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of Peckar & Abramson, P.C. -- (312) 239-9722

Seventh Circuit Allows Claims Splitting in Downers Grove Environmental Case

The U.S. Court of Appeals for the Seventh Circuit recently issued an opinion reversing the trial court’s dismissal of Arrow Gear Co. v. Downers Grove Sanitary District, Nos. 90-1509 & 09-4030, which concerned the Ellsworth Industrial Park Superfund Site in Downers Grove, Illinois.

In 2004, a class action lawsuit (Muniz v. Rexnord) was filed on behalf of area residents alleging that their groundwater had been contaminated by companies in the Ellsworth Industrial Park.  The Muniz lawsuit asked for damages, mainly for impairment of property values.  The defendants agreed with the plaintiff class to a settlement of approximately $16 million, and the defendants agreed to settle contribution actions that they had against each other.

While the Muniz case was pending, Arrow Gear filed a separate action for contribution under the Superfund statute against several companies for, among other things, payment of hooking up Downers Grove residents to Lake Michigan water.  Some of those companies were also defendants in the Muniz class action case.

Once the Muniz case was dismissed with prejudice as a result of the class action settlement, the defendants in the Arrow Gear case argued that the Muniz dismissal was res judicata because Arrow Gear arose out of the same facts as Muniz (the groundwater contamination caused by the leakage of industrial solvents at the Ellsworth Industrial Park).  The district court agreed and dismissed the case.  The Seventh Circuit reversed and ruled that the Muniz dismissal was not res judicata:

“Coming finally to the merits, we face the adamant insistence by the defendants that a dismissal with prejudice bars, by principles of res judicata, a further suit arising from the same set of facts, regardless of what the parties intended.  This is false.  Litigants who want to split a claim among different suits can do so (subject to a qualification about to be noted). . . .

“When the Muniz case was settled, the EPA, moving with the majestic deliberateness characteristic of government agencies, was still investigating contamination by the firms that had been defendants in that case (which include Arrow and Precision) and was expected to impose additional costs on them, and may continue doing so because its investigative activities have not concluded.  Already it is seeking $1 million to reimburse it for the cost of investigating.  And because the Muniz settlement did not address the contamination of the class members’ water supply, the defendants in that suit have, separately from the $16 million settlement of the Muniz suit, agreed to connect the houses of the class members to another water-supply system at a cost of some $4 million.

“It would have been difficult to settle all possible claims by the cross-claiming defendants before their total liability was determined.  So claim splitting-allocation of the $16 million first, and of the additional $5 million (which will doubtless grow) second-made sense, and the district court should not have forbidden it.  True, the order dismissing Muniz had not mentioned the settlements, and some of them had postdated the dismissal.  But as parties to the settlements the defendants were bound by them regardless of when they were made and whether they were mentioned in a judicial order.”

Stay tuned to the Illinois Environmental Law Blog for more news and developments.

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    The Seventh Circuit Court of Appeals recently upheld the federal government’s ability to criminally prosecute environmental activists who destroy property under the federal Animal Enterprise Terrorism Act (“AETA”).

    In United States v. Johnson, the defendants travelled from Los Angeles, California to a mink farm in Morris, Illinois. The mink farm was in the business of breeding, raising, and selling minks to fur manufacturers. At the mink farm, the defendants released approximately 2000 minks from their cages. They also removed portions of the fence surrounding the mink farm to help the minks escape, and they destroyed the minks’ breeding cards, which were needed to sell the minks to a furrier. In addition, they poured caustic substances on two farm vehicles and spray-painted the words “Liberation is Love” on a barn. The vandalism caused between $120,000 and $200,000 worth of damage. The defendants then began traveling to a fox farm in Roanoke, Illinois, which bred foxes to sell to fur manufacturers. They planned to damage the fox farm as well, but they were arrested by local law enforcement before they arrived at the fox farm. The defendants were charged in state court with possession of burglary tools and were convicted. They were sentenced to 30 months imprisonment.

    Then, the defendants were charged with violating the AETA by the federal government. Count I of the indictment alleged that they conspired to travel in interstate commerce for the purpose of damaging and interfering with the operation of an animal enterprise, and in connection with that purpose, damaged the property of an animal enterprise. Count II alleged that the defendants damaged real and personal property used by an animal enterprise. The defendants moved to dismiss the indictment against them, asserting that the AETA was facially overbroad, was unconstitutionally vague, and violated substantive due process because it labeled persons who committed the act as “terrorists”. The District Court denied the motion to dismiss.

    The Seventh Circuit affirmed the District Court’s ruling that rejected all of the defendants’ arguments. In particular, the defendants suggested that the AETA prohibited advocacy that caused damage to only intangible property such as profits or goodwill. The court rejected that argument and held that the AETA prohibited destruction of or damage to tangible items and property owned by the animal enterprise. In fact, the court looked at the legislative history of the AETA, which reinforced the conclusion that it was not intended to criminalize speech or expressive conduct that caused damage only to the animal enterprise’s profits or goodwill. Several legislators made statements indicating that, while the statute was being passed to combat the violence being perpetrated against animal enterprises as well as people and entities connected to animal enterprises, Congress was aware of the importance of protecting the First Amendment right to engage in lawful protest against animal enterprises. In particular, the court looked at a speech by Senator Feinstein stating: “I fully recognize that peaceful picketing and public demonstrations against animal testing should be recognized as part of our valuable and sacred right to free expression. For this reason, all conduct protected by the First Amendment is expressly excluded from the scope of this legislation. This law effectively protects the actions of the law-abiding protester while carefully distinguishing the criminal activity of extremists.” In summary, the court found that the text of the statute as well as the legislative history made clear that the statute does not criminalize speech or expressive conduct that causes damage only to intangible profits or goodwill of an animal enterprise.

    The Seventh Circuit had an easy task in this case, deciding to interpret the statute to criminalize destructive conduct but keeping the door open to reasonable protests that do not harm private property. Environmental activists need to be aware of this line in the sand that has been drawn by Congress and the courts.
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    1 week ago  ·