Opinion ID: 4517065
Heading Depth: 3
Heading Rank: 2

Heading: Other Judicial Interpretations

Text: Our interpretation of the local event exception aligns with two of our sister circuits. The Third Circuit’s 2013 opinion in Abraham was the first appellate decision to arrive at a view similar to ours. In Abraham, the St. Croix Renaissance Group (“SCRG”) purchased a former alumina refinery, which had for the previous 30 years emitted hazardous substances into the red mud outside the refinery. 719 F.3d at 272–73. These substances were dispersed by wind and disseminated as a 12 Case: 19-14427 Date Filed: 03/17/2020 Page: 13 of 19 result of erosion. Id. at 273. The plaintiffs sued, arguing that SCRG was liable for the continuing torts resulting from the plant. Id. at 273–74. SCRG removed the case to federal court. Id. at 273. The Third Circuit acknowledged the presence of “an,” but looked to the ordinary meaning of “event or occurrence” to confirm whether the phrase necessarily refers to a singular moment in time. Id. at 277. The court stated that “neither the term ‘event’ nor ‘occurrence’ is used solely to refer to a specific incident that can be definitively limited to an ascertainable period of minutes, hours, or days.” Id. Instead, an “event or occurrence” can refer to “a continuing set of circumstances” that “share some commonality and persist over a period of time.” Id. This rule allowed the plaintiffs’ claims to stay in state court, as their complaint alleged a continuous, ongoing emission of toxic substances without any “separate and discrete incidents causing the emission.” Id. at 280. The Fifth Circuit followed a similar approach the next year in Rainbow Gun Club. The plaintiffs in that case entered into oil, gas, and mineral leases with Denbury Onshore. 760 F.3d at 407. They later sued, arguing Denbury breached its duty to act as a reasonable and prudent operator of the well that was drilled under these leases. Id. The Fifth Circuit agreed with the Third Circuit that the plain meanings of “event” and “occurrence” support the view that the local event exception is “not generally understood to apply only to incidents that occur at a discrete moment in time.” Id. at 409. The court took account of the singularity 13 Case: 19-14427 Date Filed: 03/17/2020 Page: 14 of 19 implicit in the local event exception by holding that it encompasses both “a discrete moment in time” as well as “a pattern of conduct in which the pattern is consistent in leading to a single focused event.” Id. at 411–12. The Fifth Circuit concluded that the plaintiffs’ claims belonged in state court because their complaint alleged “multiple acts of negligence” giving rise to one harm-causing event: “the failure of the Well.” Id. at 412. The Ninth Circuit has issued two decisions exemplifying a contrasting view. First, in Nevada v. Bank of America Corp., 672 F.3d 661 (9th Cir. 2012), the State of Nevada brought a parens patriae action in state court alleging that “Bank of America misled Nevada consumers about the terms and operation of its home mortgage modification and foreclosure processes, in violation of [Nevada law].” Id. at 664. Bank of America removed the case to federal court and the district court denied the motion to remand. Id. at 666. Although the Ninth Circuit did order the case remanded to state court, id. at 676, it declined to apply the local event exception, id. at 667–68. The local event exception, said the court, “applies only where all claims arise from a single event or occurrence . . . that gives rise to the claims of all plaintiffs.” Id. at 668 (quotation marks omitted). The local event exception did not apply to Nevada’s claims because the complaint “allege[d] widespread fraud in thousands of borrower interactions.” Id. (emphasis added). 14 Case: 19-14427 Date Filed: 03/17/2020 Page: 15 of 19 Three years later came Allen. In Allen, the plaintiffs alleged that Boeing released toxins into the groundwater around one of its facilities, and that another firm, Landau Associates, was negligent in its investigation and remediation of the pollution. 784 F.3d at 627. In the Ninth Circuit’s estimation, the plaintiffs’ case belonged in federal court because “a continuing course of pollution, contamination, or conduct that occurs over a period of years” does not fit within the local event exception. Id. at 632. The Ninth Circuit, like we do, examined dictionary definitions of “event” and “occurrence.” Id. at 630–31. While the Ninth Circuit recognized these words can be given a broader interpretation, the court concluded without citation that they “most commonly and reasonably refer to a singular happening,” and that “[t]here is no reason to think that Congress intended anything else.” Id. at 631. We view the Ninth Circuit’s reading of the statute as too cramped. “An event or occurrence” can be a single moment in time, but it can also be a series of connected events occurring over a longer period. At the same time, the Third Circuit’s analysis would benefit from guardrails for applying the local event exception. The constraints of the Fifth Circuit’s decision in Rainbow Gun Club— requiring the defendants’ actions to be contextually connected and to culminate in one, distinct harm-causing event or occurrence—ensure that courts are best 15 Case: 19-14427 Date Filed: 03/17/2020 Page: 16 of 19 equipped to decide which cases are truly local and which should remain in federal court.