Pruitt v. Allied Chemical Corp.

523 F. Supp. 975, 16 ERC 2014, 12 Envtl. L. Rep. (Envtl. Law Inst.) 20170, 16 ERC (BNA) 2014, 1981 U.S. Dist. LEXIS 9850
CourtDistrict Court, E.D. Virginia
DecidedSeptember 15, 1981
DocketCiv. A. 77-0035-R
StatusPublished
Cited by24 cases

This text of 523 F. Supp. 975 (Pruitt v. Allied Chemical Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pruitt v. Allied Chemical Corp., 523 F. Supp. 975, 16 ERC 2014, 12 Envtl. L. Rep. (Envtl. Law Inst.) 20170, 16 ERC (BNA) 2014, 1981 U.S. Dist. LEXIS 9850 (E.D. Va. 1981).

Opinion

MEMORANDUM

MERHIGE, District Judge.

Plaintiffs bring the instant action against Allied Chemical Corporation (“Allied”) for Allied’s alleged pollution of the James River and Chesapeake Bay with the chemical agent commonly known as Kepone.

Plaintiffs allege that jurisdiction vests with the Court pursuant to 28 U.S.C. § 1331 (federal question), § 1332 (diversity of citizenship), and § 1333 (arising in admiralty).

Plaintiffs allegedly engage in a variety of different businesses and professions related to the harvesting and sale of marine life from the Chesapeake Bay (“Bay”). 1 All claim to have suffered economic harm from defendant’s alleged discharges of Kepone into the James River and thence into the Bay. Plaintiffs assert their right to compensation under each of the dozen counts to their complaint. Defendant has moved to dismiss nine of those counts for failure to state a claim upon which relief can be granted. The parties have fully briefed the issues involved, and the matter is ripe for disposition.

Defendant moves to dismiss counts I, II, III, V, VII, VIII, IX, X and XII of the complaint as they apply to all plaintiffs other than those directly engaged in the harvesting of the Bay’s marine life. 2 That is, defendant would dismiss these nine counts as to all plaintiffs except those classified in paragraph 6.A of the complaint (generally, fishermen, shellfishermen, and lessors of oysterbeds.) All plaintiffs, subject to defendant’s motion, claim as damages lost profits resulting from their inability to sell seafood allegedly contaminated by defendant’s discharges, and from a drop in price resulting from a decline in demand for seafood coming from areas affected by Kepone. These plaintiffs can generally be described as parties suffering only indirect harm to their property or businesses as the result of Kepone pollution. 3 They or their possessions have not been caused direct, physical damage by defendant. Instead, plaintiffs allege that the stream of profits they previously received from their businesses or employment has been interrupted, and they seek compensation for the loss of the prospective profits they have been denied. As plaintiffs’ claims rely on various, radically different theories of liability, the Court considers each count, or group of similar counts, separately.

Negligence and Products Liability

Counts I, II and V allege that negligence, of some degree, by defendant entitles plain *977 tiffs to recover. 4 Count III alleges that the effluents released by defendant were “defective and unreasonably dangerous”, and that defendant should be strictly liable for any harm caused by its discharges. All of these counts arise from the Court’s diversity jurisdiction and rely on theories of state tort law.

The Virginia Supreme Court has, to the Court’s knowledge, never directly considered the question of recovery for loss of prospective economic benefits. It is commonly stated that the general rule both in admiralty and at common law has been that a plaintiff cannot recover for indirect economic harm. 5 The logical basis for this rule is obscure. Although Courts have frequently stated that economic losses are “not foreseeable” or “too remote”, these explanations alone are rarely apposite. As one well-respected commentator has noted, “the loss to plaintiff in each case ... would be readily recoverable if the test of duty — or remoteness — usually associated with the law of negligence were applied.” 6

The Court frankly acknowledges the fact that there exist a substantial number of cases that may be construed to establish a general rule favorable to plaintiffs. 7 As noted by the Ninth Circuit in Union Oil Co. v. Oppen, 501 F.2d 558 (9th Cir. 1974), the general rule has found application in a wide variety of contexts:

[T]he negligent destruction of a bridge connecting the mainland with an island, which caused a loss of business to the plaintiff who was a merchant on the island, has been held not to be actionable... . A plaintiff engaged in commercial printing has been held unable to recover against a negligent contractor who, while engaged in excavation pursuant to a contract with a third party, cut the power line upon which the plaintiff’s presses depended.... A defendant who negligently injures a third person entitled to life-care medical services by the plaintiff is liable to the third person but not to the plaintiff. .. . The operators of a dry dock are not liable in admiralty to charterers of a ship, placed by its owners in the dry dock, for negligent injury to the ship’s propeller where the injury deprived the charterer of the use of the ship.

501 F.2d at 563-64 (citations omitted).

Nevertheless, there also exist cases that conflict with this broadly recognized general rule. 8 At least two of the minority cases deal with precisely the case present here: the loss of business opportunities due to pollution of streams adjoining a plaintiff’s property. 9 Moreover, even defendant concedes that a third case, Union Oil, supra, that provided compensation for fishermen for losses caused by pollution from oil spills, is correctly decided. Although defendant would distinguish Union Oil as limited sole *978 ly to those who labor on the water (but not at its edge) the rationale for creation of this particular distinction is unclear.

Given the conflicting case law from other jurisdictions, together with the fact that there exists no Virginia law on indirect, economic damages, the Court has considered more theoretical sources in order to find a principled basis for its decision. There now exists a considerable amount of literature on the economic rationale for tort law. 10 In general, scholars in the field rely on Judge Learned Hand’s classic statement of negligence 11 to argue that a principal purpose of tort law is to maximize social utility: where the costs of accidents exceeds the costs of preventing them, the law will impose liability.

The difficulty in the present case is how to measure the cost of Kepone pollution. 12 In the instant action, those costs were borne most directly by the wildlife of the Chesapeake Bay. The fact that no one individual claims property rights to the Bay’s wildlife could arguably preclude liability. The Court doubts, however, whether such a result would be just.

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523 F. Supp. 975, 16 ERC 2014, 12 Envtl. L. Rep. (Envtl. Law Inst.) 20170, 16 ERC (BNA) 2014, 1981 U.S. Dist. LEXIS 9850, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pruitt-v-allied-chemical-corp-vaed-1981.