WARREN SMITH, ET AL. V. CARBIDE AND CHEMICALS OF CORPORATION, ET AL. APPEALS
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RENDERED : JUNE 21, 2007
TO BE PUBLISHED
';WUyrrMr Caurf of ~R
2005-SC-000686-CL
WARREN SMITH
AND 127 ADDITIONAL APPELLANTS,
NAMED IN THE NOTICE OF APPEAL
[o~A`rC~sut
CERTIFICATION OF LAW FROM
U.S. COURT OF APPEALS, SIXTH CIRCUIT
NO. 04-5323
V.
CARBIDE AND CHEMICALS CORPORATION ;
UNION CARBIDE CORPORATION ;
MARTIN MARIETTA ENERGY SYSTEMS INCORPORATED ;
MARTIN MARIETTA UTILITY SERVICES
INCORPORATED ; LOCKHEED MARTIN ENERGY
SYSTEMS INCORPORATED ;
AND LOCKHEED MARTIN UTILITY SERVICES
APPELLEES
OPINION OF THE COURT BY JUSTICE SCHRODER
CERT IFYING THE LAW
Pursuant to CR 76.37(1), this Court granted the certification request of the United
States Court of Appeals for the Sixth Circuit to answer the following questions of
Kentucky law:
I.
Is proof of actual harm required to state a claim for an intentional
trespass?
II .
If the plaintiffs can prove a diminution in their property values due to an
intentional trespass, do they have a right of recovery under Kentucky law?
In certifying the questions of law to this Court, the United States Court of Appeals
for the Sixth Circuit provided a brief explanation of the facts that gave rise to the case .
The one hundred and twenty eight (128) appellants are individuals who own eighty
parcels of property (property owners) within ten miles of the fifty-year-old Paducah
Gaseous Diffusion Plant (PGDP), a federally owned and contractor-operated uranium
enrichment facility located in McCracken County, Kentucky. The appellees are those
contractor-companies (contractors) that have operated the PGDP facility under
agreement with the federal government.
The Order of Certification further provided that:
In August 1988, the Radiation Health and Toxic Branch of
the Kentucky Department of Health discovered groundwater
contamination, specifically contamination of trichloroethlene
(TCE) and technetium-99 (Tc-99), in a plume of groundwater
flowing northwest from the facility . Levels of TCE exceeding
regulatory limits were detected in a few wells, but the Tc-99
concentrations were below the proposed regulatory limits .
The PGDP provided a temporary water supply to the
residents in the area to alleviate any concerns about the
groundwater contamination, and the United States
Department of Energy eventually provided them with
municipal water at no cost. No health problems associated
with this contamination have been claimed by the [property
owners]; rather, they seek damages for the alleged
diminution in the market value of their properties due to the
contamination .
On March 1, 1990, a second plume of TCE groundwater
contamination was detected extending northeast from the
boundaries of PGDP . The PGDP conducted a neighborhood
notification survey of all local residents and held public
briefings about the newly detected contamination . In total,
approximately 10 billion gallons of contaminated water were
spreading off the PGDP site as of April 2000, the month in
which the United States General Accounting Office issued a
report regarding the contamination and cleanup efforts .
The property owners filed a lawsuit on January 3, 1997,' alleging (per the
certification order) :
a diminution in property values based on contamination
caused by the operation of the PGDP . Although they
concede that the alleged contamination is composed of
imperceptible particles, which are not visible to the naked
eye, their contention is that the groundwater and soil
contamination constituted an intentional trespass, a
characterization not contested by the defendants . Because
the trespass was intentional, the [property owners] maintain
that a demonstration of actual harm is not necessary to
maintain their action.
The contractors filed a motion for summary judgment and the property owners
filed a cross-motion. In granting the contractors their motion and dismissing the case,
the district court cites to Mercer v. Rockwell International Corp . , 24 F .Supp .2d 735, 741
(W.D. Ky. 1998), the "`right to exclusive possession' is liberally interpreted so as to not
subject property owners to most uninvited intrusions, some entries may be so
insubstantial or so trifling that they will not infringe upon the legally protected interest in
freedom from interference with exclusive possession ."
The case was appealed to the United States Court of Appeals for the Sixth
Circuit which has to decide whether the district court erred in determining that there are
no genuine issues of material fact regarding the actual harm to the property owners'
realty. Because issues in the case involve questions of Kentucky law that have not
been addressed previously by a Kentucky court, the Sixth Circuit has requested
certification of the aforementioned questions of law pursuant to CR 76 .37 .
' Under the Price-Anderson Act, 42 U.S.C . §§ 2011, federal courts are granted jurisdiction over actions
relating to nuclear facilities, but are required to apply state law.
3
I.
Is proof of actual harm required to state a claim for an intentional
trespass?
To the first question for certification, "is proof of actual harm required to state a
claim for intentional trespass?", we must answer "No."
Property owners are traditionally afforded far-reaching legal protections in the
exclusive use and enjoyment of their land. 6-A AMERICAN LAw OF PROPERTY §28.1 (A.J.
Casner ed. 1954) . "Any intended intrusion or encroachment which is not privileged is
actionable without regard for the shortness of the period of the interference, or the
absence of pecuniary harm." Id. Kentucky follows the common law. In Fletcher v.
Howard , 226 Ky. 258, 10 S.W.2d 825 (1928) overruled in .pqrt
Cissell v. Grimes
Investments . Inc. , 383 S.W.2d 128 (Ky. 1964), 2 the Court dealt with an intentional
trespass where the evidence on actual damages was speculative or vague. Our
predecessor, the Court of Appeals, opined that when "[t]he evidence was vague as to
the amount of damage, but where a trespass has been committed upon the property of
another, he is entitled at least to nominal damages for the violation of his rights ." Id. at
260, 10 S .W.2d at 95.
By 1950, in the case of Huahett v. Caldwell , 313 Ky. 85, 230 S.W.2d 92 (1950),
the then Court of Appeals, in discussing the difference between an intentional and
innocent trespass, recognized "[i]t is the universal inference of the law that every
unauthorized entry upon the land of another person results in some damages, though it
may be nominal ." Id. a t 90, 230 S.W.2d at 96 (emphasis added) . In the case of Randall
v. Shelton , 293 S.W.2d 559, 562 (Ky. 1956), the Court set forth the three situations
where an interference with property will support an award of damages in Kentucky:
z Cissell , 383 S.W
.2d at 130, recognized the common law rule as to damages for intentional trespass, but
refused to remand where only nominal damages were at issue .
4
intentional trespass ; extra-hazardous activity; and negligent trespass that causes a
harm or injury .
Ellison v. R & B Contracting, Inc . , 32 S.W.3d 66 (Ky. 2000), provided this Court
with an opportunity to revisit the law of trespass to real property . The jury found the
trespass was intentional . Although the case focused on the proper damages for
trespass, the Court reaffirmed the traditional law of trespass, "even if the plaintiff
suffered no actual damages as a result of the trespass, the plaintiff is entitled to nominal
damages ." Id. at 71 . However, in intentional trespass, in order to recover more than
nominal damages, a property owner must prove "actual injury," which we shall discuss
further below. Hu hett, 313 Ky. at 90, 230 S.W.2d at 826-27.
II.
If the plaintiffs can prove a diminution in their property values due to
an intentional trespass, do they have a right of recovery under
Kentucky law?
The second question certified to this Court, "if the plaintiffs can prove a
diminution in their property values due to an intentional trespass, do they have a right of
recovery under Kentucky law?" cannot be answered simply "yes" or "no". The question
confuses the "right to recover" with the "measure of damages" as a substitute "for proof
of actual harm". Kentucky law allows the recovery of just compensation (not merely
nominal damages) upon proof of actual injury to the real estate . Hughett , 313 Ky. at 90,
230 S.W.2d at 96 . Once the particular injury to real estate is shown, the diminution in
fair market value is a recognized measure of damages. Ellison, 32 S.W .3d at 69; see
also George v. Standard Slag Co. , 431 S .W.2d 711, 712 (Ky. 1968) (providing for a
measure of damages) . The preliminary question in a contamination case in Kentucky is
at what level does the trespass evolve from a mere stigma, or damage to the reputation
of the realty, into an actual injury or harm? See Morgan v=Hightower's Adm'r , 291 Ky.
58, 163 S.W.2d 21 (Ky. 1942) .
The Hu hett Court recognized that "the courts of the country have differed on the
question of what constitutes actual loss . . . ." Id. at 90-91, 230 S .W .2d at 96. In
Rockwell Int'I Corporation v. Wilhite , 143 S.W.3d 604 (Ky.App . 2003), our Court of
Appeals dealt with known deposits of polychlorinated biphenyls (PCBs) on some fiftyfour tracts of land. The property owner's argument in Rockwell claimed harm to the
land even though PCBs were invisible to the eye, odorless, and presented a
progressive problem, much like the intentional trespass in our case . Although that case
dealt with negligent trespass, the applicable statute of limitations, and the "discovery
rule," much of the court's discussion on actual injury or harm is relevant in the case sub
judice for compensatory damages for intentional trespass and even nuisance cases .
Citing this Court's earlier decision in Wilhite v. Rockwell International Corporation , 83
S.W.3d 516 (Ky. 2002), and the evidence before the trial court, the appellate court
noted that competent evidence of injury included the fact that PCB's were designated by
Congress and the state of Kentucky as hazardous substances, that the EPA had made
determinations of the concentrations which were unreasonably dangerous and
carcinogenic, etc. Rockwell , 143 S.W.3d at 618.
In rejecting the property owner's argument that gny detectable quantity of PCB's
provides sufficient proof of injury to support a claim for actual or compensatory
damages, the Court of Appeals held that a decrease in the fair market value was not in
itself a harm but a means of "measuring the harm ." Id. at 621 . As to the level or
concentration of PCB's that amount to a harm, the court noted that "after a quarter of a
century and a half of industrialization there is most likely no land in the continental
United States that is completely free from one or more potentially toxic or harmful
substances . . . ." Id. The court opined that because "[n]o'persons who have come upon
the land have been harmed, no farm animals or pets have been sickened, nor have any
crops been lost" and that "[t]he land and the buildings thereon continue to be used as
they were before the presence of PCBs was discovered", the landowners failed to
establish injury or harm as a consequence of the trespass . Id . at 625.
To reach the question posed, the Sixth Circuit must determine whether the
contaminants in this case create an actual injury - an interference with an owner's use
of the land . We know from Mor an, 291 Ky. at 60, 163 S .W .2d at 22-23, that mere
damage to the reputation of realty does not entitle one to recovery, as that injury is more
imaginary than real. Likewise, the mere presence of contaminants may only damage
the property's reputation and not its use . The Court of Appeals in Rockwell , 143 S.W.3d
at 604, set the bar for a compensable harm in negligent trespass cases to fall at the
point where the contaminants cause a health hazard. Relying on our rationale in Wood
v. Wyeth-Ayerst Laboratories , 82 S.W.3d 849 (Ky. 2002), a products liability case with a
question as to "harm to the person," the Rockwell court reasoned that the mere
presence of PCB's itself was not an injury, that some physical harm needed to be
shown . Id. at 623.
This Court is not as forgiving in identifying actual injury to real property, whether
by intentional or negligent trespass . When the intrusion is through imperceptible
particles not visible to the naked eye, there may still be an actual injury.
In
Commonwealth ex. rel. Dep't of Natural Res. v. Stephens, 539 S .W .2d 303, 305 (Ky.
1976), a takings case, the Court recognized damages for interfering with a property's
use where no physical injury existed to the property (the owner was prohibited from
certain uses of his property) . And in George and Anderson , nuisance cases, the court
allowed damages for interfering with the use and enjoyment of property without a
physical intrusion . George , 431 S.W.2d at 711 ; Ky. & W . Va. Power Co. v. Anderson ,
288 Ky. 501, 156 S .W.2d 857 (1941) . Property owners are not required to prove
contamination that is an actual or verifiable health risk, nor are they required to wait until
government action is taken. An intrusion (or encroachment) which is an unreasonable
interference with the property owner's possessory use of his/her property is sufficient
evidence of an actual injury (or damage to the property) to award actual damages .
When the parcel's groundwater is contaminated, whether by imperceptible
particles or visible particles, to the extent that it cannot be used for consumption by
humans, animals, or crops, there is an actual injury . When ponds and streams have to
have signs posted to prevent swimming, fishing, drinking, or other otherwise normal
uses, there is an unreasonable interference with one's use and enjoyment . The amount
of harm, if any, to the individual parcels, and the corresponding measure of actual or
compensatory damages will depend upon the proof introduced at trial - an issue of fact.
Ellison, 32 S.W.3d at 70. To the extent that the property owners prove actual or
compensatory damages for the harm (the cost of restoring the property to the pretrespass condition), "the amount by which the injury to the property diminishes its total
value operates as an upper limit on any damage recovery ." Id. Thus, the diminution in
the property's value due to an intentional trespass is a recognized measure of damages
after, or if, an actual injury has been found.
The law of Kentucky is hereby certified to the United States Court of Appeals for
the Sixth Circuit .
All sitting . McAnulty, Noble, Scott, and Schroder, JJ ., concur. Cunningham, J.,
dissents by separate opinion . Minton, J ., dissents by separate opinion in which
Lambert, CJ, joins .
COUNSEL FOR APPELLANTS :
James W. Owens
730 Clark Street
P.O. Box 2757
Paducah, KY 42001-2757
Edmund J . Schmidt III
1913 21 St Avenue South
Hillsboro Village
Nashville, TN 37212
David Randolph Smith
1913 21 St Avenue South
Hillsboro Village
Nashville, TN 37212
COUNSEL FOR APPELANTS :
Robert E. Tait
Vorys, Saater, Seymour & Pease, LLP
P.O. Box 1008
52 East Gay Street
Columbus, OH 43216-1008
Mark C. Whitlow
Whitlow, Roberts, Houston & Straub
300 Broadway
P.O. Box 995
Paducah, KY 42002-0995
"Suprtutr
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2005-SC-000686-CL
WARREN SMITH
AND 127 ADDITIONAL APPELLANTS
NAMED IN THE NOTICE OF APPEAL
V.
APPELLANTS
CERTIFICATION OF LAW FROM
U.S . COURT OF APPEALS SIXTH CIRCUIT
NO. 04-5323
CARBIDE AND CHEMICALS CORPORATION ;
UNION CARBIDE CORPORATION ;
MARTIN MARIETTA ENERGY SYSTEMS INCORPORATED ;
MARTIN MARIETTA UTILITY SERVICES INCORPORATED ;
LOCKHEED MARTIN ENERGY SYSTEMS INCORPORATED ;
AND LOCKHEED MARTIN UTILITY SERVICES
APPELLEES
DISSENTING OPINION BY JUSTICE CUNNINGHAM
I respectfully dissent from the most thoroughly researched and well-stated
majority opinion . At the same time, I cannot join the concise and well-written dissenting
opinion of Justice Minton.
In my opinion, the majority is correct in stating that the answer to question one
should be "no." However, I part ways on the second issue and believe that the answer
to the second question should be an unequivocal "yes." Once an intentional trespass is
shown, the diminution in the property value should, in and of itself, be sufficient to award
damages. I do not believe that actual harm - as the majority defines such harm - is
required for damages to be awarded in intentional trespass . American Law of Property
and the Rockwell case - both relied upon by the majority - seem to hold actual damage
is required only in negligent trespass .
In fact, Rockwell states that liability is imposed for intentional trespass when
there is an intrusion, even when it is harmless. Liability is imposed for negligent
trespass only when there has been harm to the property . This suggests that no harm is
required in intentional trespass, and that once that is established damages are
computed .
If nominal damages are authorized for intentional trespass, then certainly actual
damages should be .
Here, the totally innocent and complaining property owners have had their
property invaded by unseen particles to the extent that the trespassing party has
provided an independent water source . If the presence of this intrusion reduces the
value of the property, then those landowners should be compensated .
The past Kentucky cases would indicate that a person subject to intentional
trespass is entitled to nominal damages only when other damages cannot be proven .
They certainly infer that when other damages are proven they should be recoverable . I
do not agree with the majority opinion that "in order to have a right of recovery of
compensatory damages under Kentucky law, the property owner must show proof of
actual harm or injury ." It doesn't seem logical to allow someone to receive nominal
damages - which are unspecific and nonexistent - and not afford compensatory
damages which are real and discernible .
It seems critical to this writer not to become bogged down in semantics in
debating the terms "harm" and "damages." When this case is distilled to its simplest
form, a clear and cogent need for judicial redress surfaces . There exists an innocent
property owner. There is a willful and intentional trespasser upon that property . The
trespass causes a change in the property . Because of that change, a free and willing
buyer is reluctant to pay the same money as he or she would have paid without the
change. There is harm. There is damage.
Neither should we be moved by the law's aversion to compensating for a mere
"stigma" upon real estate . The trespass here is real. It is not a stigma . It is neither
imagined by the owner or the general public. The decrease in market value to that
trespass is not irrational, fantastical, or rooted in emotion . The PCB's may be unseen,
but they are not without manifest results . Property buyers are as reasonable in their
reluctance to purchase a potential need for future litigation as they would be of
accepting a cloud upon the title .
1 do not accept the prediction that such a holding would have "the potential of
opening the proverbial floodgates of litigation ." Common experience of the industrial
age has taught us that those entities capable of perpetuating such trespasses are also
more than capable of taking care of themselves . Unless the diminution of the value of
their property is recoverable in our courts upon a mere showing of intentional trespass,
individual homeowners cannot.
,,$uyr:emr (~vurf of ~irufurhV
2005-SC-000686-CL
WARREN SMITH
AND 127 ADDITIONAL APPELLANTS
NAMED IN THE NOTICE OF APPEAL
V.
APPELLANTS
CERTIFICATION OF LAW FROM
U.S . COURT OF APPEALS, SIXTH CIRCUIT
NO . 04-5323
CARBIDE AND CHEMICALS CORPORATION ;
UNION CARBIDE CORPORATION ;
MARTIN MARIETTA ENERGY SYSTEMS INCORPORATED ;
MARTIN MARIETTA UTILITY SERVICES INCORPORATED ;
LOCKHEED MARTIN ENERGY SYSTEMS INCORPORATED ;
AND LOCKHEED MARTIN UTILITY SERVICES
APPELLEES
DISSENTING OPINION BY JUSTICE MINTON
I respectfully dissent because I believe that Kentucky should join other states in
requiring proof of actual harm to sustain a viable action for the intentional trespass of
imperceptible particles . This position is aptly expressed in Judge Joseph McKinley's
opinion in this case . See Smith v. Carbide and Chemicals Corp ., 298 F.Supp .2d 561
(W.D .Ky. 2004). As stated by the Supreme Court of Washington, "[n]o useful purpose
would be served by sanctioning actions in trespass by every landowner within a
hundred miles of a manufacturing plant. Manufacturers would be harassed and the
litigious few would cause the escalation of costs to the detriment of the many."
Bradley v. American Smelting and Refining Co. , 709 P.2d 782, 791 (Wash . 1985) .
Judge McKinley wisely cautioned that the approach taken by the majority would have
"the potential of opening the `proverbial floodgates of litigation[ .]"' Smith , 298 F.Supp .2d
at 569.
I would also adopt Judge McKinley's scientifically verifiable measure of actual
harm requiring "proof that the contaminants constitute a scientifically demonstrable
health or safety hazard at the levels shown to be present on the property[,)" id. at 572
73 (quotation marks omitted) . Basing a determination of actual harm on demonstrable
scientific evidence instead of on a subjective fear would better preserve our
longstanding rule that denies recovery for a diminution in property values based solely
on a stigma. See, e.g., Morgan v. Hightower's Adm'r. , 291 Ky. 58, 163 S .W.2d 21
(1942).
Under Kentucky law, punitive damages are also recoverable in situations where
compensatory damages are nominal. Commonwealth Dept. of Agriculture v. Vinson,
30 S.W.3d 162,165-66 (Ky. 2000); Louisville & N . R. Co. v. Ritchel, 148 Ky. 701,
147 S .W. 411, 413-14 (1912) . Thus, the majority's approach potentially allows a
property owner who has suffered no scientifically demonstrable harm to seek an award
of punitive damages .
For the foregoing reasons, I respectfully dissent.
Lambert, C .J ., joins this dissenting opinion .
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