United States District Court, W.D. Missouri, Southwestern Division
JODELLE L. KIRK, Plaintiff,
SCHAEFFLER GROUP USA, INC., FAG HOLDING, LLC, and FAG BEARINGS, LLC, Defendants.
ORDER PARTIALLY GRANTING PLAINTIFF'S MOTION ON COLLATERAL ESTOPPEL
GREG KAYS, District Judge.
This case arises from Plaintiff Jodelle Kirk's allegation that Defendants are liable for negligently or intentionally introducing trichloroethylene ("TCE") into the environment near her childhood home, contaminating the groundwater and causing her to develop a variety of serious illnesses.
Now before the Court is Plaintiff's Motion for a Determination that Offensive, Non-Mutual Collateral Estoppel Applies to Bar Defendant from Re-Litigating Certain Issues (Doc. 40). Plaintiff contends that because other courts have repeatedly held a predecessor company arguably related to Defendants liable for this contamination, collateral estoppel prevents Defendants from contesting certain allegations in this case.
For the following reasons, the motion is GRANTED IN PART.
Collateral estoppel, or issue preclusion, is a legal doctrine which precludes the same parties from relitigating issues which have been previously adjudicated between them. Oates v. Safeco Ins. Co. of Am., 583 S.W.2d 713, 719 (Mo. 1979). The purpose of the doctrine is to "to promote judicial economy and finality in litigation.'" Allstate Ins. Co. v. Blount, 491 F.3d 903, 909 (8th Cir. 2007) (quoting Liberty Mut. Ins. Co. v. FAG Bearings Corp., 335 F.3d 752, 758 (8th Cir. 2003)).
Collateral estoppel is an issue of substantive law which requires a federal court sitting in a diversity action to apply the forum state's law on collateral estoppel. Richardson v. Phillips Petroleum Co., 791 F.2d 641, 643 (8th Cir. 1986). "This rule applies [even] when the original judgment is that of another federal court sitting in diversity." Follette v. Wal-Mart Stores, Inc., 41 F.3d 1234, 1237 (8th Cir. 1994). Thus, the Court applies Missouri's collateral estoppel law to this motion.
Historically, Missouri courts applied the doctrine only when all the parties were part of the previous action. In 1979, the Missouri Supreme Court extended the doctrine to cases in which a stranger to the prior suit asserted collateral estoppel against a party to a prior suit. Oates, 583 S.W.2d at 719. Applying the doctrine in this way is known as non-mutual collateral estoppel, referring to the fact that at least one of the prior parties was not involved in the prior litigation. A plaintiff may invoke the doctrine against a defendant even "where the plaintiff was not a party to the earlier judgment." In re Caranchini, 956 S.W.2d 910, 912 (Mo. 1997). This is called offensive non-mutual collateral estoppel. Id.
In determining whether offensive non-mutual collateral estoppel applies under Missouri law, a court considers: (1) whether the issue decided in the prior case is identical to the issue presented in the present action; (2) whether the prior case ended with a judgment on the merits; (3) whether the defendant was a party, or in privity with a party, to the prior case; and (4) whether the defendant had a full and fair opportunity to litigate the issue in the prior case. James v. Paul, 49 S.W.3d 678, 682 (Mo. 2001). Each case is analyzed on its own facts, and the court should not apply the doctrine where doing so would be inequitable. Id.
FAG Bearings Corporation ("FAG"), a Delaware corporation, operated a ball bearing manufacturing plant in Joplin, Missouri. From approximately 1975 through 1981, this plant used the volatile organic chemical TCE in its operations as a vapor degreaser. The Village of Silver Creek, Missouri ("Silver Creek") is one of several residential areas located downhill from this plant. Plaintiff alleges that TCE released from the plant made its way into "the water supply of her childhood residence" in Silver Creek, and subsequently caused her to develop autoimmune hepatitis, steroid-induced diabetes, Barrett's esophagus, and precancerous cells on her cervix. Plaintiff is suing under theories of strict liability (Count I), negligence (Count II), and negligence per se (Count III).
FAG no longer operates under its original name. On January 6, 2005, it was converted into Defendant FAG Bearings LLC ("FAG Bearings") pursuant to Del. Code Ann. tit. 8, § 266. Since this date, FAG Bearings has been wholly owned by Defendant Schaeffler Group USA, Inc. ("Schaeffler"). Prior to 2005, Schaeffler did not have an ownership interest in either FAG or FAG Bearings.
Defendant FAG Holding, LLC ("FAG Holding") was formed on January 6, 2005, when FAG Holding Corporation converted into FAG Holding. FAG Holding has been wholly owned by Schaeffler since at least this date. FAG Holdings and FAG Bearings appear to be sister corporations who are owned by the same entity, Schaeffler.
The Defendants in this case are FAG Bearings, Schaeffler, and FAG Holding.
FAG's release of TCE into the groundwater from the Joplin manufacturing plant has been repeatedly litigated and is well-settled. The four cases that ended with a judgment on the merits are discussed below.
1. FAG Bearings Corp. v. Gulf States Paper Co., et. al. In this case, FAG sued other manufacturers in the area around its plant claiming they caused or contributed to the contamination found on FAG's property and in certain residential drinking water wells in Silver Creek and in the Village of Saginaw, Missouri. FAG Bearings Corp. v. Gulf States Paper Co., No. 95-5081-CV-SW-8, 1998 WL 919115, at *1-2, 39 (W.D. Mo. Sept. 30, 1998). FAG asserted claims against the defendants for contribution under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), and for nuisance, trespass, and strict liability. Id. at *2. Two of these manufacturers counterclaimed against FAG. Id.
After a three-week bench trial, the court, the late Honorable Judge Joseph Stevens, Jr., ruled against FAG. Judge Stevens' decision made extensive factual findings. Relevant to the present case, he found:
* FAG released TCE into the environment in a number of different ways. Because of periodic malfunctions in the plant's vapor recovery system, some TCE was released into the atmosphere as fugitive air emissions. Id. at *4.
* FAG released approximately 12, 000 to 25, 000 gallons of TCE through waste, spills, leaks, overflowing tanks, incidental use of TCE, and dumping of "still bottoms" into the ground at FAG's facility. Id. at *4-5.
* During investigations at FAG's facility from 1991 to 1996, "TCE or TCErelated chemicals were detected in at least 36 different locations across the FAG facility." Id. at *11.
* FAG's employees occasionally dumped or pumped TCE directly into the ground. The highest levels of TCE contamination were found at or near these locations. Id. at *12.
* The "trail, " or plume, of contamination runs directly from these locations to residential wells located south of FAG's property. Id.
* FAG was "100%" responsible for the TCE contamination in Silver Creek, Saginaw, and on FAG's property. Id. at *24, 31-32, 41.
* FAG "totally refused to cooperate in investigation and remediation" of the TCE contamination. Id. at *41.
Judge Stevens did not, however, determine the extent of the TCE contamination. He held:
FAG has released substantial quantities of TCE onto its property. TCE and TCE-related chemicals existing on FAG's property are attributable to FAG's release. FAG may also be the source of other chemicals existing on its property and in the Villages [Silver Creek]. However, the extent of FAG's release and of the contamination existing at its ...