Appeal Court Overturns Certification, illustrates ongoing challenges with environmental contamination class actions

Movies like Erin Brockovitch and A Civil Action (numbers 9 and 22, respectively, on the ABA Journal's 25 Greatest Legal Movies) have captured the public's imagination -- and have played a significant role in shaping the public's understanding of class actions.  A common thread in these classic class action films is that both deal with harm caused to the public by environmental contamination -- so called “toxic torts”.  Hollywood has, in some ways, linked class actions with environmental harm as one way the public-at-large can address environmental degradation.

But the Canadian class action experience has shown that, due to the myriad issues involved in environmental contamination cases, it can be difficult to certify an environmental class action (e.g., Hollick v. Toronto (City)) , and even if certified, plaintiffs have a challenging time proving their claim on a class basis (e.g., Smith v. Inco, although certified only in a far narrower scope than originally sought).  In the early December 2013 decision Canada v. MacQueen, the Nova Scotia Court of Appeal reinforced the difficulties involved in environmental class actions when it overturned the certification of a class action brought against the Province of Nova Scotia and the Government of Canada relating to damages allegedly caused by the operation of a steel works for nearly 100 years in Sydney, Nova Scotia.

Background

The Governments of Nova Scotia and Canada owned and operated a steel works (consisting of the steel plant and coke ovens supplying coke for the plant) in Sydney, Nova Scotia from 1903 to 2000 (the coke ovens closed two years earlier).  The landowners and residents of Sydney filed a lawsuit against the Province of Nova Scotia and the Government of Canada alleging that the emission of hazardous contaminants from the steel works harmed them and their property.  On January 19, 2012, Justice Murphy of the Nova Scotia Supreme Court certified the claim as a class proceeding.  On December 4, 2013, the Nova Scotia Court of Appeal overturned Justice Murphy’s certification decision.

Why was the certification overturned?

1. The certification judge did not assess the individual causes of action raised against the defendants, which the Court of Appeal found to be an error of law.  Ultimately, the Court concluded that liability under strict liability (Rylands v. Fletcher), trespass and battery could not be sustained as causes of action and should therefore not be certified.
2. Strict Liability (the Rule in Rylands v. Fletcher): The Court was not convinced that the ordinary operation of a steel mill and coke ovens (including works’ emissions) constituted “non-natural” use, one requirement of the Rule.  Referencing Smith v. Inco,  the Court commented that the emissions were a natural and ordinary consequence of the activities that were lawfully carried on at the time.  Further, the Court reasoned that “escape” of the thing causing harm, another requirement of the Rule, was inconsistent with the intentional release of the emissions.
3. Trespass and Battery/Negligent Battery: The Court concluded that the contamination alleged by the plaintiffs was an “indirect harm”.  Because the torts of trespass and battery require “directness”, the Court concluded that the facts as-pleaded could not sustain a cause of action in either tort.
4. Nuisance: The Court concluded that there was a sufficient evidentiary basis to sustain a claim in nuisance – whether the emission and accumulation of contaminants actually constituted an unreasonable interference with the plaintiffs’ land (the crux of a claim in nuisance) was something to be determined at trial.  However, the plaintiffs’ nuisance claim failed at the common issues stage of the analysis.  The Court reasoned that nuisance will always require the participation of the individual claimants because there must be a substantial interference with each claimant’s actual use or enjoyment of the land.
5. Negligence: The plaintiffs’ claim in negligence failed at the common issues stage as well because of the individualized nature of the duty and standard of care owed to each class member depending on when the member owned the property and when the alleged exposure took place.
6. Given the failure of the nuisance and negligence causes of action at the common issues stage, it was not surprising that the Court also found that a class action was not the preferable procedure due to the individualized nature of each claim grounded in nuisance or negligence.

What's Next?

Hard to say.  Expect plaintiff's class action counsel to continue to attempt to obtain certification for environmental class actions.  Defence counsel are likely to continue to oppose certification on grounds to those raised in MacQueen.  Observers on both sides of the issue will continue to watch closely to see if there ever will be a “Canadian Erin Brockovitch” case.