Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

West Virginia Hospitality and Travel Association, Inc. v. American Water Works Co., Inc.

United States District Court, S.D. West Virginia, Charleston

March 15, 2018

WEST VIRGINIA HOSPITALITY AND TRAVEL ASSOCIATION, INC., a West Virginia Not-for-Profit corporation, on behalf of all of its adversely affected members, and as assignee of certain of its adversely affected members, Plaintiff,
v.
AMERICAN WATER WORKS COMPANY, INC., a Delaware corporation; AMERICAN WATER WORKS SERVICE COMPANY, INC., a New Jersey corporation; WEST VIRGINIA-AMERICAN WATER COMPANY, a West Virginia corporation; EASTMAN CHEMICAL COMPANY, a Delaware corporation; GARY SOUTHERN, an individual; and DENNIS P. FARRELL, an individual, Defendants.

          MEMORANDUM OPINION AND ORDER

          John T. Copenhaver, Jr. United States District Judge

         Pending is plaintiff West Virginia Hospitality and Travel Association, Inc.'s (“Hospitality”) motion for partial summary judgment on one issue relating to the question of defendant Gary Southern's liability, filed August 16, 2016. [1]

         Also pending is Hospitality's motion for leave to file one day late its reply to the response to its motion for partial summary judgment, filed September 29, 2016. That motion is granted, and Hospitality's reply has been taken under consideration as set forth below.

         I. Background

         On January 9, 2014, a liquid mixture containing crude methylcyclohexanemethanol (“MCHM”) leaked from tanks owned by Freedom Industries, Inc. (“Freedom Industries”), into the Elk River near Charleston, West Virginia. (Pl.'s Ex. 1, at 1; Pl.'s Ex. 3, Stipulation of Facts ¶ 1.) MCHM is “a frothing agent used to clean coal” and is itself a mixture of, among other compounds, 1% methanol. (Pl.'s Ex. 1, at 17, 44; Pl.'s Ex. 4, at West Virginia DEP Waste Characterization Form, Freedom Industries MSDS, and Eastman MSDS; Pl.'s Ex. 6, at 4-5.) The leaked MCHM traveled downstream and penetrated the filtration system of a West Virginia American Water (“American Water”) plant. (Pl.'s Ex. 1, at 21-23, 44-45.) As a result, American Water issued a “Do Not Use Order, ” prohibiting water usage for nearly 300, 000 people across nine counties in West Virginia and lasting nine days. (Id. at 1, 23.)

         A subsequent investigation by the Office of the West Virginia Attorney General opined that

[t]here was historical negligence at the [tank facility] that resulted in the deterioration of [storage] tanks . . ., a flaw in the concrete pad surrounding the tanks, a failure of the culvert traveling underneath the tank farm, and a breach of the secondary containment wall that ultimately resulted in the contamination of the Elk River.

(Id. at 47; see also id. 28-43, 45-46.) At the time of the leak, Southern was the president of Freedom Industries. (Id. at 18, 43; Pl.'s Ex. 3, Stipulation of Facts ¶ 2.) Southern first joined Freedom Industries in 2009 and later served on the company's board of directors from March 2010 to December 2013, when he entered his role as president. (Pl.'s Ex. 3, Stipulation of Facts ¶ 2.) He succeeded Dennis P. Farrell who was president of Freedom Industries from about October 2001 through around December 6, 2013. (See Pl.'s Ex. 2, Stipulation of Facts ¶ 2.)

         On July 18, 2015, Southern pled guilty to three criminal charges under the Clean Water Act and the Refuse Act, each stemming from the MCHM leak: negligent discharge of a pollutant, 33 U.S.C. §§ 1319(c)(1)(A), 1311; unlawful discharge of refuse matter, 33 U.S.C. §§ 407, 411; and negligent violation of a permit condition, 33 U.S.C. §§ 1319(c)(1)(A), 1311, 1318. (Pl.'s Ex. 3, Plea Agreement at 1.) As part of the plea agreement, Southern stipulated that as both a board member and president, “[he] was a responsible corporate officer of Freedom . . . having the responsibility and authority, along with others, to ensure that Freedom complied with all laws, including environmental laws.” (Id., Stipulation of Facts ¶ 2; see also id., Stipulation of Facts ¶ 3-4.) Further, Southern stipulated that his “negligence[, ] . . . as a responsible corporate officer of Freedom, . . . was a proximate and contributing cause, albeit not the only proximate or contributing cause, of the discharge of some quantity of MCHM into the Elk River from the [tank facility] on January 9, 2014.” (Id., Stipulation of Facts ¶ 4.)

         Southern now submits an affidavit in an effort to provide more detail on his role at Freedom and in the MCHM leak. (See Def.'s Ex. A.) After Freedom was acquired by a separate company, Chemstream Holdings, Inc. (“Chemstream”), Southern began his tenure as president of Freedom on December 9, 2013. (Id. ¶ 2.) Southern swears that:

3. During my tenure as president of Freedom up to and including January 9, 2014, I understood that I was to report to Jim Barker, a Vice-President of Chemstream who was my supervisor; I also understood that I did not have authority to approve capital expenditures for Freedom's [tank facility] or any other Freedom facility.
4. During my tenure as president of Freedom up to and including January 9, 2014, I was not involved in the day-to-day management of operations at the [tank facility].
5. During my tenure as president of Freedom up to and including January 9, 2014, I did not direct operational employees on the management of hazardous materials produced or stored at the [tank facility], and I did not direct operational employees on the management, storage or disposal of hazardous waste generated at the [tank facility].
6. During my tenure as president of Freedom up to and including January 9, 2014, I did not draft or sign any reports, applications or certifications required for compliance with environmental regulations.
7. During my tenure as president of Freedom up to and including January 9, 2014, I did not have any contact or communications with state or federal agencies regarding compliance with environmental regulations or operation of the [tank facility].
8. After I became president of Freedom in December 2013, I had internal discussions with David McCombie and others at Chemstream about Dennis Farrell's future role in the company. We had discussions about moving Farrell to the role of supervising Freedom's sales force immediately but I was told that Chemstream wanted to move at a slower pace so Farrell still had substantial operational responsibilities on January 9, 2014. The plan was for David McCombie to become Freedom's future president and eventually replace me. To improve his knowledge of the business, McCombie wanted to spend time shadowing me on the administrative side and Farrell and Mike Burdette, Director of Operations for the [tank facility], on the operational side before Farrell was moved into the sales position full time.

(Id. ¶¶ 3-8.) Southern further swears that “[he] worked in the Charleston, West Virginia area for approximately eight days” of the month or so he was president of Freedom; that “[he] was not present at the [tank facility] on each of those days;” and that he was travelling for work when the leak was detected. (Id. ¶ 9.)

         Hospitality is a West Virginia not-for-profit with its principal place of business in Charleston, West Virginia. (Pl.'s Am. Ex. 12, at ¶ 2.) Hospitality is comprised of various “tourism and hospitality establishments.” (Compl. ¶ 4.) Its purpose is to further the interests of its member-establishments and of “the tourism and hospitality industries in West Virginia.” (Id.) Constantine Stanley, the chief executive officer and president of one of Hospitality's member-establishments, Adelphia, Inc., swears that his company incurred about $3, 576 in water-related expenses as a result of the MCHM leak. (See Pl.'s Ex. 13 ¶¶ 1, 3-5.)

         On January 8, 2016, Hospitality initiated this action in this court on behalf of its adversely affected members and as assignee of the claims of some of its adversely affected members. The gist of Hospitality's claims is that its members suffered and continue to suffer economic and ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.