Source: http://openjurist.org/390/f3d/461
Timestamp: 2014-11-21 16:40:48
Document Index: 231340012

Matched Legal Cases: ['§ 7409', '§ 3', '§ 8', '§ 7413', '§ 7604', '§ 7604', '§ 7604']

390 F3d 461 Ellis v. Gallatin Steel Company Harsco Corporation | OpenJurist
390 F. 3d 461 - Ellis v. Gallatin Steel Company Harsco Corporation	Home390 f3d 461 ellis v. gallatin steel company harsco corporation
390 F3d 461 Ellis v. Gallatin Steel Company Harsco Corporation 390 F.3d 461
Richard ELLIS, Executor of the Estate of Vernon Ellis, Richard Ellis, Thomas Ellis, and Laverne Brashear, Plaintiffs-Appellants (02-6421)/Cross-Appellees,v.GALLATIN STEEL COMPANY (02-6429) and HARSCO CORPORATION (02-6422/6478), Defendants-Appellees/Cross-Appellants.
No. 02-6421.
No. 02-6422.
No. 02-6429.
No. 02-6478.
ARGUED: Jeffrey M. Sanders, Sanders, Tismo & Assoc., Ft. Thomas, Kentucky, for Appellants. John C. Bender, Greenebaum, Doll & McDonald, Lexington, Kentucky, John B. Nalbandian, Taft, Stettinius & Hollister, Cincinnati, Ohio, for Appellees. ON BRIEF: Jeffrey M. Sanders, Sanders, Tismo & Assoc., Ft. Thomas, Kentucky, James M. Hecker, Trial Lawyers for Public Justice, Washington, D.C., Jonathan A. Conte, Cincinnati, Ohio, for Appellants. John C. Bender, David A. Owen, Greenebaum, Doll & McDonald, Lexington, KY, John B. Nalbandian, Thomas T. Terp, Sr., Taft, Stettinius & Hollister, Cincinnati, Ohio, for Appellees.
Gallatin Steel Company manufactures steel and Harsco Corporation processes slag (a steel byproduct) on adjacent pieces of property in rural Kentucky. In addition to steel and slag, both operations produce a considerable amount of dust, what has come to be known in the regulatory world as "fugitive dust," a phrase that loses its redundancy when applied to dust particles that migrate from one piece of property to another. Unhappily for the Ellis family and for Laverne Brashear, the dust particles from these manufacturing operations migrated to the Ellis family farm and to Brashear's residence, both of which neighbor the Gallatin and Harsco operations.
The itinerant dust prompted several private and governmental lawsuits. The Ellises and Brashear sued the two companies under four legal theories, among others: (1) The companies violated Kentucky's fugitive-dust emission rule, which constitutes a violation of the Clear Air Act; (2) the companies failed to obtain a state "prevention of significant deterioration" (PSD) permit as a precondition to construction of a "major emitting facility," which also constitutes a violation of the Clean Air Act; (3) the companies were jointly and severally liable for response costs incurred by the Ellises under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA); and (4) the companies violated Kentucky nuisance law.
The Environmental Protection Agency of the United States (EPA) also sued the companies under the Clean Air Act and eventually entered into consent decrees with Gallatin and Harsco. The decrees required Gallatin and Harsco to implement compliance measures and to pay civil penalties. Concluding that the decrees barred the private plaintiffs' fugitive-dust claims that pre-dated the entry of the decree, the district court dismissed all of these claims. Concluding that the consent decrees and state administrative proceedings precluded the PSD claims and that the CERCLA claim was meritless, the district court dismissed these claims as well. As to the private plaintiffs' fugitive-dust claims that post-dated the consent decree, the district court awarded injunctive relief (based on the Clean Air Act and state-law nuisance) and compensatory and punitive damages totaling $848,280 (based on state-law nuisance). We affirm all of these rulings with one exception: the district court's award of injunctive relief under the Clean Air Act. As to that claim, the private plaintiffs have not shown that they were entitled to injunctive relief and have not shown that they complied with the notice requirements of the Clean Air Act. That one ruling, accordingly, must be reversed.
Factual Background. Vernon Ellis lives on a 168-acre farm in Gallatin County, Kentucky. His sons, Richard and Thomas, also live on the farm in separate residences along with each of their spouses and children. Laverne Brashear lives across the road (U.S. Highway 42) from them on a half-acre plot of land.
In April 1995, Gallatin Steel Company and Harsco Corporation began operating a steel manufacturing facility and a slag processing plant, respectively, in an industrially zoned area located a quarter-mile down U.S. 42 to the west of the Ellises and Brashear. Gallatin and Harsco are separate legal entities.
That same month, the Ellises began to notice an unfamiliar dust on the farm, which they attributed to Gallatin's and Harsco's operations. With the arrival of the dust, the Ellises say, they have experienced more respiratory problems, headaches, itchy throats and infections than they had in the past. To try to mitigate these medical problems, Richard and Thomas Ellis kept their children indoors, they discarded their above-ground swimming pools and they stopped hunting on their land.
In 1997, Richard and Thomas began documenting the dust problems by (among other things) taking photos of the dust crossing Gallatin's and Harsco's property lines. All told, they spent over 8,000 hours monitoring the steel manufacturing and slag processing operations. In addition to the visible dust, the Ellises noticed that explosions occur at the Harsco slag plant, "throwing heavy chunks of slag out like a volcano and shaking the ground like an earthquake." D. Ct. Op. at 7 (Oct. 8, 2002). These explosions regularly vibrate plaintiffs' houses, knock objects over and on one occasion broke Brashear's water pipes.
Procedural History. The fugitive dust and slag explosions prompted seven different proceedings. The Ellises filed two citizen lawsuits against Gallatin and Harsco under federal environmental protection laws (and later amended their complaint to include state-law nuisance claims). Brashear filed a similar citizen suit against Harsco (and also later amended her complaint to include state-law nuisance claims). The United States filed two enforcement actions against the corporations. And Gallatin and Harsco filed various permit applications that resulted in state administrative proceedings to determine whether they had the proper permits for their operations. The proceedings arise in the following statutory and regulatory context.
The federal Clean Air Act is a model of cooperative federalism. It requires each State to establish a state implementation plan (SIP) to limit emissions in accordance with national ambient air quality standards set by the federal EPA. 42 U.S.C. §§ 7409(b)(1), 7410(a)(1). In compliance with this requirement, Kentucky's SIP prohibits "the discharge of visible fugitive dust emissions beyond the lot line of the property on which the emissions originate." 401 Ky. Admin. Regs. 63:010, § 3(2). Other Kentucky laws implement the Clean Air Act by prohibiting the construction of a major emitting facility in designated "attainment areas" (regions, such as Gallatin County, that meet national air quality standards) without first obtaining a PSD permit. 401 Ky. Admin. Regs. 51:017, § 8. The Kentucky Division of Air Quality manages the PSD program and grants the requisite permits. The federal EPA and state agencies may enforce these regulatory requirements on their own initiative or at the suggestion of private citizens. See 42 U.S.C. § 7413(a) (federal EPA enforcement authority); 401 Ky. Admin. Regs. 63:010 & 51:017 (state regulations); 42 U.S.C. § 7604 (citizen suit provisions); see also Her Majesty the Queen v. City of Detroit, 874 F.2d 332, 335 (6th Cir.1989) (EPA-approved state implementation plans are enforceable in federal court).
To supplement these enforcement provisions, the Clean Air Act allows citizens to file actions to enforce its provisions when two requirements have been met. First, citizens cannot commence their own suits unless they have given 60-days' notice to the Administrator of the EPA, to the State, and to the alleged violator. 42 U.S.C. § 7604(b)(1)(A). Second, citizens cannot commence independent suits if the EPA or the State has already commenced an enforcement action and is diligently prosecuting the violation, though they may intervene in these actions. 42 U.S.C. § 7604(b)(1)(B).
On April 28, 1995, the Kentucky Division of Air Quality issued a (non-PSD) air emission permit to Harsco for its slag operation. In 1997, the same Kentucky agency determined that Gallatin and Harsco were not a single emitting source and issued Gallatin a PSD permit. The resulting permit covered Gallatin's steel operations only and did not include Harsco's slag processing plant.
In anticipation of filing a citizen suit under the Clean Air Act, the Ellises sent a notification letter, dated December 29, 1998, to the EPA, the U.S. Attorney General and the Kentucky Natural Resources and Environmental Protection Cabinet. Less than 60 days later, on February 25, 1999, the United States filed its first enforcement action, civil action 99-030, in the district court for the Eastern District of Kentucky. The enforcement action charged Gallatin with violations of the Clean Air Act and several air-quality regulations.
On July 30, 1999, the Ellises filed their first citizen suit, civil action 99-152, against Gallatin and Harsco alleging numerous violations of the Clean Air Act, the Clean Water Act, CERCLA, and the Resource Conservation and Recovery Act. Four months later, on December 1, 1999, the Ellises filed a second citizen suit, civil action 99-242, against Gallatin and Harsco alleging numerous violations of the same four federal statutes.
On January 19, 2000, the district court granted summary judgment against the Ellises on all but three of the claims in their first citizen suit because they had failed to give proper notice of the claims. See D. Ct. Op. at 1 (Jan. 19, 2000). The district court consolidated the three surviving counts (two CERCLA claims and a Clean Air Act claim) into the Ellises' second citizen suit.
On June 22, 2000, the Kentucky Division of Air Quality reversed its earlier determination that Gallatin and Harsco were not a single source. As a result, the agency issued a revised PSD permit to Gallatin. And because Harsco did not have a PSD permit (it had a non-PSD air emission permit), the agency sent Harsco a letter on July 5, 2000, asking the company to submit a PSD permit application for its slag processing plant. In August 2000, Gallatin and Harsco filed administrative appeals to the agency's determination that their facilities composed a single source.
On October 4, 2000, the United States amended its complaint and proposed a consent decree to resolve the federal claims. As the Ellises concede, the United States added claims that "overlapped with the Ellises' existing claims in their second complaint." Ellis Br. at 19.
At this point, Brashear entered the picture. On December 27, 2000, she filed a complaint against Harsco alleging four violations of the Clean Air Act.
The district court granted the Ellises' and Brashear's motion to intervene in the United States' enforcement suit. On June 20, 2002, the district court granted the United States' motion to enter the Gallatin and Harsco consent decrees. The Gallatin consent decree included various compliance measures, such as the use of a vacuum truck and the installation of a dust suppression system, designed to reduce fugitive dust emissions; Gallatin also agreed to pay a civil penalty of $925,000. Harsco's consent decree also included compliance measures, as the company agreed to relocate its slag dumping, to install a containment facility around its slag operations and to install a water-spray system. Harsco agreed to pay a civil penalty of $175,000.
The next major development came in September 2002, when the district court ruled on opposing summary-judgment motions in the remaining citizen suits. The court concluded that the Harsco consent decree operated as a res judicata bar to the private fugitive-dust claims predating its entry, which is to say the consent decree barred citizen claims regarding all past violations and all continuing violations up to the date the court entered the decree. It also concluded that the Gallatin consent decree operated as a res judicata bar to the citizens' PSD permit claims.
Three months after the entry of the consent decrees, the court held a bench trial concerning the second citizen suit. After the trial, the court held that the plaintiffs had no right to enforce the consent decree against Harsco. But since the plaintiffs showed that fugitive dust had crossed the Ellises' property lines after the entry of the consent decrees on June 20, 2002, the court held that those fugitive-dust violations constituted a common-law nuisance under state law. To remedy the nuisance, the court awarded each plaintiff $24,570 in compensatory damages (for the reduction in the rental value of their property) and a lump sum of $750,000 in punitive damages to the plaintiffs collectively. The court apportioned liability for the compensatory and punitive damages, finding Harsco 80% liable and Gallatin 20% liable. To prevent future violations of the Clean Air Act and future state-law nuisance violations, the court granted the plaintiffs a permanent injunction against Harsco and Gallatin and assigned a court-appointed expert to monitor Harsco's and Gallatin's compliance with the injunction.
We initially consider Gallatin's and Harsco's challenges to the compensatory and punitive damage awards under state nuisance law. The companies raise three challenges: Gallatin claims that the evidence does not support the compensatory damage award in favor of Brashear; Harsco challenges the admission of expert testimony on the appropriate amount of compensatory damages; and both companies challenge the award of punitive damages.
A. Compensatory Damages to Brashear
Gallatin first argues that the evidence does not support the district court's award of post-consent-decree nuisance damages to Brashear. Even if the evidence tends to show that dust from Harsco's slag processing and dumping operations created a nuisance on her property, Gallatin argues that the evidence does not tie its steel-processing operation to this problem.
The district court, however, found that "[d]ust from Gallatin and Harsco ... [has] interfered with Ms. Brashear's use and enjoyment of her property," D. Ct. Op. at 10 (Oct. 8, 2002) (emphasis added) — a finding that the evidence supports and that thus is not clearly erroneous. See EEOC v. Yenkin-Majestic Paint Corp., 112 F.3d 831, 833 (6th Cir.1997). Contrary to Gallatin's suggestion, it is not true that Brashear's testimony and evidence "lacked any reference to emissions or activities at Gallatin Steel and instead focused solely on Harsco's slag processing operations." Gallatin Br. at 40. At trial, Brashear said the following:
Q. Mrs. Brashear, are you getting dust on your property from the Harsco and Gallatin Steel Companies.
THE COURT: As of now, you mean?
Q. Mrs. Brashear, as of today, are you getting dust on your property from these two companies?
A. I most certainly am.
A. Last night, I went out and I cleaned my patio furniture, and I have the cloth that I cleaned it off with. I had metallic dust on it. I had the gray dust, and it was all on there last night when I cleaned.
JA 513 (emphasis added).
In the course of these questions and answers, Brashear asserts not once, but twice, that dust from Gallatin landed on her property. That she could identify Gallatin and Harsco as sources of the dust should not be cause for surprise in view of the difference in color between the companies' emissions (red and gray). Bolstering Brashear's testimony, an expert testified that particulates found on Brashear's property came from Gallatin's operations.
Also unconvincing is Gallatin's contention that Brashear failed to show that Gallatin's dust — not just Harsco's dust — interfered with her use and enjoyment of the property. The company offers no explanation, to say nothing of providing any evidence, as to why Harsco's gray dust would interfere with Brashear's use and enjoyment of her property but Gallatin's red dust would not. The district court, moreover, fully accounted for any proportional difference in the degree of interference caused by Gallatin's and Harsco's dust through its allocation of nuisance damages (80% for Harsco and 20% for Gallatin).
Harsco challenges the award of compensatory damages on a different ground, arguing that the district court should have excluded the testimony of the plaintiffs' expert, Roger Meade, on the appropriate amount of damages. We review the district court's admission of expert testimony for an abuse of discretion. Kumho Tire Co. v. Carmichael, 526 U.S. 137, 152, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999).
Harsco first argues that the district court failed to apply any of the Daubert factors for evaluatin