Judge blocks class action suit against Dow Chemical

A Saginaw County judge ruled this week that a recent U.S. Supreme Court decision means that property owners in the dioxin-contaminated Tittabawasee floodplain cannot sue Dow Chemical for damages in a class action.

Operations at Dow’s Midland plant have spread dioxin — a highly toxic and cancer-causing byproduct of the chemical manufacturing process — and other chemicals, through the Tittabawassee and Saginaw Rivers and into Lake Huron. Flooding of the rivers downstream from Dow has deposited dioxin-laden sediments on properties in the floodplain.

Sampling of floodplain properties has revealed dioxin contamination at levels thousands of times higher than allowed by Michigan and prompted state health officials to warned residents to keep children from playing in dirt near their homes, to wear masks while mowing their lawns, to avoid eating fish and livestock raised in the floodplain and to take other precautions.

Since 2003 a group of about 150 Tittabawassee property owners have been trying to sue Dow as a group on behalf of the more than 2,000 people with property in the floodplain.

The plaintiffs claim that they are not able to fully use their properties because of the contamination and that their properties have lost value. Dow has acknowledged that the dioxin contamination came from its operations but insists that it is not harmful to residents.

In the battle over certification of class status Dow has argued that because the level of pollution on the contaminated parcels varies, the property owners should not be treated as a group.

In 2005 Saginaw County Judge Leopold Borello approved class action status for this lawsuit, but Dow appealed to the Michigan Supreme Court.

In 2009 that court established new guidelines for certification of class status and ordered Borello to reevaulate his certification in view of the new standards.

Borello, who had retired, went back to work to hear arguments on the matter.

In an opinion released Tuesday Borello reversed his earlier approval of class status for the group.

He said that the case met the Michigan guidelines for class standards but that the recent U.S. Supreme Court case Wal-Mart v. Dukes has created a new rules for what a group must have in common with one another in order to be considered a class.

In a 5-4 decision last month the U.S. Supreme Court ruled that 1.5 million former and current Wal-Mart employees could not sue the company as a class for discrimination in compensation and promotions because they could not show that they were victims of one single discriminatory policy.

Writing for the court’s conservative majority Justice Antonin Scalia said that Wal-Mart’s decentralized structure meant that the case involved millions of employment decisions and the women failed to show “some glue holding the alleged reasons for all those decisions together.”

Borello said that the Wal-Mart decision forced him to reverse his order granting class certification to the Tittabawassee floodplain residents.

“Even assuming that defendant negligently released dioxin and that it contaminated the soil in plaintiffs’ properties,” he wrote, “whether and how the individual plaintiffs were injured involves highly individualized factual inquiries regarding issues such as the level and type of dioxin contamination in the specific properties, the different remediation needs and different stages for different properties, and the fact that some of the properties have been sold.”

Plaintiffs’ attorney Teresa Woody said that her legal team is still reviewing Borello’s order.

“It’s our impression that there is an error of law in the order,” she said. “We think that if the state has its own certification rules then the Dukes case does not apply.”

Woody said she intends to continue to pursue Dow for damages regardless of whether the claims go forward as a class or as many individual claims.

“Dow intends to continue to vigorously defend the case if plaintiffs choose to appeal this decision or if the case moves forward with individual plaintiffs,” the company said in a statement.