DOYLE v. FLUOR CORP. No. ED 98462.
400 S.W.3d 316 (2013)
James DOYLE, et al., Plaintiffs/Respondents, v. FLUOR CORPORATION, et al., Defendants/Respondents, Joseph Miller, et al., Objectors/Appellants.
Missouri Court of Appeals, Eastern District, Division One.
Application for Transfer Denied June 25, 2013.
Mark I. Bronson , St. Louis, MO, Steven M. Bronson , Gerson Smoger , Dallas, TX, James R. Dowd , Clayton, MO, for Appellants.
Maurice B. Graham , John Henry Quinn III , Andrew Rothschild , Ted Perryman , Theordore Williams , Edward L. Dowd, Jr. , Thomas Ward , St. Louis, MO, Kevin Scott Hannon , Denver, CO, for Respondents.
CLIFFORD H. AHRENS, Presiding Judge.
Appellants appeal the trial court's judgment approving a class action settlement in favor of Herculaneum residents whose real property was affected by the Doe Run lead smelter. We affirm.
Appellants are 28 objectors in a class of over 700 Plaintiffs (collectively, the Class) who suffered nuisance and damage to their real property as a result of toxins emitted from Doe Run. The Class is represented by six named Plaintiffs (the Representatives). Defendants are entities and executives associated with the smelter.
The Doe Run smelter was established in 1892 and came under environmental scrutiny in the 1980s due to elevated levels of lead in the soil of residential neighborhoods near the facility. As relevant here, soil remediation (i.e., replacement) began in 1991 and accelerated beginning in 2001 pursuant to a consent decree between Defendants and the Environmental Protection Agency. By 2007, 524 properties in Herculaneum had been remediated. Concurrent with remediation, in 2002 Defendants agreed, in cooperation with the Missouri Department of Natural Resources, to offer to purchase all of the residential properties within approximately three-eighths of a mile of the smelter. Properties in the buy-out zone had been remediated first, as they were closest to the smelter, and to date nearly all properties in Herculaneum have been remediated except for "a few" at the outskirts. Twenty-four of the 28 Appellants are former property owners who sold their property to Defendants under the purchase program. The remaining four are current owners still residing in Herculaneum.
From the protracted procedural history of this case, highlights relevant to the issues on appeal here can be summarized as follows. The Representatives filed their petition July 9, 2001. At the time, all six Representatives owned real property in the area affected by Doe Run. In 2005, the Class was certified to include "all persons who own residential real property" in a defined geographic area of Herculaneum. The Class contained two sub-classes: owners whose property had been remediated and owners whose property had not been remediated. In 2006, two of the Representatives sold their property and moved. In February 2010, in its order approving notice to the Class, the trial court clarified
In February 2012, after over a decade of litigation, Representatives and Defendants (together here, Respondents) reached a settlement agreement whereby, in consideration for the Plaintiffs' release of all property-related claims,
A month later, on the eve of judicial approval of the settlement — two years after notice of the action and 22 months after the opt-out deadline — Appellants
I. Class Representation
For their first point,
Even indulging Appellants on the merits for the sake of exhaustion, adequacy of representation and fairness of settlement are determinations within the sound discretion of the trial court, and we find no abuse of that discretion here. Plubell v. Merck & Co., Inc., 289 S.W.3d 707 (Mo. App.2009) (adequacy of representation reviewed for abuse of discretion); Bachman v. A.G. Edwards, Inc., 344 S.W.3d 260 (Mo.App.2011) (adequacy of settlement reviewed for abuse of discretion). Rule 52.08(a)(4) requires a trial court to find
In 2005, when the trial court first certified the Class, with its sub-classes, it specifically found that the Representatives "demonstrated that they ... are capable of fairly and adequately representing the interests of property owners in Herculaneum." This court affirmed the trial court's order in its entirety. Doyle v. Fluor Corp., 199 S.W.3d 784 (Mo.App. 2006). In 2010, when the trial court clarified that class membership includes current and previous owners, it acknowledged the possibility of tension between the two but specifically found that "such conflict does not reach critical mass and is manageable." In its final judgment approving the settlement and allocation plan, the trial court specifically considered Appellants' post-hearing argument and expressly found that the Representatives adequately represented the class. Noting that the adequacy of representation can be evaluated based on the terms of the settlement Ring v. Metro. St. Louis Sewer Dist., 41 S.W.3d 487, 492 (Mo.App.2000), the trial court enumerated the following factors supporting its determination. The action was complex and vigorously litigated over a long period; both parties incurred considerable expenses. The settlement was a product of an arm's-length negotiation, free of fraud or collusion. Further litigation would consume even more time and resources, cause the Class additional hardship, uncertainty and delay in compensation, and possibly jeopardize the settlement altogether. Indeed, the court observed that, if the case were to proceed to trial, there was no guaranty that the Plaintiffs would succeed or recover as much as the settlement offered them. With respect to allocation, the court rejected Appellants' complaint that the plan failed to account for differences within the Class, particularly distance from the smelter and previous remediation, because, in short, the entire area was contaminated. Viewed through a "nuisance lens," the court stated, "reasonable minds can differ on how to quantify loss." The plan provides nuisance compensation to all current and previous owners by function of duration of ownership and additional compensation for all current owners' property damage based on remediable surface area. Respondents explain that, by the time of settlement in 2012, nearly all properties in the Class had undergone remediation, so the sub-class distinction created in 2005 had become largely irrelevant. The court balanced the merits of Plaintiffs' case and the risks of trial against the terms of the settlement, it considered the nature and extent of their damages and recovery under the allocation plan, and ultimately it found the arrangement fair, reasonable, and adequate. We find no abuse of discretion in any of the foregoing determinations by the trial court, and Appellants fail to convince us to the contrary.
Though Appellants insist that each sub-class (remediated vs. unremediated) required separate representation, they admit that virtually all properties in Herculaneum now have been remediated, thus rendering
For their second point, Appellants contend that notice of the action and opt-out instructions, published and direct-mailed to the Class in 2010, was inadequate as to the scope of the Class (specifically language as to whether former owners were included), the specific rights and interests of its members, and the deadline for opting out. Appellants' complaint regarding the scope of the Class was not raised in the trial court and hence is not preserved for our review. Rather, Appellants' specific objections before the trial court were that (1) the notice didn't mention the release of punitive damages under the settlement, (2) the opt-out deadline was not recorded in the court file so that members of the public (or lawyers) following the case would know of the deadline, and (3) the notice by publication didn't specify the deadline date. Desiring to turn back the clock on a decade of litigation, Appellants sought relief from these alleged defects in the form of withdrawal of the prior notice and submission of a new notice, specifying publication and deadline dates, to be properly spread upon the record and re-issued to the Class. The trial court refused to grant this drastic measure, reasoning that (1) the absence of a specific reference to punitive damages did not render notice inadequate, and Plaintiffs could still recover punitive damages in personal injury actions; (2) the court approved the notice form with a blank date in anticipation of appeal but the date was specified in the written notice; and (3) the published notice advised readers how to request notice by direct-mail, which did specify the date (May 4, 2010). We find no abuse of discretion in these determinations.
First, Appellants' primary complaint — i.e., that the 2010 notice apprising members of the existence of the action lacked specifics concerning the terms of the resulting settlement reached two years later — is logically absurd. Notice of a lawsuit cannot be deemed inadequate for failing to divine the precise terms of a future settlement, such as the release of claims for punitive damages. Moreover, the notice sets no expectation for an award of punitive damages in the first place. It states simply that "the lawsuit seeks to compensate members of the Class for damages they may have incurred because
Second, the trial court exercised appropriate discretion in approving the form notice with a blank date at that time in anticipation of appeal, as indeed further litigation did ensue. Appellants cite no authority for the proposition that proper notice to the Class by mail and publication in compliance with Rule 52.08 can be nullified by a reservation in the court file. We cannot fathom how such facts could justify reversal here.
Finally, we agree that notice of the opt-out date was adequate. Rule 52.08 simply requires that the class be provided "the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort." Rule 52.80(c)(2). The notice must advise that: members can opt out by a specified date, the judgment will include all members who don't opt-out, and members may enter an appearance by counsel. Id. The 2010 notice satisfied these requirements. Although the published notice lacked a specific date, it did instruct readers how to obtain direct-mail notice, and both notices contained contact information for further inquiry. We find no abuse of discretion in the trial court's refusal to withdraw and re-issue notice of the action at this point in the proceedings or in its approval of the final settlement over Appellants' objections. Point denied.
For their third and final point, Appellants maintain that the trial court abused its discretion by denying their motion for continuance and discovery, which Appellants sought purportedly to evaluate the fairness of the settlement. We review a court's decision on a request for continuance and discovery under an abuse of discretion standard. City of Wentzville v. Dodson, 133 S.W.3d 543, 548 (Mo.App. 2004). We allow the trial court broad discretion in the control and management of discovery. Id. A trial court abuses that discretion when its ruling was "clearly against the logic of the circumstances then before it and so arbitrary and unreasonable as to shock our sense of justice and indicate a lack of careful consideration." Id.
Notice of the settlement was mailed to the Class February 10, 2012. On February 16, Appellants' counsel sent a letter to Class counsel requesting essentially all discovery in the case, for the stated purpose of advising Appellants "on the settlement." Class counsel declined to provide the entirety of discovery in the record, much of which, they assert, was known to Appellants' counsel by virtue of their representation of Doe Run plaintiffs in personal injury cases and through public records of the EPA. Instead, Class counsel provided certain reports by environmental experts relevant to the chosen structure of the allocation plan. Appellants deemed those reports insufficient and demanded additional detail "that explains the rationale for
The trial court heard arguments at the time of the approval hearing. Respondents argued that Appellants' request was overbroad and unnecessary to form their stated objection, and, moreover, as a general principle, objectors have no absolute right to discovery (citing precedent from other jurisdictions
On appeal, Appellants seem to challenge the validity of a protective order entered by the trial court placing certain confidential information and discovery documents under seal. That issue is not preserved, and we will not review it. With respect to the precise issue of whether the trial court acted within its broad discretion in denying Appellants' motion for continuance, we see no abuse of discretion in that decision. Appellants' counsel has conducted significant discovery in other suits against Doe Run, voluminous environmental information is publicly available, and Respondents provided additional discovery specifically relevant to Appellant's objection concerning allocation. In short, all properties were affected, and distance from the smelter was simply not the parties' chosen basis for allocation under the settlement. Appellants' objection to this decision did not suffer for lack of further environmental discovery. Weighing the arguable benefit of additional time for Appellants' discovery against the potentially substantial prejudice to the Class as a result of further delays, it becomes apparent that the trial court properly exercised its discretion by denying the motion. Point denied.
The trial court's judgment approving the final settlement is affirmed.
SHERRI B. SULLIVAN and GLENN A. NORTON, JJ., concur.
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