By Leah S. Poniatowski, J.D.
Public water suppliers pleaded sufficient facts to meet substantial causation standard despite fungibility of the chemical.
Dow Chemical and two other manufacturers of 1,4-dioxane were unsuccessful on their motion to dismiss several products liability lawsuits filed by public water suppliers because the underlying complaints’ assertion that the chemical was fungible and could not be traced to the exact manufacturer was not an admission that the suppliers could not establish substantial causation, a federal district court in New York ruled. Nor was there any legal support for the manufacturers’ position that the suppliers failed to meet the pleading standard because of the fungibility (Locust Valley Water District v. Dow Chemical Co., June 4, 2020, Gershon, N.).
Public water suppliers (collectively, the suppliers) in Long Island, New York filed over 20 products liability-based lawsuits against The Dow Chemical Co., Ferro Corp., and Vulcan Materials Co. (collectively, the manufacturers) with respect to the manufacturing of the chemical 1,4-dioxane (dioxane). The U.S. Environmental Protection Agency (EPA) classifies dioxane as a possible human carcinogen, and the chemical has never been approved by any federal or state agency as an additive to drinking water in any amount.
Environmental regulation. Although the New York State Department of Health set the generic maximum contaminant level (MCL) for dioxane at 50 parts per billion, state legislation that passed in 2017 requires water systems to test for dioxane, and a water quality control council established by the governor recommended that the dioxane MCL be reduced to 1 part per billion. The suppliers alleged strict products liability for defective design and failure to warn; negligence; public nuisance; and trespass. They also sought compensatory and punitive damages, largely to recover the costs of removing the chemical from the drinking water wells.
Suppliers’ complaints. Dioxane became widely used in the 1950s to stabilize chlorinated solvents and is not a naturally occurring chemical. It became banned in 1996 with respect to its contribution to ozone layer depletion but the existing stocks were exempt from the ban, allowing its manufacture for almost a decade later. The suppliers alleged that the manufacturers knew, or should have known, that: (1) dioxane is toxic to humans and presents a hazard to public drinking water wells; (2) the primary use of their products led to concentration of dioxane in the waste stream; (3) solvent use and recovery systems, by design, produced wastewater with high concentrations of the chemical and routinely malfunctioned; (4) regular use and disposal of septic tank and drain cleaners containing the chemical would release it into groundwater; and (5) despite the pollution arising from the foreseeable use of products containing dioxane without adequate warnings, the manufacturers promoted, marketed, and sold those products where the wells were located.
The complaints filed after the first one also alleged that the chemical was fungible, and that "[u]sing currently accepted scientific methods, it is impossible, based on the chemical’s physical characteristics, to identify the manufacturer or the product containing the [dioxane]." The suppliers also contended that "once released into the environment, [dioxane] lacks characteristics or a chemical signature that would enable identification of the specific company that manufactured the products, based on any physical characteristics[.]"
Accordingly, the manufacturers challenged the validity of the suppliers’ lawsuits, arguing that the suppliers could not establish causation if a particular dioxane molecule could not be traced to a particular defendant. In response, the suppliers asserted that the additional allegation was not an admission that it was impossible to identify the manufacturer responsible for the chemical in their wells, but that they would use multiple lines of evidence, i.e., market share, to demonstrate that the conduct of each manufacturer was a substantial factor in causing the harm alleged.
Causation. The court agreed with the suppliers that the allegations were not an admission that they could not establish substantial factor causation. Further, the court stated that the manufacturers did not provide any authority for their position that the fungibility of a chemical prohibits a party from meeting the causation pleading standard when alleging manufacturer liability. Rather, controlling precedent affirmed that a jury considering market share as part of the circumstantial evidence was not improper; thus, the plaintiff in that case had been able to prove that a manufacturer’s conduct was a substantial factor in causing groundwater contamination despite the fungibility of the contaminating chemical. The court here was also unpersuaded by the manufacturers’ unnamed third-party liability argument. Therefore, the motion to dismiss the complaints on causation grounds was denied.
Alternative liability theories. The court also denied the manufacturers’ motion to dismiss the alternative theories of liability because the suppliers had properly pleaded facts supporting direct, substantial factor causation and, thus, there was no need to evaluate whether the suppliers could also proceed under an alternative theory.
The case is No. 19-cv-2490 (NG) (RLM).
Attorneys: Stephanie D. Biehl (Sher Edling LLP) for Locust Valley Water District. Jeanette Bayoumi (Hausfeld LLP) for Suffolk County Water Authority. Joel Alan Blanchet (Phillips Lytle LLP) for The Dow Chemical Co. Robb W. Patryk (Hughes Hubbard & Reed LLP) for Ferro Corp. Felice B. Galant (Norton Rose Fulbright US LLP) for Vulcan Materials Co.
Companies: Locust Valley Water District; Suffolk County Water Authority; The Dow Chemical Co.; Ferro Corp.; Vulcan Materials Co.
MainStory: TopStory ChemicalNews DesignManufacturingNews CausationNews NewYorkNews
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