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Miller v. Cudahy Co.

Citation: 17 ELR 21242
No. No. 77-1212, 656 F. Supp. 316/26 ERC 1812/(D. Kan., 03/03/1987) Punitive damage award imposed

The court holds that the corporate owners of a salt mining operation that has polluted an aquifer used for domestic water supply and irrigation are not entitled to reduction of a $10 million punitive damage award, since defendants have continued to pollute and have not demonstrated that the pollution can be cleaned up within a reasonable time. A predecessor of one of the defendants began a salt production operation in Rice County, Kansas, in 1908. Highly concentrated brine from the production process began running off the property and contaminating underground drinking water supplies. Complaints from area farmers and investigations by state agencies during the 1930s were not able to abate the pollution. In 1977, 40 landowners and lessees filed a complaint in this court. In 1983, the court rejected defendants' claim that the case was no longer actionable because they had been polluting the aquifer for so long. The court held that the pollution was a continuing nuisance giving rise to a continuing series of causes of action. 567 F. Supp. 892 (D. Kan. 1983). In 1984, the court found defendants liable for $3.06 million in actual damages to growing crops and for $10 million in punitive damages. The court held the punitive damage award in abeyance because testimony indicated that a cleanup might be feasible. The court noted that it would reassess the punitive damage award if defendants made a good faith effort to remedy the pollution and it could be cleaned up within a reasonable time. 592 F. Supp. 976, 15 ELR 20050 (D. Kan. 1984).

The court first rejects defendant General Host Corporation's motion to dismiss. The court holds that the fact that General Host was unaware of the extent of the pollution when it acquired the salt mining operation in 1971 is not a defense to liability. The court holds that General Host's motion to dismiss is untimely under the Federal Rules of Civil Procedure. General Host's motion is best characterized as a motion to dismiss for failure to state a claim under Rule 12(b)(6). Under Rule 12(h)(2), a 12(b)(6) motion cannot be made after trial. Although defendants asserted a 12(b)(6) defense in its answer, it did not move for dismissal on these grounds until two years after trial.

The court next rejects defendants' motion for a new trial based on newly discovered evidence. The court holds that the recently revised permit requirements by the Big Ben Groundwater Monitoring District do not warrant a new trial. Although the revisions would prevent plaintiffs from obtaining permits to use water from the aquifer for irrigation even if the water were pure, plaintiffs could have obtained irrigation permits at the time of trial. The court holds that plaintiffs' failure to apply for irrigation permits does not prevent them from recovering for lost crop profits. Plaintiffs did not apply for permits because defendants' pollution rendered the water unfit for irrigation. The court holds that other alleged new evidence could have been discoverd by defendants in time for trial had they exercised due diligence. Defendants have had at least seven years of discovery to investigate the contamination of the aquifer, but instead chose to ignore the entire matter. Even if defendants' were not required to start an investigation until after the court's 1983 order, and even if defendants could be excused for not seeking a continuance after the 1983 order, defendants still had sufficient time to begin an investigation prior to trial. Defendants chose not to begin an investigation until threatened with a $10 million punitive damage award. The court notes that even had defendants exercised due diligence, it would deny their motion for a new trial.

Turning to plaintiffs' request to recover its expenses from defendants for the remedial phase of the case, the court initially notes that this phase was conducted for defendants' benefit, since the amount of damages had already been determined, and that defendants are more able to afford these expenses than plaintiffs. The court holds that plaintiffs are entitled to recover discovery costs and the costs of fees paid to an expert that the court ordered plaintiffs to select to work with defendants in the development of a remedial action cleanup plan. The court holds, however, that plaintiffs are not entitled to attorneys fees, attorney travel expenses, and all other expert fees.

The court next declines to implement a court-ordered cleanup plan or to reduce the $10 million punitive damage award. The court initially clarifies its 1984 order retaining jurisdiction over the punitive damage award. The court notes that it retained jurisdiction over the punitive damage award only, not over issues of liability or actual damages. The court notes that it did not give defendants the option of choosing between paying the punitive damage award and implementing any cleanup plan, but instead stated that it would consider reducing the punitive damage award if defendants developed and implemented a good faith effort to clean up the aquifer. The court next reviews the development of the remedial action plan. The court concludes that no feasible court-implemented cleanup plan can be found. The proposed cleanup plans do not address the sodium pollution in the aquifer. An effective cleanup would take 75 to 150 years due to the persistence of the sodium contamination in the soil surrounding the aquifer. This is far too long for a court to retain jurisdiction over a case. The court declines to adopt a consent order that defendants entered into with the Kansas Department of Health and Environment in February 1987 under which defendants agreed to implement a cleanup plan proposed to the court. The court holds that this consent order does not require it to reduce the punitive damage award, which was awarded based on past behavior.

The court concludes that its punitive damage award was appropriate. A court-ordered cleanup plan requires cooperation between plaintiffs and defendants, something that cannot be expected after this highly contentious litigation. Defendants have not acted in good faith to develop the best possible cleanup plan, have not cooperated with plaintiffs in the remedial phase of this case, and have continued to pollute.

The full text of this opinion is available from ELR (43 pp. ELR Order No. C-1360).

Counsel for Plaintiffs
Deborah Carney
23876 Currant Drive, Golden CO 80401
(303) 526-0611

Counsel for Defendants
Ron Campbell, Thomas D. Kitch
Fleeson, Gooing, Coulson & Kitch
1600 Kansas State Bk. Bldg., 125 N. Market St., P.O. Box 997, Wichita KS 67201
(316) 267-7361

Theis, J.