and
“unacceptable,” but the partnership kept quiet about the existence of that monitor.
Indeed, Matthew Heilig’s mother testified she had no idea of the monitor right in front of
her home registering a high level of lead. The partnership also kept mum about the levels
recorded at their monitor. They did not share those levels with either the community or
44 regulatory authorities. Dan Vornberg, Doe Run’s director of environmental affairs,
admitted that he never shared the levels at the environmental building with anyone. In
his words, he did not report the levels to the EPA because the agency “didn’t ask for
them.” Instead, the levels were kept in-house. Robert Schreiber, from the DNR,
confirmed that he was never shown the 1979 results showing a ninety-day average of
32.3. Had he known of the results, which he described as “abnormally high,” he would
have alerted the Missouri Department of Health and the EPA.
Furthermore, the partnership publicized demonstrably false information. In a
report released to the public in March of 1990, purporting to report on the air quality and
emissions in the smelter area for the years 1988 and 1989, Doe Run declared that an 8.59
quarterly average in 1988 was an “abnormally” high reading and was the “highest level in
a decade.” Doe Run made this statement despite the 32.3 reading in 1979.
“Absolutely outrageous.” That is how public-health expert David Rosner
described attempts to hide information from the community that had been contaminated
by the smelter’s pollutants. Jim Tarr, an expert in air-pollution control, similarly opined
that the data “absolutely, positively” should have been shared with the government, and
that it was not appropriate to stand silent. Both experts agreed that hiding the truth
distorted the community’s and the regulatory agencies’ appreciation of the danger.
Withholding information limited the ability of the people in the community to make
reasonable informed decisions in order to shield their children from the contaminated air.
Withholding information and refusing an official fence-line monitor also skewed the very
results that formed the basis of the implementation plan. Herculaneum’s implementation
plan did not address the truth of the matter “by any stretch of the imagination.” The state
45 of Missouri and the EPA simply did not realize the degree of the pollution. 31 Those in
public health depend on accurate, fair, and honest data. By not knowing the truth, the
State operated under an “illusion” and could not adequately address the danger and
protect the community. In sum, the partnership hid critical information about what was
being emitted from the smelter, putting the children further at risk.
Slag Pile & Other Smelter Equipment
The slag pile on site at the Herculaneum smelter was quite large – about twenty
feet high and covering about twenty acres. The slag material itself contained a
percentage of lead that had not been refined. Lead dust also accumulated on the slag pile,
as well as other open storage piles around the plant. James Lanzafame, an environmental
officer for Doe Run, acknowledged that they did not need a computer model to tell them
that dust would blow off the piles. Yet, the partnership did not purchase a portable
sprayer, to spray down the piles with water, until 1992, when the partnership authorized
$2,820 for the purchase. The partnership did not purchase a sprayer prior to this time
because they were addressing other “bigger” sources first.
Children from town long played and rode their bikes on the slag pile. The smelter
placed a small, low fence around the pile in the early 1980s, to try to signal that the pile
was a hazardous-waste area. Dan Vornberg noted that they posted signs and “tried to get
the message out” that the community should not play on the pile. Vornberg, Doe Run’s
director of environmental affairs, admitted that this was not a perfect system, and
31 For instance, in developing the implementation plan for Herculaneum in the early 1980s, the State believed the highest ambient air value was 2.28, when the private fence-line monitor instead showed a level of 32.
46 explained that they relied on parents to inform and watch their children. A chain-link
fence topped with barbed wire did not enclose the pile until after the partnership period.
In the early 1990s, Vornberg estimated that it would cost Doe Run 2 to 5 million
dollars to cover the slag pile. The partnership never covered the pile. Vornberg
explained, “At the time there was no requirement to close it.”
As noted earlier, lead concentrate arrived at the smelter by truck and by railcar.
The trucks kicked up dust as they traveled through the neighborhood streets. When asked
by a resident in 1990 why Doe Run did not switch shipment of all incoming lead
concentrate to rail, the company responded that if they shipped all concentrates by rail,
the rail rates would rise to the point of putting the smelter out of business. In 1991,
Vornberg proposed bringing in all lead concentrate via rail, rather than shipping some via
truck. He noted that trucks delivered thirty percent of the concentrate and that those
trucks generated dust. Vornberg presented his proposal to the president of Fluor and
other partnership officials. The record does not show that Doe Run ever changed
delivery methods.
In December of 1993, the partnership authorized money for an enclosed
conveyor-belt system to replace the old, existing, open conveyor-belt system. An
enclosed system would eliminate a major source of dust within the plant, and
correspondingly, significantly lower fugitive emissions and lead levels at the fence-line
air monitors. Richard Coleman, a chemical engineer and consultant for smelters,
explained that an enclosed system existed as early as 1976, and therefore the partnership
could have replaced the conveyor-belt system much earlier than 1993.
47 “Community Outreach”
Over the years, the partnership engaged in a number of “community outreach”
programs. The children presented evidence showing that Doe Run was less than
forthcoming in its outreach. Doe Run allayed concerns, downplayed the smelter’s
contribution as a source of lead, and consistently and repeatedly assured the community
that all was well.
Shortly after formation of the partnership, in 1987 and 1988, Doe Run officials
began community walks and distributed two pamphlets, entitled “My Book about Staying
Safe Around Lead” and “What Everyone Should Know About Lead Poisoning.” These
pamphlets described lead poisoning, its signs and symptoms, the sources of lead,
screening programs and preventative measures to take – such as washing one’s hands, not
putting things in one’s mouth, and eating healthy foods. Officials went door-to-door,
handed out this literature, and asked residents if they had any concerns. Officials did not,
however, tell them of the past and present dangers to their children of grave and
irreversible injuries.
In July of 1989, at the time when Doe Run had received a notice of violation from
the DNR for violating the national air quality standard, Doe Run sent a letter to their
employees who had children, in response to concerns raised regarding air lead levels in
Herculaneum. In that letter Doe Run downplayed the concerns, stating simply that the
“standards are set very conservatively ….”
In 1990, prior to conducting the second soil study, Doe Run held an informational
meeting to inform residents of the upcoming study. To announce the meeting, Doe Run
distributed a letter to residents, in which Doe Run expressly stated that they were
48 proposing the study, even though their information “indicates that there is no significant
health problem among residents living near the smelter.”
On a display chart for the meeting, Doe Run listed reasons for the meeting, three
of which were:
TO LET YOU KNOW the current status of the area’s lead health, which is favorable.
TO LET YOU KNOW THAT NO SERIOUS HEALTH THREAT has been identified for people living near the smelter.
TO DETERMINE THE BEST AND SAFEST way to ensure the continuing good health and well-being of every Herculaneum resident.
On another chart, Doe Run listed eight sources of lead, listing “lead smelters” last, after
such sources as “improperly fired ceramics” and “antique pewter.” On yet another chart,
Doe Run listed the ways in which lead entered the body, listing “breathing dust and
fumes produced by lead smelters” last, after such items as “folk medicines,” “cosmetics,”
and “breathing dust and fumes produced when working on leaded stained glass.” Doe
Run created another chart, listing the following measures residents could take to reduce
their exposure to lead: “wash hands before eating,” “vacuum carpets and floors
frequently,” “check plumbing for lead piping,” “wear a mask when scraping leaded
paint,” “avoid using leaded ceramic pans or dishes when cooking, storing, and serving
food,” and lastly, “keep clothes clean.”
This last chart exemplifies the consistent message from Doe Run – that residents
could lower their exposure to lead if they would just clean their homes and watch their
kids. Another example of Doe Run’s misleading messages is when the partnership
provided vacuum cleaners for the residents, free of charge. Doe Run officials simply told
49 Nora Murray that “this will help keep your house clean.” 32 Ms. Murray just thought Doe
Run was being nice.
Doe Run officials continued their door-to-door community walks in 1991. During
these walks, Doe Run officials did not tell residents that exposure to lead lowered IQs.
Officials did not tell residents that the brain effects were irreversible. Officials did not
tell pregnant mothers that pregnancy released lead from bone. Officials did not tell
residents that lead could impair brain function in children. When asked why Doe Run did
not inform residents about the risks, Gary Walker, the partnership’s environmental officer
and industrial hygienist, answered only that “we told them about what we were doing to
try to make things better in the community.” Doe Run again emphasized that parents
could minimize exposure to lead by cleaning their homes. Walker insisted that parents
needed to take responsibility and spend some amount of time cleaning their homes. He
declared the lead “may or may not be related to the smelter,” and that there were
“multiple issues” as to why lead was present in the community. He further maintained
that as of 1992 there were “only a few people” at the CDC levels of concern, when the
evidence showed otherwise. He knew soil levels were high, but persisted in the notion
that lead-based paint contributed to the elevated lead levels. He also maintained that the
residents knew of the lead in the community because the smelter had been there for over
a hundred years. This “had to know” position was yet another message consistently
advanced by Doe Run – even to the point of insinuating it was the parents’ fault for
choosing to live close to the smelter.
32 Nora Murray, a cousin of Brian and Tiffany Bolden, also lived in Herculaneum.
50 Soil-Abatement Program
In 1991, a year after completing the second soil study, Doe Run instituted a soil-
abatement program, in which they dug up and then replaced leaded soil. Doe Run
budgeted $480,000 for the program in 1991. Out of nearly two hundred homes in the
nearby community, Doe Run in 1991 replaced soil in only six yards, a vacant lot, and a
one-acre field. They did not start at the homes with the highest level of lead in the soil.
When asked why only six yards, Gary Walker explained that they, Doe Run, wanted to
do a “pilot project” to see whether they could do a “decent” job. Paul Allen, a consultant
for Fluor and member of the partnership committee, commented on the newly-replaced
yards when reporting to Fluor’s president in October of 1991, expressly remarking that
the program was “costing only a nominal amount.”
The following year, in 1992, Doe Run again replaced soil in just six residential
yards. When asked why, after 1991, Doe Run did not buy all the equipment they
possibly could, and proceed to clean the entire area in 1992, Mr. Walker explained that
they were using equipment – high lifts, bobcats and the like – that took a lot of time and
effort to complete the job. He also blamed the rain, wash-outs, “and other things.” He
further explained that Doe Run had hired consultants and contractors who were landscape
people to do the soil replacement, so “there’s a learning process in getting that done.” In
sum, he explained that Doe Run’s progress in replacing soil was limited by the type of
equipment they were using and their knowledge about how to get started. “You’ve got to
walk before you can run,” he protested. Dan Vornberg, the partnership’s director of
environmental affairs, gave a similar explanation. He noted that the soil-replacement
program was a pilot program to demonstrate the feasibility of the program. He further
51 noted that no one else in the state had done anything, that the State was not interested,
and that federal officials were not pressuring them. He also explained that in Doe Run’s
view, lead in the soil only minimally raised the blood level of a child, and so soil
replacement “wasn’t the most important thing that could be done.” Vornberg was also of
the opinion that most of the houses had a soil lead level below 2000. The results, noted
before, belie this opinion.
Doe Run acknowledged that the process of removing the contaminated soil kicked
up a lot of dust. But, Doe Run did not move families out of their homes when cleaning
up the contaminated yards. Doe Run did not perceive any risk to the residents because
they kept the residents away from the heavy equipment. Doe Run also did not offer to
clean the residents’ homes after completing the remediation projects. And although Doe
Run monitored the blood levels of their own workers during the soil cleanups, they did
not monitor the levels of the resident children. Mr. Walker characterized the workers’
exposure as “low.” But testing on those workers revealed an average blood level of 15.
Dr. O’Connor, the children’s expert in environmental chemistry and chemical
safety, opined that the soil-remediation project was not effective. In his view, it simply
was not feasible to clean up the entire area. Dr. O’Connor explained that Doe Run may
have replaced soil in a particular yard, but lead dust was still in the surrounding
environment – be it in the street, the air, or an adjoining yard – and the soil replacement
did not protect a yard from that dust. Doe Run did not retest yards after replacement to
see if and how much lead had reaccumulated in the yards. 33 And even though Doe Run
33 As noted in our recent decision, Doyle v. Fluor Corp, 400 S.W.3d 316 (Mo. App. E.D. 2013), soil remediation accelerated beginning in 2001, after the partnership period, pursuant to a consent decree between the smelter and the EPA. By 2007, 54 properties had been remediated. To date, nearly all properties in Herculaneum have been remediated except for a few at the outskirts of town.
52 made a minimal effort at remediation, they did not explain the danger of the lead to the
homeowners.
1992 Blood Study
In April of 1992, in conjunction with a national study, Doe Run conducted
another blood study of residents. Doe Run planned to test those children, aged six
months to six years, who lived within a one-and-a-half mile radius of the smelter.
However, several parents testified that they did not know, or were never contacted about
the test.
Testing revealed an average blood lead level of 11.6, above the CDC level of
concern. This average was an overall average – based on children within the one-and-a-
half mile radius of the smelter. Of those children living closest to the smelter, within the
first half mile, ninety-one percent – thirty of thirty-three children – had lead levels above
10. Of these thirty children, ten children had levels between 10 and 15, fifteen children
had levels between 15 and 20, and five children had levels over 20. 34 The average level
for those children living within a half mile of the smelter was 15.6.
Doe Run issued a press release after the study, emphasizing that levels had
decreased since 1975 and 1984. They did not point out that nearly every child tested in
the first half mile of the smelter was above the CDC level of concern of 10.
Dr. Rodgers, the pediatrician who served on the CDC Advisory Committee on
Childhood Lead Poisoning, concluded that these levels should have triggered
community-wide efforts. Doe Run contended that they followed the CDC guidelines, and
that they worked to ensure that those with blood levels above 10 were told they needed to
34 Those levels were 21, 23.1, 27, 28, and 28.
53 get another blood test. Several parents, however, were never informed of the test results.
Mrs. Shanks, for instance, never received a letter and only later learned that her daughters
had tested at 10.2 and 10.8. Had she known that over 90% of the children living near the
smelter, including her daughters, had lead poisoning, she would have moved out and
sought treatment. Others, like the Alexanders, received results, but no one from Doe Run
ever contacted them about those results. The letter, as sent, gave them no reason to be
concerned. Their son Preston was tested twice in 1992, two months apart. His levels
were 16.9 and 16.5. Dr. Rodgers testified that when someone tests above 15 twice within
the same year, the CDC would say that you need to find the source of the lead and then
get the person away from that source. And certainly the person needs to be followed
closely. As a pediatrician, Dr. Rodgers would have told the Alexanders that they needed
to get Preston away from the source of the lead.
REACT Program
After this blood study, in the late summer of 1992, Doe Run hired a company by
the name of REACT Environmental Engineers to perform a variety of functions,
including conducting an environmental survey of households with children having
elevated blood lead levels. Doe Run and REACT asked residents to complete a
household questionnaire. Curiously, a number of questions had no connection to lead
exposure. 35 But in addressing the activities of household members, the questionnaire
began by asking about every other type of potential lead exposure other than the
35 For instance, the survey asked such questions as whether household members smoked or used tobacco products, and whether household members had any pets in house. The survey also asked the highest level of education for the head of household, the gross household income, and the race of the children. The survey also asked whether the resident owned or rented the house.
54 smelter. 36 And in addressing occupations, the questionnaire asked no questions
specifically about the smelter, such as whether any member of the household worked
there.
Preston Alexander’s parents participated in the REACT survey. Officials
collected paint chips and dust from the home, as well as soil and water samples. Testing
showed that the Alexanders had no problems with lead in their water supply; the lead
present was well within the acceptable range. The Alexanders had no lead paint inside
their house and just a minimal, acceptable, amount of lead paint on their outside steps.
The house dust samples, however, showed a “relatively high” lead concentration of 6030
for the vacuum sample and a “moderate” lead concentration of 1270 for the wipe sample.
And soil testing revealed “moderately high to high” lead concentrations of 1720 and
3620.
Based on these findings, the letter reporting the test results set forth a litany of
recommendations to reduce their child’s exposure to lead in the home, including: making
sure peeling paint was not accessible to the child, either inside or outside of the house;
conducting an extensive one-time cleaning of the entire house; wet-mopping and cleaning
windowsills, furniture, and baseboards twice a week; vacuuming carpets and rugs twice a
week; washing toys daily; washing their child’s hands and face frequently, especially
before he eats and after playing in the soil; making sure their child was not ingesting
paint chips or soil; making sure their child ate regular meals; and making sure parental
36 For instance, the questionnaire first asked whether anyone painted pictures with artists’ paints, painted furniture or the inside/outside of the home, worked with stained glass, cast lead into fishing sinkers, soldered electronics or pipes, repaired auto radiators or worked on auto bodies, worked in a sewage treatment plant, made any pottery, performed any welding, cleaned a firearm, or visited an indoor firearm target range. The survey did not ask about smelting lead until the seventeenth of twenty-seven questions regarding household activities.
55 occupations or hobbies did not expose their child to lead. But nowhere does the letter
even allude to the lead smelter. And nowhere does the letter suggest that parents need to
move their children out of Herculaneum. The letter never mentions that the lead found
could be a poison to the Alexanders’ children. No one ever explained to the Alexanders
just how “relatively high” the dust sample of 6030 was. And no one ever explained the
meaning of the soil numbers or the meaning of “moderately high.” Furthermore, despite
stating the purpose of the survey was to determine the most likely sources of exposure,
the letter never even mentions the most likely source of the lead in their home. In Mrs.
Alexander’s words, Doe Run was conducting a lot of surveys and they were being asked
a lot of questions, but “we had no answers.”
The Alexanders interpreted the letter as telling them they were not keeping a
clean home and, if they did, everything would be alright. After receiving the letter, Mrs.
Alexander, a professional housekeeper, tore apart her home and cleaned constantly. Even
though she believed herself a good housekeeper, she allowed Doe Run to conduct an
extensive one-time cleaning of her home. Instead of a “professional” cleaning service, as
offered in the letter, Doe Run simply sent employees from the smelter – coworkers of Mr.
Alexander – to clean the home. And those employees used dirty, dusty equipment from
the smelter. The workers took equipment that was used in the smelter’s change house
and brought it straight across the street to clean the Alexanders’ home.
1993 “Community Interaction” Program
Doe Run officials launched a new “community interaction” program in 1993.
Doe Run was under mounting regulatory pressure and believed it was losing community
standing and empathy. Doe Run officials set various goals for their program, including:
56 having 95% (but notably, not all) of children in the smelter umbrella with a blood lead
level less than 10 (the new CDC level of concern); eliminating negligence liability;
booking liability for the half-mile radius at appraised value of property; “optimizing” Doe
Run’s public-relations position; reducing the possibility of a negative media campaign;
and managing “the impact on Doe Run’s potential to operate and consequently the value
of the company and its potential marketability to the public or another company.”
Doe Run hired a new public-relations firm. This new firm developed a
communications strategy for Doe Run that included messages to convey to the
community, and then a multi-faceted approach for interacting with the community to
disseminate these messages. The firm identified several key audiences, such as residents
nearest the smelter, parents of young children, and residents new to the area, and then
matched messages to these audiences. Slightly tailored for each audience, those
messages all struck a consistent and familiar refrain: Doe Run is a credible source of
information; Doe Run is a responsible company that continues to improve its
environmental performance; the community is safe; Doe Run’s operation does not
adversely affect either the health of children or property values; and lastly, most exposure
is historical and can be avoided by careful attention during routine house-cleaning. In
handwritten notes from a meeting with this new public-relations firm, Dan Vornberg
ominously observed, “Perception is reality.”
As part of this new “community interaction” program, the partnership produced
and distributed a video entitled “Living with Lead.” In general terms, the video conveyed
that exposure to too much lead could cause health problems. Remarkably, the video
showed a child playing in a yard, and made it appear that it was okay for children to be
57 playing in lead-contaminated yards. Again Doe Run deflected attention away from the
smelter. A good portion of the video dealt with lead-based paint, and even described
precautionary measures to be taken when remodeling homes with lead-based paint. The
word “smelter” was used only twice in the entire video. The video stated that many or all
women were below the CDC level of concern, but never mentioned the children of
Herculaneum. The video never alluded to the 1992 blood test results. Instead, the video
stated that many children in the United States were above the CDC level of concern, and
that “most don’t live near lead smelters.” When asked about this at trial, Mr. Walker,
Doe Run’s environmental officer, stated the video statement was correct and, in defense,
declared: “but everybody in Herculaneum in the half mile absolutely knows they live
near a lead smelter.”
The partnership also published a series of newsletters called “Neighborhood
Notes.” Portrayed by Doe Run as a way of informing residents about community events,
Doe Run’s environmental progress, and ways to minimize lead exposure, the children
contended these newsletters were likewise misleading.
Over the course of four newsletters, Doe Run included a number of articles
portraying the company as a good neighbor. 37 They publicized that they were running
experiments and soil tests at eleven homes to see how the soil could be improved, and to
learn how to treat each yard to correct any problems. In yet another article, Doe Run
extolled the environmental progress at the smelter, noting that newly-installed equipment
would reduce air emissions. The focus of the measures and article, however, was sulfur
dioxide gas, not lead emissions. In lauding their environmental progress, Doe Run never
37 For instance, in one article, Doe Run boasted that their employees had filled sandbags during the Great Flood of 1993. In another full-page article, they touted their whistle alarm, which sounded for fires and tornados, as a “real benefit” to the community.
58 mentioned that they had not met the air-quality standard and did not think they ever
would.
The articles often minimized the extent of contamination, as well as the dangers
of lead. In announcing that company representatives would be doing “walk abouts” and
distributing coupons good for one free rental of a rug shampoo machine, Doe Run
downplayed the danger: “It’s our way of saying thank you for meeting with us and a way
for you to get dust out of your home. Some of that dust might contain a small amount of
lead.” In an article discussing their soil-replacement program, Doe Run stated that
“some” of the homes nearest the smelter had relatively high levels of lead in the soil.
Professor Fisher, the marketing professor and a communications expert, believed that this
statement misled residents regarding the dangers they confronted. A lot of homes had
high lead levels, not just “some.” Professor Fisher was also critical of the way Doe Run
informed the community about the availability and importance of blood testing. Instead
of conveying a sense of urgency, Doe Run had written the newsletter in a “light and
breezy tone,” with an “alarming lack of candor.” Professor Fisher further opined that,
given Doe Run’s knowledge that children within a half-mile of the smelter had very high
levels of lead, this casual tone was totally inappropriate when the very grim numbers
confirmed a healthcare emergency. Indeed, parents testified that the newsletters gave
them no cause for concern, but instead conveyed that Doe Run was a good neighbor, and
that there was nothing to worry about.
Doe Run’s last newsletter, from February of 1994, is especially telling. Doe Run
included but one article in this newsletter, an article entitled “An Expert Talks About
Families and Lead,” in which Dr. Eugene Shippen, a physician and consultant for lead
59 companies about the health effects of lead exposure, gave his thoughts on lead. After
proclaiming “there is positive news about the health effects of lead exposure,” the article
noted that yesterday’s children were exposed to dramatically higher levels of lead than
today’s youngsters, because many sources of lead – gas, water, food cans, and toothpaste
tubes – had been eliminated. Despite the fact that Doe Run was not meeting the air-
quality standard for lead, it ran an article proclaiming “today’s cities have lead levels in
the air well below what was measured in the past.” The article goes on to declare that
much of what is known about health problems caused by lead emissions comes from
studies done before environmental controls were put into place, and that today’s smelters
could not be compared to the way operations were run sixty years, or even ten years ago.
The article then counsels that “the best defense parents have to prevent young children
from becoming exposed to lead is close observation,” and that “one of the highest risk
factors for young children is exposure to old lead paint.” Little is said of smelters, other
than stating that “even with a point source such as a smelter, a community’s lead
exposure is below what used to be normal in a major city when lead was used in products
families were exposed to.” The overall tenor of this article – that conditions are so much
better than what they used to be – reflected the strategy of the lead industry, and sounded
the recurring refrain of Doe Run.
As advertised, Doe Run indeed revived their door-to-door walks as a part of their
new “community interaction” program, as a way to disseminate their messages. The
children argued that Doe Run officials, in their walk-abouts and in the informational
packets they distributed during those walks, were every bit as misleading as in the video
and the Neighborhood Notes. The children heard the same messages. Doe Run touted
60 their “many projects” designed to reduce exposure to lead, including replacing soil
around “a number” of homes. Doe Run is a responsible company. In offering coupons
for a free rental of a rug shampoo machine, Doe Run told residents that “[k]eeping lead
dust out of your house is one of the best ways to reduce your family’s exposure to lead.”
Just clean. In responding to the question “How big a problem is exposure to lead?’, Doe
Run did not mention the children of Herculaneum, but instead spoke in general terms,
stating that “only about 200 [children] live around the 25 lead smelters in the United
States.” The community is safe. In responding to the question “where does the lead
come from?”, Doe Run answered that lead “comes from many places,” and then
mentioned lead smelters as a source of lead after mentioning old water pipes and food
cans. 38 Doe Run’s operation does not adversely affect the community. When asked if
their answer was designed to make people think that the smelter was a minor source,
Gary Walker, Doe Run’s environmental officer, simply answered: “anybody that lives in
Herculaneum knows the smelter is there, and they had received, by this time, information
about the lead in soil. They were seeing people removing … soil from yards with lead.
They knew that this was one of the sources….” They knew. Doe Run did not mention
the current blood levels present in the Herculaneum children. Instead, they boasted that
levels were “43 percent lower” than what they were in 1975. When asked the point of
comparing current lead levels with levels from 1975, Mr. Walker responded: “You want
to move forward…You want to tell people that you’re doing better.” Perception is
reality.
38 In full, Doe Run’s prepared answer stated: Lead comes from many places. In the past, lead was in gasoline and paint, which can chip and be eaten by small children. Old water pipes were soldered with lead, which can find its way into drinking water. Cans used to store food might have lead seams and that lead can get into food. Lead smelters also are a source of some lead in the air and in soil.
61 Buyouts
Numerous experts testified that Doe Run should have bought out the community.
They did not.
Richard Coleman, the chemical engineer and smelter consultant, stated that
engineering controls alone, such as replacing and installing new equipment, would not
solve Doe Run’s problem. Those control measures alone could not achieve the 1.5 air
standard. According to Mr. Coleman, Doe Run had other avenues available to meet the
national standard. For one, Doe Run could dramatically reduce production. Mr.
Coleman noted that this meant Doe Run would likely have to shut down the plant. Doe
Run could also expand out their property’s perimeter to a point where they complied. To
do that, Doe Run had to buy out all the surrounding houses. In Mr. Coleman’s opinion,
Doe Run should have done so.
Dr. O’Connor, the chemist with expertise in environmental chemistry and
chemical safety, also concluded that Doe Run needed to move the children to prevent
their continuing exposure to the high levels of lead. In his view, the residents were
endangered and cleanup was not feasible. Dr. O’Connor opined that Doe Run should
have offered buyouts at a very early date, as soon as Doe Run knew the area was
contaminated and that they were not going to stop contaminating the town.
Professor Fisher, the marketing and business ethics professor, opined that if Doe
Run had operated in the community’s best interest, they would have moved the residents
rather than surveying them for their attitudes, as they had done during their walk-abouts.
According to Dr. Rosner, the public-health expert, a buyout was the most logical
course of action, given the high levels of lead in the children. In his opinion, Doe Run
62 should have bought out the community in 1989, when Paul Allen, a partnership
committee member, raised the idea of a buyout in response to the “very complex and
serious environmental problem” that existed in Herculaneum. If not then, Rosner opined,
then Doe Run unquestionably should have bought out the homes when they learned in
1992 that nearly every child tested in the first half mile of the smelter was above the CDC
level of concern of 10. Doe Run knew those close to the smelter were subject to high
levels of fugitive emissions. In Dr. Rosner’s opinion, all Doe Run had to do to reduce
that exposure was move the residents. And Doe Run could have met the national ambient
air standard if they would just have moved the fence-line to a new plant boundary that
was further away. Doe Run could have done just that, but decided not to.
Dr. Rodgers, the pediatrician and toxicologist, also testified that Doe Run should
have moved the children away from the smelter. Nathan Davis was a perfect example.
Nathan underwent four blood tests in 1992. His levels were all quite high, at 19, 20.5,
16, and 20. Dr. Rodgers explained that if someone with these results had come to him as
the head of a poison center, he would have told them to identify the source of the child’s
lead and remove the child from the source. In Nathan’s case, he would have told the
Davis family to get away from Herculaneum.
A primary goal of poison-prevention activities is removal – either remove the
source or, if that is not possible, then remove the child from the source. The CDC
published a document in 1991, entitled “CDC Preventing Lead Poisoning in Young
Children, A Statement by the Centers for Disease Control.” The CDC emphasized
throughout the document that eliminating childhood lead poisoning required preventing
lead poisoning altogether. “For the child who is lead poisoned, however, efficient and
63 effective interventions are needed as quickly as possible.” “Abatement means making
the source of lead inaccessible to the child.” “Complete abatement of the lead hazards in
the child’s environment is the most effective and only certain way to prevent further
damage.” The CDC also recommended that environmental interventions be directed at
primary prevention of lead poisoning in communities with a large number or percentage
of children with blood lead levels greater than or equal to 10.” The CDC further
emphasized that its focus was on the source: “The purpose of community-level
intervention is to identify and respond to sources, not cases, of lead poisoning.”
“Whatever mechanisms are used, the goal of hazard abatement must be to systematically
eradicate the lead hazards in the community. Such a program will protect not only lead-
poisoned children but all children – and thus safeguard the community’s future.”
When asked if he knew a way of abatement – making lead inaccessible to people
within a half-mile of smelter – other than offering to buy out properties and moving
families away from the smelter, Gary Walker responded, “The health department did not
say that that was needed or necessary, that we needed to move those people ….”
Unquestionably, Doe Run could afford a buyout. Dan Vornberg, Doe Run’s
director of environmental affairs, admitted that Doe Run had several hundred million
dollars in sales and very large profits, and that they “had a lot of cash flow.” In 1988,
Doe Run completely and independently financed a secondary-lead project out of the
partnership’s cash flow. Financial reports for fiscal year 1988 show Doe Run’s net
income at 60 to 61 million dollars. 39 In 1989, Doe Run made 13.1 million dollars more
than the partnership had projected. Professor Henry Ordower, a professor of law at St.
39 Net income, of course, is total income revenues less expenses – in other words, the amount of money left over after a company has paid all its expenses.
64 Louis University School of Law, who teaches courses on business associations and
corporate finance, remarked that this extra 13.1 million dollars was more than sufficient
to buy out the town. In formulating its 1990 budget, Doe Run reduced operating costs
and capital expenditures by a total of six million dollars. According to Professor
Ordower, the partnership could have used this freed-up money to buy out the town. But
Doe Run budgeted just $265,000 in its 1990 budget for buyouts. Doe Run again cut its
budget in 1991, reducing operating costs by thirty million dollars. By September of
1991, Fluor had more cash on hand than it could effectively invest. In 1993, Gary
Walker, the partnership’s environmental officer and industrial hygienist, calculated a cost
of $9,238,299 to buy out all the houses in Herculaneum.
Substantial precedent existed for buying communities out. Love Canal, in New
York, was bought out in 1978; Mountain View, Arizona, in the 1970s; Revilletown,
Louisiana, in 1987-1989; Morrisonville, Louisiana, in 1989-1990; and closer to home,
Times Beach, Missouri, was bought out in 1983. Granted, these classic examples of
buyouts relate to the chemical industry, but towns around lead smelters had also been
bought out. Smeltertown in El Paso, Texas, home of the ASARCO smelter, was bought
out in 1972; and Kellogg, Idaho, home of the Bunker Hill smelting facility, was bought
out in 1983.
Doe Run officials considered buyouts as early as 1987. In July of that year,
Jeffrey Zelms, president of Doe Run, requested partnership approval to purchase certain
properties surrounding the smelter. In making his request, Mr. Zelms noted reasonable
grounds existed to believe that the EPA would promulgate regulations requiring smelters
to create a belt around the plants for environmental reasons. Mr. Zelms wanted to get a
65 jump on those regulations by creating such a belt a little at a time. Mr. Zelms requested
just over one hundred thousand dollars for the project.
The partnership committee apparently approved the request, since Doe Run began
purchasing properties shortly thereafter. However, once purchased, the partnership
turned around and rented out the homes. Notably, the lease contracts contained a clause
stipulating that no children under the age of eighteen could live in the home. Doe Run
did not rent to families with children under eighteen because it was a “risk management”
issue. Yet Doe Run never told the neighbors, or the town in general, that they were not
renting homes to families with children because of the presence and danger of lead. Dan
Vornberg explained: “We didn’t have the right of eminent domain. We didn’t have the
right to destroy the value of their property by telling them it wasn’t safe to live there.
That was their determination.”
The issue of buyouts next arose in 1989, when Paul Allen, newly appointed to the
partnership committee, reported on his recent trip to Herculaneum. In a letter to Les
McCraw, fellow committee member and CEO of Fluor, Mr. Allen cited the “very
complex and serious environmental problem” that existed in Herculaneum, and cautioned
that an all-out buyout would likely result in a massive class-action suit. He wrote:
We discussed the idea of buying up all the property in Herculaneum where homes can be purchased for an average of only $38,000. However, an all- out program to do this, to relocate families, raze the buildings and return the land to its pristine state, would very likely precipitate a massive class action suit.
Mr. Allen again worried about the possibility of a class-action suit in a second letter to
Mr. McCraw:
All this discussion gave rise to the question as to whether the 9.1 million dollars for … sinter plant revisions might be better spent on buying all the
66 properties in Herky, locating the families elsewhere and returning the land to its pristine state. … From the discussion on November 3rd though, it appears that the idea of buying Herculaneum property on an all out rush basis is much too simplistic. Implementation of such an idea would almost certainly invite a major class action suit.
Indeed, Doe Run decided to not buy out the entire community. Instead, the
partnership decided to purchase homes gradually, budgeting for only a certain number of
home purchases per year. Moreover, Doe Run only purchased homes one house out from
the smelter property line. And Doe Run’s purchase of properties was unrelated to the
presence of children with high blood lead levels, even though Dan Vornberg in 1987 said
that a buyout was one of the things to be done in response to high blood lead levels.
Furthermore, Doe Run never solicited people in the proposed buyout zone to purchase
their property. Instead, Doe Run waited until the owner placed their house on the market.
Doe Run would then appraise the home, and if the appraisal met the asking price, they
would then purchase the home.
In the early 1990s Doe Run still only had a budgeted amount of money each year
for buyouts. And Doe Run still did not specifically purchase property based on the safety
of children. Rather, if a resident approached them about a potential buyout, Doe Run
considered the proximity of the house to the smelter and the available budget. If Doe
Run had expended their budgeted money for the year, Doe Run put people off and told
them to wait until the following year. Doe Run told parents in 1992 that the company
was getting out of buying houses because it was getting “too costly.”
Even as late as 1993, Doe Run still only purchased a small number of homes.
When asked why Doe Run did not ask people to move in 1992, when Doe Run knew of
the high level of lead in the soil, the high fugitive emissions, and the high blood lead
67 levels, Dan Vornberg, the partnership’s director of environmental affairs, explained only
that Doe Run was instituting a multi-tiered program of selected purchases, soil lead
education, plus a $20 million air lead reduction program. Furthermore, in Doe Run’s
view, the real-estate market was robust, and people could sell their house if they were not
in Doe Run’s buyout zone. Mr. Vornberg did not believe that residents were having
difficulty selling their properties. The children, however, presented evidence that
residents could not sell their homes because their property was contaminated. Mr.
Vornberg further excused Doe Run’s actions by explaining that Doe Run did not have the
right of eminent domain, so in their view, they could not go to people and offer to move
them away from the area. Although Doe Run continually argued that they “could not
force residents to sell their property,” numerous parents testified that if Doe Run had
offered, they would have sold in a heartbeat.
Doe Run declined to buy a home in October of 1993 despite compelling
circumstances. A resident had approached Doe Run about the possibility of Doe Run
buying her home. She was afraid her children were being poisoned by the lead. She
already had a dog die from lead poisoning, and the soil level at her home was 3525. She
herself was experiencing headaches, nausea, cramps, and diarrhea. She could not sell her
house. Doe Run offered blood testing, but told her they could not commit to purchasing
the house in the “midst of budgets.” They also said that an environmental review by an
outside party would help them decide if they had any responsibility with regards to her
symptoms. The Doe Run official, in memorializing the conversation, wrote that he
“attempted to deliver some of our key messages – following CDC guidelines, making
improvements, air lead coming down in community, trying to get more information out to
68 them.” The official also noted that the house was not in the present buyout zone. The
official also asked the resident if she knew the smelter was there when she bought the
home.
Even in the closing days of the partnership, Doe Run still had no interest in
buying homes. Moreover, Doe Run was still laying blame at the parents’ feet. The
Yateses’ experience is especially telling. Prior to the spring of 1994, the Yateses had no
concerns about life with their children in Herculaneum. They then learned that their
neighbor’s dog had died from lead intoxication. The Yateses had blood tests run on their
children. Isaiah’s level was 13. Upon learning this, Isaiah’s father immediately called
Doe Run and demanded a meeting with company officials. The Yateses met with several
officials, some of whom were lawyers, in a large conference room at the smelter. The
Yateses sat at one end of the long conference table, the Doe Run officials at the other.
The Yateses informed the officials that Isaiah had over the allowable limit of lead, and
they wanted to know what Doe Run was going to do about it. They asked if Doe Run
would be interested in purchasing their home. The officials made it clear to the Yateses
that Doe Run would not. “We’re not interested in buying your property,” they repeatedly
said. Even when the Yateses said they were just asking fair-market price, officials
responded: “Not interested.” Officials then told the Yateses that they needed to run their
air conditioner more. But the Yateses did not even have an air conditioner. To add insult
to injury, one of the officials then remarked that Isaiah’s level and exposure probably
came from the Yateses “not keeping [their] baseboards clean enough in the house,” and
that the Yateses “didn’t keep [their] house clean enough.” These remarks ended the
meeting.
69 “Absolutely inappropriate” and “horrifying.” That is how the children’s experts
described Doe Run’s course of conduct. Richard Coleman, the chemical engineer and
smelter consultant, explained that Doe Run should have been forthcoming and honest
with the community, explained the hazards involved, and told residents that the company
wanted to buy their houses to avoid their exposure to lead. Jim Tarr, the expert in air-
pollution control, similarly testified that Doe Run should have first told the truth, both to
the community and to the regulatory agencies; and that secondly, Doe Run should have
taken definitive action to protect the children’s health, either by providing their families
an opportunity to live elsewhere or by shutting down the lead smelter. Professor Fisher
and Dr. Rosner both opined that it was absolutely inappropriate for Doe Run to condition
public health and a course of action on the possibility of lawsuits. Dr. Rosner explained:
the idea that you allow people to have their children in harm’s way while you know there’s a problem and you tell them to have vacuum cleaners or clean up their act or wash their hands or dust their house, when you know that’s not the problem, is a horrifying, horrifying example of the misuse ... of their power.
Dr. Rosner further testified that it was not appropriate to just buy properties when they
became available and without regard to the blood levels of the children. He was equally
critical of Doe Run renting the homes after they purchased them. Dr. Rosner explained
that the fact that Doe Run rented only to “no-children” families shows that Doe Run fully
appreciated that children living in those homes were at risk. They knew everything they
needed to know to get people out of the area. But they stood silent. Doe Run protected
themselves as owners of the leasehold, but did not protect the children next door.
In sum, a public-health emergency existed in Herculaneum. And according to Dr.
Rosner, the public-health expert, Doe Run acted inappropriately in failing to warn the
70 community and in failing to move the residents out of harm’s way. The children of
Herculaneum faced a risk that was predictable, understandable, and preventable. The
children would have been at no risk if they had been moved away from the smelter. Doe
Run should not have just offered, but should have convinced the residents to move. But
Doe Run did not. Instead, Doe Run officials did everything in their power to keep the
residents in the dark. Doe Run could have and should have protected the children and
moved them away from the smelter. But they did not. Instead, Doe Run let the children
sit there amidst the dust. 40
Trial
After nearly six years of discovery and pre-trial proceedings, the children
proceeded to trial against three of the partners: Fluor, Massey, and DRIH. These three
entities were represented at trial by the same group of attorneys. 41 Over the course of
thirteen weeks during the spring and summer of 2011, the parties presented 52 witnesses,
and introduced over 1,400 exhibits. The trial, at times, was quite contentious. 42
Defendants presented a vigorous defense. In simple terms, as summed up by their
counsel in his closing argument, the defendants defended on grounds that it “wasn’t us,”
and that the children were not harmed but were all doing “quite well.” As to the business
and operational side of things, defense counsel insisted that the three defendants were not
involved in the operations of the smelter, but just had ownership. Fluor, Massey, and
DRIH did not smelt “one ounce of lead,” counsel protested. Counsel instead pointed the
40 Concurrent with remediation efforts that took place after the partnership period, the owners of the smelter in 2002 agreed, in cooperation with the Missouri DNR, to offer to purchase all of the residential properties within approximately three-eighths of a mile of the smelter. Doyle v. Fluor Corp, 400 S.W.3d 316 (Mo. App. E.D. 2013). 41 These attorneys also jointly briefed and argued the defendants’ appeal. 42 We commend the trial judge on his constant and judicious professionalism.
71 finger at Jeffrey Zelms, president of Doe Run, and at St. Joe, another partner from the
partnership period, but not a party at trial. 43 Counsel insisted that Zelms was the person
in charge and the one really running the company and the smelter. As far as the day-to-
day running of the smelter, “the buck stopped” with Mr. Zelms. Counsel alternatively
claimed that St. Joe ran the show, and argued that it was St. Joe who dominated Massey
and DRIH, not Fluor. He insisted that the children sued Fluor, as opposed to the
“operating company,” simply because Fluor was a “huge” company and because Fluor
owned entities that were partners. “Remember, we didn’t smelt it, we didn’t do any of
the stuff, it wasn’t our actions.” “We (Fluor) are being sued because of legalisms and
because of contracts.”
Defendants adamantly argued that they were not negligent. They acknowledged
they knew of the contamination in the area, but insisted their actions were reasonable,
when considered in context of the knowledge and standards of the time. Counsel
defended that the 1.5 national standard was difficult to meet, and that it was not easy to
bring an old smelter and all of its emissions into control, to bring the smelter into the new
age, but they tried. Counsel protested that no federal or state agency claimed that Fluor,
Massey, or DRIH had ever done anything wrong. To the contrary, defendants maintained
that they complied with the implementation plans and the law, and that they did many
positive things to control emissions and benefit the community. He noted that blood lead
levels in the community were declining. Counsel also pointed out that the partnership
spent millions of dollars on new equipment at the smelter, that they bought out homes,
offered free blood testing, distributed educational materials, and cleaned up yards, even
43 See Appendix C for details of the partnership. St. Joe was owned by Fluor, and was the parent corporation of Massey.
72 though the EPA had not ordered them to do so. Counsel even insinuated that they may
not have been responsible for all the lead in the soil. He noted that in years past, the city
used slag material on the roads, and argued that lead in some of the soils may have come
from residents themselves going to the slag pile and bringing it home. As to the buyouts,
counsel insisted that the decision was not made for economic reasons. He explained that
they did not buy out the entire town because Jeffrey Zelms never recommended a buyout.
He explained that Zelms, intimately familiar with the community, wanted to reduce
emissions and bring the smelter into compliance, and keep the community together. In
defendants’ opinion, “this was not a community that really wanted to disband.”
“All doing well.” Such were defense counsel’s words in describing the children.
In defendants’ view, the children were not harmed. Defendants claimed that the children
were successful, that they were gainfully employed, and that the ones still in school were
doing well, and that even though the children supposedly had ADHD and IQ losses, they
were doing as well or better than their parents. Defendants maintained that the majority
of the children – 13 of the 16 – did not have ADHD at all. They conceded that three of
the children had ADHD, but insisted that lead was not the cause. Counsel argued that
ADHD is caused by many things, and that a “heated debate” still existed as to whether
lead in fact causes ADHD. Counsel claimed that many of the children did not have
symptoms until just before trial. And he told the jury that because of the nature of the
injuries alleged – being cognitive in nature rather than physical like a broken leg – the
jury had to decide if the children’s injuries were real. Indeed, he wondered if one of the
reasons the children did not testify might have been because the jury would get a chance
to actually see them and evaluate if they were really harmed.
73 Each child submitted four claims to the jury: a separate claim against each of the
three defendants for negligently allowing the children to be exposed to unsafe levels of
lead during the time when each defendant was a partner; and an additional claim against
Fluor, for negligently allowing the children to be exposed to unsafe levels of lead through
its total domination and control of subsidiaries DRIH and Leadco. The children also
sought punitive damages against each defendant. In all, the jury received 214
instructions – 150 during the liability phase of the trial, and 64 during the punitive-
damage phase of the trial. The jury filled out a total of 32 verdict forms – 16, or one for
each child during the liability phase of the trial, and likewise 16 during the punitive-
damage phase.
A unanimous jury found in favor of each child on all claims, and assessed a total
of $38,527,186 in compensatory damages. 44 A unanimous jury also found each
defendant liable for punitive damages. In the punitive-damage phase of the trial, the
children presented one witness, who testified to the value, worth, and financial condition
44 The compensatory damages awarded varied by child:
CHILD COMPENSATORY DAMAGES AMOUNT Preston Alexander $2,501,425 Patrick Blanks $2,981,430 Bryan Bolden $2,593,151 Tiffany Bolden $2,832,492 Nathan Davis $2,199,124 Gabriel Farmer $3,031,175 Sydney Fisher $2,366,606 Heather Glaze $2,590,290 Jeremy Halbrook $2,852,192 Matthew Heilig $2,479,350 Austin Manning $1,250,000 Jesse Miller $2,547,651 Jonathan Miller $2,167,086 Ashley Shanks $1,638,802 Lauren Shanks $2,062,850 Isaiah Yates $2,433,562
74 of the three defendants. Counsel for both sides then presented closing arguments.
Counsel for the children recommended a total punitive-damage award of 208 million
dollars – 160 million against Fluor, 32 million against Massey, and 16 million against
DRIH – to send a message to defendants that they cannot come into this state and poison
our children, and that they cannot ever choose profits over our children. The jury
returned a verdict assessing a total of 320 million dollars in punitive damages, 112
million dollars more than requested, to be divided equally among the sixteen children: 15
million dollars per child against Fluor; 3 million dollars per child against Massey; and 2
million dollars per child against DRIH. This amounts to a 20 million-dollar punitive-
damage award for each child; a 240 million-dollar award against Fluor; a 48 million-
dollar award against Massey; and a 32 million-dollar award against DRIH. Together, the
sum of the compensatory-damage amount and the punitive-damage awards is
$358,527,186.
The defendants appeal.
DISCUSSION
Defendants advance seventeen points of alleged trial-court error. We can divide
those points into the following general categories: (1) the submissibility of the children’s
case; (2) trial rulings; (3) jury instructions; (4) punitive damages; and (5) post-trial
motions to reduce the compensatory and punitive-damage awards. We address each
category in turn. In so doing, we hold that the children made a submissible case against
all defendants on their negligence claim predicated on defendants’ conduct while
partners. The children’s domination claim against Fluor, however, is based on a flawed
75 statement of agency law. We therefore reverse the judgment entered against Fluor on this
theory of liability.
As to the trial rulings, defendants advance five challenges – three contest the
admission of several of the children’s expert witnesses; one complains about the
exclusion of evidence; and one protests the trial court’s denial of a mistrial after
children’s counsel mentioned the Missouri Victims’ Compensation Fund during voir dire.
We deny defendants’ allegations of error because defendants failed to preserve those
points for our review.
As to the jury instructions, we hold that the children’s compensatory-damage
verdict directors neither constituted a roving commission nor permitted the jury to hold
defendants liable for conduct predating their partnership interest, and therefore the trial
court did not err in submitting those instructions.
As to punitive damages, we hold that the children made a submissible case for
punitive damages against all defendants, and we deny defendants’ various contentions
regarding the form of the punitive-damage instructions. However, because the children
submitted their punitive-damage claim against Fluor in the conjunctive, requiring the jury
to find Fluor liable on both the partner claim and the domination claim in order to assess
punitive damages against Fluor, and because we hold that the children’s domination
claim is based on an incorrect statement of law, we reverse the punitive damages assessed
against Fluor.
Lastly, as to defendants’ attempts to reduce the awards, we find no abuse of
discretion in the trial court denying remittitur of compensatory damages and the punitive-
76 damage awards do not violate the Due Process Clause. We turn now to the submissibility
of the children’s claims.
Submissibility
The children advanced two theories of liability in suing defendants for negligence.
First, the children sought to hold each defendant liable based on the defendant’s negligent
conduct while a partner in the Doe Run partnership. Secondly, the children sought to
hold Fluor liable due to its alleged domination and control of its subsidiaries and the
partnership. Defendants challenge the submissibility of both theories.
Standard of Review
Whether the children made a submissible case is a question of law we review de
novo. D.R. Sherry Const., Ltd. v. Am. Family Mut. Ins. Co., 316 S.W.3d 899, 904 (Mo.
banc 2010); Doe Run Res. Corp. v. Certain Underwriters at Lloyd’s London, 400 S.W.3d
463, 470 (Mo. App. E.D. 2013). A case may not be submitted to the jury unless each and
every fact essential to liability is predicated upon legal and substantial evidence. Sanders
v. Ahmed, 364 S.W.3d 195, 208 (Mo. banc 2012); Doe Run Res., 400 S.W.3d at 470. In
determining whether the children made a submissible case, we review the evidence in the
light most favorable to the claim’s submission, giving the children the benefit of all
reasonable inferences. Id. We disregard all evidence and inferences that conflict with the
verdict. Id. The children “may prove essential facts by circumstantial evidence as long
as the facts proved and the conclusions to be drawn are of such a nature and are so related
to each other that the conclusions may be fairly inferred.” Doe Run Res., 400 S.W.3d at
470. This Court will reverse the jury’s verdict for insufficient evidence only if there is a
77 complete absence of probative facts to support the jury’s conclusion. Sanders, 364
S.W.3d at 208; Doe Run Res., 400 S.W.3d at 470.
Theory I: Defendants’ Conduct While Partners
The children sought to establish defendants’ liability for negligence due to each
defendant’s conduct while a partner in the Doe Run partnership. Defendants, however,
insist that the court’s judgment improperly imposes liability on them for conduct
antedating their joining the partnership. They believe they are being held responsible for
smelter operations and the “copious quantities” of lead released into the Herculaneum
atmosphere in the decades before any of them acquired their partnership interest and had
any connection with the smelter. The defendants reallege this in various points on
appeal. Defendants contend they are responsible only for the acts of the partnership that
occurred during the period of time they were partners. They further argue that the
children presented no competent evidence that they were damaged by any acts occurring
during the defendants’ respective partnership period, and therefore the defendants insist
that we must reverse judgment for the children and remand the cause to the trial court
with instructions to enter judgment in their favor on the children’s partner-liability
claims.
Under the Missouri partnership act, all partners are jointly and severally liable for
everything chargeable to the partnership. Section 353.150. And Missouri law holds a
partnership liable for the acts of one of the partners in the ordinary course of the
partnership’s business or with the authority of his copartners. Section 358.130. Thus, all
partners are jointly and severally liable for torts committed by a partner acting within the
scope and ordinary course of the partnership’s business. Sections 358.150 and 358.130;
78 Dwyer v. ING Inv. Co., 889 S.W.2d 902, 906 (Mo. App. E.D. 1994); Martin v. Yeoham,
419 S.W.2d 937, 951 (Mo. App. 1967). Defendants acknowledge these well-established
principle of law, but contend this liability is restricted to claims that can be made with
regard to the specific time when each defendant was a partner. Thus, they contend Fluor
is subject to liability for the operation of the smelter for only the one day it owned a
partnership interest; that Massey is subject to liability for the operation of the smelter for
only the four months it owned a partnership interest; and that DRIH is subject to liability
for the operation of the smelter for only the five years it owned a partnership interest.
Defendants contend they are not liable for conduct antedating their partnership, for two
reasons: first, because the children’s tort claims are not “obligations” under the Missouri
Partnership Act, such that defendants, as incoming partners, would be liable for the pre-
existing torts; and second, because they did not expressly assume historic, pre-existing
liabilities upon joining the partnership.
Liability of Incoming Partner: Tort Claims & Obligations
Section 358.170 of the Missouri Partnership Act, entitled “Liability of Incoming
Partner,” provides that a person “admitted as a partner into an existing partnership is
liable for all the partnership obligations arising before his admission as though he had
been a partner when such obligations were incurred….” Defendants argue that the
“obligations” assumed by an incoming partner are contractual undertakings and debts of
the partnership and not unasserted tort claims. Defendants maintain that the this statutory
section serves to protect creditors who have extended credit to the partnership. Uniform
Partnership Act 1914 § 17 (Comment). 45 They then reason that an incoming partner can
45 Section 358.170 is identical with §17 of the Uniform Partnership Act.
79 protect itself by examining the partnership books and records, thereby obtaining full
knowledge of the partnership’s financial condition, and can insist on liquidation or
settlement of existing partnership debts before joining. The same is not true, defendants
posit, for unasserted tort claims based on the partnership’s prior conduct, of which the
new partner may be unaware and thus unable to evaluate. Defendants contend that the
children’s lawsuit amounts to an unasserted tort claim, based on conduct that preceded
the defendants’ respective periods as partners, that simply cannot be an “obligation”
under the statute. Thus, they declare that they are not liable for injuries suffered by the
children that were attributable to smelter operations prior to the time they acquired their
partnership interests. In sum, they disclaim liability for the consequences of the more
than 100 years of contamination that occurred before their entry into the partnership.
Caselaw on this issue is scarce. Different courts have reached different
conclusions of whether a tort claim is an “obligation” of the partnership. Soberg v.
Sanders, 220 N.W. 781 (Mich. 1928); Wierzbinski v. Celina Mut. Ins. Co., 426 F.Supp 27
(E.D. Wis. 1976); Penrod Drilling Co. v. Silvertooth, 144 S.W.2d 335 (Tex. Civ. App.
Galveston 1940). Compelling arguments exist on both sides of the issue. However, we
need not delve into the intricacies of those scholarly arguments and decide the question,
for defendants proceed from a faulty premise. Contrary to the defendants’ assertions, the
children did not seek to hold defendants liable for conduct antedating the defendants’
respective partnership interests. Rather the children claimed the defendants were
responsible for their own conduct while partners. In their petition, the children pleaded
wide-ranging acts of negligence on the part of defendants while partners. 46 Although the
children also alleged that defendants, pursuant to successorship and various partnership 46 See footnote 8 on page 17.
80 agreements, assumed liabilities arising out of the operation of the smelter, the children
did not submit this theory of liability to the jury. The jury instructions specifically
required the jury to assess each defendant’s conduct and liability while a partner rather
than assumed partnership liability or incoming partner liability for pre-existing torts. As
to Fluor, the instructions required the jury to find each of the following in the
conjunctive: (1) that Fluor was a partner; (2) that while Fluor was a partner, the adjacent
community of Herculaneum was contaminated with unsafe levels of lead which
originated from the smelter operations; 3) that while Fluor was a partner, Fluor knew or
should have known of the unsafe contamination of the community; (4) that Fluor
specifically allowed the children’s exposure to unsafe levels of lead; (5) that Fluor was
thereby negligent; and (6) that such negligence directly caused or directly contributed to
cause damage to the children. 47 The instructions as to Massey and DRIH similarly
limited liability to the time each was a partner. The instructions for Massey and DRIH
differed from the Fluor instruction only in the fact that the instructions imputed liability
47 The “partner” verdict director for Fluor reads: On the claim of plaintiff (--) for compensatory damages for personal injury against defendant Fluor Corporation, your verdict must be for plaintiff (---) if you believe: First, defendant Fluor Corporation was a partner of the Doe Run Company Partnership, and Second, while defendant Fluor Corporation was a partner of the Doe Run Company Partnership, the adjacent community of Herculaneum was contaminated with unsafe levels of lead which originated from the smelter operations, and Third, at that time, defendant Fluor Corporation had information from which it, in the exercise of ordinary care, knew or should have known that the adjacent community of Herculaneum was contaminated with unsafe levels of lead which originated from the smelter operations, and Fourth, defendant Fluor Corporation allowed plaintiff (---), a resident of Herculaneum, to be exposed to unsafe levels of lead which originated from the smelter operations before May 26, 1990, and Fifth, defendant Fluor Corporation was thereby negligent, and Sixth, such negligence directly caused or directly contributed to cause damage to plaintiff (---).
81 to Massey and DRIH based on the knowledge and negligence of the partnership, rather
than of the entity itself, as had been the case with Fluor. 48
Granted, the children adduced evidence of lead emissions, airborne lead levels,
soil contamination, partnership activity, and other events occurring prior to the time
defendants joined the partnership. But this does not mean that defendants were held
liable for those actions. The evidence of the years of lead emissions, the accumulation of
lead in the soil, the violations of the air-quality standards, and the partnership’s early
conduct necessarily provided a historical background, showing the extent and harmful
nature of the lead contamination, as well as the defendants’ knowledge of the
contamination in the Herculaneum community. The children did not premise the
defendants’ liability on past conduct that had concluded. Of course, much of the conduct
occurring prior to the partnership period continued into and through the partnership
48 The “partner” verdict directors for Massey and DRIH were largely identical except for the particular defendant’s name and the ending date of the particular defendant’s involvement in the partnership. The instructions also differed slightly from the Fluor instruction in the third and fourth paragraphs, in that the instructions ascribed liability to Massey and DRIH Fluor based on the partnership’s knowledge and negligence, rather than that of the individual entity. The verdict directors read: On the claim of plaintiff (--) for compensatory damages for personal injury against defendant A.T. Massey Coal Company/DRIH, your verdict must be for plaintiff (- --) if you believe: First, defendant A.T. Massey Coal Company [DRIH] was a partner of the Doe Run Company Partnership, and Second, while defendant A.T. Massey Coal Company [DRIH] was a partner of the Doe Run Company Partnership, the adjacent community of Herculaneum was contaminated with unsafe levels of lead which originated from the smelter operations, and Third, at that time, the Doe Run Company Partnership had information from which it, in the exercise of ordinary care, knew or should have known that the adjacent community of Herculaneum was contaminated with unsafe levels of lead which originated from the smelter operations, and Fourth, the Doe Run Company Partnership allowed plaintiff (---), a resident of Herculaneum, to be exposed to unsafe levels of lead which originated from the smelter operations before April 5, 1989[March 26, 1994], and Fifth, the Doe Run Company Partnership was thereby negligent, and Sixth, such negligence directly caused or directly contributed to cause damage to plaintiff (---).
82 period, including the time that defendants were partners. The smelter continued to emit
harmful lead dust; the lead continued to accumulate in the soil; and the air continued to
be contaminated, such that the smelter never met national air quality standards during the
partnership period. Thus the defendants’ liabilities were not “historic” at all. Throughout
the case and now on appeal, defendants consistently ignore their many acts of omission
as a basis for liability. The children adduced substantial evidence of these. Defendants
do not deny that upon becoming and while serving as partners they well knew of the
unsafe lead contamination present in the community. Despite this, defendants failed to
act and allowed the contamination to continue. Day after day, be it for one day or five
years, defendants operated the smelter, emitting lead into the air. Day after day, that lead
settled on the soil of the nearby community. Day after day, the lead in the air and soil,
emitted from the smelter, found its way into the children’s homes and into the children
themselves. Day after day, defendants stood silent, and failed to inform – and worse,
misinformed – the community about their safety. Day after day, the defendants failed to
inform the parents of the level of lead present in the soil around their home, or the level
of lead present in their children. Day after day, the defendants failed to curtail operations
or install equipment to meet federal ambient air levels. Day after day, the defendants
failed to adequately remediate the lead contaminating the surrounding neighborhood.
Day after day, by their actions and inactions, defendants allowed the children to be
exposed to unsafe levels of lead.
Assumed Historical Liabilities
Even if the children had premised the defendants’ liability on conduct predating
their partnership interest, we conclude that the children produced sufficient evidence
83 from which a jury could conclude that each defendant assumed that liability upon
acquiring its partnership interest and becoming a partner.
It is axiomatic that a partnership rests on contract. Allison v. Dilsaver, 387
S.W.2d 206, 211 (Mo. App. 1965); Hidden v. Edwards, 285 S.W. 462, 467 (Mo. 1926).
The rights and liabilities of the partners, though generally fixed or implied by law, are
subject to modification according to the agreement and intention of the parties. Allison,
387 S.W.2d at 211; Hidden, 285 S.W. at 467; see also Section 358.180 of the Missouri
Partnership Act (setting forth rules by which the rights of duties of partners are to be
determined, noting that those rights and duties are subject to any agreement between the
partners). In other words, the partnership agreement governs, and the rights and
liabilities of the partners are to be determined in accordance with the partnership
agreement. Heath v. Spitzmiller, 663 S.W.2d 351, 354 (Mo. App. S.D. 1983).
The partnership agreement here provided that in forming the Doe Run
partnership, partners St. Joe and Homestake contributed to the partnership all of the
liabilities constituting their respective lead businesses, so that the partnership would have
the obligation of managing all such liabilities. The contributed liabilities expressly
included “contingent liabilities relating to employment, environmental, product and other
matters.” The partnership agreement further defined St. Joe’s liabilities as “… all usual
and customary obligations and liabilities related to the ownership and operation of the St.
Joe Assets (whenever arising and whether or not set forth…” and “the pollution control
debt relating to the Herculaneum smelter….” It is undisputed that St. Joe’s assets
included the Herculaneum smelter. Professor Ordower, in commenting on the
partnership agreement, stated that the partners had contributed all their environmental
84 liabilities to the partnership, including any environmental liabilities from before they
joined together. Similarly, Jeffrey Zelms, president of Doe Run, in discussing the assets
and liabilities contributed to the partnership, testified that the historic liabilities for the
smelter in Herculaneum went to the Doe Run partnership. Even defendants, in their brief
on appeal, admit that in forming the Doe Run partnership, Homestake and St. Joe
“intended to assume at least some of each other’s historical liabilities for their respective
lead operations.” The partnership agreement is unambiguous; all liabilities relating to the
operation of the Herculaneum smelter, whenever arising, were contributed to the
partnership.
Of course, the Doe Run partnership consisted of more than just the original two
partners, St. Joe and Homestake. Over the course of the partnership, these original
partners transferred or sold their partnership interests to other entities. The partnership
agreement allowed such transfers and dictated that upon such transfer, the new partner
assumed all the duties, liabilities, and obligations of the transferring partner. The
partnership agreement contained two separate provisions regarding transfers – one
governed transfers to wholly-owned affiliates, the other governed transfers to
nonaffiliates. As to transfers to a wholly-owned affiliate, the agreement provided that
upon such transfer the affiliate was required to execute a copy of the partnership
agreement “to assume all the duties, liabilities and obligations of the transferring partner”
in respect to the partnership and under the partnership agreement.
The first such transfer occurred in October of 1988, when St. Joe transferred part
of its partnership interest to Massey. Defendants argue the partnership agreement did not
apply, and therefore any “historic” or pre-existing liabilities did not transfer to Massey,
85 because Massey was not a wholly-owned subsidiary of St. Joe. Although it may be true
that Massey was not a wholly-owned subsidiary of St. Joe, the non-transferring partner,
Homestake, did not object, and in fact expressly consented to the transfer. Moreover, and
more critically, Massey executed a copy of the partnership agreement contemporaneously
with the transfer, adopting the terms and conditions of that agreement, and accepting the
duties, liabilities, and obligations of a general partner pursuant to the partnership
agreement. Massey’s corporate representative, Richard Grinnan, in his deposition read at
trial, admitted that Massey assumed the liabilities of the Herculaneum smelter as part of
the obligations Massey undertook when it entered into the partnership. Professor
Ordower similarly testified that when Massey accepted the transfer of partnership interest
from St. Joe, thereby becoming a general partner in the Doe Run partnership, Massey
took on all the historic liabilities of the partnership.
When Massey assigned its partnership interest to DRIH in April of 1989, DRIH,
as Massey had done before it, executed a copy of the partnership agreement, adopting and
agreeing to the terms and conditions of that agreement, and accepting the duties,
liabilities, and obligations of a general partner. Professor Ordower explained that in
executing the partnership agreement and accepting all of the liabilities and obligations of
the partnership, DRIH assumed whatever historic liabilities came with becoming a
general partner.
Lastly we address Fluor’s purchase of Homestake’s partnership interest. In
addition to the provision governing transfers to affiliates, the partnership agreement also
contained a provision governing transfers to nonaffiliates, which allowed a partner to sell
all its shares to a third party. Such transfer, however, was conditioned on the requirement
86 that the party purchasing the shares “be bound by the provisions of and assume the
obligations of the transferor Partner under this Agreement as fully and to the same extent
as though such transferee had executed this Agreement.” Professor Ordower explained
that in purchasing Homestake’s shares and becoming a general partner in the partnership,
Fluor took on the historic liabilities of the partnership. Furthermore, contemporaneously
with Fluor’s purchase of Homestake’s shares, the partners – Fluor, Homestake, DRIH,
and St. Joe – executed an amendment to the partnership agreement. That amendment
expressly provided that Fluor was “substituted” for Homestake as a partner. The
amendment also stated that the partnership would continue to be in existence after the
sale. Fluor’s intent to assume all of the partnership’s liabilities is likewise unambiguous.
Fluor stepped into Homestake’s shoes, and in so doing became obligated, like Homestake
before it, for all liabilities relating to the operation of the smelter, whenever arising.
Elements of Negligence
As noted, the children sought recovery on a negligence cause of action. To prove
negligence, a plaintiff must show that the defendant had a duty to protect the plaintiff
from injury; the defendant failed to perform that duty; and defendant’s failure caused
injury to the plaintiff. Hoffman v. Union Elec. Co., 176 S.W.3d 706, 708 (Mo. banc
2005).
Defendants do not challenge the submissibility of the children’s action except on
the grounds of causation. Thus, we will consider only that element, and simply note that
the children presented sufficient evidence establishing both a duty and breach of that
duty. And undoubtedly, they also showed injury.
87 The mere fact that injury follows negligence does not necessarily create liability
on the part of the tortfeasor. Branstetter v. Gerdeman, 274 S.W.2d 240, 245 (Mo. 1955)
Plaintiffs must establish a causal connection between the charged negligent conduct and
the loss or injury sustained. Id. Defendants claim the children failed to prove that the
activities of Doe Run that occurred during defendants’ respective periods of partnership
ownership caused the children’s injuries. In other words, they argue the children
provided no evidence to connect their injuries to the conduct of defendants during the
one-day, five-month, or five-year periods that defendants respectively owned partnership
interests. Defendants complain that the children instead inundated the record with
evidence of lead emissions, and supposedly resulting pollution, that occurred during the
previous period of ownership by St. Joe and its predecessors before the existence of the
Defendants point to the children’s causation expert, Dr. O’Connor, and
characterize his attempt to trace the children’s exposure to the actual period of
defendant’s partnership participations as highly speculative, equivocal, and conjectural
ruminations. As to Fluor, Dr. O’Connor could not say that lead emitted on May 25,
1990, the single day of Fluor’s partnership interest, had entered the bodies of any of the
children in this case. When asked if he could say whether any of the lead in the
children’s bodies was generated during the five-month period when Massey was a
partner, Dr. O’Connor replied that “likely” some of it did, but he could not give any
estimate as to what amount or what percentage, and he acknowledged that one could not
tell lead from 1988 apart from lead in 1950. As to DRIH’s five-year involvement, Dr.
O’Connor similarly stated that some lead from that time period “probably” got into the
88 children’s bodies, “but you can’t tell what percentage that was.” Defendants argue that
“probably” or “likely” do not constitute proof of causation under Missouri law.
Defendants argue that when properly confined to the periods for which defendants are
actually responsible – their respective times as partners – the children’s causation
analysis suffers from the same infirmity as that in Zafft and Benjamin Moore, that being
the inability to trace injuries to a particular defendant. Zafft v. Eli Lilly & Co., 676
S.W.2d 241 (Mo. banc 1984); City of St. Louis v. Benjamin Moore & Co., 226 S.W.3d
110 (Mo. banc 2007).
Zafft was a pharmaceutical product-liability action in which the plaintiffs alleged
injury as a direct result of their exposure in utero to a drug (DES) taken by their mothers.
Plaintiffs sued thirteen defendants, representing all or substantially all of the known
makers, sellers or distributors of DES in Missouri at the relevant time. The plaintiffs,
however, were unable to identify which defendant made, sold, or distributed the
particular drug ingested by their mother. The drug had been marketed generically by as
many as 300 different companies, and thus it was impossible to match a specific dosage
with an individual manufacturer. Zafft, 676 S.W.2d at 242-43. The plaintiffs’ inability to
trace their damage to a particular defendant doomed their case. Our Supreme Court
cautioned:
If the injury may have resulted from one of two causes, for one of which, and not the other, the defendant is liable, the plaintiff must show with reasonable certainty that the cause for which the defendant is liable produced the result; and, if the evidence leaves it to conjecture, the plaintiff must fail in his action.
Id. at 246. Accordingly, the Court held that plaintiffs had not proven causation and thus
could not maintain their cause of action. Id. at 247.
89 Benjamin Moore involved a public-nuisance claim brought by the City of St.
Louis against a number of companies that put lead paint into the stream of commerce.
The city sought to recover its costs for assessing, abating, and remediating lead paint that
was allegedly present at or abated from a number of properties in the city. Benjamin
Moore, 226 S.W.3d at 112-13. Relying on Zafft, the Court reiterated that “where a
plaintiff claims injury from a product, actual causation can be established only by
identifying the defendant who made or sold that product. Id. at 115. The city, however,
could not connect any specific defendant to any specific project. Specifically, the city
could not identify the manufacturer of any lead paint that was allegedly present at or
abated from the properties at issue. Id. at 113. The Court thus held that without this
product-identification evidence, the city could not prove actual causation. The Court
reasoned:
Without product identification, the city can do no more than show that the defendants’ lead paint may have been present in the properties where the city claims to have incurred abatement costs. That risks exposing these defendants to liability greater than their responsibility and may allow the actual wrongdoers to escape liability entirely. Id. at 115-16.
Defendants contend that the principles of causation reiterated in Benjamin Moore
dictate the outcome of this case and require rejection of children’s claims based on
partnership liability. They argue that Dr. O’Connor’s inability to trace any lead from
Fluor’s one day of ownership to any child mandates reversal of the judgment against
Fluor, and that Dr. O’Connor’s concession that lead was not traceable to any particular
time period also invalidated the children’s claims as to Massey and DRIH. We disagree.
To begin, the Zafft and Benjamin Moore cases are readily distinguishable. In those cases,
multiple sources of the offending agent – be it the drug in Zafft or the paint in Benjamin
90 Moore – existed. The cases treated the question of an indeterminate defendant. Here, on
the other hand, we only have one source of the offending agent – the smelter. Moreover,
defendants’ argument again proceeds from a faulty premise. The issue is not whether a
causal connection can be made between a particular particle of lead dust and the
children’s injuries. Rather, the critical inquiry is whether plaintiffs have established a
connection between a defendant’s negligent act or omission and the injury suffered by the
plaintiffs. Plaintiffs did not need to prove the transmigration of lead into a child’s
bloodstream occurred on a specific date. They needed to prove the defendants’
negligence while partners caused injury. Zafft and Benjamin Moore “reaffirm the policy
that a plaintiff who seeks recovery in tort against one joined as a defendant must identify
that defendant as an actor in the production of the harm for which the plaintiff seeks
recovery.” Elam v. Alcolac, Inc., 765 S.W.2d 42, 183 (Mo. App. W.D. 1988). And here
the children have alleged and shown such a connection – that the acts and omissions of
the defendants caused them harm.
To establish a causal connection between the alleged negligent conduct of the
defendant and the resulting injury to the plaintiff, a plaintiff must prove that the
defendant’s conduct is both the actual cause and the proximate cause of the plaintiff’s
injury. Callahan v. Cardinal Glennon Hosp., 863 S.W.2d 852, 865 (Mo. banc 1993);
Freight House Lofts Condo Ass’n v. VSI Meter Servs., 402 S.W.3d 586, 599 (Mo. App.
W.D. 2013).
“An essential element of the proof of a cause of action for negligence is that there
be some reasonable connection between an act or omission of the defendant and the
damage the plaintiff has suffered.” Elam, 765 S.W.2d at 173 (citing Prosser and Keeton,
91 The Law of Torts § 41 [Fifth ed. 1984]). This connection is the “causation in fact” – or
actual causation – of the damage sustained. Id. In noting the necessity of establishing
causation in fact, our Supreme Court has explained:
Any attempt to find liability absent actual causation is an attempt to connect the defendant with an injury or event that the defendant had nothing to do with. Mere logic and common sense dictates that there be some causal relationship between the defendant’s conduct and the injury or event for which damages are sought.
Callahan, 863 S.W.2d at 862. A defendant’s conduct is the actual cause, or cause-in-fact,
of the plaintiff’s injury where the injury would not have occurred “but for” that
conduct. 49 Richey v. Philipp, 259 S.W.3d 1, 8 (Mo. App. W.D. 2008); Callahan, 863
S.W.2d at 861-62. The “but for” formula of causation in fact “is as much an expression
of legal policy as of factual quantum.” Elam, 765 S.W.2d at 176. As announced by our
Supreme Court:
The traditional and foremost policy of the tort law is to deter harmful conduct and to ensure that innocent victims of that conduct will have redress. Cognate principles of equity and economic efficiency also inform that policy: that the costs of the pervasive injury … shall be borne by those who can control the danger and make equitable distribution of the losses, rather than by those who are powerless to protect themselves.
Id. The children easily proved actual causation in this case. But for defendants operating
the smelter, the children would not have been harmed. But for defendants failing to
adequately control the emissions and release of lead into the surrounding neighborhood,
the children would not have been harmed. But for defendants failing to warn or inform
the community of the level of contamination present, the children would not have been
49 The “but for” test for causation applies in all cases except those involving two independent torts, either of which is sufficient in and of itself to cause the injury (e.g., two-fire cases). Callahan, 863 S.W.2d at 862- 63. That is not our situation here.
92 harmed. But for their many acts and omissions, the children would not have been
harmed.
Once a plaintiff establishes actual causation, the issue becomes one of proximate
cause – that is, whether the defendant should be held liable because the harm is the
reasonable and probable consequence of the defendant’s conduct. Benjamin Moore, 226
S.W.3d at 114; Callahan, 863 S.W.2d at 865. In regard to proximate cause, our Supreme
Court has explained:
Proximate cause requires something in addition to a “but for” causation test because the “but for” causation test serves only to exclude items that are not causal in fact; it will include items that are causal in fact but that would be unreasonable to base liability upon because they are too far removed from the ultimate injury or damage. … Missouri, like many other states, has not applied a pure foreseeability test; we have generally said that the injury must be a reasonable and probable consequence of the act or omission of the defendant. This is generally a “look back” test but, to the extent it requires that the injury be “natural and probable,” it probably includes a sprinkling of foreseeability. To the extent the damages are surprising, unexpected, or freakish, they may not be the natural and probable consequences of a defendant's actions.
Callahan, 863 S.W.2d at 865 (internal citations omitted). Thus, we determine proximate
cause “by looking back, after the injury or damage has occurred, and examine whether
the injury is a reasonable and probable consequence of the defendant’s conduct.” Richey,
259 S.W.3d at 9; Callahan, 863 S.W.2d at 865. Foreseeability, as it relates to proximate
cause, “refers to whether a defendant could have anticipated a particular chain of events
that resulted in injury or the scope of the risk that the defendant should have foreseen.”
Richey, 259 S.W.3d at 9 (quoting Lopez v. Three Rivers Elec. Corp., Inc., 26 S.W.3d 151,
156 (Mo. banc 2000)). It is only necessary that the party charged knew or should have
known an appreciable chance existed that some injury would result. Richey, 259 S.W.3d
93 at 9. Furthermore, the defendant’s negligence need not be the sole cause of the injury; it
only need be one of the causes without which the injury would not have occurred. Id.
Indeed, as reflected in the jury instructions, the jury in this case needed only to find that
defendants’ negligence “contributed to cause” damage to the children.
As with actual causation, the children here easily proved proximate causation.
Defendants knew of the lead contamination in the air and soil in the Herculaneum
community. Defendants knew of the toxic and harmful nature of lead. The children’s
lead poisoning was a reasonable and probable consequence of defendants’ conduct in
continuing operations at the smelter and allowing the children to be exposed to unsafe
levels of lead by failing to take appropriate action to stem the contamination and warn the
community of the danger.
To conclude, we hold that the children made a submissible case against all
defendants based on each defendant’s negligence while a partner in the Doe Run
partnership. Hence, the trial court did not err in overruling defendants’ motions for
directed verdict and judgment notwithstanding the verdict. We deny this point.
Theory 2: Domination and Control
The children submitted an additional theory of liability against Fluor – a
“domination and control” theory – seeking to hold Fluor liable based on agency
principles and Fluor’s parent-subsidiary relationship with DRIH and Leadco. The
children contended that Fluor exercised total control over its subsidiaries with respect to
the lead business, and that in exercising such control, Fluor dominated and controlled all
activities of the partnership and exercised total control over the smelter. In the children’s
view, the subsidiaries were mere conduits for Fluor. They argued that Fluor’s conduct, in
94 controlling its subsidiaries and the activities of the partnership in operating the smelter,
created a relationship with the community that gave rise to Fluor’s duty to exercise
reasonable care to protect the children from harm caused by lead from the smelter – a
duty that the children maintain Fluor breached. The children cited to the Ritter, Sedalia,
and Blackwell cases for the principle that a parent corporation may be held liable for a
subsidiary’s actions where the parent company exercises “such domination and control
that the controlled corporation [or subsidiary] has, so to speak, no separate mind, will or
existence of its own and is but a business conduit for its principal.” Ritter v. BJC Barnes
Jewish Christian Health Sys., 987 S.W.2d 377 (Mo. App. E.D. 1997); Sedalia Mercantile
Bank and Trust Co. v. Loges Farms, Inc., 740 S.W.2d 188 (Mo. App. W.D. 1987);
Blackwell Printing Co. v. Blackwell-Wielandy Co., 440 S.W.2d 433 (Mo. 1969).
The children rightly contend that they adduced ample evidence from which the
jury could have concluded that Fluor exercised total dominion and control over DRIH
and Leadco. We do not have a want of evidence in this case. The problem here lies with
the legal theory relied upon by the children.
A Roadmap
Courts, both nationwide and in Missouri, recognize two doctrines by which to
hold a parent corporation liable for the acts of a subsidiary: piercing the corporate veil
and agency. The children expressly disavowed reliance on piercing the corporate veil as
a means to hold Fluor liable. Nevertheless, we find a discussion of that doctrine
necessary to explain the agency theory of liability in Missouri, and what appears to be the
flawed development and statement of the theory relied upon by the children. We thus
95 begin with a general overview of corporations, then proceed to a discussion of piercing
the corporate veil, and then, finally, agency liability.
Corporations
A corporation is an artificial entity created by the state. See generally Mo. Const.
art. XI, section 2; Chapter 351 RSMo; Clark v. Austin, 101 S.W.2d 977, 982 (Mo. 1937).
Among the principal attributes of a corporation is the corporation’s legal existence
distinct and separate from its shareholders. Mo. Corporate Organization and Operation
§1.2 (MoBar 2005). “Ordinarily, a corporation is regarded as a wholly and separate legal
entity, distinct from the members who compose it.” Thomas Berkeley Consulting Eng’r,
Inc. v. Zerman, 911 S.W.2d 692, 695 (Mo. App. E.D. 1995); accord Blackwell Printing
Co., 440 S.W.2d at 437. Likewise, two separate corporations are regarded as wholly
distinct legal entities, even if one partly or wholly owns the other. Cent. Cooling &
Supply Co. v. Dir. of Revenue, State of Mo., 648 S.W.2d 546, 548 (Mo. 1982); Mid-
Missouri Tel. Co. v. Alma Tel. Co., 18 S.W.3d 578, 582 (Mo. App. W.D. 2000); Grease
Monkey Intern., Inc., v. Godat, 916 S.W.2d 257, 262 (Mo. App. E.D. 1995)(“In the eyes
of the law, two different corporations are two different persons. This is true even if one
corporation is the sole shareholder of the other.”).
Another major feature of the corporate form is that it insulates shareholders from
personal liability for the actions of the corporation. Shareholders are not ordinarily
personally liable for corporate obligations. Mo. Corporate Organization and Operation
§1.4 (MoBar 2005); 1 Fletcher Cyclopedia of the Law of Corporations §14 (2006);
Adelstein v. Jefferson Bank and Trust Co., 377 S.W.2d 247, 251 (Mo. 1964).
Correspondingly, a parent corporation is normally not liable for the acts of its subsidiary
96 corporations. Mid-Missouri Tel. Co., 18 S.W.3d at 582. The mere existence of a parent-
subsidiary relationship, without more, does not subject a parent corporation to liability for
acts of the subsidiary. Sedalia, 740 S.W.2d at 202.
Ordinarily, courts protect the separate legal identities of individual corporations,
even if one corporation owns a part or all of the other. Collet v. Am. Nat. Stores, Inc.,
708 SW.2d 273, 283 (Mo. App. E.D. 1986). This general rule is not without exceptions,
however. In certain instances, courts will make an exception and hold a parent
corporation liable for the acts of a subsidiary. We first discuss piercing the corporate
veil.
Piercing the Corporate Veil
Piercing the corporate veil is an equitable doctrine used by the courts to look past
the corporate form and impose liability upon owners of the corporation – be they
individuals or other corporations – when the owners create or use the corporate form to
accomplish a fraud, injustice, or some unlawful purpose. See generally Edward D.
Gevers Heating & Air Conditioning Co. v. R. Webbe Corp., 885 S.W.2d 771 (Mo. App.
E.D. 1994); Ritter, 987 S.W.2d at 384. To pierce the corporate veil, a plaintiff must
prove the following three elements:
(1) Control, not mere majority or complete stock control, but complete domination, not only of finances, but of policy and business practice in respect to the transaction attacked so that the corporate entity as to this transaction had at the time no separate mind, will or existence of its own; and (2) Such control must have been used by the defendant to commit fraud or wrong, to perpetrate the violation of a statutory or other positive legal duty, or dishonest and unjust act in contravention of plaintiff's legal rights; and (3) The aforesaid control and breach of duty must proximately cause the injury or unjust loss complained of.
97 Collet, 708 S.W.2d at 284; see also Doe 1631 v. Quest Diagnostics, Inc., 395 S.W.3d 8,
18 (Mo. banc 2013)(applying the Collet test). Our focus here will be on the first element,
regarding control.
There is no hard and fast rule for when a court will pierce the corporate veil; the
inquiry is highly fact-specific and depends on the equities of the situation at hand.
However, mere identity of shareholders, directors, or officers between two corporations is
insufficient to find an identity of interests between the two entities to pierce the corporate
veil. Mitchell v. K.C. Stadium Concessions, Inc., 865 S.W.2d 779, 784 (Mo. App. W.D.
1993). Likewise, merely showing that one has absolute control of a corporation does not
of itself justify piercing the corporate veil. Fairbanks v. Chambers, 665 S.W.2d 33, 37-
39 (Mo. App. W.D. 1984); C.C. Dillon Co. v. Robinson, 636 S.W.2d 380, 383 (Mo. App.
E.D. 1982). One seeking to pierce the corporate veil needs to show both complete
control and improper purpose. Id. Even though corporations are related and one has
complete control over the other, there can be no piercing of the corporate veil without a
showing of impropriety in the establishment or use of the corporate form sought to be
disregarded. Id. The determination of whether there is a case for equitable relief, in the
face of complete control by a parent over its subsidiary, is decided by the test of whether
or not the arrangement involved is being used for a proper purpose. Cent. Cooling, 648
S.W.2d at 548; Phelps v. Missouri-Kansas-Texas R.R. Co., 438 S.W.2d 181, 186 (Mo.
1968)(citing May Dep’t Stores Co. v. Union Elec. Light & Power Co., 107 S.W.2d 41
(Mo. 1937)). As our Missouri Supreme Court aptly summarized long ago:
If any intercorporate affiliation is devised for or is being used to accomplish an improper or unlawful purpose, certainly equity does have the authority to tear down technical legal barriers and reach beyond them to impose liability or grant proper relief. If the purpose is lawful, and fair
98 and equitable to those with whom it is intended to deal, legal forms and relationships should be observed. Men have the right to use legal forms which they believe to be helpful in accomplishing proper purposes. The question should not be merely instrumentality, but instrumentality for what purpose.
May Dep’t Stores, 107 S.W.2d at 55.
Our Supreme Court recently reaffirmed its previous admonition that the parent-
subsidiary separation should be “ignored with caution and only when the circumstances
clearly justify it.” Doe 1631, 395 S.W.3d at 18 (quoting Cent. Cooling, 648 S.W.2d at
548; see also 66, Inc. v. Crestwood Commons Redevelopment Corp., 998 S.W.2d 32, 40
(Mo. banc 1999)(noting Missouri law recognizes the “narrow circumstances” in which
the corporate veil can be pierced in order to hold the corporation’s owners liable); accord
Fairbanks, 665 S.W.2d at 37 (“special circumstances”). As the Court stated in Central
Cooling:
The doctrine of corporate entity is one of substance and validity; it should be ignored with caution, and only when the circumstances clearly justify it. The theory of the alter ego has been adopted by the courts to prevent injustice, in those cases where the fiction of a corporate entity has been used as a subterfuge to defeat public convenience or to perpetrate a wrong; it should never be invoked to work an injustice, or to give an unfair advantage.
Cent. Cooling, 648 S.W.2d at 548 (internal quotation omitted).
As seen in the Central Cooling case, the Court referenced an “alter ego” theory
rather than “piercing the corporate veil.” The phrase “alter ego” is often seen in Missouri
jurisprudence, as is the phrase “mere instrumentality.” See, e.g., Gevers Heating & Air
Conditioning, 885 S.W.2d at 773 (referencing “alter ego” rule); C.C. Dillon, 636 S.W.2d
at 383 (instrumentality). Indeed, “[t]he terminology used by courts in considering
whether a parent corporation will be held liable for the actions of its subsidiary has not
99 been a model of clarity.” Mobil Oil Corp. v. Linear Films, Inc., 718 F.Supp 260, 266
(D.Del 1989); Berkey v. Third Ave. Ry. Co., 244 N.Y. 84, 94 (1926)(J. Cardozo noting
problem of relationship between parent and subsidiary corporations is enveloped in
“mists of metaphor”). Terms such as “alter ego,” “instrumentality,” “conduit,” “adjunct,”
and “agent” are often deemed equivalent and interchangeable. See, e.g., State ex rel.
Shull v. Liberty Nat. Bank of Kansas City, 53 S.W.2d 899, 902 (Mo. 1932)(using terms
“mere conduit,” “instrumentality,” and “adjunct” interchangeably when discussing
disregarding corporate entities); C.C. Dillon, 636 S.W.2d at 383 (using “alter ego” and
“instrumentality” interchangeably as devices to pierce the corporate veil); Real Estate
Investors Four, Inc. v. Am. Design Group Inc., 46 S.W.3d 51, 56 (Mo. App. E.D.
2001)(“adjunct” and “alter ego”); Dwyer, 889 S.W.2d at 904-05 (noting “instrumentality”
test and “alter ego” test developed in Missouri jurisprudence interchangeable); Mobil Oil,
718 F.Supp at 266 (noting that terms “alter ego,” “instrumentality,” “agent,”
“disregarding the corporate entity,” and “piercing the corporate veil” used
interchangeably); Norwood P. Beveridge, Piercing the Corporate Veil: The Oklahoma
Law of Corporate Alter Egos, Adjuncts, and Instrumentalities, 26 Okla. City U.L. Rev.
503, 506 (2001)(noting that “many very different terms are being used to describe the
same doctrine of piercing the corporate veil). The precise title to be placed upon the
relationship is unimportant. Camelot Carpets, Ltd. v. Metro Distrib. Co., 607 S.W.2d
746, 750 (Mo. App. E.D. 1980); see also Beveridge, supra, at 506 (noting that there is no
reason to believe that the different terms are distinguishable from each other). The
contours of the theory remain the same, no matter the term. Mobil Oil, 718 F.Supp at
266. If a parent corporation completely dominates its subsidiary, and has created or is
100 using the subsidiary corporation for some improper purpose, then the courts will
disregard the corporate form of the subsidiary and hold the parent liable. Camelot
Carpets, 607 S.W.2d at 750.
The use of the term “agent” in the context of piercing the corporate veil is
unfortunate because it can cause confusion with pure agency theory. Mobil Oil, 718
F.Supp at 266 n.9; Lowendahl v. Baltimore & O.R. Co., 287 N.Y.S. 62, 74 (1936). As we
shall see, Missouri courts have not been immune from this confusion. The theories are
separate and distinct, however, and used in distinctly different situations. See generally
Nat’l Plumbing Supply Co. v. Torretti, 175 S.W.2d 947, 952 (Mo. App. 1943); Japan
Petroleum Co. (Nigeria) Ltd. v. Ashland Oil, Inc., 456 F.Supp 831, 839-40 (D.Del 1978);
Phoenix Canada Oil Co. Ltd. v. Texaco, Inc., 842 F.2d 1466, 1476-77 (3rd Cir. 1988);
see also, 38 A.L.R.3d 1102 §§3-4 (1971). Unfortunately, courts over the years have not
always observed the distinction between these two separate bases for a parent
corporation’s liability. Restatement of Agency 2d, Appendix S 14M, Reporter’s Notes at
68 (1958). “The result has been a weakening and muddying of the term ‘agent.’” Id.
Again, the children here do not rely on piercing the corporate veil to hold Fluor
liable. They did not plead such a theory, they did not submit a piercing-the-corporate-
veil instruction, and they expressly disclaimed use of any such theory throughout trial and
on appeal. In sum, they claim no impropriety in Fluor’s establishment or use of its two
subsidiaries. Instead, they urge an agency relationship as a means to hold Fluor liable.
Agency Theory
The law of agency is based on the fundamental premise that he who acts through
another acts by or for himself. 2A C.J.S., Agency §1; 3 Am Jur 2d, Agency §2. As a
101 general rule, one may “properly appoint an agent to do the same acts and achieve the
same legal consequences as if [they] had acted personally.” 2A C.J.S., Agency §§1 & 3.
Stated simply, “an agency relationship exists when one person is authorized to represent
and act for another in dealings with third parties.” 2A C.J.S., Agency §1 “[T]he agent
steps into the shoes of the principal and acts for the principal pursuant to the grant of
authority vested in him by the principal.” Id. Stated more formally: “Agency is the
fiduciary relation that arises when one person (a principal) manifests assent to another
person (an agent) that the agent shall act on the principal’s behalf and subject to the
principal’s control, and the agent manifests assent or otherwise consents so to act.”
Restatement Third, Agency §1.01; State ex rel. Ford Motor Co. v. Bacon, 63 S.W.3d 641,
642 (Mo. banc 2002).
Because the fundamentals of agency law include the concept that the agent is a
substitute for the principal, it is, accordingly, a consequence of the agency relationship
that whatever an agent does in the lawful prosecution of the transaction entrusted to him
is the act of the principal. 3 Am Jur 2d, Agency §2. “[W]hen one directs, orders, or
knowingly authorizes another to perform an act on one’s behalf, then one is liable for the
harm proximately caused by that act.” 2A C.J.S., Agency §419. “The principal should
not be allowed to escape liability for an act done through the medium of an agent which,
if done by the principal himself or herself, would have resulted in liability.” Id. It is a
fundamental rule of agency law that “the principal is bound by, and liable for, the acts
which his agent does with or within the actual or apparent authority from the principal,
and within the scope of the agent’s employment or which the principal ratifies.” 3 Am
Jur 2d, Agency §270. This general rule of liability is based upon the principle that “a
102 duty rests upon every person, in the management of his own affairs, whether by himself
or by his agents, to so conduct them as not to injure another, and that if he does not do so,
and another is thereby injured, he shall answer for the damage.” Id. “This principle does
not work any injustice to the principal, for it is based upon the policy of protection of the
third person and results from the consideration that it is the principal who makes it
possible for the agent to inflict the injury.” Id.
Although formerly corporations could not be held liable for torts, today it is well-
settled that corporations can be held liable for a tort precisely as in the case of natural
persons. 10 Fletcher §4877. Generally speaking, the rules governing liability of a
principal for a tort committed by an agent are the same whether the principal is a natural
person or a corporation, and whether the agent is a natural or artificial person. Id. “A
corporation is liable, therefore, whenever a tortious act is committed by an agent within
the scope of the agent’s authority and in the course of the agent’s employment.” Id.
Missouri law is in accord with that of a number of other states that recognize that
a traditional principal-agent relationship may be created between two corporations,
whereby one corporation may be held liable for the activities of another corporation, such
as its subsidiary. Weitz Co. v. MH Washington, 631 F.3d 510, 522 (8th Cir. 2011)(noting
that Missouri law recognizes piercing the corporate veil, referred to there as “alter-ego”
liability, and agency liability as separate, distinct causes of action); see also Nat’l
Plumbing Supply Co. v. Torretti, 175 S.W.2d 947, 951 (Mo. App. 1943)(noting that one
corporation may act as agent for another); Bacon, 63 S.W.3d at 642 (noting agency
relationship may exist between a parent and its subsidiary); Ritter, 987 S.W.2d at 384-85
(conducting two separate analyses, one for piercing the corporate veil and one for agency,
103 with two separate holdings); see also, e.g., Satellite Cable Servs., Inc. v. N. Elec. Co-op.,
Inc., 581 N.W.2d 478, 481-82 (S.D. 1998)(noting “a parent corporation may be held
accountable for the conduct of its subsidiary when an agency relationship exists between
them,” and finding no need to decide whether the “mere instrumentality” exception to the
rule of corporate separateness applied in case because ample evidence existed to establish
that an agency relationship existed between parent and subsidiary); Chrysler Corp.
(Delaware) v. Chaplake Holdings, Ltd., 822 A.2d 1024, 1035 (Del. 2003); Kissun v.
Humana, Inc., 479 S.E.2d 751 (Ga. 1997); Mobil Oil, 718 F.Supp at 271. Under an
agency theory, the court “may attribute the actions of a subsidiary company to its parent
where the subsidiary acts on the parent’s behalf or at the parent’s direction.” C.R. Bard,
Inc. v. Guidant Corp., 997 F.Supp. 556, 560 (D.Del. 1998). One corporation may assume
the role of the second corporation’s agent in the course of one or more specific
transactions. But “a corporation does not become an agent of another corporation merely
because a majority of its voting shares is held by the other.” Bacon, 63 S.W.3d at 642
(quoting Restatement (Second) of Agency §14M).
Agency Distinguished from Piercing the Corporate Veil
The agency theory differs from piercing the corporate veil in theory and
operation. Under an agency theory, the court attributes specific acts to the parent
corporation, as principal, because of the parent’s authorization of those acts. Bard, 997
F. Supp. at 560. Only the precise conduct instigated by the parent is attributed to the
parent. Id. (internal quotation omitted). The rest of the subsidiary’s actions still pertain
only to the subsidiary. Applied Biosystems, Inc. v. Cruachem, Ltd., 772 F.Supp. 1458,
1464 (D.Del 1991)(citing Lea Brilmayer & Kathleen Paisley, Personal Jurisdiction and
104 Substantive Legal Relations: Corporations, Conspiracies, and Agency, 74 Calif.L.Rev. 1
(1986)). The parent corporation is held liable precisely because the subsidiary acted on
behalf of or at the parent’s direction. Bard, 997 F.Supp at 560. When legal liability is
predicated on principles of agency, courts do not ignore or set aside the existence and
entity of the subsidiary. Mobil Oil, 718 F.Supp at 271; see also Lowendahl, 287 N.Y.S.
at 74. Rather the separate corporate identity of the subsidiary is affirmed, and the two
corporations remain distinct entities. Id. The opposite is true when courts pierce the
corporate veil. Mobil Oil, 718 F.Supp at 271; Lowendahl, 287 N.Y.S. at 74. In those
situations, courts hold parent companies liable because of their total control and their
improper use of the subsidiary. In such a situation, courts set aside and ignore the
subsidiary’s corporate entity to hold the parent liable. Mobil Oil, 718 F.Supp at 271;
Lowendahl, 287 N.Y.S. at 74. All activities – and liabilities – of the subsidiary become
those of the parent. Applied Biosystems, at 1464 (citing Brilmayer & Paisley, supra).
One of the essential elements of agency relationship is that the principal has the
right to control the conduct of the agent with respect to matters entrusted to him. State ex
rel. Elson v. Koehr, 856 S.W.2d 57, 60 (Mo. banc 1993)(citing Restatement (Second) of
Agency § 14 and adopting the Restatement definition of an agency relationship).
Complete domination or control of the agent by the principal, however, is not required to
establish an agency relationship. Mobil Oil, 718 F.Supp at 271. Nor is complete
domination and control the underlying reason why courts hold a principal liable for the
actions of its agent. A traditional agency theory focuses on the arrangement between the
parent and the subsidiary, the authority given in that arrangement, and the relevance of
that arrangement to the plaintiff’s claim. Bard, 997 F.Supp at 560; see also Bacon, 63
105 S.W.3d at 642. Courts must avoid “the notion that a parent company can be held liable
for the obligations of a subsidiary [under the agency theory] purely on the basis of
domination and control.” Bard, 997 F.Supp at 560 (quoting Mobil Oil, 718 F.Supp. at
271 n. 15).
Ritter Agency Test
The children rely on the Ritter-Sedalia-Blackwell line of cases as the test in
Missouri for establishing a traditional principal-agent relationship between two
corporations.
In Ritter, our Court stated:
In order to establish a principal-agent relationship between two corporate entities, there must be such domination and control that the controlled corporation has, so to speak, no separate mind, will or existence of its own and is but a business conduit for its principal. To hold a parent liable for its subsidiary’s acts, the control must be actual, participatory and total.
Ritter, 987 S.W.2d at 385 (emphasis added).
We believe this Ritter agency test is a flawed statement of traditional agency law,
for three reasons: (1) it swallows the piercing-the-corporate-veil doctrine; (2) it
developed out of piercing-the-corporate-veil jurisprudence; and (3) it runs counter to the
agency test set forth by the Missouri Supreme Court in Bacon. That Missouri courts may
have blurred the lines between, or confused the two theories of liability is no surprise; we
would not be the first or only court to do so.
Swallows Piercing the Corporate Veil
To begin, notice how the Ritter test for agency is nearly identical to the first
element of the Collet test for piercing the corporate veil, said element again being:
106 (1) Control, not mere majority or complete stock control, but complete domination, not only of finances, but of policy and business practice in respect to the transaction attacked so that the corporate entity as to this transaction had at the time no separate mind, will or existence of its own
Collet, 708 S.W.2d at 284 (emphasis added). To pierce the corporate veil, a plaintiff
must not only show complete domination, but he must also show that the corporate form
was established or used for some improper purpose. Such is not the case with the Ritter
agency test. As set forth in Ritter, a plaintiff could hold a corporation liable for another
corporation’s acts, such as the acts of its subsidiary, by merely showing complete
domination and control. Indeed, this is what the children sought to do in this case. As
we see it, this runs completely counter to, and renders meaningless, the longstanding,
well-established doctrine of piercing the corporate veil. If the Ritter test correctly stated
the test for corporate agency, Missouri would have no reason to have a distinct test for
piercing the corporate veil.
Roots
Next, tracing the history of the Ritter agency test shows that the test developed
from piercing-the-corporate-veil cases, not traditional agency cases. In setting out the
standard for establishing a principal-agent relationship between two corporate entities,
the Ritter court quoted the test set out in Sedalia Mercantile Bank and Trust Co. v. Loges
Farms, Inc., 740 S.W.2d 188 (Mo. App. W.D. 1987). Sedalia involved a parent-
subsidiary relationship. The plaintiffs pursued an agency theory at trial, contending that
the subsidiary acted on behalf of and as agent for the parent corporation. Our Western
District, in assessing whether a principal-agent relationship existed, set out the test later
enunciated and quoted by the Ritter court. Sedalia, 740 S.W.2d at 202-03. The Court
then held that no principal-agent relationship existed between the parent corporation and
107 its subsidiary because the plaintiffs failed to prove any pervasive involvement, or any sort
of actual, participatory and total control on the part of the parent corporation. Id. at 203.
In setting out the agency test ultimately used in Ritter, and relied upon by the
children in this case, the Sedalia court cited and quoted a Missouri Supreme Court case
from 1969, Blackwell Printing Co. v. Blackwell-Wielandy Co., 440 S.W.2d 433 (Mo.
1969), and William Fletcher’s treatise, Cyclopedia, Corporations. The cited section of
Fletcher’s treatise, however, deals with piercing the corporate veil, as does the Blackwell
case. The Blackwell court rejected the position that the defendant was the “alter ego” of a
realty company, reasoning:
A corporation is ordinarily an entity, separate and apart from its stockholders, and mere ownership of all the stock of one corporation by another, and the identity of officers of one with officers of another, are not alone sufficient to create identity of corporate interest between the two companies or to create the relation of principal and agent or to create a representative or fiduciary relationship between the two. Something more than majority stock control is required. There must be such domination and control that the controlled corporation has, so to speak, no separate mind, will or existence of its own and is but a business conduit for its principal. This was not shown.
Blackwell, 440 S.W.2d at 436-437 (internal citations omitted)(emphasis added).
Blackwell was a piercing-the-corporate-veil case; it was not a traditional agency
case. But, for reasons unknown to this Court, the language from Blackwell was
transformed in Sedalia and then Ritter into stating the test for a traditional agency
relationship between two corporate entities. Perhaps it is part and parcel of the confusion
created by the imprecise and interchangeable terminology. Maybe it is the language that
mere ownership and identity of officers is “not alone sufficient to create identity of
corporate interests between the two companies or to create the relation of principal and
agent ….” We suppose one could take the Court’s language as saying one needs to show
108 complete domination and control in order to establish a principal-agent relationship.
Again, in our view, this swallows the doctrine of piercing the corporate veil. Moreover,
it is dicta at best. Whatever the reasons, we believe our courts have misapplied this
language from Blackwell in those cases, such as Sedalia and Ritter, brought under
traditional agency principles.
We further note that Blackwell’s predecessors are also all piercing-the-corporate-
veil cases. In setting out the above-quoted language, the Blackwell court cited Turpin, a
Missouri Supreme Court decision from 1966. 50 Turpin v. Chicago, Burlington & Quincy
R.R. Co., 403 S.W.2d 233 (Mo. banc 1966). Turpin, in turn, quoted the federal case
Fawcett v. Missouri Pac. R.R. Co., 242 F.Supp. 675, 677-78 (W.D. La 1965), and
Fawcett in turn quoted language from Kentucky Elec. Power Co. v. Norton Coal Mining
Co., 93 F.2d 923 (6th Cir. 1938). Although the courts in these three cases did not use the
terminology “piercing the corporate veil,” the courts in all three cases rejected attempts to
hold a parent company liable because there was no showing of impropriety in the
establishment or use of the subsidiary. Thus, we conclude the operative doctrine was
piercing the corporate veil, and not traditional agency. This long history, with roots deep
in piercing-the-corporate-veil jurisprudence, further supports our conclusion that
Missouri courts have misapplied the language and statements of law contained in
Blackwell.
Agency Test in Bacon
In addition to this flawed doctrinal development, the Ritter test for establishing a
principal-agent relationship between corporations runs contrary to the teachings of our
50 The Blackwell court, like the Sedalia court, also cited to a section of Fletcher’s treatise dealing with piercing the corporate veil.
109 Missouri Supreme Court in State ex rel. Ford Motor Co. v. Bacon, 63 S.W.3d 641 (Mo.
banc 2002).
At its core, Bacon is a venue case. However, the case involved a parent
corporation and its wholly-owned subsidiary, and it involved traditional agency theory.
We therefore find the case pertinent. Plaintiffs in the underlying action against Ford
predicated venue in Greene County because Ford Motor Credit Company, Ford’s wholly-
owned subsidiary, maintained an office in Greene County and acted as Ford’s “agent for
the transaction of its usual and customary business” there. Ford raised a defense of
improper venue. Bacon, 63 S.W.3d at 642. To resolve the venue question, our Supreme
Court noted it must determine whether Ford Credit was Ford’s agent. Id. The Court then
stated:
“Agency is the fiduciary relation which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act.” Restatement (Second) of Agency sec. 1 (1958); State ex rel. Elson v. Koehr, 856 S.W.2d 57, 60 (Mo. 1993). The Restatement specifically states, “A corporation does not become an agent of another corporation merely because a majority of its voting shares is held by the other.” Restatement (Second) of Agency sec. 14M. Therefore, an agency relationship between a parent and its subsidiary may only be established if the elements of an agency relationship exist. Id. at sec. 14.
In Elson, this Court adopted the Restatement definition of an agency relationship, which sets out three essential elements: 1) that an agent holds a power to alter legal relations between the principal and a third party; 2) that an agent is a fiduciary with respect to matters within the scope of the agency; [and] 3) that a principal has the right to control the conduct of the agent with respect to matters entrusted to the agent….
Elson, 856 S.W.2d at 60 [quoting Restatement (Second) of Agency §§12- 14]. The absence of any one of these three characteristics defeats the purported agency relationship.
110 Bacon, 63 S.W.3d at 642. (Emphasis added). As we see it, our Supreme Court had before
it a parent corporation and its subsidiary. The theory advanced and analyzed was a
traditional agent relationship – not piercing the corporate veil. We conclude that the
Bacon test is the test in Missouri for establishing a principal-agent relationship between
two corporations.
The children here sought to hold Fluor liable under traditional agency principles
merely because of its domination of and control of its subsidiaries. This is insufficient.
Therefore, we hold that a principal-agent relationship was not established, and thus the
parent company, Fluor, cannot be held liable for the actions of its subsidiaries under an
agency theory purely on the basis of domination and control. The children did not plead
and submit to the jury the elements of an agency relationship, as those elements are set
out in Bacon. The children’s theory is further flawed in that they seek to hold Fluor
liable based on its own acts rather than based on the acts of its subsidiaries. 51
Defendants insisted that the children’s theory of liability was not a valid
submission for either piercing the corporate veil or for traditional agency, and that,
therefore, the trial court should have not submitted it to the jury. We grant their point.
We acknowledge that the trial court’s submission was supported by some existing
Missouri cases. However, in our opinion, those cases misstate traditional agency law.
We therefore will no longer follow Ritter. We reverse the judgment entered against Fluor
on this theory of liability.
51 The instruction submitting this theory is likewise flawed. See further, under our discussion of the jury instructions submitted in this case.
111 Trial Rulings
We next turn to defendants’ allegations of error regarding the court’s voir dire and
evidentiary rulings. Defendants contend the trial court erred in denying their motion for a
mistrial after counsel for the children mentioned the Missouri Victims’ Compensation
Fund during voir dire. Defendants next advance three points challenging the trial court’s
rulings admitting testimony of several of the children’s expert witnesses. Lastly,
defendants contend the trial court erred in excluding certain evidence.
Preservation
We begin our discussion of these allegations by emphasizing that an appellant
must properly preserve their allegations of error in order to secure review on appeal. Syn,
Inc. v. Beebe, 200 S.W.3d 122, 135 (Mo. App. W.D. 2006). Defendants here, in whole or
in part, failed to preserve their allegations of error regarding these complained-of trial
issues. Their failure to do so is fatal to their claims of error. A party must meet several
requirements in order to preserve an issue for appellate review. For one, a party must
raise an objection in the trial court. See, e.g., Payton v. Union Pac. R. R. Co., 405
S.W.3d 1, 7 (Mo. App. E.D. 2013). We generally will not convict the trial court of error
on an issue that was not put before it to decide. Smith v. Shaw, 159 S.W.3d 830, 835
(Mo. banc 2005); Rouse v. Cuvelier, 363 S.W.3d 406, 418 (Mo. App. W.D. 2012);
Lincoln Credit Co. v. Peach, 636 S.W.2d 31, 36 (Mo. banc 1982). Moreover, a party
must object in a timely fashion. See, e.g., Letz v. Turbomeca Engine Corp., 975 S.W.2d
155, 168 (Mo. App. W.D. 1997). “A party should make any objection to the trial process
at the earliest opportunity to allow the other party to correct the problem without undue
expense or prejudice.” Sanders, 364 S.W.3d at 207. If a party does not make an
112 objection at the time of the incident giving rise to the objection, we may deem the
objection waived or abandoned. Id.; Letz, 975 S.W.2d at 168. Next, a party on appeal
must base its claim of error on the same grounds raised in its trial objection. See, e.g.,
Gallagher v. DaimlerChrysler Corp., 238 S.W.3d 157, 168 (Mo. App. E.D. 2007). A
point is preserved for appeal only if it is based on the same theory presented at trial. Id.
A party may not advance a new objection on appeal. Id. Nor may the party alter or
broaden the scope of the objection voiced at trial. Hill v. City of St. Louis, 371 S.W.3d
66, 75 (Mo. App. E.D. 2012). Rather, an appellant must maintain a consistent theory of
objection. Gallagher, 238 S.W.3d at 168. “[A]llegations of error not presented to or
expressly decided by the trial court shall not be considered in any civil appeal from a jury
tried case.” Rule 84.13(a); Hill, 371 S.W.3d at 75.
We lastly note that a party on appeal must develop the issue raised in its point
relied on in the argument portion of their brief. Smith v. Med Plus Healthcare, 401
S.W.3d 573, 576 (Mo. App. E.D. 2013). Failure to support a point with relevant legal
authority or argument beyond conclusory statements preserves nothing for appeal.
Carlisle v. Rainbow Connection, Inc., 300 S.W.3d 583, 586 (Mo. App. E.D. 2009). In
such instances, we will deem the issue abandoned. Med Plus Healthcare, 401 S.W.3d at
576. To the extent that defendants’ allegations of error are preserved, we emphasize that
the complained-of decisions lie within the discretion of the trial court. Callahan, 863
S.W.2d at 867 (mistrial); Moore v. Ford Motor Co., 332 S.W.3d 749, 756 (Mo. banc
2011)(admission or exclusion of evidence); Swartz v. Gale Webb Transp. Co., 215
S.W.3d 127, 129-30 (Mo. banc 2007)(expert testimony). We will reverse a denial of a
motion for mistrial only where there has been a manifest abuse of discretion. Callahan,
113 863 S.W.2d at 867. Similarly, we will reverse the trial court’s ruling admitting or
excluding evidence only if the trial court clearly abused its discretion. St. Louis Co. v.
River Bend Estates Homeowner’s Ass’n, 408 S.W.3d 116, 123 (Mo. banc 2013). A trial
court abuses its discretion when its ruling is clearly against the logic of the circumstances
then before the court and is so arbitrary and unreasonable that it shocks the sense of
justice and indicates a lack of careful consideration. Moore, 332 S.W.3d at 756.
“Appellate review of the trial court’s exercise of discretion does not pivot on whether a
reviewing court would have exercised its discretion in like manner, but whether the trial
court abused its discretion.” Chapman v. St. Louis County Bank, 649 S.W.2d 920, 921
(Mo. App. E.D. 1983). If reasonable persons can differ as to the propriety of the trial
court’s action, we then cannot say that the trial court abused its discretion. River Bend
Estates, 408 S.W.3d at 123.
With these principles in mind, we turn to the trial court’s voir dire ruling.
Voir Dire
In questioning the venire panel on the issue of punitive damages, counsel for the
children informed the panel that half of any punitive damages awarded goes to the
Missouri Victims’ Compensation Fund. 52 He then inquired if anyone on the panel
52 In full, counsel for children asked: Thank you, your Honor. What I would like to know is which side, if you’re on the side of those people who are in favor of deterring corporations with punitive damages, deterring them from doing something wrong in the future by assessing punitive damages or like those who don’t believe in doing that and believe that they should just be taken care of each time something happens again in the future. Can I see what thoughts any of you may have on that? Do you have any thoughts? Let me ask you another question. Some of the money – some people like the fact that 50 percent of punitive damages assessed go to the Missouri Victims’ Compensation Fund. Other people don’t like the fact that 50 percent or half of any punitive damages assessed go to the State of Missouri Victims’ Compensation Fund. Anyone of those that may not believe or like the fact that these go to, half the punitive damages go to Victims’ Compensation Fund? Does anyone have any feelings the other way?
114 disagreed with that distribution. Defense counsel remained silent. Five veniremembers
asked follow-up questions about punitive damages and the fund. Children’s counsel
responded, answering their questions, expounding on the purpose of the fund, noting that
distribution to the fund was a matter of law, and clarifying that plaintiffs receive the other
half of the assessed damages. Defense counsel remained mute. Counsel did not raise an
objection directed toward the discussion about the fund until over an hour later, during
the court’s afternoon recess, when counsel requested a mistrial. After hearing each side’s
arguments, the trial court denied defendants’ request. The following morning, defendants
filed a written motion for mistrial. The trial court expressed its concern, requested a
written response from the children, and took the motion under submission. The court
took up the motion the following morning and entertained lengthy arguments. After
hearing those arguments and reviewing submitted caselaw and the transcript, the trial
court denied defendants’ motion.
Defendants contend the trial court should have declared a mistrial. They insist
information regarding the fund should never be disclosed, because it is wholly irrelevant
to any of the issues presented to the jury to decide, and because it is highly prejudicial in
that it invites enhancement of the punitive-damage award to counteract the distribution to
the fund. Defendants argue the children had no purpose for mentioning the fund other
than to improperly engender sympathy and boost damages, and adamantly proclaim
prejudice was “graphically” illustrated thirteen weeks later, when the jury awarded
“exactly two times” the amount of punitive damages suggested by the children.
We do not condone counsel’s line of questioning. Granted, counsel is afforded
wide latitude in examining prospective jurors for possible bias and their state of mind
115 regarding the matter at hand. Littell v. Bi-State Transit Dev. Agency, 423 S.W.2d 34, 36-
7 (Mo. App. 1967)(quoting 31 Am.Jur, Jury, s 139); see also Ashcroft v. TAD Res.
Intern., 972 S.W.2d 502, 507 (Mo. App. W.D. 1998)(holding trial court erred in
preventing plaintiff from inquiring as to the bias and prejudice of the venire against the
award of punitive damages). On the other hand, Missouri courts have long condemned as
highly improper counsel’s disclosure of extrinsic matters that, to counsel’s knowledge,
will tend to create prejudice against the other party. See Welch v. Sheley, 443 S.W.2d
110, 117 (Mo. 1969); Scott v. W. Union Tel. Co., 109 S.W.2d 912, 914-15 (Mo. App.
1937). While true, we will not disturb the trial court’s decision. Defendants did not
timely object. Counsel clearly had the opportunity to object, and did object to other
matters during this line of questioning, but as to the mention and discussion of the fund,
defense counsel raised no objection. Instead, counsel remained silent, allowing the
colloquy to continue.
Defendants cited two cases to the trial court: Giddens v. Kansas City S. Ry. Co.,
937 S.W.2d 300 (Mo. App. W.D. 1996) and Burke v. Deere & Co., 6 F.3d 497 (8th Cir.
1993). In Burke, the court reversed a jury verdict, in part because the jury was informed
that a portion of any punitive-damage award would be paid into a civil trust fund
administered by the court. Burke is a federal case applying Iowa law, and while
instructive, it is not binding precedent. Moreover, the appellate court did not base its
reversal solely on mention of the trust fund, as defendants advocate here. Burke, 6 F.3d
at 513. The Giddens court upheld the trial court’s grant of a new trial for improper
closing argument designed to inflame the jury, even though no objection had been lodged
116 at trial. Giddens, however, dealt with closing argument, not voir dire, and the case did
not involve the fund. Giddens, 937 S.W.2d at 306-07.
Now on appeal, the defendants point to Henderson v. Fields, 68 S.W.3d 455 (Mo.
App. W.D. 2001), a case that did involve the fund. 53 In that case, plaintiff’s counsel
mentioned the fund during closing argument, and informed the jury that half of any
money awarded went to the state and not the family. Counsel then immediately urged the
jury to “send a message, be strong, take action.” Defense counsel objected, but did not
give a legal or factual basis for the objection, and thus did not preserve the matter for
appellate review. While the court on appeal ex gratia found the counsel’s comment
regarding the fund improper, because it went beyond the evidence and instructions, in the
end the appellate court could not say that manifest injustice had occurred in overruling
the insufficient objection. The matter was not preserved for appellate review, and thus
the appellate court did not disturb the verdict. The court simply was unwilling to convict
the trial court of error for failing to sustain an insufficient objection. Henderson, 68
S.W.3d at 470-71.
We, too, are unwilling to convict the trial court of error under our circumstances.
We further note that children’s counsel did not allude to the fund again during the
remaining voir dire. Counsel did not mention the fund during the ensuing three months
of trial, and he did not refer to the fund thirteen weeks later, when making closing
53 Defendants also cite several out-of-state cases holding that it is reversible error to inform juries about the allocation of a portion of punitive-damage awards to the state. Honeywell v. Sterling Furniture Co., 797 P.2d 1019 (Ore. 1990)(holding trial court erred in instructing jury as to how any award of punitive damages would be distributed); Ford v. Uniroyal Goodrich Tire Co., 476 S.E.2d 565 (Ga. 1996)(holding trial court erred in instructing the jury that a portion of any punitive damages awarded would go to state treasury). Defendants also cite to In re Exxon Valdez, 229 F.3d 790, 798 (9th Cir. 2000), for the proposition that “a jury deliberating on the amount of a damages award is not to consider where the funds that constitute that award will come from, or where they will end up.” Again, these are not Missouri cases and thus are not binding precedent. Henderson is the only Missouri case cited by defendants or discovered by us that deals specifically with informing the jury about the fund.
117 arguments to the jury. Lastly, contrary to defendants’ assertion, the jury did not award
“exactly two times” the suggested amount of punitive damages. While the jury assessed
more than requested, the jury did not simply double the suggested amount of punitive
damages.
Generally, we will not reverse the denial of a mistrial except upon a showing that
the trial court manifestly abused its discretion. Callahan, 863 S.W.2d at 867. The trial
court gave extensive and measured consideration to the issue, and its ruling is not
contrary to Missouri precedent. 54 Defendants have not persuaded us that the trial court
abused its considerable discretion in denying their motion. We deny this point. We turn
now to the trial court’s evidentiary rulings.
Evidentiary Rulings
Defendants’ first challenge the trial court’s rulings regarding the testimony of
Professor Henry Ordower and Professor James Fisher. Defendants contend these
witnesses’ testimony was riddled with legal conclusions about partnerships, and the
rights, obligations, and liabilities of partners in general and the defendants in particular.
They argue that the witnesses’ testimony was not only improper and inadmissible, as
encroaching on the court’s duty to interpret documents and instruct on the law, but also
that it was incorrect and led the jury astray. Defendants boldly assert the trial court
“abdicated its duty to control the admission of evidence and instruct the jury on the law,”
and instead allowed the two witnesses to “poison the well” with improper opinions and
impose their “own brand of justice” on the proceedings. They maintain that “the jury’s
54 Although we are dealing with voir dire here, and not closing argument, we note that the committee drafting Missouri’s approved jury instructions takes no position on whether the interest of the State and fund can be argued to the jury. MAI 35.19, Committee Comment [H] (2012 Revision).
118 view of the applicable law and the defendants’ relationships was irreparably tarnished
and distorted by the court’s abandonment of its function as evidentiary gatekeeper.”
Defendants’ protests go too far. We begin by addressing defendants’ allegations
concerning Professor Ordower.
Professor Henry Ordower
Defendants challenge court rulings during two different portions of Professor
Ordower’s testimony – his testimony about partnerships in general and his testimony
regarding the interpretation of the various partnership agreements. 55 Professor Ordower
began his testimony by describing the considerations and decisions parties must make
and take into account in deciding what format to use for their business. He explained that
in the 1980s, when the Doe Run partnership was formed, one had basically two choices
for a business entity – either a corporation or some type of a partnership, be it general or
limited. Professor Ordower then generally described the benefits and disadvantages of
forming a partnership, including that the partners are liable for the partnership’s debts.
The professor also generally considered the disadvantages of forming a corporation. And
then, in response to a hypothetical posed by children’s counsel, Professor Ordower
outlined the responsibilities and liabilities of partners. Professor Ordower then moved on
and testified specifically about the various partnership agreements and other contractual
arrangements among the defendants. The trial court overruled defendants’ various
objections protesting that the professor’s testimony constituted legal conclusions.
55 Defendants also complain that the trial court repeatedly referred to the witness as “Professor,” and accuse the trial court of abdicating its duty to control the admission of evidence. We doubt we have reached the point where simple courtesy and civility no longer have a place in our courtrooms. Henry Ordower is a professor of law at St. Louis University School of Law, and has been so for over thirty years. The trial court similarly referred to defendants’ witnesses by their professional titles. We particularly note that the trial court referred to defense witness Benjamin Akande by the title “Doctor,” in accord with that witness’s doctorate degree. We reject this overstated complaint.
119 Defendants allege the trial court abused its discretion in allowing Professor
Ordower to express opinions containing legal conclusions. In particular, they contend the
court improperly permitted Professor Ordower to instruct the jury on substantive
partnership issues, particularly the rights and liabilities of partners. 56 And they assert the
trial court improperly permitted Professor Ordower to interpret the various documents,
and to advise the jury of their supposed legal effect. In sum, defendants complain that the
trial court permitted Professor Ordower to conduct a “flawed tutorial” for the jury on the
law of partnerships and the interpretation of partnership documents. They maintain it
was for the trial court, not the witness, to instruct the jury on the law and to examine the
pertinent partnership documents to ascertain the respective rights, duties, responsibilities,
and obligations of the various parties.
We deny this point, for a number of reasons. First, defendants objected to some,
but not all of the now complained-of testimony. Thus, their point is not entirely
preserved for our review. Next, although defendants complain about Professor
Ordower’s testimony regarding the general nature and workings of a partnership,
56 As to Professor Ordower’s general testimony regarding partnerships, defendants complain about the following statements: 1. All partners are directly liable for the debts of the partnership and for any injury that creates a liability to a third party. 2. When businesses become partners in a partnership, “their histories come along with them,” and if they have debts, “they’re now the responsibility of the partnership and all of its partners.” 3. When a partner commits a tort, “[t]he partnership and each partner is fully responsible.” 4. When a new partner joins the partnership, “he becomes liable for the partnership’s history.” 5. If partners use herbicides, and some might have been used before they became partners, and someone later gets sick, the partners have a long-term problem, and “there’s no way they can terminate that liability, that responsibility, unless the injured party, who is now their potential creditor, lets them off the hook.” 6. If corporations transfer an existing business to a partnership, “then the partnership would take on the liabilities of those two separate businesses.” Defendants did not object to statements 2 and 6. Defendants claim that these statements, “among others,” were improper and that they “need not detail any more of this astonishing performance.” This Court cannot review these “other” statements when defendants have neither bothered to point out what those statements are nor identify what specific ruling they are challenging.
120 defendants have not explained or shown how those statements were incorrect statements
of law. Further, we disagree with defendants that the complained-of statements
constituted impermissible “legal opinions,” or that they usurped the court’s prerogative to
instruct the jury on each element of the children’s case. Professor Ordower did not tell
the jury what decision to reach. Rather, Professor Ordower provided useful background
information regarding the nature of partnerships, the differences between corporations
and partnerships, the benefits and disadvantages of each business relationship, and the
responsibilities and liabilities of partners – all topics unfamiliar to the average layperson.
Missouri law allows a qualified expert to testify to an opinion in a civil action if his or her
“scientific, technical or other specialized knowledge will assist the trier of fact to
understand the evidence or to determine a fact in issue.” Section 490.065.1; Hill, 371
S.W.3d at 74; see also George Weis Co., Inc. v. Dwyer, 956 S.W.2d 335, 339-40 (Mo.
App. E.D. 1997); Wulfing v. Kansas City Southern Ind., 842 S.W.2d 133, 153-54 (Mo.
App. W.D. 1992)(holding that expert testimony on complex procedural matters, industry
standards, and highly technical statutes and regulation is permissible to allow the jury to
evaluate the conduct of the parties, even though the testimony covers matters of law)
(case overruled on other grounds by Executive Bd. of Missouri Baptist Convention v.
Carnahan, 170 S.W.3d 437 (Mo. App. W.D. 2005)).
In fact, defendants themselves called an expert to similarly testify. Defendants
called Dr. Benjamin Akande, Professor of Economics and Dean of the School of
Business and Technology at Webster University, as an expert to testify as to corporate
and partnership structure, as well as the role, oversight, and responsibilities of parent
corporations with respect to wholly-owned subsidiaries. Dr. Akande described generally
121 the features and benefits of a corporation, including that the corporate structure affords
limited liability for the owners, and that a shareholder’s liability is limited to only the
liabilities and assets of the organization. He also explained that a corporation could be an
owner and investor in other corporations and that corporations could also invest in
businesses that are in a different line of business. He described how corporate entities
operate, including how they relate with parent and subsidiary corporations. The children
contend that Dr. Ordower’s testimony was needed in light of Dr. Akande because the
defendants continually obscured the difference between corporations and partnerships,
misled the jury as to the nature of the partnership, and urged that Doe Run was a separate
legal entity from its partners. Indeed, Dr. Akande testified that the partnership committee
functioned and operated like a corporate board of directors. He described Massey and
DRIH as “investors.” He described Fluor as merely a “parent,” an “owner,” and an
“investor,” that served in a more tangential, oversight capacity by receiving reports from
its subsidiaries and approving budgets. He specifically testified that the partnership
committee did not operate the smelter. And he also specifically opined that Fluor,
Massey, and DRIH were not responsible for the day-to-day operations of the smelter.
We discern no meaningful distinction in the nature of testimony provided by Dr.
Akande and that of Dr. Ordower. Based on the evidence and documents supplied to him,
Dr. Akande expressed his opinions and explained defendants’ version of the business
organizations at play. Dr. Ordower did the same for the children. Both experts were
disclosed and deposed prior to trial. Given all these circumstances, we cannot find an
abuse of discretion on the part of the trial court in allowing Professor Ordower’s
testimony.
122 As to defendants’ complaint about Professor Ordower’s interpretation of the
various agreements, and their charge that the professor distorted, manipulated, and
mischaracterized those agreements, thereby misleading the jury, this was a matter for
cross-examination, rebuttal evidence, and argument.
Although defendants protest that it was for the court, not the witness, to instruct
the jury on substantive partnership issues and the meaning of the various agreements, the
real crux of their complaint is that the court allowed plaintiffs, through Professor
Ordower, to “brainwash” the jury, from the very first day of trial, with the notion that
defendants bore responsibility for “historic liabilities.” They charge that Professor
Ordower’s “flawed polemic” on partnership responsibilities and the meaning of the
partnership documents set the predicate for the court’s erroneous instructions allowing
plaintiffs to blame defendants for every “historic” lead emission that had occurred since
the smelter opened in 1892. They insist the jury, led astray by Professor Ordower’s
misleading, inadmissible opinions and mischaracterizations, imposed upon defendants the
consequences of every perceived misdeed that had ever occurred at the smelter.
Again, defendants’ argument is ill-founded. The children did not submit their
case on the theory of assumed liabilities. Liability here was limited to the times
defendants held their respective partnership interest. Just because the jury awarded a
large verdict does not mean that they held defendants liable for “every perceived
misdeed,” as defendants contend. Defendants have not demonstrated an abuse of
discretion on the part of the trial court in allowing Professor Ordower’s testimony, and
we discern none. The court did not “abdicate” its responsibility to control the admission
123 of evidence, as defendants charge. Rather, the trial court gave careful consideration to
the testimony and the defendants’ challenges to that testimony. We deny this point.
Professor James Fisher
Defendants make much the same argument regarding Professor James Fisher.
They allege the trial court abused its discretion in allowing the professor to express
opinions containing legal conclusions, ethical mandates, and “good business practices.”
The children designated Professor Fisher, a marketing and business ethics
professor at St. Louis University, to testify on the topics of “corporate structure,
interrelationship of defendants, liability, and responsibility for wrongful conduct.” At his
deposition, Professor Fisher stated children’s counsel asked him to address issues having
to do with business ethics and responsibility.
Defendants first contend that Professor Fisher was not qualified to give his
proposed opinions because he was “not a lawyer,” and had “no expertise in
environmental or regulatory matters.” Defendants’ bare contention is supported only by
conclusory argument and is unsupported by any authority, save for a cursory citation to
the statutory section dealing with expert witnesses. Consequently, we hold that
defendants have abandoned their argument. See, e.g., MedPlus Healthcare, 401 S.W.3d
at 575-76 (holding point deemed abandoned where appellant cited no authority and failed
to develop issue raised in point relied on).
Defendants also argue that the trial court allowed the professor to mislead the
jurors about defendants’ obligations. They complain that the court, in allowing Professor
Fisher’s testimony, authorized the professor to create a new list of legal duties for
corporations – ranging from “do no harm” to a mandatory buyout of neighborhood
124 properties – and to testify that defendants breached those duties. They argue that the trial
court should have excluded Professor Fisher’s “ethical” testimony because the jury may
have assumed that breach of an ethical obligation equates to a violation of the applicable
legal standard.
Defendants’ argument suffers from several different flaws. To begin, their
assertion regarding the confusion caused by Professor Fisher’s testimony is speculative.
More critically, however, is the fact that the complained-of testimony is either largely
unpreserved or constitutes cumulative testimony. As such, defendants state no grounds
upon which to predicate reversal. Gateway Foam Insulators, Inc. v. Jokerst Paving &
Contracting, Inc., 279 S.W.3d 179, 189 (Mo. banc 2009)(holding appellant can show no
prejudice, and thus no grounds for reversal, from the admission of allegedly inadmissible
evidence if the challenged evidence was cumulative to other evidence admitted without
objection).
Defendants first specifically complain about Professor Fisher’s testimony that
corporations have a responsibility “to do no harm, to communicate honestly, and even
openly, and not to use [their] knowledge to disadvantage the public.” Defendants,
however, did not object to this testimony. Defendants also take issue with Professor
Fisher’s testimony that Fluor had a primary responsibility for the lead pollution in
Herculaneum, and that Fluor had “a duty of care to take responsible and effective action
not to do harm. To be honest. To be a good communicator.” Defendants next take issue
with Professor Fisher’s testimony that corporations should “never” choose concerns
about class-action suits over protecting the neighbors, and that a buyout in Herculaneum
was “doable” and that not doing it was an unreasonable choice. The trial court admitted
125 this testimony over defendants’ objections. However, once again, this testimony is
cumulative.
Defendants next complain that Professor Fisher wandered afar from ethical
considerations and, despite his lack of legal training, opined that the risk of legal action
by the Herculaneum community was one of the liabilities undertaken by the partners
when the partnership was formed. Defendants also assert the trial court should have
disallowed the professor’s statement that Massey acquired those same liabilities when it
received its partnership interest. Again, although defendants objected at trial, this
complained-of testimony was entirely cumulative to other testimony.
Lastly, defendants challenge Professor Fisher’s various criticisms of defendants.
Fisher criticized defendants for attempting to “avoid,” “reduce,” or “put off” expenditures
in order to increase profits. He criticized Fluor’s emphasis on “profit” and its “ruthless
prioritization” of spending. Fisher stated that Doe Run’s refusal to rent homes to families
with children was a “way of avoiding liability,” and he stated that it was “outrageous”
for a corporation not to report the results of air monitoring to the people in the
community. He criticized Doe Run’s communications with the community as “clearly
misleading,” as “light and breezy” to mask the gravity of the situation, and as “trying to
make Doe Run appear as a good corporate citizen.” Again, defendants did not object to
any of these complained-of statements. Moreover, the vast majority of the objections at
trial were solely on grounds that such testimony was “speculative” – a ground not argued
on appeal. Furthermore, the complained-of testimony is cumulative of other testimony,
either of other parts of the professor’s own testimony or that of other witnesses.
Obviously such evidence is damaging to the defendants. And Professor Fisher’s opinions
126 are pointed. However, these circumstances do not render the evidence inadmissible.
Defendants were free to cross-examine Professor Fisher, adduce their own rebuttal
evidence, and challenge the professor’s opinions in closing arguments.
In sum, defendants will not be heard to complain when they did not object, when
they objected on grounds other than those now asserted, or when they complain of
cumulative evidence. We deny this point.
Dr. George Rodgers, Dr. Carl Hansen, and Robert Johnson
For their next evidentiary point, defendants assert the trial court abused its
discretion in admitting “damage evidence” offered by three of the children’s experts – Dr.
George Rodgers, Dr. Carl Hansen, and Robert Johnson. Dr. Rodgers, a pediatric
toxicologist, testified about the effects of lead on children. Dr. Hansen, a vocational
rehabilitation expert, estimated the children’s lost earning capacities. Mr. Johnson, an
economist, calculated the children’s lifetime earnings losses. Defendants contend the
experts’ opinions were not based on competent evidence but instead were “riddled” with
“layers of speculation and conjecture” about the blood lead levels the children may have
had as small children, the effects of lead exposure on children’s IQs, the children’s
diminished educational and occupational prospects, and the children’s projected lifetime
earnings losses. In sum, defendants complain that the children built their compensatory
damage model by stacking the “speculative musings” of these different experts to
manufacture multi-million-dollar damage claims for each child.
Defendants complain about various aspects of each witness’s testimony.
Defendants, however, failed to object at trial to the testimony of which they now
127 complain. We also note that much of the complained-of testimony came in during
defendants’ cross-examination of the witnesses. We deny this point.
Stock Sale Agreement
For their last evidentiary point, defendants allege the trial court abused its
discretion in excluding the 1994 Stock Sale Agreement because the agreement and its
accompanying schedules were relevant. The agreement is the one between Fluor and
DRAC, for Fluor’s sale of St. Joe to DRAC. Defendants attempted to use the documents
during their cross-examination of Professor Ordower, and then later sought to introduce
the documents during the punitive-damage portion of the trial. The trial court excluded
the documents in both instances.
Defendants contend generally that the agreement and its accompanying schedules
were relevant to challenge their liability for actual and punitive damages, and the
assessment of an amount for punitive damages. In particular, they contend the evidence
was relevant in two instances: first, to show the sale of liabilities; and second, to show
the presence of a multi-million dollar reserve on St. Joe’s books for environmental
projects and expenditures.
As to the sale of liabilities, defendants argued at trial that the stock-sale agreement
was relevant to show that Doe Run was subject to liabilities associated with both the
current and prior conduct of the lead business, and that those liabilities be they personal
injury, environmental, or otherwise continued with St. Joe, and then transferred to DRAC
as part of the sale. Defendants advance little to no argument along these lines on appeal.
Rather, they now simply allege, in cursory fashion, that the agreement was “relevant to
show the relationship of the parties and the parties’ treatment and understanding of the
128 responsibilities of those involved in the operation of the smelter.” They contend that the
agreement would have “completed the historical narrative of the smelter,” and that the
agreement was relevant “to the disposition of [the partnership] interests, the provision for
environmental issues relating to smelter operations, and the continuation of St. Joe’s
responsibility for the smelter.” This is the sum total of defendants’ argument.
Consequently, because they failed to carry forth their complaint from trial, and because
they failed to support their position with argument beyond conclusions, defendants have
abandoned this issue.
As to the environmental reserve, defendants on appeal argue that the reserve’s
existence directly rebuts the children’s contention that defendants refused to spend
money on environmental projects, that they were insensitive to environmental issues, and
that they disregarded the safety of the Herculaneum community. Thus, defendants
contend the information was directly relevant to their liability for punitive damages.
They additionally submit that the presence of a 24.8 million dollar reserve warranted
consideration by the jury in assessing punitive damages. Defendants did not advance
these arguments at trial. There, defendants stated simply that they wanted to read into the
record that portion of the agreement showing a reserve for environmental projects among
the liabilities going to DRAC, in order to show that money was left in the company for
meeting environmental actions underway as well as for future environmental issues.
Defendants have not preserved this issue for our review. We will not convict the trial
court of error on arguments not put before it.
We further critically note that defendants failed to demonstrate what prejudice
they suffered from the trial court’s exclusion of the agreement. In order to obtain a
129 reversal based on the exclusion of evidence, an appellant must demonstrate that the
excluded evidence would have materially affected the merits of the cause of action.
Williams v. Trans States Airlines, Inc., 281 S.W.3d 854, 872 (Mo. App. E.D. 2009);
Byers v. Cheng, 238 S.W.3d 717, 726 (Mo. App. E.D. 2007); Section 512.160.2; Rule
84.13(b). In other words, the appellant must demonstrate resulting prejudice by showing
that the outcome of his case would have been different had the excluded evidence been
admitted. Williams, 281 S.W.3d at 875; McGuire v. Kenoma, LLC., 375 S.W.3d 157,
185 (Mo. App. W.D. 2012). Defendants, however, failed to argue prejudice. They only
advance a bare assertion concluding that exclusion of the evidence was “prejudicial
error.” Because defendants failed to articulate and demonstrate prejudice, grounds for
reversal do not exist, even if they had defendants preserved the issue for our review. We
deny this point.
Jury Instructions
We next turn to defendants’ allegations regarding the compensatory-damage
verdict directors. 57 The children proffered four such verdict directors: one submitted
their domination theory as to Fluor; the other three submitted their partner theory as to
Massey, DRIH, and Fluor, respectively. 58
The trial court held a lengthy instruction conference – at defense counsel’s office,
on a Sunday, no less. Defendants raised numerous objections, and the trial court
entertained extensive arguments by both parties. Defendants’ mischaracterization,
declaring that the trial court “summarily” overruled their objections, is ludicrous.
57 Defendants also challenge the punitive-damage verdict directors. We address that challenge separately, in conjunction with our discussion of punitive damages. 58 Each child submitted identical instructions, the only difference being the insertion of the particular child’s name.
130 Defendants claim the trial court erred in submitting all of the verdict directors.
Because of our holding rejecting the children’s domination theory, we need not address
defendants’ allegations of error regarding the instruction submitting that theory. 59 Thus,
we confine our discussion to defendants’ complaints about the partner verdict directors. 60
59 However, we note that the instruction does not attribute the actions of an agent to the principal, nor follow the Bacon elements. Rather, the instruction simply ascribes blame to Fluor, the purported principal. Thus, the instruction does not properly submit an agency theory. The instruction read: On the claim of plaintiff (insert child’s name) for compensatory damages for personal injury against defendant Fluor Corporation, your verdict must be for plaintiff (---) if you believe: First, defendant DRIH and Leadco Investments, Inc. were partners of the Doe Run Company Partnership, and Second, before March 26, 1994, the adjacent community of Herculaneum was contaminated with unsafe levels of lead which originated from the smelter operations, and Third, before March 26, 1994, the Doe Run Company Partnership knew or had information from which it, in the exercise of ordinary care, should have known that the adjacent Herculaneum community was contaminated with unsafe levels of lead which originated from the smelter operations, and Fourth, with respect to the Doe Run Company partnership, defendant Fluor Corporation had actual, participatory, and total dominion and control of partners DRIH and Leadco Investments, Inc. and exercised such dominion and control so DRIH and Leadco Investments, Inc. had no separate mind, will, or existence of their own but were mere conduits for defendant Fluor Corporation, and Fifth, defendant Fluor Corporation, in the exercise of that dominion and control, allowed plaintiff (--), a resident of Herculaneum, to be exposed to unsafe levels of lead which originated from the smelter operations before March 26, 1994, and Sixth, defendant Fluor Corporation was thereby negligent, and Seventh, such negligence directly caused or directly contributed to cause damage to plaintiff (--). 60 The partner verdict directors for Massey and DRIH were identical in all respects except for the particular defendant’s name and the ending date of the particular defendant’s involvement in the partnership. The verdict directors, with the challenged phrase in italics, read: On the claim of plaintiff (--) for compensatory damages for personal injury against defendant A.T. Massey Coal Company [DRIH], your verdict must be for plaintiff (---) if you believe: First, defendant A.T. Massey Coal Company [DRIH] was a partner of the Doe Run Company Partnership, and Second, while defendant A.T. Massey Coal Company [DRIH] was a partner of the Doe Run Company Partnership, the adjacent community of Herculaneum was contaminated with unsafe levels of lead which originated from the smelter operations, and Third, at that time, the Doe Run Company Partnership had information from which it, in the exercise of ordinary care, knew or should have known that the adjacent community of Herculaneum was contaminated with unsafe levels of lead which originated from the smelter operations, and Fourth, the Doe Run Company Partnership allowed plaintiff (---), a resident of Herculaneum, to be exposed to unsafe levels of lead which originated from the smelter operations before April 5, 1989 [March 26, 1994], and
131 Defendants fault those instructions in two respects. First, they contend the phrase
“allowed plaintiff … to be exposed to unsafe levels of lead,” contained in the fourth
paragraph of the instructions, was impermissibly vague and resulted in a roving
commission. Second, defendants contend the instructions imposed liability on them for
the operation of the smelter and for lead released before they were partners.
We review de novo the question of whether the jury was properly instructed.
Klotz v. St. Anthony’s Med. Ctr., 311 S.W.3d 752, 766 (Mo. banc 2010). For us to
reverse a jury verdict for instructional error, the party challenging the instruction must
show: (1) that the instruction as submitted misled, misdirected, or confused the jury; and
(2) that prejudice resulted from the instruction. Fleshner v. Pepose Vision Inst., P.C., 304
S.W.3d 81, 90-91 (Mo. banc 2010). “Prejudicial and reversible error occurs when an
Fifth, the Doe Run Company Partnership was thereby negligent, and Sixth, such negligence directly caused or directly contributed to cause damage to plaintiff (---).
The partner verdict director for Fluor differed slightly in the third and fourth paragraphs, in that it ascribed liability to Fluor based on Fluor’s knowledge and negligence, rather than the partnership’s knowledge and negligence. The instruction, with the challenged phrase in italics, read: On the claim of plaintiff (--) for compensatory damages for personal injury against defendant Fluor Corporation, your verdict must be for plaintiff (---) if you believe: First, defendant Fluor Corporation was a partner of the Doe Run Company Partnership, and Second, while defendant Fluor Corporation was a partner of the Doe Run Company Partnership, the adjacent community of Herculaneum was contaminated with unsafe levels of lead which originated from the smelter operations, and Third, at that time, defendant Fluor Corporation had information from which it, in the exercise of ordinary care, knew or should have known that the adjacent community of Herculaneum was contaminated with unsafe levels of lead which originated from the smelter operations, and Fourth, defendant Fluor Corporation allowed plaintiff (---), a resident of Herculaneum, to be exposed to unsafe levels of lead which originated from the smelter operations before May 26, 1990, and Fifth, defendant Fluor Corporation was thereby negligent, and Sixth, such negligence directly caused or directly contributed to cause damage to plaintiff (---).
132 instruction is proffered to the jury that gives the jury a roving commission.” McNeill v.
City of Kansas City, 372 S.W.3d 906, 909 (Mo. App. W.D. 2012).
Roving Commission
Defendants first fault the partner verdict-directing instructions because they did
not specify the conduct that constituted the breach of duty necessary to support the
children’s negligence claims. They contend the phrase “allowed plaintiff … to be
exposed to unsafe levels of lead” was too open-ended and vague, and left it to the
“whim” of the jurors to decide for themselves the conduct they could consider in deciding
whether to hold defendants liable. Defendants insist that the instructions should have
specified what defendants did or did not do to “allow” the exposure or make them liable
to the children.
Defendants complain that the verdict directors ill-defined the negligent act upon
which the children could base liability, but they do not explain how the submitted
instructions “misled, misdirected, or confused the jury.” In evaluating alleged
instructional error, when faced with a claim that the instruction is vague, “the issue is
whether the phrase as used in the verdict director was misleading in the context of the
evidence at trial.” Klotz, 311 S.W.3d at 767. Throughout the trial here, the children’s
evidence centered on how defendants allowed the community’s children to be exposed to
unsafe levels of lead. Defendants, through their insufficient briefing, have failed to
demonstrate grounds upon which to predicate reversal. See generally Fleshner, 304
S.W.3d at 90-91 (listing required showings to obtain reversal on instructional grounds).
Furthermore, in the context of this case, we find that the sought-after additions –
specific negligent acts – constitute evidentiary detail. A proper verdict-directing
133 instruction submits only the ultimate facts, not evidentiary details. Twin Chimneys
Homeowners Ass’n v. J.E. Jones Const. Co., 168 S.W.3d 488, 497-98 (Mo. App. E.D.
2005); see also Rule 70.02(b). 61 Simplicity is the key component to instructing a jury in
Missouri. 2 Mo. Prac., Methods of Prac.: Litigation Guide §15.2 (4th ed. updated 2012).
The guiding philosophy of MAI is that the jury should be given simple, concise
instructions that ask them to decide the ultimate factual issues in the case. Mo. Civil
Trial Practice §12.1 (MoBar 3rd ed. 2002); 2 Mo. Prac. §15.2; see also Dennis E. Egan,
Jury Instructing in Missouri, 35 Journal of Missouri Bar 440, 441(1979); Missouri
Approved Jury Instructions, 1963 Report to Missouri Supreme Court, XL (7th ed. 2012);
Edgerton v. Morrison, 280 S.W.3d 62, 66-67 (Mo. banc 2009)(noting basic premise of
MAI is to submit only ultimate issues and avoid evidentiary detail). It is expected that
lawyers will supply in their closing arguments all of the details of the evidence and how
those details fit into the legal framework given to the jury by the court. Mo. Civil Trial
Practice §12.1; 2 Mo. Prac. §15.2.
No precise, universally applicable definition exists that explicitly differentiates
evidentiary facts from ultimate facts. Stalcup v. Orthotic & Prosthetic Lab, Inc., 989
S.W.2d 654, 658 (Mo. App. E.D. 1999). Courts determine on a case-by-case basis which
facts are ultimate facts, to be included in the instruction, and which facts are evidentiary
detail, to be excluded from the instruction. Ostrander v. O’Banion, 152 S.W.3d 333,
336-37 (Mo. App. W.D. 2004). The decision ultimately depends on the specific theory
relied on by the party offering the instruction. Id. at 336.
61 Rule 70.02(b) mandates that when an Missouri Approved Instruction is modified, as was the case here, then “such modifications or such instructions shall be simple, brief, impartial, free from argument, and shall not submit to the jury or require findings of detailed evidentiary facts.”
134 Although the purpose of MAI is to hypothesize the ultimate issue without
evidentiary detail, the submission must not be so barren of fact that it allows the jury
“unbridled power to speculate and find liability based on a vague, abstract ‘roving
commission’ that lacks sufficient clarity to assure that the verdict is based on proper
evidentiary considerations established on the record, but rather invites the jury to
construct a theory of liability on its own.” Egan, supra, at 440. The term “roving
commission” is a catchall term, used to describe any number of different types of faulty
instructions that “allow the jury – due to various inclusions or omissions – to rove onto
forbidden ground … to reach its verdict.” Id. at 443. For instance, a jury instruction may
be considered a roving commission “when it is too general or where it submits a question
to the jury in a broad, abstract way without any limitation to the facts and law developed
in the case.” See generally Coon v. Dryden, 46 S.W.3d 81, 93 (Mo. App. W.D. 2001).
And an instruction is a roving commission if it fails to advise the jury what acts or
omissions of the party, if any, found by it from the evidence would constitute liability.
McNeill, 372 S.W.3d at 910. “To avoid a roving commission, the court must instruct the
jurors regarding the specific conduct that renders the defendant liable.” Id. On the other
hand, when a plaintiff’s theory of the case is supported by the evidence and the
instruction submits ultimate facts that define the plaintiff’s theory of negligence, the
instruction is not a roving commission. Smith v. Kovac, 927 S.W.2d 493, 498 (Mo. App.
E.D. 1996).
A contention similar to defendants’ was made in Stone v. Duffy Distrib., 785
S.W.2d 671 (Mo. App. S.D. 1990). There, the plaintiff claimed that the submitted
contributory-negligence instruction, positing that he “failed to follow the instructions of
135 his doctors,” gave the jury a roving commission because it failed to submit his exact act
or omission. The court rejected the claim, noting that detailed evidence existed
concerning the instructions that the doctors gave plaintiff. Much evidence also existed
concerning the plaintiff’s actions in following, or failing to follow those instructions.
The court reasoned that to hypothesize the details of the evidence on those issues in the
instruction would be precisely what Rule 70.02(e) condemns. In the end, the court found
that the instruction hypothesized the ultimate facts average jurors would reasonably
believe they had to find from the detailed evidence. 62 Stone, 785 S.W.2d at 678.
Ostrander v. O’Banion, 152 S.W.3d 333 (Mo.App. W.D. 2004) is likewise
helpful. There, a patient brought a medical-malpractice action against her doctor for
negligence in removing her gallbladder. The doctor challenged the verdict-directing
instruction, which directed a verdict in favor of the patient on a finding that the doctor
“placed a surgical clip in a position that extended partially across the common hepatic
bile duct of plaintiff.” 63 The doctor argued that the instruction should have required the
jury to find that he either failed to identify or that he misidentified the biliary anatomy
before he placed the surgical clip partially across the common bile duct. He contended
that failure to submit the issue in this manner enabled the jury to find for the patient by
62 The instruction in Stone read, with the challenged phrase in italics: In your verdict you must assess a percentage of fault to plaintiff Bobby Joe Stone, whether or not defendants were partly at fault, if you believe: First, plaintiff Bobby Joe Stone failed to follow the instructions of his doctors, and Second, plaintiff Bobby Joe Stone was thereby negligent, and Third, such negligence of plaintiff Bobby Joe Stone caused or directly contributed to cause any damage plaintiff may have sustained. 63 In total, the verdict director read, with the complained-of phrase in italics: Your verdict must be for the plaintiff if you believe: First, defendant placed a surgical clip in a position that extended partially across the common hepatic bile duct of plaintiff; and Second, defendant was thereby negligent; and Third, as a direct result of such negligence, plaintiff sustained damage.
136 virtue of the adverse result because the instruction did not submit the act or omission
complained of, as required. Ostrander, 152 S.W.3d at 337.
The appellate court rejected the doctor’s claim. In so doing, the court noted that
under the patient’s theory of negligence, supported by her experts, it was always a breach
of duty to place the clip on the common bile duct. Although there may be different
reasons how or why the clip was placed, the reasons for the improper placement
ultimately made no difference. It was the ultimate act of placing the clip across the duct
that was the breach. The specific theory of negligence presented by the plaintiff’s two
experts, and the ultimate issue to be decided by the jury was whether the defendant
placed the hemoclip across plaintiff’s common bile duct. Thus, the verdict director
accurately presented the issue to be decided by the jury. Id. at 339.
Defendants bring to our attention the recent decision of our Western District,
Minze v. Missouri Dep’t of Public Safety, 2014 WL 1364940 (April 8, 2014), an
employment-discrimination case in which the court found that the verdict director
submitting plaintiff’s retaliation claim constituted an impermissible roving commission.
The instruction hypothesized that the defendant “took adverse action” against the
plaintiff, and that a causal relationship existed between the complaint and the “adverse
action.” 64 Similar to defendants’ argument here, the State in Minze argued that the
instruction constituted a roving commission because the instruction failed to set forth
specific acts constituting retaliation, thereby allowing the jury to consider actionable and
64 In full, the instruction read, with the complained-of phrases in italics: Your verdict must be for the Plaintiff and against Defendant MMDPS if you believe: First, Plaintiff complained of employment discrimination based on sex; and Second, Defendant MMDPS took adverse action against her; and Third, a causal relationship existed between the complaint and the adverse action; and Fourth, as a direct result of such conduct, Plaintiff sustained damage.
137 non-actionable behavior in the aggregate. The court, relying on Scanwell Freight
Express STL, Inc. v. Chan, 162 S.W.3d 477, 482 (Mo. banc 2005), agreed. In Scanwell,
our Supreme Court found the verdict director fatally defective because by using the word
“including,” a word of enlargement and not limitation, the instruction made actionable
the aggregate of all of the defendant’s conduct – both that which was actionable and that
which was not. Scanwell, 162 S.W.3d at 482. The Minze court found that the proffered
instruction suffered from the same infirmity because by using only the words “adverse
action,” the instruction impermissibly enlarged the scope of conduct for the jury’s
consideration beyond that which was actionable. The court further found that the term
“adverse action” was not given proper “flesh and meaning” during the course of the trial.
We find that Minze and Scanwell actually support our decision.
The ultimate issue to be decided in this case was whether defendants allowed the
children to be exposed to unsafe levels of lead. In the context of this case, the
defendant’s various acts and omissions were evidentiary detail. Be it defendants’ failure
to warn, to buy out the homes, to contain emissions, to honestly communicate to the
town, or any other of defendants’ acts or omissions, the end result is the same – the act or
omission allowed the children to be exposed to unsafe levels of lead. The term “allowed”
was sufficiently given “flesh and meaning” during the trial, and unlike the Minze and
Scanwell instructions, does not include both actionable and non-actionable conduct. The
submission was entirely responsive to the negligence pleaded in the children’s petition
and established at trial. We hold that the verdict directors did not constitute a roving
commission.
138 “Historic” Liabilities
Defendants next fault the verdict-directing instructions as improperly permitting
the jury to hold defendants liable for the release of lead and the operation of the smelter
before defendants were partners, rather than properly limiting liability to conduct of the
partnership and operation of the smelter during the period of time each particular
defendant was a partner. Specifically, defendants point to the fourth paragraph of the
verdict director, which asked the jury to consider whether the defendant allowed the
children to be exposed to unsafe levels of lead “which originated from the smelter
operations:” (1) “before April 5, 1989” for Massey; (2) “before March 26, 1994” for
DRIH; and (3) “before May 26, 1990” for Fluor. (Emphases added). Essentially,
defendants view the instructions as “open ended.” In defendants’ view, by simply stating
“before” and then giving the ending date of each defendant’s partnership interest, the
instruction permitted the jury to hold defendants responsible for any conduct occurring
and any lead emitted at any time before the stated date, including the time before
defendants were partners. Defendants assert the instructions should have included both
the beginning and the ending dates of each defendant’s respective partnership interest,
and expressly referred to conduct between those dates.
Defendants’ argument – that they are being held responsible for conduct predating
their time in the partnership – strikes a familiar refrain that we have already addressed.
Although the instructions could have been more artfully drafted to include the beginning
date of each defendant’s partnership interest, we cannot conclude that the instructions
permitted the jury to hold defendants responsible for the release of lead and operation of
the smelter before they were partners. Why would we conclude that the jurors imposed
139 pre-partnership liability when defendants failed to point to any argument where
children’s counsel requested such? Rather, children’s counsel focused his argument on
the defendants, as partners, and their knowledge of the contamination, their appreciation
of the danger of lead, and their deceit and failure to reasonably act given these
circumstances. We also note that defense counsel in his closing argument repeatedly
reminded the jury, without objection, to focus on the partnership periods. Most critically,
as we discussed earlier, the verdict directors, in the second and third paragraphs,
cautioned the jury to assess each defendant’s conduct and liability while a partner. Given
all these circumstances, we hold that the verdict directors, when viewed in their entirety,
effectively limited liability to the time of each defendant’s respective partnership interest.
To conclude, the trial court did not err in submitting the complained-of partner
verdict directors. We deny defendants’ points, and turn to their allegations of error with
respect to punitive damages.
Punitive Damages
Defendants challenge the submissibility of the children’s claim for punitive
damages. They also assign error in the verdict directors submitting the issue of punitive
damages to the jury.
The children sought separate punitive-damage awards against each defendant.
They sought punitive damages against Fluor based on Fluor’s own knowledge and
conduct. They sought punitive damages against Massey and DRIH based on the
knowledge and conduct of the partnership.
140 Submissibility
Defendants allege the trial court erred in denying their motions for directed
verdict and for judgment notwithstanding the verdict with respect to the children’s claim
for punitive damages. Defendants contend the children failed to demonstrate conduct
that would justify punitive damages. They argue that the alleged negligent conduct here
– “allowing” children to be exposed to lead – is simply not tantamount to the intentional
wrongdoing necessary to support punitive damages.
As to Fluor, defendants argue that Fluor was only a partner for one day, and
maintain that the children did not show any conduct during that day that could support
punitive damages. They argue that there was no evidence that any lead emitted on that
day injured any child, and thus insist that the children’s claim for punitive damages
against Fluor was based on the historical activities of the smelter, with little regard to the
actions of Fluor or the period of Fluor’s partnership. Defendants argue that the only
possible act on that one day that could constitute the culpable mental state necessary to
justify punitive damages would be Fluor’s failure to buy homes or relocate the smelter –
and defendants argue that the children provided no authority, other than the testimony of
Dr. Fisher, that Fluor had any legal duty to buy out the smelter’s neighbors. They
contend that “allowing” the neighbors to remain in their homes hardly qualifies as the
kind of “outrageous, officious” conduct sufficient to warrant punitive damages.
As to Massey and DRIH, defendants insist that because the children chose to
submit separate punitive-damage claims against Massey and DRIH, rather than a joint
submission, then the children were required to prove separate culpability of each
defendant. They contend that the children presented no evidence of actionable
141 misconduct by Massey and DRIH. Indeed, defendants frequently note that Massey and
DRIH were “inactive,” “silent,” “passive” partners, which were not involved in the
smelter’s day-to-day operations. Defendants further argue that even if Missouri law
permits punitive damages to be assessed against Massey and DRIH based on the
partnership’s conduct, the children still failed to make a submissible case because they
failed to show conduct during the respective partnership periods that could support
punitive damages. Defendants argue that the partnership could not have reasonably been
held to have known that its conduct during the five months of Massey’s partnership was
creating a high risk of injury because the blood levels during that time were “far below”
the level the CDC considered elevated. Defendants also argue that Doe Run was in
compliance with the implementation plan in place, in an attempt to reduce lead
emissions, which belies the notion that the partnership was engaged in intentional
wrongdoing during Massey’s partnership period.
Defendants likewise argue that Doe Run’s conduct during DRIH’s partnership
time does not justify punitive damages. They contend that the steps Doe Run took to
address elevated blood levels, and its continued efforts to reduce lead emissions after the
CDC changed the blood lead standard in 1991, all preclude a finding that the partnership
exhibited the requisite mental state for punitive damages. They contend that Doe Run’s
many actions refute any notion of complete indifference or conscious disregard on the
part of Doe Run. They tout their outreach to the community, and their efforts to raise
awareness about the blood lead levels, the dangers of lead, and the ways to reduce lead
risks to children. They also refer to their efforts to address emissions and counteract the
effects of prior lead emissions with such programs as the soil-remediation program, the
142 free vacuums, and the home-repurchase program. And they cite their compliance with
the state implementation plans and regulatory requirements, their ongoing cooperation
with regulatory authorities in addressing environmental matters, and their persistent
efforts to meet the national ambient air quality standards. Citing to Alcorn, they argue
that punitive damages are simply not available against a party that complied with an
ongoing regulatory program. Alcorn v. Union Pac. R.R. Co., 50 S.W.3d 226 (Mo. banc
2001)(overruled on other grounds by Badahman v. Catering St. Louis, 395 S.W.3d 29
(Mo. banc 2013)).
“There must be some element of outrage to justify punitive damages.” Burnett v.
Griffith, 769 S.W.2d 780, 789 (Mo. banc 1989)(citing to Restatement (Second) of Torts,
section 908(1) Comment b (1979)). Further, punitive damages require a willful, wanton
or malicious culpable mental state on the part of the defendant. Burnett, 769 S.W.2d at
789. A plaintiff can establish this requisite culpable mental state by showing either that
the defendant committed an intentional wanton, willful, outrageous act or that defendant
acted with reckless disregard for the plaintiff’s rights and interests. Peel v. Credit
Acceptance Corp., 408 S.W.3d 191, 209 (Mo. App. W.D. 2013); Burnett, 769 S.W.2d at
787. Plaintiffs must prove their claim for punitive damages by clear and convincing
proof. Rodriquez v. Suzuki Motor Corp., 936 S.W.2d 104, 110 (Mo. banc 1996). Thus,
to make a submissible case for punitive damages, a reasonable juror must be able to
conclude, from the evidence and the inferences drawn therefrom, that the plaintiff
established with convincing clarity that the defendant’s conduct was outrageous because
of evil motive or reckless indifference. Drury v. Missouri Youth Soccer Ass’n, Inc., 259
143 S.W.3d 558, 573 (Mo. App. E.D. 2008); see also Gilliland v. Missouri Athletic Club, 273
S.W.3d 516, 520 (Mo. banc 2009).
“Ordinarily punitive damages are not recoverable in actions for negligence,
because negligence, a mere omission of the duty to exercise care, is the antithesis of
willful or intentional conduct.” Hoover’s Dairy, Inc. v. Mid-America Dairymen,
Inc./Special Products, Inc., 700 S.W.2d 426, 435 (Mo. banc 1985)(internal quotation
omitted). “But an act or omission, though properly characterized as negligent, may
manifest such reckless indifference to the rights of others that the law will imply that an
injury resulting from it was intentionally inflicted.” Id. “Or there may be conscious
negligence tantamount to intentional wrongdoing, as where the person doing the act or
failing to act must be conscious of his conduct, and, though having no specific intent to
injure, must be conscious, from his knowledge of surrounding circumstances and existing
conditions, that his conduct will naturally or probably result in injury.” Id. Punitive
damages can be awarded in a negligence action when the defendant knew or had reason
to know that a high degree of probability existed that the action would result in injury.
Hoover’s Dairy, 700 S.W.2d at 436.
Whether sufficient evidence exists to support an award of punitive damages is a
question of law, which we review de novo. Gilliland, 273 S.W.3d at 520. In reviewing
the submissibility of punitive damages, we view the evidence and all reasonable
inferences drawn therefrom in the light most favorable to submissibility. Id. We
disregard all evidence and inferences that are adverse thereto. Drury, 259 S.W.3d at 573.
Only evidence that tends to support the submission should be considered. Id.
144 We first address defendants’ claim that because the children submitted separate
punitive-damage claims as to each defendant rather than a joint award against all
partners, then the children were required to prove the separate culpability of each
defendant.
Defendants provided no authority mandating proof of separate culpability. They
rely principally on a federal case applying Missouri law, Blue v. Rose, 786 F.2d 349 (8th
Cir. 1986). There, a federal court held that an award of punitive damages in one sum
against partners was proper where the tortious act by one partner was committed within
the scope of partnership authority and business. The court, however, did not hold that
this was mandated. To the contrary, the court expressly recognized that “in some cases
the evidence might support separate findings of punitive damages in varying amount
against partners jointly sued and that the jury should be instructed accordingly.” Blue,
786 F.2d at 353.
Indeed, defendants’ proposition runs counter to well-established principles of
agency and partnership law. As previously noted, in Missouri, all partners are jointly and
severally liable for everything chargeable to the partnership. Section 353.150. And
Missouri law holds a partnership liable for the acts of one of the partners in the ordinary
course of the partnership’s business or with the authority of his copartners. Section
358.130. This section expressly provides that the partnership is liable for “any penalty”
that may be incurred. Section 358.130. Under Missouri law, punitive damages are
intended as a penalty as their purposes is to punish and deter. Rodriquez, 936 S.W.2d at
110; Alcor, 50 S.W.3d at 248 (punitive damages are imposed as punishment for and
deterrence of bad conduct). And Missouri recognizes that partners are vicariously liable
145 for punitive damages based on acts of their copartners done in the course of partnership
business. Rogers v. Hickerson, 716 S.W.2d 439, 447 (Mo. App. S.D. 1986). Several
other states have also so recognized. See, e.g., Shetka v. Kueppers, Kueppers, VonFeldt
& Salmen, 454 N.W.2d 916, 918-19 (Minn. 1990); Meleski v. Pinero Int’l Rest., 424
A.2d 784, 790-92 (Md. App. 1981); Spencer v. Steinbrecher, 164 S.E.2d 710, 716 (W.Va.
1968). This liability attaches even if partners did not participate in, ratify, or have
knowledge of the activity giving rise to the award of punitive damages. Rogers, 716
S.W.2d at 447.
Given that the partnership is liable for penalties incurred by a partner for acts
done in the course of the partnership’s business, including punitive damages, and that
partners are liable for everything chargeable to the partnership, proof of individual
culpability is not required. Furthermore, separate instructions were especially warranted
here, where Massey and DRIH were partners at different times.
Defendants’ contention that the children did not prove conduct sufficient to
support an award of punitive damages is unavailing. Defendants argue that their
community outreach and their various programs to address emissions and counteract the
effects of prior lead emissions all belie the notion that the partnership was operating with
complete indifference and conscious disregard of the neighborhood children. Defendants
did not raise this argument at the trial court, and therefore it is not preserved for appeal.
Rule 72.01(a); Johnson v. Allstate Indem. Co., 278 S.W.3d 228, 233 (Mo. App. E.D.
2009)(holding argument against submissibility not preserved for appeal because it was
not raised as a specific ground in defendant’s motion for directed verdict). Moreover, in
citing evidence in their favor, defendants ignore our standard of review. We further note
146 that defendants’ position now on appeal is directly contrary to that taken in their motions
for directed verdict and for JNOV. In those motions, defendants expressly argued that
there was no evidence that they were involved with any direct communications with
Herculaneum residents at all, for any reason.
Defendants at trial, and now on appeal, protest that they certainly could not be
subject to punitive damages when they were doing everything that was required by the
EPA and the DNR. They contend that the partnership’s ongoing cooperation with
federal, state, and local authorities in addressing environmental matters precludes a
finding that Doe Run exhibited the requisite mental state for punitive damages. Relying
on Alcorn, they argue that punitive damages are simply unavailable against a party that
complied with an ongoing regulatory program intended to address the very issues on
which plaintiffs base their claims. In defendants’ view, their purported conformity with
the regulatory process negates any conclusion of intentional wrongdoing.
Alcorn is readily distinguishable on its facts. There, an Amtrak train collided with
a car at a railroad crossing that had neither flashing lights nor a crossing gate. Union
Pacific Railroad, the railroad which owned the tracks and crossing, had notice of serious
sight obstructions and several near misses at the crossing. Nearly a year prior to the
accident, the State identified the crossing as needing improvement. And three months
before the Alcorn collision, the State authorized the railroad to perform a preliminary
engineering plan and cost estimate for the crossing. Rather than spending its own money,
the railroad waited for public funds to upgrade the crossing. The car passenger sued both
Amtrack and Union Pacific. The jury awarded punitive damages against Union Pacific.
147 The Missouri Supreme Court reversed. In reaching its decision, the Court restated
several factors that weigh against submission of punitive damages as circumstances in
which (1) prior similar occurrences known to the defendant have been infrequent; (2) the
injurious event was unlikely to have occurred absent negligence on the part of someone
other than the defendant; and (3) the defendant did not knowingly violate a statute,
regulation, or clear industry standard designed to prevent the type of injury that occurred.
Alcorn, 50 S.W.3d at 248 (quoting Lopez, 26 S.W.3d at 160). The case turned on the last
of these factors – compliance with the law and industry standards. 65 The Court noted that
no clear evidence existed that the railroad knowingly violated an applicable regulation or
statute by failing to upgrade the crossing. The Court also noted that the railroad was in
the process of upgrading the crossing at the behest of the state, and there was no showing
that the railroad failed to cooperate with the state in its efforts or that the railroad in any
way violated an applicable regulation or resisted the regulatory process. In the end, the
Court reasoned that conformity with the regulatory process negated the conclusion that
the railroad’s conduct was tantamount to intentional wrongdoing. Alcorn, 50 S.W.3d at
249.
Here, in contrast to Alcorn, the children presented a multitude of actions and
inactions by the defendants to support their claim for punitive damages. Moreover, even
though defendants maintain they were in compliance with regulatory programs, the
children presented remarkable evidence to the contrary. According to the children’s 65 As to the first factor regarding prior similar occurrences, the Court noted that while serious sight problems existed and previous incidents occurred at the crossing, passive warning devices were in place that the railroad believed satisfied its duty to the public. As to the second factor regarding others’ negligence, the Court noted that the jury found that 25 percent of the fault for Alcorn’s injuries was attributed to Amtrak’s negligence. Thus the Court did not consider whether this second factor weighed against submission of a punitive-damage claim. Alcorn, 50 S.W.3d at 248.
148 evidence, the defendants hid information from regulators, resisted regulatory changes,
and never complied with industry standards for ambient air quality standards. The other
two factors also weigh in favor of submissibility. There is a long history in this country
of lead poisoning occurring from lead smelters; and the lead poisoning in this case would
not have happened absent the defendants’ negligence. We find Alcorn inapposite.
We hold that the children’s claim for punitive damages was submissible against
all defendants. The children presented sufficient clear and convincing evidence that
Fluor, as well as the partnership during both Massey’s time and DRIH’s time as a partner,
acted with either evil motive or a reckless disregard for the children’s interests, knowing
that a high degree of probability existed that their actions would result in injury. The jury
could find Fluor’s actions outrageous, even on the one day it was a partner. Fluor,
knowing that the lead emitted from the smelter was contaminating the surrounding
neighborhood and poisoning the children, failed to sound an alarm. The partnership
likewise knew the dangers of lead. They knew that the children were breathing in levels
of lead in the air that violated federal standards, and they knew that the children were
living amidst toxic dust and soil. They knew that the blood lead levels in the surrounding
neighborhood were extremely high. Yet, knowing this, the partnership continued to
release the toxins and hid the dangers and extent of contamination from regulators and
the public. More than that, they misled the public. They delayed installation of
emission-control measures. They did only token remediation programs. They refused to
buy out homes. They deflected blame and responsibility to the parents. And their reason
for doing so was readily apparent – the economic costs of being sued and of complying
with government mandates. In short, the defendants placed their ability to turn a profit
149 above the well-being of children. We are neither offended nor surprised by the jury’s
conclusion. The jury could rightly find such actions outrageous.
We turn now to the instructions submitting the children’s punitive-damage claims.
Instructions
The court, at the children’s request, submitted a punitive-damage verdict director
to the jury for each defendant. 66 The instructions were substantially similar, save for the
66 Each child used the same three verdict directors, the only difference being the insertion of the particular child’s name. The verdict director submitting the claim for punitive damages against Fluor reads: If you find in favor of plaintiff (---) and against defendant Fluor Corporation under Instruction Number ___ [domination compensatory verdict director for the particular child] and ___ [partner compensatory verdict director for the particular child], and if you believe that: First, defendant Fluor Corporation allowed plaintiff (---), a resident of Herculaneum, to be exposed to unsafe levels of lead which originated from the smelter operations before March 26, 1994, and Second, before March 26, 1994, defendant Fluor Corporation knew or had information from which it, in the exercise of ordinary care, should have known that such conduct created a high degree of probability of injury, and Third, defendant Fluor Corporation thereby showed complete indifference to or conscious disregard for the safety of others, then in Verdict _, you may find that defendant Fluor Corporation is liable for punitive damages. You may consider risk of harm to others in determining whether defendant Fluor Corporation’s conduct showed complete indifference to or conscious disregard for the safety of others. If you find that defendant Fluor Corporation is liable for punitive damages in this stage of the trial, you will be given further instructions for assessing the amount of punitive damages in the second stage of the trial.
The verdict directors submitting the claims for punitive damages against Massey and DRIH are the same, save for the company name and applicable date. They read: If you find in favor of plaintiff (---) and against defendant A.T. Massey [DRIH] under Instruction Number ___ [partner compensatory verdict director for the particular child], and if you believe that: First, the Doe Run Company Partnership allowed plaintiff (---), a resident of Herculaneum, to be exposed to unsafe levels of lead which originated from the smelter operations before April 5, 1989 [March 26, 1994], and Second, before April 5, 1989, the Doe Run Company Partnership knew or had information from which it, in the exercise of ordinary care, should have known that such conduct created a high degree of probability of injury, and Third, the Doe Run Company Partnership thereby showed complete indifference to or conscious disregard for the safety of others, then in Verdict _, you may find that defendant A.T. Massey [DRIH] is liable for punitive damages.
150 defendant’s name and respective partnership date. The instruction for Fluor was based on
the knowledge and conduct of Fluor; the instructions for Massey and DRIH were based
on the knowledge and conduct of the partnership.
Defendants fault all three verdict directors, and thus claim the trial court erred in
submitting those instructions. They first criticize all three instructions for the use of the
term “allowed,” and for directing the jury that they could find the defendants liable for
punitive damages if they found the defendant “allowed” the plaintiff to be exposed to
unsafe levels of lead. Defendants repeat the same argument as they did with the
compensatory-damage verdict directors, contending they were roving commissions.
They maintain that the instructions should have posited specific conduct or acts on which
punitive damages could be based. We have already addressed and rejected this argument.
The defendants also fault the instructions as permitting the jury to impose punitive
damages on defendants for activities and lead emissions at the smelter that predated
defendants’ participation in the partnership. Defendants failed to develop an argument in
support of their complaint, advancing only a conclusory argument, which simply
references their previous argument with regard to the compensatory-damage verdict
directors. Moreover, defendants speculate that the punitive-damage verdict directors are
not limited to the activities and emissions for which they are responsible. But this
argument ignores the explicit limitation that existed in the compensatory-damage verdict
directors that limited defendants’ liability to negligence during the respective partnership
You may consider risk of harm to others in determining whether the Doe Run Company Partnership’s conduct showed complete indifference to or conscious disregard for the safety of others. If you find that defendant A.T. Massey [DRIH] is liable for punitive damages in this stage of the trial, you will be given further instructions for assessing the amount of punitive damages in the second stage of the trial.
151 periods. The punitive-damage verdict directors referenced their corresponding
compensatory-damage verdict director, and the jury received those instructions at the
same time. Further, the jury was told to only consider the defendants’ liability for
punitive damages after concluding that they bore responsibility for actual damages. And,
of course, we view the questions of error and prejudice by considering the instructions as
a whole, not by parsing the separate phrasing of each instruction. Defendants point to
nothing in the record, by way or argument or a question from the jury, that would cause
us to conclude that the jury considered conduct for which the defendants bore no
responsibility in assessing punitive damages. We deny this contention as well.
Defendants next fault the instructions for Massey and DRIH for permitting the
imposition of separate punitive damages on Massey and DRIH based on conduct of the
partnership instead of requiring the jury to find that the individual defendants themselves
each engaged in conduct supporting the imposition of punitive damages. We have
already addressed defendants’ contention that because the children pursued separate
punitive-damage awards against each defendant, they were required to prove the separate
culpability of each defendant. For those same reasons, we deny defendants’ allegation of
instructional error.
Although we find the issue of punitive damages submissible as to all defendants,
and although we deny defendants’ various contentions regarding the form of the punitive-
damage instructions, we nevertheless reverse and remand the punitive damages assessed
against Fluor. As defendants correctly note, the children submitted their punitive-damage
claim against Fluor in the conjunctive, requiring the jury to find Fluor liable on both the
partner claim and the domination claim in order to assess punitive damages against Fluor.
152 The children expressly acknowledged at the instruction conference that they were
assuming such a burden. That decision is not without consequences. We have struck
down the children’s domination claim as an incorrect application of law. Hence, the
punitive-damage award against Fluor must fail.
We presume the jury followed the instruction and found Fluor liable for punitive
damages because Fluor was liable both as a partner and as a dominating principal. In
assessing the amount of punitive damages, the damage-assessment instruction directed
the jury to consider Fluor’s conduct, and to assess an amount that would serve to deter
Fluor and others from like conduct. 67 Again, we presume the jury followed the
instruction and considered Fluor’s conduct as a partner and its separate conduct as a
dominating principal in arriving at its assessment of 15 million dollars for each child.
Given the conjunctive submission and a singular award dependent on Fluor’s conduct, we
cannot determine what portion of the award the jury assessed to punish Fluor’s conduct
as a partner, and what portion of the award the jury assessed to punish Fluor’s conduct as
a dominating principal. We thus must reverse the punitive damages assessed against
Fluor.
67 The jury was instructed: In addition to any compensatory damages you assessed in Verdict [compensatory verdict], you may assess against defendant Fluor Corporation an additional amount as punitive damages in such sum as you believe will serve to punish defendant Fluor Corporation for the conduct for which you found that defendant Fluor Corporation is liable for punitive damages and will serve to deter defendant Fluor and others from like conduct. You may consider risk of harm to others in determining whether defendant Fluor Corporation’s conduct showed complete indifference to or conscious disregard for the safety of others. However, in determining the amount of any punitive damage award, you must not include damages for harm to others who are not parties to this case. If punitive damages are assessed against more than one defendant, the amounts assessed against such defendants may be the same or they may be different.
153 We have found children’s partner theory and the issue of punitive damages
submissible against Fluor. We therefore remand the case for further proceedings to
assess punitive damages against Fluor.
We find no infirmity as to the compensatory-damage award. The parties
submitted the compensatory-damage instruction and verdict form to the jury without any
request for apportionment among the defendants. Indeed, as partners, defendants are
jointly and severally liable for torts committed by a partner acting within the scope and
ordinary course of the partnership’s business. Further, the instruction asked the jury to
assess a single sum dependent on the children’s injuries, not dependent on an individual
defendant’s conduct. 68 In assessing punitive damages, the jury considered both forms of
Fluor’s tortious conduct, and awarded a sum of money to punish that conduct. In
assessing compensatory damages, the jury did not consider Fluor’s conduct and the two
theories of liability, but instead considered the actual damages the children did and would
suffer, and assessed a sum of money to fairly compensate the children for that damage.
The children were damaged from their exposure to unsafe levels of lead. As we have
held, substantial evidence supported the partner theory as to all defendants. And we
know, by virtue of the punitive-damage verdict director, that the jury found Fluor liable
on the partner theory. Finally, defense counsel acknowledged in oral argument before
this Court that one theory alone could uphold the compensatory-damage award against
68 The court instructed the jury: If you find in favor of plaintiff [insert child’s name] and against one or more defendants, then you must award plaintiff [---] such sum as you believe will fairly and justly compensate plaintiff [---] for any damages you believe he sustained and is reasonably certain to sustain in the future that his exposure to unsafe levels of lead directly caused or directly contributed to cause. The verdict form, in part, read: We, the undersigned jurors, assess the compensatory damages of plaintiff [insert child’s name] at $ ________.
154 Fluor. In light of these circumstances, we affirm the compensatory-damage award as to
Post-Trial Motions for Reduction of Awards
Following the jury’s verdicts, the defendants unsuccessfully attempted to have the
trial court reduce the compensatory damages, as well as the punitive damages.
Compensatory Damages: Remittitur
Defendants first argue that the trial court erred in denying their motion for
remittitur of compensatory damages. Defendants claim the verdicts are excessive
because they include an “enhancement” for lost earnings, as testified to by Hansen, and a
component for “loss of IQ,” as testified to by Rodgers. Defendants argue that Hansen’s
testimony lacked foundation and that Rodgers testimony was “speculative and
unfounded.”
Generally, the determination of damages is primarily for the jury. Emery v. Wal-
Mart Stores, Inc., 976 S.W.2d 439, 448 (Mo. banc 1998); Delacroix v. Doncasters, Inc.,
407 S.W.3d 13, 36 (Mo. App. E.D. 2013). However, if the trial court finds that the jury’s
verdict is excessive because the amount exceeds fair and reasonable compensation for the
plaintiff’s injuries and damages, the trial court may enter a remittitur order, reducing the
damage award. Section 537.068.
The trial court enjoys broad discretion in deciding whether remittitur should be
ordered. Emery, 976 S.W.2d at 448. We review for abuse of that discretion, and will
interfere only when the verdict is so grossly excessive that it shocks the conscience of the
court and convinces us that both the trial judge and the jury have abused their discretion.
Emery, 976 S.W.2d at 448. We should exercise our power to interfere with the judgment
155 of the jury and the trial court with hesitation and only when the verdict is manifestly
unjust. Fust v. Francois, 913 S.W.2d 38, 49 (Mo. App. E.D. 1995). On review, we
consider the evidence in the light most favorable to the trial court’s order. Badahman v.
Catering St. Louis, 395 S.W.3d 29, 39 (Mo. banc 2013). Here, this means we consider
the evidence in the light most favorable to the verdict. Id. And we disregard any
contrary evidence. Delacroix, 407 S.W.3d at 36. This court does not weigh the
evidence; therefore our inquiry is limited to determining whether the jury’s verdict is
supported by substantial evidence. Id.
No precise formula exists to determine whether a verdict is excessive. Evans v.
FirstFleet, Inc., 345 S.W.3d 297, 303 (Mo. App. S.D. 2011). Each case must be
examined on its own facts. Id. Typically, courts examine a number of factors, including:
(1) loss of income, both present and future; (2) medical expenses; (3) plaintiff’s age; (4)
the nature and extent of plaintiff’s injuries; (5) economic considerations; (6) awards given
and approved in comparable cases; (7) the superior opportunity for the jury and the trial
court to evaluate plaintiff’s injuries and other damages. Emery, 976 S.W.2d at 408.
Defendants do not address – or even set out – these factors. And they again
ignore our standard of review, whereby we view the evidence in the light most favorable
to the verdict. Defendants have thus failed to properly brief this issue. Defendants’
argument is predicated on the rejection of evidence to which they raised no objection
during trial. Essentially, defendants seek a reweighing of the evidence. Indeed,
defendants spend the vast majority of their argument under this point restating their
assertions that the complained-of testimony was speculative, full of conjecture, and
lacking foundation. Defendants acknowledge that the amount awarded was within the
156 range of the evidence presented by the children. Considering the factors set out above,
and viewing the evidence favorable to the verdict, defendants have failed to show that the
verdicts are manifestly unjust, such that the trial court abused its discretion in denying
remittitur. The children presented ample evidence of the effects of their injuries on their
education and employability, demonstrating a loss of both current and future income. We
Defendants pursued three avenues in their attempt to reduce or eliminate the
punitive-damage awards: a motion for reduction of the awards as unconstitutionally
excessive, a motion for remittitur, and a motion to amend the judgment.
We need not fully address the trial court’s denial of defendants’ motion to amend
the judgment. Defendants by that motion sought to reduce the punitive-damage awards
against DRIH, as being duplicative of the awards against Fluor. That request is now
moot. Defendants on appeal also allege that the trial court erred in denying their motion
because the punitive-damage awards against all defendants were duplicative of each
other. Defendants contend that all three awards were based on the same conduct during
overlapping time periods of smelter operations. Defendants did not seek relief on this
ground in their motion to amend. The issue is therefore not properly preserved for
appeal. We further note that defendants presented us with cursory and conclusory
arguments, simply pointing this Court to other portions of their brief. It is not the
function of this Court to go in search of a party’s argument. Having failed to develop
their argument, the defendants have abandoned the issue. We deny the point, and turn to
the constitutional and statutory grounds for reducing the awards.
157 Constitutionality of Punitive-Damage Awards
Defendants contend the trial court should have reduced the punitive-damage
awards as unconstitutional because the awards were so excessive that they violated their
due-process rights. Defendants claim the awards are unconstitutional because they are
grossly excessive, they bear no reasonable relationship to defendants’ conduct, they are
substantially disproportionate to the compensatory-damage awards, they vastly exceed
the amounts requested by the children, they are well beyond any punishment of which
they may have had notice, and because they are unprecedented in Missouri law.
Punitive damages may properly be imposed on a tortfeasor to further a state’s
legitimate interests in punishing unlawful conduct and deterring its repetition. BMW of
N. Am., Inc. v. Gore, 517 U.S. 559, 568 (1996); Letz, 975 S.W.2d at 177. Punishing a
tortfeasor through an award of punitive damages is an exercise of state power that must
comply with the Due Process Clause of the Fourteenth Amendment. Honda Motor Co.,
Ltd. v. Oberg, 512 U.S. 415, 434 (1994); Letz, 975 S.W.2d at 177. 69 And the Due
Process Clause prohibits the imposition of “grossly excessive” or “arbitrary” punishments
on a tortfeasor. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 417 (2003);
Peel v. Credit Acceptance Corp., 408 S.W.3d 191, 211 (Mo. App. W.D. 2013). A grossly
excessive punitive damage award violates a tortfeasor’s substantive right of due process
69 The constitutional concerns are both procedural and substantive. Letz, 975 S.W.2d at 177. Procedurally, due process requires that adequate standards and controls be in place to prevent a punitive-damage award from becoming an arbitrary deprivation of property. Barnett v. LaSociete Anonyme Turbomeca France, 963 S.W.2d 639, 662 (Mo. App. W.D. 1997)(overruled on other grounds by Badahman v. Catering St. Louis, 395 S.W.3d 29 (Mo. banc 2013)). Proper jury instruction and review of a jury award by the trial court and an appellate court generally satisfies due process. Letz, 975 S.W.2d at 177. Substantively, a punitive-damage award cannot be so “grossly excessive” in relation to the state’s interest in punishment and deterrence that it enters into the “zone of arbitrariness” that violates the Due Process Clause of the Fourteenth Amendment. Id; Barnett, 963 S.W.2d at 662.
158 in that it furthers no legitimate purpose and constitutes an arbitrary deprivation of
property. State Farm, 538 U.S. at 417; Peel, 408 S.W.3d at 211.
“Imposing punitive damages requires that a proper balance be struck.” The
Fireworks Restoration Co., LLC v. Hosto, 371 S.W.3d 83, 91 (Mo. App. E.D. 2012).
“The award must be enough to ensure that the tortfeasor is adequately punished and
deterred from future similar conduct; yet, the award must not be grossly excessive.” Id.
(citing BMW, 517 U.S. at 568). “No precise constitutional line or simple mathematical
formula exists with regard to determining whether a punitive damage award is grossly
excessive.” Peel, 408 S.W.3d at 211. Each case must be assessed on its own facts. Scott
v. Blue Springs Ford Sales, Inc., 176 S.W.3d 140, 144 (Mo. banc 2005)(Teitelman
concurring); see also Estate of Overbey v. Chad Franklin Nat’l Auto Sales North, LLC,
361 S.W.3d 364, 373 (Mo. banc 2012). To satisfy due process, the amount of punitive
damages should reflect the extent of the defendant’s offense and be related to the
resulting actual or potential harm. Letz, 975 S.W.2d at 177 (citing BMW, 517 U.S. at
575). The United States Supreme Court has set out three guideposts, commonly referred
to as the “Gore guideposts,” when reviewing whether a punitive-damage award comports
with due process: (1) the reprehensibility of the defendant’s misconduct; (2) the disparity
between the harm or potential harm suffered by the plaintiff and the punitive-damage
award; and (3) the difference between the punitive damages awarded by the jury and the
civil penalties authorized or imposed in comparable cases. BMW, 517 U.S. at 574-75;
Estate of Overbey 361 S.W.3d at 372. We review the trial court’s determination of the
constitutionality of the punitive-damage award de novo. Hosto. 371 S.W.3d at 91; State
Farm, 538 U.S. at 418.
159 Defendants here do not separately address the awards, but instead address the
awards against all defendants in the aggregate. In that respect, they have inadequately
briefed this issue. Defendants have not provided us grounds to separately impugn the
awards against Massey and DRIH. To the extent defendants do address the awards
against Massey and DRIH, their argument is simply a rehash of their prior argument,
claiming that punitive damages were not warranted against these defendants because they
were merely “passive” partners in the partnership, and during their respective partnership
periods, the smelter purportedly operated in compliance with the state implementation
plan approved by the State of Missouri and the EPA.
These shortcomings aside, given the constitutional implications we will
nevertheless review the surviving damage awards against Massey and DRIH. The jury
assessed three million dollars in punitive damages per child against Massey, and two
million dollars per child against DRIH. Upon consideration of the Supreme Court’s
guideposts, we conclude that the awards pass constitutional muster.
The degree of reprehensibility of defendant’s conduct is the most important
indicium of the reasonableness of a punitive-damages award. BMW, 517 U.S. at 575;
State Farm, 538 U.S. at 419; Estate of Overbey, 361 S.W.3d at 373. Punitive damages
should reflect the enormity of the offense. BMW, 517 U.S. at 575. Some wrongs are
more blameworthy than others. Id. For instance, “trickery and deceit” are more
reprehensible than negligence. Id. at 576 (citing TXO Prod. Corp. v. Alliance Res. Corp.,
509 U.S. 443 (1993)). An incident that is recidivistic can be punished more harshly than
an isolated incident. BMW, 517 U.S. at 577. Repeated instances of wrongful conduct can
demonstrate that “strong medicine” is required to deter further repetition. Id. at 576-77.
160 In assessing reprehensibility, we must consider whether: the harm was physical rather
than economic; the tortious conduct evinced an indifference to or a reckless disregard of
the health or safety of others; the conduct involved repeated actions or was an isolated
incident; and the harm resulted from intentional malice, trickery, or deceit, or mere
accident. State Farm, 538 U.S. at 419; Hosto, 371 S.W.3d at 92.
Again, the punitive-damage awards against Massey and DRIH are based on the
partnership’s knowledge and conduct. At this point, little else needs to be said in that
regard. We find the partnership’s conduct highly reprehensible. The harm suffered by
the children was both physical and economic. Defendants’ conduct was deceitful,
involved repeated actions, and evinced an indifference and reckless disregard of the
health and safety of the children. Defendants’ claim on appeal that any reprehensibility
factor is “minimal” ignores the evidence that the jury obviously accepted.
We turn, then, to the second Gore guidepost, and assess the relationship between
the punitive-damages award and the harm that has either occurred or is likely to result
from the defendants’ conduct. The United States Supreme Court “has been reluctant to
identify concrete constitutional limits on the ratio between harm, or potential harm, to the
plaintiff and the punitive damages award.” State Farm, 538 U.S. at 424; Peel, 408
S.W.3d at 410. No rigid benchmarks or mathematical formulas exist. State Farm, 538
U.S. at 424-25. Rather, the precise award in any case “must be based on the peculiar
facts and circumstances of the defendant’s conduct and the harm to the plaintiff.” State
Farm, 538 U.S. at 425; Estate of Overbey, 361 S.W.3d at 373. A reasonable relationship
must exist between the award and the harm likely to result from the defendant’s conduct
as well as the harm that actually occurred. TXO, 509 U.S. at 460; Letz, 975 S.W.2d at
161 179. High-ratio punitive-damage awards are sometimes necessary in order to have a
sufficient deterrent effect. Scott, 176 S.W.3d at 144 (Teitelman concurring)(citing Kemp
v. Am. Tel. & Telg. Company, 393 F.3d 1354 (11th Cir. 2004)(upholding 2,172:1 punitive
to compensatory ratio) and Mathias v. Accor Econ. Lodging, Inc., 347 F.3d 672 (7th Cir.
2003)(upholding 37:1 ratio)). A compelling and strong state interest in deterring
environmental pollution may also warrant a large punitive-damage award, even in the
absence of highly reprehensible conduct. Johansen v. Combustion Eng’g, Inc., 170 F.3d
1320, 1338-39 (11th Cir. 1999)(upholding punitive-damage award one hundred times
greater than compensatory award against mine operator where acidic water escaped and
damaged nearby property).
Here, the jury awarded compensatory damages averaging $2,426,699 per child.
The jury assessed three million dollars in punitive damages per child against Massey, and
two million dollars per child against DRIH. Thus, the verdicts represent a ratio of
punitive sanction to average compensatory award of 1.24-to-1 for Massey and less than
1-to-1 for DRIH, both relatively low ratios. Given defendants’ egregious acts and the
harm, both actual and potential, suffered by the children, we find the punitive-damages
awards to be reasonably related to the compensatory-damage awards.
Lastly, we consider the third Gore guidepost and compare the punitive-damage
awards and the civil penalties that could be imposed for comparable misconduct. The
parties cite provisions of Missouri’s air-conservation and hazardous-waste laws. Those
provisions authorize fines up to $10,000 per day for air-pollution violations and up to
$50,000 per day for hazardous-waste violations. Section 260.425.3(6) and 643.151.3. If
defendants were penalized under these statutes, for a violation on each day of their
162 partnership period, Massey would face a fine of 1.56 to 7.8 million. DRIH would face a
fine of 18 to over 90 million dollars.
Defendants argue no Missouri precedent has allowed punitive-damage awards for
what defendants maintain was “passive” behavior. Defendants are correct in one respect.
This case is unprecedented. No other case in Missouri involves the knowing poisoning of
children over an extended period of time.
Considering all relevant factors, including the state’s interest in deterring and
punishing conduct such as that exhibited by defendants, we hold that the punitive-damage
awards in this case is neither “grossly excessive” nor “arbitrary” and does not violate the
Due Process Clause. We deny this point.
Remittitur of Punitive-Damage Awards
Lastly, defendants contend the trial court erred and abused its discretion in
denying their motion for remittitur of punitive damages. 70
“Generally, the decision to award punitive damages is peculiarly committed to the
jury and the trial court’s discretion, and the appellate court will only interfere in extreme
cases.” Smith v. Brown & Williamson Tobacco Corp., 275 S.W.3d 748, 810 (Mo. App.
W.D. 2008)(internal quotation omitted). Section 510.263 allows the trial court to order
remittitur of punitive damages “based on the trial judge’s assessment of the totality of the
70 Remittitur and a constitutionally reduced verdict, though potentially achieving the same result, are in theory different. A remittitur is a substitution of the court’s judgment for that of the jury regarding the appropriate award of damages. Johansen, 170 F.3d at 1331. The court orders a remittitur when it finds that the jury’s award is excessive and unreasonable on the facts. Id.; Section 537.068. In other words, the court may order remittitur relief when the jury awards a verdict that is simply “too bounteous” under the evidence. Moore v. Missouri-Nebraska Exp., Inc., 892 S.W.2d 696, 714 (Mo. App. W.D. 1994). A constitutional reduction, on the other hand, is a determination that the law does not permit the award. Johansen, 170 F.3d at 1331. Unlike a remitittur, which is discretionary with the court, a court has a mandatory duty to correct an unconstitutionally excessive verdict so that it conforms to the requirements of the due-process clause. Id.
163 surrounding circumstances.” As with a compensatory-damage award, the trial court has
broad discretion to remit a punitive-damage award if, “after reviewing the evidence in
support of the jury’s verdict, the court finds that the jury’s verdict is excessive because
the amount of the verdict exceeds fair and reasonable compensation for plaintiff’s injuries
and damages.” Section 537.068; Hill, 371 S.W.3d at 80. This Court will not disturb the
trial court’s decision to deny remittitur of punitive damages unless the trial court abuses
its discretion. Hill, 371 S.W.3d at 80. The trial court will be said to have abused its
discretion “when the punitive damage award is so disproportionate to the factors relevant
to the size of the award that the award reveals improper motives or a clear absence of the
honest exercise of judgment.” Call v. Heard, 925 S.W.2d 840, 849 (Mo. banc 1996). As
previously noted, the amount of punitive damages must somehow be related to the
wrongful act and the resulting actual or potential injury, although there is no fixed
mathematical relation between the amount of actual damages and the amount of punitive
damages awarded. Id. “Only when the amount is manifestly unjust will appellate courts
interfere with or reduce the size of a verdict.” Smith, 275 S.W.3d at 810 (internal
quotation omitted).
No bright-line test exists to determine if a punitive-damage award is excessive.
Barnett v. LaSociete Anonyme Turbomeca France, 963 S.W.2d 639, 662 (Mo. App. W.D.
1997)(overruled on other grounds by Badahman, 395 S.W.3d at 40). We evaluate
punitive-damage awards on a case-by-case basis. Smith, 275 S.W.3d at 810. Missouri
courts have identified a nonexclusive list of factors to consider in determining whether
the trial court abused its discretion in denying remittitur of a punitive-damage award: (1)
the degree of malice or outrageousness of the defendants’ conduct, which has been
164 deemed a critical factor; (2) aggravating and mitigating circumstances; (3) the
defendant’s financial status, as an indication of the amount of damages necessary to
punish the defendant; (4) the character of both parties; (5) the injury suffered; (6) the
defendant’s standing or intelligence; (7) the age of the injured party; and (8) the
relationship between the two parties. Call, 925 S.W.2d at 849; Smith, 275 S.W.3d at 811.
On review, we view the evidence in the light most favorable to the trial court’s decision.
Badahman, 395 S.W.3d at 39.
Given our disposition, we need only address the trial court’s denial of remittitur as
to the punitive-damage awards against Massey and DRIH. Defendants in their motion
argued for remittitur because Massey and DRIH did not operate the smelter, but rather
were silent, passive partners. Defendants also claimed remittitur was warranted because
the awards were unprecedented and more than requested. They complained that the
award against Massey was based on improperly-admitted evidence of the financial
condition of Massey’s parent company. 71 Lastly, defendants boldly asked for remittitur
because, simply, the children were not really hurt. They brazenly stated:
The nature of Plaintiffs’ alleged injuries also supports substantial remittitur of these punitive damage awards. Even accepting as true Plaintiffs’ characterization of their own injuries, the objective evidence established that Plaintiffs are healthy, well-functioning members of society who have not suffered any debilitating injuries as a result of any Defendants’ conduct.
We find no abuse of discretion in the trial court’s denial of remittitur. The
defendants knew of lead’s danger, they knew they contaminated Herculaneum with lead
dust. They hid the truth from the regulators. They misled the town about the children’s
peril. They caused grave and permanent injuries to the children. They did all this
71 Defendants raised no point on appeal charging error on the part of the trial court in admitting this evidence. And the defendants lodged no objection to the evidence at trial.
165 APPENDIX A Exposure History and Lead Level Testing Results for Children
Gabe Farmer: Gabe was born in January of 1986. He lived in Herculaneum from
the time he was born until 1987. He returned in January of 1989, when he was three, and
continued to live in Herculaneum through 1994. 72 Gabe was tested in March 1994, when
he was 8 years old. His level was 9, almost five times the national average. This level
would have been higher when Gabe was younger. The most likely levels of lead in
Gabe’s blood, from birth to age seven, were: 17.3, 19.7, 18.6, 31, 31.2, 28.2, and 17. 73
Jeremy Halbrook: Jeremy was born in 1984, and moved to Herculaneum in
October of 1986, when he was about 2 years old. He continued to live in Herculaneum
through March of 1994. Jeremy was tested in October of 1995, when he was one month
shy of his eleventh birthday. His level then was 12, six times the national average. Like
Gabe, this level would have been higher when Jeremy was younger. The likely levels of
lead in Jeremy’s blood, starting at age two through age six, were: 20.9, 25.2, 22.1, 19.6,
and 17.7.
Heather Glaze: Heather was born in 1987, and moved to Herculaneum in
September of 1988. She lived in Herculaneum, right across street from plant, for two
years, until August of 1990 when she moved away. She returned to Herculaneum when
she was about seven years old. Heather was tested when she was between eight and nine
72 Many children, like Gabe, continued to live in Herculaneum past March of 1994. Dr. Rodgers specified that date, however, because that was the end of the partnership period of ownership. 73 Dr. Jill Ryer-Powder, a toxicologist, testified as to the most likely blood lead concentration for four children who did not have blood lead levels drawn before the age of seven: Gabe Farmer, Heather Glaze, Jeremy Halbrook, and Patrick Blanks. Dr. Ryer-Powder arrived at her values using a computer model called the Integrated Exposure Uptake Biokinetic Model, IEUBK for short, established by the United States Environmental Protection Agency. The user of this computer model inputs various environmental parameters, such as the concentration of lead in soil, air, water, and food, as well as the maternal blood lead level and the bioavailability of lead in dirt and dust. The model then calculates a likely blood lead level for children at specific age levels up through age 6.
167 years old. Her level then was 13.2, which Dr. Rodgers described as “very high” for a
child of Heather’s age. When one year old, Heather likely had a level of 16.5 or 27; and
when two years old, she likely had a level of 18.3 or 30.2. 74
Preston Alexander: Preston was born in June of 1989. His mother lived in
Herculaneum while pregnant with him. Preston lived directly across the street from the
smelter, from the time of his birth through 1994. Preston was tested two times in 1992,
when he was between three and four years old. His levels then, for tests done two
months apart, were 16.9 and 16.5. Preston was tested again when he was between six and
seven years old. His level then was “very high,” at 15.1.
Bryan Bolden: Bryan was born in June of 1989. His mother lived in
Herculaneum while pregnant with him. Bryan lived in Herculaneum until September of
1990, when he was about 15 months old. He returned to Herculaneum three years later,
in July of 1993, when he was four, and remained in Herculaneum through 1994. Bryan
was tested twice in the fall of 1995, when he was between six and seven years old. His
levels were 22.6 and 20, described by Dr. Rodgers as “extremely high” and ten times the
national average. The levels would have been higher when Bryan was younger.
Nathan Davis: Nathan was born in November 1987. He moved to Herculaneum
in May of 1989 and lived there through 1994. Nathan was first tested in 1992, when he
was between four and five years old. His levels were 19, 20.5, 16, and 20. These “very
high” levels would have been even higher during his toddler years, when lead levels
would have peaked.
74 The differences in results are attributed to Dr. Ryer-Powder running two models with two different soil sample levels. When using the higher level, the blood lead levels came out as 27 and 30.2.
168 Tiffany Bolden: Tiffany, the younger sister of Bryan, was born in May of 1990.
Her mother lived in Herculaneum while pregnant with her. Tiffany left Herculaneum
when four months old and returned in July of 1993, when she was three. Tiffany was
first tested in October and November of 1995, when she about five-and-one-half years
old. Her levels were 22.8 and 23 – “extremely high”.
Ashley Shanks: Ashley was born in 1986, and moved to Herculaneum in August
of 1991, when she a little less than five years old. She lived in Herculaneum through
1994. Ashley was tested in June of 1992, when she was six years old. Her level was
10.2, more than twice the national average.
Patrick Blanks: Patrick was born in July of 1990, and lived in Herculaneum
through 1994. Patrick was not tested during the first seven years of life. Patrick’s likely
levels of lead, starting from birth through age seven, were: 19.5, 22.5, 21.7, 21, 18.3,
16.3, and 14.6.
Lauren Shanks: Lauren, the younger sister of Ashley, was born in 1990. She too
moved to Herculaneum in August of 1991, when she was about 9 months old. Like her
sister, she lived in Herculaneum through 1994. Lauren was tested in June of 1992, when
she was twenty months old. Her level was 10.8, also more than twice the national
average.
Isaiah Yates: Isaiah was born in September of 1992. He lived right across the
street from plant from the time he was born through 1994. Isaiah was tested in March of
1994, when he was only eighteen months old. His level was 13, described by Dr.
Rodgers as “very high.”
169 Matthew Heilig: Matthew was born in August of 1994, after the partnership
period, as were the four remaining children that follow. Matthew was tested in October
of 1995, when he was only 14 months old. His level was 24.
Austin Manning: Austin was born in March of 1997. He moved to Herculaneum
when he was three months old, and continued living there until 2002. Austin was tested
in September of 2001, when he was between four and five years old. His level was 16.
Jonathan Miller: Jonathan was born in August of 1995. He moved to
Herculaneum in January of 1999, when he was a little over four years old. Jonathan was
tested ten months later, in November of 1999. His level was 14.
Jesse Miller: Jesse, the younger brother of Jonathan, was born in March of 1998.
Like his brother, he moved to Herculaneum in January of 1999, when he was ten months
old. He was tested in November of 1999. His level was 16.1.
Sydney Fisher: Sydney was born in July of 2000. Her mother lived in
Herculaneum while pregnant with her. Sydney was tested in August of 2001, when she
was thirteen months old. Her level was 18.
170 APPENDIX B The Children’s Diagnoses
As noted, each child was diagnosed with ADHD. There are three types of
ADHD: (1) inattentive type only, where patients have problems with inattention only;
(2) hyperactivity-impulsivity type only, which is rare; and (3) combined type, where
patients have all the above - inattention, hyperactivity, and impulsivity. The combined-
type of ADHD is the most common type of ADHD, and is the most pervasive and the
most impairing. Dr. Rodgers opined that each child also suffered IQ loss due to their
exposure to lead. In all, the children were diagnosed as follows:
Gabe Farmer: moderate ADHD, predominantly inattentive type; adjustment disorder with some depressive mood symptoms; asthma
Jeremy Halbrook: severe ADHD, combined type; developmental motor coordination disorder; learning disorder; asthma
Heather Glaze: moderate ADHD, combined type; anxiety; depression
Preston Alexander: ADHD, predominantly inattentive type; cognitive disorder; asthma
Bryan Bolden: ADHD, combined type; asthma
Nathan Davis: ADHD, combined type; asthma
Tiffany Bolden: ADHD, combined type; asthma
Patrick Blanks: ADHD, combined type; significant academic and cognitive deficiencies; memory performance weakness; neuropsychiatric disorder; anxiety disorder; depression; antisocial personality; insomnia; IQ loss
Ashley Shanks: ADHD; anxiety
171 Lauren Shanks: moderate ADHD, combined type; adjustment disorder with mixed anxiety and depressive mood symptoms
Isaiah Yates: ADHD, predominantly inattentive type; adjustment disorder with depressive and mood symptoms; asthma
Matthew Heilig: ADHD, combined type; significant academic and cognitive deficiencies; neuropsychiatric disorders, including mood disorder and depression; insomnia; psychosomatic illness manifesting as chronic headaches; sensorineural hearing loss; asthma; IQ loss
Austin Manning: ADHD (diagnosis made from records after Austin’s death). Tragically, Austin died in a house fire after moving away from Herculaneum.
Jonathan Miller: mild ADHD, predominantly inattentive type
Jesse Miller: severe ADHD, combined type; cognitive disorder; developmental motor coordination disorder; written expressive disorder
Sydney Fisher: ADHD, combined type
172 APPENDIX C Historical Background of Doe Run Partnership
The Doe Run partnership was formed in November of 1986. Prior to that time, in
April of 1981, Fluor had acquired St. Joe Minerals Corporation. 75 St. Joe, now a wholly-
owned subsidiary of Fluor, continued to operate the Herculaneum smelter as it had done
for decades. Five years later, on November 1, 1986, St. Joe and Homestake Lead
Company of Missouri formed a general partnership called The Doe Run Company. Over
the life of the partnership, the two original partners transferred or sold all or part of their
interest in the partnership. The transfers on the St. Joe side of the partnership are all to
various subsidiaries – all within the Fluor corporate family. The first such transfer
occurred nearly two years into the partnership, in October of 1988, when St. Joe
transferred much of its partnership interest to its subsidiary Massey. 76 The partnership at
this point thus consisted of partners Homestake, St. Joe, and Massey.
Five months later, Massey assigned all of its partnership interest to its wholly-
owned subsidiary DRIH. The partnership at this point consisted of partners Homestake,
St. Joe, and DRIH. On May 25, 1990, Fluor purchased Homestake’s entire interest in
the partnership. At this point, the partnership consisted of partners St. Joe, DRIH, and
Fluor. 77
75 Specifically, Fluor’s wholly-owned subsidiary, Fluor Acquisition Corporation, merged with St. Joe Minerals after acquiring all of the shares of stock of St. Joe Minerals. Fluor Acquisition Corporation was the surviving entity and was renamed St. Joe Minerals Corporation. 76 Section 6.02 of the partnership agreement permitted a partner to transfer its interest in the partnership to any of its wholly-owned affiliates. An “affiliate” defined by partnership agreement as “any company which shall for the time being be directly or indirectly controlled by, or under common control with a partner.” 77 When Fluor acquired Homestake’s interest, Fluor, Homestake, St. Joe, DRIH, and Leadco agreed to continue the partnership.
173 Later that same day, for tax purposes, Fluor transferred its newly-acquired
partnership interest to its wholly-owned subsidiary, Leadco Investments, Inc. (Leadco).
At this point, the partnership consisted of partners St. Joe, DRIH, and Leadco, all
subsidiaries of Fluor.
Nearly four years later, in January of 1994, Leadco merged with St. Joe, with St.
Joe as the surviving entity, leaving a partnership consisting of partners St. Joe and DRIH.
Two months later, St. Joe bought out DRIH, leaving St. Joe, a wholly-owned subsidiary
of Fluor, as the exclusive and sole owner of the smelter. Shortly thereafter, in April of
1994, Fluor sold all its stock in St. Joe to DR Acquisition Corporation.
Thus, during the eight-year life of the partnership, Fluor was a partner for part of
one day (May 25, 1990); Massey was a partner for five months (October 31, 1988, to
April 4, 1989); and DRIH was a partner for just under five years (April 4, 1989, to March
25, 1994). Although Fluor was a partner for only a short time, its subsidiaries in one
form or another, be it wholly-owned or a tiered sub-subsidiary, were partners throughout
the entire partnership period, from formation in 1986 to termination in 1994.
174 APPENDIX D Summary of Fluor’s Influence over the Partnership
A partnership committee ran the partnership until 1990. The committee consisted
of six members, with each partner having the right to appoint up to three representatives
to serve on the committee. Initially, all three St. Joe representatives on the partnership
committee were St. Joe employees. That soon changed. By February of 1988, St. Joe
had appointed three high-ranking Fluor officials to be its representatives: Leslie
McCraw, then president of Fluor; Robert Guyett, the CFO; and Vincent Kontny, a high-
ranking officer and later president of Fluor. The insertion of Fluor personnel into
partnership committee roles, while not improper, signaled a change in Fluor’s
involvement with the partnership. Although not a partner until 1990, Fluor was
extensively involved in partnership affairs prior to that time, to the exclusion of named
partners St. Joe, Massey, and DRIH.
To begin, partner DRIH was essentially an entity and partner in name only. As
noted in Appendix C, DRIH became a partner in April of 1989. DRIH was a newly-
created entity, having just been created two weeks prior to becoming a partner in Doe
Run. Massey created DRIH as a “wholly-owned subsidiary tax company,” for the
purpose of receiving the partnership interest. DRIH had no assets prior to acquiring the
partnership interest. DRIH had no employees, no offices, no phones, and did not conduct
any business other than acquiring the partnership interest from Massey. Defense counsel
at trial admitted that DRIH had no employees and was not a smelter operator, and stated
that the plaintiffs could have left DRIH out and “just sued Fluor.” Of all the partnership
committee meeting minutes produced at trial, not a single one refers to partner DRIH, the
175 partner with the largest partnership interest during the time period of April 1989 to
January 1994.
DRIH is not the only entity and partner name absent from partnership minutes.
From the fall of 1987 forward, minutes of the partnership committee meetings never
mention St. Joe, even though it was a named partner through the end of the partnership in
1994. Instead, the minutes consistently and repeatedly refer to Fluor as being the partner.
Others, including a Homestake representative and chairman of the partnership committee,
also repeatedly referred to Fluor as part of the partnership. A business analysis,
conducted in 1989 at the behest of the president of Doe Run, described the Doe Run
Company as “a joint venture of Fluor Corporation and the Homestake Mining Company.”
Correspondence about partnership affairs flowed in and out of Fluor. Approval for
partnership projects came from Fluor. In fact, Fluor’s approval was always necessary – a
partnership project could not go forward without Fluor’s approval. Fluor received the
partnership cash distributions. Fluor was the entity that informed Homestake about the
transfer of partnership interests. Partners St. Joe, Massey, and DRIH are rarely, if ever,
mentioned or involved in partnership matters.
Two letters written in 1989 by Les McCraw, president of Fluor, are especially
telling of Fluor’s involvement in the partnership. Writing the president of Homestake in
January of 1989, shortly after St. Joe transferred part of its partnership interest to Massey,
Mr. McCraw stated:
We would like to confirm our prior discussion, in which we indicated that this transfer will not cause any changes in our prior or current operational, or partnership relationships, with respect to Doe Run or Homestake. Specifically, we have no plans to make any changes, as a result of this transfer, in our representation on the Doe Run Partnership or Finance/Audit Committees.
176 I know we agree that the Doe Run Partnership has been a huge success, and we certainly would not cause any changes which might adversely affect what has been a winning formula.
Mr. McCraw wrote this letter on Fluor corporate letterhead, and signed it “Les McCraw,
President.” Mr. McCraw never indicated or referred to himself in any other capacity or
position other than president of Fluor. Indeed, he held no other position. Professor
Henry Ordower, in examining the letter, noted that Mr. McCraw’s use of the pronoun
“we” throughout the letter meant that he was referring to the corporation on whose
letterhead it was written – Fluor. 78
Mr. McCraw again wrote the president of Homestake in October of 1989, this
time informing him that Paul Allen would be replacing Vince Kontny as a representative
of St. Joe on the partnership committee. In so doing, Mr. McCraw announced a more
“proactive role” on the part of Fluor, stating:
“Subsequent events have convinced us that we need to take a more proactive role in the management of Doe Run.”
Mr. McCraw again wrote this letter on Fluor corporate letterhead, and signed the letter as
president of Fluor. In commenting on this letter, Professor Ordower again explained that
in using the term “we,” Mr. McCraw meant Fluor.
The partnership committee stopped meeting and ceased to exist in 1990, when
Fluor acquired Homestake’s partnership interests and then transferred that partnership
interest to Leadco. At that time, partners St. Joe, Leadco, and DRIH executed an
amended partnership agreement and agreed to make Leadco the managing partner of the
partnership. Leadco purportedly had full direction and control of the conduct, business,
and affairs of the partnership, subject to certain express exceptions. Or at least this is
78 Again, Professor Ordower is a Professor of Law at St. Louis University School of Law who testified on behalf of the children.
177 what the newly-amended partnership agreement provided. However, Leadco was much
like DRIH – an entity in name only. Created for tax purposes—to reduce Fluor’s
Missouri state income taxes—Leadco had no offices, no phones, and no employees. The
children presented evidence that despite this designation of Leadco as managing partner,
and despite the fact that Leadco, St. Joe, and DRIH were the named partners, Fluor
continued to be extensively, if not exclusively, involved in running the partnership.
“100% Fluor” – that is how Fluor considered and represented the Doe Run
partnership once it purchased Homestake’s partnership interest. Fluor issued a news
release at that time, headlined: “FLUOR BECOMES 100 PERCENT OWNER OF DOE
RUN.” The press release noted that the acquisition gave Fluor “full and controlling
ownership of its lead investment.” Jeffrey Zelms, president of the Doe Run Company,
explained that the partnership committee became unnecessary and stopped meeting when
Fluor acquired Homestake’s interest because Fluor “became 100% owners of Doe Run …
there was a partnership, but Fluor subsidiaries were the partners.” Fluor represented
itself as owning Doe Run on more than one occasion. Notably, in Doe Run’s 1990 and
1991 reports to the Herculaneum community detailing the environmental performance of
the smelter, Doe Run expressly stated: “In 1990, Fluor became the sole owner of The
Doe Run Company.”
Fluor not only considered itself the owner of Doe Run, it treated Doe Run as
another subsidiary. In an October 1990 memo to in-house counsel and other Doe Run
employees, Robert Guyett, Fluor’s senior vice-president and chief financial officer, urged
corporate treatment of Doe Run, stating:
As an overall comment the partnership concept is not appropriate. Even though technically Doe Run is a partnership, our ownership is Corporate.
178 Therefore, all our oversight, etc., should follow the more normal corporate form like our other operations (Massey and Fluor Daniel). …
He also referred to Fluor as being “Doe Run’s corporate owner,” and in concluding,
stated: “Doe Run should be looked at as a Corporation.”
The children presented evidence showing that Fluor controlled and kept a tight
rein on Doe Run’s budget. Jeffrey Zelms, president of Doe Run, was authorized to
independently approve expenditures to a certain dollar amount without further oversight
or authorization. After Fluor became a “100% owner,” it lowered that dollar amount to
just $200,000. Moreover, that partnership approval had to come from a representative of
“Fluor Corporation” – not from a representative of St. Joe, Leadco, or DRIH, the named
partners, but from a representative of Fluor. Professor Ordower noted that once Fluor
purchased Homestake’s interest, DRIH, Leadco, or St. Joe were never asked for and
never authorized any expenditure. Rather, it was always Fluor that approved Doe Run’s
expenditures.
Lastly, others—such as employees of Doe Run—also considered Fluor as the
entity in charge. In June of 1990, an employee of Doe Run sought clarification from
Fluor on Fluor’s goals for Doe Run. Professor Ordower noted that in all the documents
he reviewed, he never saw Doe Run discuss St. Joe’s goals for the partnership; he never
saw any letter from Doe Run seeking advice from Leadco; he never saw any letter where
Doe Run sought advice from, or discussed DRIH and its goals for the partnership.
Professor Ordower further noted that of all the letters he saw from Doe Run, all were
directed to Fluor. This correspondence included letters from Paul Allen who routinely
and consistently reported to Fluor’s president about environmental matters at the
Herculaneum smelter. Professor Ordower explained that this was the type of information
179 Mr. Allen would tell the president of Fluor, because Fluor was responsible for the
operation of the smelter.
Related
Cite This Page — Counsel Stack
Patrick Blanks v. Fluor Corporation, Counsel Stack Legal Research, https://law.counselstack.com/opinion/patrick-blanks-v-fluor-corporation-moctapp-2014.