Case Name: Max WRIGHT, T/A Wright's Grocery, Appellant, v. MASONITE CORPORATION, Appellee; Max WRIGHT, T/A Wright's Grocery, Appellee, v. MASONITE CORPORATION, Appellant
Court: United States Court of Appeals for the Fourth Circuit
Jurisdiction: United States
Decision Date: 1966-10-19
Citations: 368 F.2d 661
Docket Number: Nos. 9940, 9941
Parties: Max WRIGHT, T/A Wright’s Grocery, Appellant, v. MASONITE CORPORATION, Appellee. Max WRIGHT, T/A Wright’s Grocery, Appellee, v. MASONITE CORPORATION, Appellant.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 368
Pages: 661–667

Head Matter:
Max WRIGHT, T/A Wright’s Grocery, Appellant, v. MASONITE CORPORATION, Appellee. Max WRIGHT, T/A Wright’s Grocery, Appellee, v. MASONITE CORPORATION, Appellant.
Nos. 9940, 9941.
United States Court of Appeals Fourth Circuit.
Argued June 29, 1965.
Decided Oct. 19, 1966.
Albert V. Bryan, Circuit Judge, dissented.
W. F. Maready and J. Robert Elster, Winston-Salem, N. C. (Norwood Robinson and Hudson, Ferrell, Petree, Stockton, Stockton & Robinson, Winston-Salem, N. C., on brief), for Max Wright.
Arthur 0. Cooke, Greensboro, N. C. (Russell Van Landingham, Thomasville, N. C., and Cooke & Cooke, Greensboro, N. C., on brief), for Masonite Corp.
Before HAYNSWORTH, Chief Judge, and SOBELOFF and BRYAN, Circuit Judges.

Opinion:
HAYNSWORTH, Chief Judge:
We affirm the District Court's dismissal of this action in which the plaintiff sought damages for loss of a stock of goods in his grocery store as a result of contamination by noxious gases, for the invasion was not intentional within the requirements of the North Carolina rule.
In the winter of 1963, there was a strong odor of formaldehyde gas in the plaintiff's grocery store. A large portion of his stock of goods became infected with the odor. Many items were returned after sale, and the remainder of the infected goods became unsalable. Wright had never before experienced such a loss.
He sought the assistance of a number of governmental agencies whose investigators were unable to detect any formaldehyde gas in the atmosphere outside Wright's store, though it was obviously present within the store. Finally, however, an acquaintance with access to some laboratory facilities took samples of the outside air which, according to tests conducted by him, disclosed the presence of some such gases.
Approximately 200 feet from the plaintiff's store was a building in which the defendant conducted its factory operations. Approximately 5% of its production of masonite board was finished with synthetic lacquers and varnishes. Such lacquers and varnishes contain a urea-formáldehyde resin. In the process of formation of the resin, a very small quantity of free formaldehyde may be left. Moreover, when such a resin is subjected to heat or certain acids it may suffer a chemical breakdown with consequent release of formaldehyde gas and ammonia.
It was the plaintiff's theory that formaldehyde gas was present in the exhaust from the spray booth in which synthetic lacquers and varnishes were applied to some of defendant's products and was the source of the gases which permeated his stock of goods. His initial inference was not an unnatural one, for when he first noticed the obnoxious odor in his store, it seemed to him to resemble the odor of a lacquer or varnish, though the governmental investigators thought the odor in the store unlike that of the defendant's exhaust gases.
Though there was evidence of a source of the contamination inside the store, in the vaporization of lighter fluid leaking from a number of containers stored near a gas-fired heater, and though the odor disappeared shortly after those containers were moved at the suggestion of governmental investigators, the District Court resolved the factual conflict in plaintiff's favor. It found that the defendant's plant was the source of the offending gases that caused the harm to the plaintiff's goods. At the same time, the District Court found, on uncontradicted evidence, that the defendant knew nothing of the harm that the plaintiff was suffering until after the event, that it had received no prior complaints from the plaintiff or from anyone else and that others living in the area experienced no similar harm. So far as appears on this record, no one has since suffered any such harm from exhaust gases discharged by the defendant.
On the basis of these findings the District Court concluded that the invasion was not intentional and that the defendant's conduct was not an actionable private nuisance under the iaws of North Carolina, which govern us in this diversity case.
Some American states have applied the rule of Rylands v. Fletcher, in noxious gas cases. They are collected in Prosser on Torts, 3rd Edition, at pages 524-6. They include Maryland and South Carolina, in this Circuit, but not North Carolina. The more general rule in the United States confines the Rylands v. Fletcher doctrine to ultrahazardous activities. This is recognized by Prosser and by the Restatement. Since the North Carolina Supreme Court, in discussing this subject, frequently has cited and paraphrased the Restatement, it provides a particularly useful point of reference.
In the Restatement of Torts, the Ry-lands v. Fletcher doctrine, as applied to ultrahazardous activity, is set forth in § 519-20. The very different rules governing liability for private nuisances are set forth in Chapter 40, the first section of which is 822. That section provides that an actor is liable for a nontrespassory invasion of another's interests in land if, in this context, the invasion is both intentional and unreasonable. Under § 825, the invasion is intentional within the meaning of § 822 only if the actor acts for the purpose of causing the harm or knows that it is resulting or is substantially certain to result from his conduct. Sections 826, et seq., elaborate the rules for application of the concurrent requirement that the actor's conduct be unreasonable.
Morgan v. High Penn Oil Co., 238 N. C. 185, 77 S.E.2d 682, was a noxious gas case. There was no question that the invasion was intentional within the meaning of Restatement § 822 and 825, for it was the result of a persistent discharge of gases after actual notice of the harm they were causing. Nevertheless, the Supreme Court of North Carolina took pains to point out:
" [A] person is subject to liability for an intentional invasion when his conduct is unreasonable under the circumstances of the particular case . See Scope and Introduction Note to Chapter 40, American Law Institute's Restatement of the Law of Torts .
"An invasion of another's interest in the use and enjoyment of land is intentional in the law of private nuisance when the person whose conduct is in question as a basis for liability acts for the purpose of causing it, or knows that it is resulting from his conduct, or knows that it is substantially certain to result from his conduct. Restatement of the Law of Torts, § 825 * (page 689).
Its ultimate conclusion was expressed in the following language:
" When the complaint is construed as a whole, however, it alleges facts which show a private nuisance resulting from an intentional and unreasonable invasion of the plaintiffs' interest in the use and enjoyment of their land." (page 690).
The first sentence from the first excerpt from the Morgan opinion, quoted above, cannot be construed as meaning the injury is intentional if the actor's conduct is unreasonable. In that case, it was conceded that the harm was intentional. The action was for an injunction and for damages suffered after notice to the defendant, admittedly received, of the harm the fumes were causing. The Court's language is simply the equivalent of, "though the invasion be intentional within the meaning of the rules contained in Restatement, Torts, Chapter 40, the actor is not liable unless his activity was also unreasonable." That this is so, finds support in the fact that the Court documented its statement by a general citation to the entire introductory note, to Chapter 40 of the Restatement. Any doubt about the meaning of the first sentence, however, is dispelled by the fact that, in its very next breath, the opinion defines exactly what is meant by an "intentional invasion." This is done in the very language of Restatement § 825, though without quotations, and is followed, immediately and appropriately, by a citation of that section.
Certainly, the holding in a case in which it was conceded that the invasion was wrought with knowledge of the harm it was causing cannot stand for the proposition that such knowledge is not an essential of the cause of action. When the Court, nevertheless, has gone out of its way to spell out the requirement of knowledge in the language of, and with specific citation to, the Restatement's formulation, a conclusion that North Carolina has rejected those principles is impermissible. Far from intimating that in North Carolina the invasion need not be intentional if the defendant's discharge of noxious gases on its own land can be said to be unreasonable though done with due care and prudence, the Supreme Court of that state has explicitly stated that it must be. When the Court has stated the requirement in the language of the Restatement, with appropriate acknowledgment of its source, there is no room for a construction of the opinion as a rejection of the Restatement's formulation.
Such a construction cannot be founded on the Court's quotation of the Cardozo dictum in McFarlane v. City of Niagara Falls, 247 N.Y. 340, 160 N.E. 391, 57 A.L.R. 1. The quotation follows a statement that one who intentionally creates a private nuisance is liable for the harm it causes regardless of negligence. The quotation lends support to that proposition, the immediate subject of discussion. It cannot support an inference that in North Carolina, the harm need not be intended, for any such inference is expressly controverted by what the Court had expressly said earlier in the same opinion when explicitly discussing the question of intention. What the Court said when directing itself to the immediate problem cannot be negated by dubious inferences derived from language it employed in discussing a related but different problem.
The other North Carolina case to which the parties principally look is Watts v. Pama Manufacturing Company, 256 N.C. 611, 124 S.E.2d 809. It is not a noxious gas case at all. It involved nothing re-' motely suggestive of ultrahazardous activity. It is, however, an ordinary pri vate nuisance case, as this one is said to be.
In that case, it appears that in 1957 the plaintiff built a house on a lot adjacent to a hosiery mill. He experienced no annoyance from the operation of the hosiery mill, but in 1960 the defendant converted the plant to other uses, installed much heavier machinery and enlarged the air-conditioning system. The almost continuous operation of the new, heavy machinery and enlarged air-conditioning equipment created vibrations which were transmitted to plaintiff's house. He protested, but to no avail. Thereafter, the house sustained substantial vibration damage.
Again, as in Morgan, there was no question but that the invasion was intentional. The house sustained the damage when the defendant continued the operation of its new, heavy machinery after notice of the harm it was causing the plaintiff in the use and enjoyment of his house. The fact that the invasion was intentional being conceded, the only question in the case was the reasonableness of the defendant's activity on its land.
That the court focused its attention on the only issue in the case is readily explicable. The court's statement, in the context of that ease, that "The question is whether or not the use is unreasonable," was the literal and whole truth. It contains no implication of a rejection of the intentional requirement. Nor does the court's general statement that one "is subject to liability for an intentional nontrespassory invasion when his conduct is unreasonable." On the contrary, there was no reason to classify the invasion as intentional unless it was of some significance.
It would have been surprising if the court had addressed itself at large to an issue which the ease did not present. Nevertheless, as in Morgan, it took pains to define the intentional requirement. It said:
"An invasion of another's interest in the use and enjoyment of land is intentional in the law of private nuisance when the person, whose conduct is in question as a basis of liability, acts for the purpose of causing it, or knows that it is substantially certain to result from his conduct." (page 818).
That is the language of Restatement § 825. The court thus positively and affirmatively foreclosed a construction of its opinion that in North Carolina one in possession of land may be liable for an unreasonable, though unintended, nontrespassory invasion of another's interest in land resulting from conduct which is neither negligent nor ultrahazardous. Its use, in defining the requirement, of the language of Restatement § 825 leaves no room for speculation that North Carolina imposes no such requirement or that it would not be applied in accordance with the reasonable and fair import of the language used.
The language a court uses, of course, cannot negate its holdings. There is no inconsistency here, however. In Morgan, Watts, and in every other North Carolina case in this area, which has been brought to our attention, the invasion was clearly intentional.
North Carolina's Supreme Court, both substantively and verbally, has embraced the Restatement's Chapter 40 formulation and applied those principles in noxious gas cases. The court's language, simply but emphatically, forecloses any suggestion that its embrace has been tentative, reluctant or reserved.
Since, in this diversity case, we are required to apply North Carolina law, as declared by its highest court, we are not at liberty to disregard what it has done and said or, by a process of inference from extracted words not immediate ly germane, to attribute meanings to its opinions which are in conflict with the plain and unequivocal language that court has used in those same opinions when directly discussing the precise question before us.
Since there was no negligence and the invasion was unintentional within the meaning of the rule applied in North Carolina, the District Court properly concluded there was no private nuisance giving rise to a cause of action for damages.
Affirmed.
. Fletcher v. Rylands, 1865, 3 H. & C. 774, 159 Eng.Rep. 737, reversed in Fletcher v. Rylands, 1866, L.R. 1 Ex. 265, affirmed in Rylands v. Fletcher, 1868, L.R. 3 H.L. 300.
. In other contexts, of course, one may be responsible for unintentional invasions of interests in land resulting from reckless, negligent, or ultrahazardous conduct.
. Even in the Cardozo dictum, there well may be an implicit assumption of intention, because the subject is approached in terms of a duty to desist, a duty which, supposedly, would arise only upon notice that harm was being caused.
. The Court also cited Restatement § 822 where it is clearly stated that liability results from a substantial invasion only if it is both intentional and unreasonable.
. See Glace v. Town of Pilot Mountain, 265 N.C. 181, 143 S.E.2d 78 (1965); Midgett v. North Carolina State Highway Commission, 260 N.C. 241, 132 S.E.2d 599 (1963); Andrews v. Andrews, 242 N.C. 382, 88 S.E.2d 88 (1955).