## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it

N o. 08

- 1924 B ILLY J. C U NN I NG H A M an d M ARY A NN C UNN I NGH AM, P laint if fs -App el lants , v.

M ASTERW EAR C OR PO RA T I ON, e tal ., D efend a nts-A pp ellees

.

A pp eal from the United S t ates Di strictC our t fo r the S outhernDi stricto f Indian a, Indian apo lisDiv isi on. No . 1:04- CV-01616- LJM -WTL

—L arry J . M cK inn ey, Judge
.
A RG UE D O CT OB ER 29, 2008

— D ECI DE D J UNE 23, 2009

Befo re P OSNER, M A NI ON, an d K ANN E, Circ uit Ju dg es . P OSNER, Cir cu i tJudg e . The pl ai nti f f s, a coupl e nam ed Cunni ng ha m , appe al f r o m th e di smi ss al, o n the de fe ndants’ m oti on f orsum m ar y j u d gm en t, o fa sui t f or com m on l aw nui sance. J uri sdic ti on i s f ounded o n di ve r si tyo fc i ti ze ns hi p. I ndi an a l aw w ou ld g o ve r n the su bs ta nt i ve i ss ue s i fthe r e wer e an y

—but the onlyi ssues p re se n te d by th e a p p ea l are p ro c ed u ra l.2 N o. 08

- 1924 From 1986 to th e beginn ing of 2004 , t he plaintiff s op erat ed a pho to g r aph i c studi o i n Mar tins vi l l e, I ndi an a. The studio was nex t d oo r to a bui l ding that unti l 19 91 had co nt ai ne d a dr y - cl ea ni ngb us i ne ss o per at ed byde f en dan t M asterw ear. (Th e othe r defen d an ts are M asterw e a r ’s own er s, and can be i gnor ed. ) I n 199 4 the pl ai nti f f s be gan l ivin g in the bui l ding that housed thei r studio

. S oo n th eyb eg anha vi ngs ev er e he ada ches , pl us a ha ck i ng co ug h i n th e ca se o f M r . Cunni ng ha m an d as th m a in the case o fhi s wife. I n Decem ber20 03, the EPA w ar ned them t ha tthe i r b ui l di ngc o nt a i ne d p e r c hl o r o e thyl e ne ( PC E) vapor s i n a concent ra ti on o f20 0 par ts per bi l l i on a nd that “thi s amoun t o fthe c o m po und c o ul d b e s igni fi ca nta nd p ose a he alth con cern over the long term

. ” Th e vap ors w er e a p p ar en tly th e re su lt of im p ro p er st or ag e o fch em ica l s byM ast er wea r . Upon r ec ei vi ngthe l et te r the pla i nti f f s m ove d out o fthe bui l ding and pu t i t up f or sal e. ( I t was s ol d the f ol l owing yea r. ) They c l ai m notto h a ve h ad the sym p tom s of w hich they com p lai n be fore th eyl i ve d i n the b ui lding and th ata fte r the y move d o ut t he s y mpt o ms di mi ni s he d. T h ey se ek d am ag es b ot hfor t h e d am ag e t o t h eir he alt h and f orwh at they conte nd i s the depres sed pri ce at w hi ch theywere f or ced to se l lthe p ro p er ty because o f its conta m ination. Th e d istri ct cou rt gran ted sum m ary j udg m en t f o r the defen dan ts afte r di squa l i fy i ngthe pl ai nti f f s’ e xpe r t m edi ca l wi tn ess un derF ed. R. Ev i d. 7 02 a nd rul i ng tha t the hear say r ule bar re d the plain ti f f s fro m t e s t i fyi ng ab o utthe v a l ua t i o n o fthe i r p r o pe r t y b y a pprai ser s.N o. 08

- 1924 3 W hen r uling o n w hetherthe p l ai nti f f s’ m edi calexper t, Dr

. D. Duan e H o us er, a phy si ci an who spe ci al i ze s in the tr eat m ent o frespi ra tor y di sea ses , would be perm i tte d to tes tify about the cause o fthe sym ptom s about w hi ch th e p lain tif f s c om p lain , th e jud ge h ad be for e h im Dr. H ouser ’ s e xpert re portpl us d ep osi ti on t est i m ony. F r o m th e s e ma t e r i a l s a n d Ho u s e r ’ s c u r r i c u l u m v i t a e we l e a r n t ha th e i s a n e xp e r i e nc e d p hy s i c i a n who h a s n eve r how eve r tr eat ed a r espi ra tor y i l l ness caused o r agg ra vate d bye xpo su r e to PCE. He h as ne ve r th el es s for m ed th e defi ni te o pi ni o n tha t al l the s y m pto m s of w hich th e p lain tiffs co m p l a i n w er e c au se d by th at ex p os u re . A te st o f ai r sa m pl es i n th e pl ai nt i f f s’ ho m e i n 19 96 f ound th atthe a i r c o nt ai ne d a l ev elofPCE f arabo ve whatthe I nd i ana e nvi ro nm entalag ency consi ders the s afe l eve l ofex po s ur e t o the c he mi c a l

. ( Th e p l a i nt i f f s s a y they w ere no t t ol d the r esul ts ofthe study and thati fthey had b ee n t old theywould not have w ai ted unti l 20 04 to mov e o ut
. ) T he EP A f o un d t ha tthe c o nc e nt r a t i o n o fP CE i n the pla i nti f f s’ hom e i n Se p tem ber20 03 w as l ower than i t had be en i n 199 6; but i t s ti l l was hi gherthan th e I ndi an a ag en cyc o ns i der s safe

. Appar en tl y the EPA h a s n o t m ad e it s o w n d et er m in at ion of w h at th e m ax im um sa f e l ev eli s, b ey o nd the war ni ngi n i ts l et te r t o the pl aint i f f s th at“ th i s amoun t o fthe c o m po und [ th e amoun t i n thei r bui l ding] c ou ld be s i gni fi cant a nd pose a heal th c on c er n ov er th e lon g t er m .” Even i fthe pla i nti f f s were exposed to an u n sa fe l eve l o f P C E , it w ou ld n ot follow th at it w as th e c au se of th eir ailm en ts . On e w ou ld h a v e t o kn ow w h at th e s p ec ific dangers were that had l ed the I nd i ana depart m ent t o4 N o. 08

- 1924 p ick th e s a fe level i t d id; and abou t tha t, H ou ser’s report an d te sti m ony ar e s i l ent. S up pose that a co ncentr ati on o f som e che m i calabove a ce rt ai n l eve l has been f ound to in c re as e t h e in c id en c e o f birt h d efe c ts , an d as a re su lt th at level is fixed as the m ax im um safe l evel of exp osu re to the c hem i cal ; a perso n w ho wa s ex p osed to a hi gher l eve l o fthe chem icaland devel oped asthm a co uld not att ribute hi s a i l m ent t o hi s e xposure. H ou s e r i s n o ta t o xi c o l o g i s ta nd di d n o tp r e s e nt, e i ther d irectly or by citation to a scientifi c li teratu re, a theory that w oul d l i nk t h e level and durati on o fthe exposure o f the pl ai nti f f s t o PC E to thei r sym pt om s. H e di d ci te a re portby the U ni ted S tat es A genc y f orToxi c S ubstance s a nd Di s e a s e R e g i s t r y wh i c h s t a t e s tha t “ l e v e l s o f2 1 6 p pm [parts per m il li on] [ofPC E ] or m ore prod uc e resp iratory tr act i rr i tat i on” and that he adaches “ have been obs er ved at ex p osu res of 100 t o 3 0 0 p p m . ” B ut the p lai nt iffs w ere ex p osed t o only 200 p arts p er b i l l i on , wh i ch i s o nl y o nefi fth o fo ne par t perm illio n. M or eov er, the re portl i sts a va ri etyo fai l m ents unrel ate d t o th e pl ai nti f f s’ ai l m ents th at ex p os u r e t o P C E ca n ca u se , an d for a ll w e k n ow it is those ail m e nt s tha t m otivated I nd iana’s selection of a “s af e ” l e v el of e x p os u re . H ou se r th u s p re se n te d n o e viden ce f r o m w hi cha t r i ero ff ac t co ul d i nfertha t th e pl ai nti f f s ’ e xp o s ur e t o P CE i s l i k e l y t o h a v e c o nt r ib ut e d s i gni fi cantl y ( orf orthatm att eratal l ) to thei r ai l m ents. The al l ege d i m pai rm ent o f the val ue o fthe pla i nti f f s’ pr o per typr es en ts a se par at e i ss ue

— conta m i nati on ca n red uc e prop erty value s w ithou t end an gering an ybod y’s heal th. Bu t like the heal th i ssue, causa ti on turns o ut to b e t h e p lain tiffs ’ A c h illes h ee l.N o. 08

- 1924 5 M r . Cunn i ng ha m want ed to test i fy tha t th e va l ue o fthe proper ty had fa l l en fro m $1 35, 000 to $105 , 000 ( the pr i ce at w hi ch i t was s old ) as a re sul t o fi ts conta m i nati on by PCE; tha t $1 35 , 00 0 was the a pp rai se d v al ue o fthe b u i l d i n g in 19 99 an d w as th e p ric e a t w h ich h e a n d h is w i f e l i ste d i t f orsa le w hen theym ove d out; thatwh en no o f f er s m ate ri al i zed, thei r re ales tat e a gent expla i ned t ha tp r o s pe c t i v e b uy e r s we r e c o nc e r ne d ab o utthe b ui l di ng ’ s be i ngc o nt ami na te d; tha t he ha d c onv i nc ed th e Cu nningh am s to l ower the l i st pri ce t o $115 , 000; and that afte r r ec ei vi ngt wo l o w off er s th eyhad final l y s o l d the proper ty, afteri t h ad been on the m ar ketf orm or e than a y ear, f or$105, 000. T he j ud ge excl ud ed al l thi s t est i m ony. The t es ti m o ny abo utwhatthe r ea l e st at e ag en t th o ug ht the pr oper ty w or th and w hat pr ospect i ve buyer s had to ld th e a ge n t w ou ld h av e b ee n ina d m i ss ible h ea rs ay . I t i s t rue that I nd i ana l aw al l ows a pro pertyo w ner to tes ti fy t o the v al ue o fhi s pro pert y, provi ded thathe c an off erso m e f actualbas i s f orhi s v al uati on; with that provi so, i t i s r ega rded as a m att erwithi n hi s per sonal kn ow led ge . C r i d e r & C rider, Inc. v. D o w nen , 87 3 N

. E.2 d 11 15 , 112 0 (In d . A p p . 200 7); Cour tVi e w Cen t r e, L. L. C. v. Wit t, 753 N .E .2 d 75 , 82 (In d . A p p . 200 1); Jor dan v. Tal aga , 532 N

. E.2 d 1 174, 1188 ( I nd

. A pp . 19 89)

. A nd tho ugh, with im m at er ial ex c ep tio n s, ev id en tia ry iss u es th at a ris e in ca se s l i ti g at ed i n f ede r alc o ur ts a r e g o ve r ne d b y the Feder alRule s o fEvi dence r ather than by sta te rul es of evi dence ev en wh en federa l j uri sdic ti on i s based o n d ive rs ity of cit ize n sh ip , e.g., Sc hin dler v. S e i l er, 474 F

. 3d 1008 , 1010 (7th Cir. 2007 ), th e fede ral rules, li ke Ind iana’s rul es, have bee n i nter prete d to perm i t a pro pertyo w ner6 N o. 08

- 1924 to testify about the va lue of his p rop erty. H e can te s t ify about i t ei ther as a m att erwithi n hi s per sonalkno w l edge, U ni t e d St at e s v. Conn , 297 F.3d 548 , 554 n. 2 ( 7th Cir. 20 02 ); Chr i s t ophe rPhe l ps & As s oc i at e s , LL C v. Gallo way, 49 2 F.3 d 53 2, 54 2 (4 th C ir. 20 07 ); Asp l und h M f g. D i vi s i on v. Ben t on H ar b o r Engi ne e r i ng, 57 F. 3d 1190, 1197-98 (3d Cir. 1995 ), or, i f h e is an ex p ert o n p rop erty value s, as an exp ert w itn es s, e.g ., U ni t e d S t at e s v. 68

. 94 Acre s of La nd, 91 8 F.2 d 38 9, 39 7-9 8 (3 d C ir. 19 90 ); U ni t e d S t at e s v. 10, 031. 98 Acre s of La nd, 850 F. 2d 634, 636- 37 ( 10th Cir

. 19 88)

— w hi ch Cu nningham howeverwas not. W ha tthe o wne r i s n o ta l l o we d t o do i s me r e l y r e pea t anothe r perso n’s val uati on , U nited Sta tes v. 68 .94 A cres of La nd, s upra , 9 18 F. 2d at 398, wh i ch w as w hat Cu nni ngha m wan t e d t o do

. No r wa s wh a tp r o s pe c t i ve bu yers told t h e real estat e agen t w ithin C un nin gh am ’s pers o na l k no wl e dg e . Mo r e i mpo r t a nt, h e c o ul d n o to f f er a re sp on sibl e o pini on about the ca use o fa c ha ng e i n the val ue o fhis p ro perty
. Even i fhe knew i ts val ue atti m e x an d at t i m e x +y, he ha d no bas i s f orte sti fyi ng to w hat ca used i ts val ue to f al l

. Th at w oul d dep end, ata m in im u m , on w h et h er th e p ric es of co m p ar ab le proper ti es had fa l l en by a com parabl e a m ount. It d oe s s ee m h igh ly like ly th at th e d isc ov er y of c on ta m in at io n w ou ld m ak e t h e m ar ke t v alu e o f a b u ild in g fa ll, th o ug h thi s i s no t ce r ta i n b ec au se r ea l e st at e pr i ce s m i g ht be r i sing

— i n f ac t th e pl ai nt i f f s so l d th e bui l di ng dur i ngthe ho us i ngb ubb l e o f th e ea r l y 2 00 0s who se l at erb ur st i ng plunged the ec onom y i nto its prese nt dol drum s. S ol d i t, as w e know , f or$1 05 ,00 0, b ut theyhad boughti n back i n 199 2 f oro nl y $ 50, 000.N o. 08

- 1924 7 T h e c rit ica l qu es tio n is h o w m u c h th ey co u ld h av e s old th e bui l di ngf o r ha d i t no t be enf o r the c o nt aminat i o n. S uppo se tha t d uring the pe r i o d i n whi chthe v al ue o fthe pla i nti f f s’ pro pertyfel l by 22 p ercent ( f ro m $1 35, 000 to $105 , 000), it w ou ld ha ve fal len by 12 p ercen t ha d th ere b ee n n o c on ta m i n at ion ; th en on ly a 10 p er c en t c h an ge in th e va l ue o fthe pr o per tywoul d b e at tr ibutable t o the conta m i nati on. The pl ai nti f f s nee ded ev i dence by a rea l es ta te a g en t o r r ea l e st at e appr ai se r t o e st ab l i shthe eff ect ofthe conta m i nati on on the val ue o fthei r proper ty. They di d not a tte m pt to pre sent any s uch evi dence. I n shor t, theyf ai l ed to pro ve ei therper sonalinj ury or p rop erty d am age, and the d istri ct cou rt w as th erefore ri ght t o dism i ss the c ase . A FFI RMED
.

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