Thursday, December 07, 2006

Environmental Enforcement Through Strict Liability

My year 2006 was mostly consumed with a trial and post-trial briefing in City of Modesto v. Dow. As a result, this blog has been dormant. I do intend, however, to resume posting in 2007.

One of the trends in the late 1990's and early 2000's that we have seen in our practice is the use of state product liability tort claims as an enforcement tool for municipalities to address environmental contamination. In City of Modesto, for example, the City sued product suppliers for PCE contamination in Modesto. These claims beg the question whether strict liability was ever intended to encompass claims for environmental contamination by a public entity. They also raise a host of questions regarding the policy bases on which the strict liability doctrine was founded -- for example, should the strict liability doctrine apply outside the context of a commercial sale of a product -- i.e., when the product is still in the product "pipeline"?

In Nelson v. Exxon Mobil, the trial court was convinced that strict liability should not apply to a product that was still in the product pipeline:
“While California law permits bystanders injured by a product, in certain circumstances, to recover under strict product liability, it has apparently only been when that injury was attendant to the use or consumption of the product, not while the product was still possessed and stored by a participant in the stream of commerce.”
The California Court of Appeal reversed, holding that sale of the product to an "ultimate consumer" is not required for the imposition of strict liability:

"In short, there is no basis for a narrow construction of the class of 'user' that supports imposition of strict liability. Our conclusion is consistent with caselaw recognizing, in other contexts, that there are reasonably foreseeable incidental and attendant uses of a product, such as storage and disposal."
The court also stated that "California provides broad, protection to bystanders and does not limit strict liability to situations occurring after sale of the product or equivalent transaction."

Nelson suggests that at least on the issue of whether strict liability applies to pre-consumer use, the courts may apply the strict liability doctrine broadly. But it does not address the policy issues that arise when a public entity plaintiff employs strict liability as an environmental enforcement tool. In Nelson, the plaintiffs were the owners of a private water company, and thus the court had no occasion to consider whether the policies supporting strict liability would support a claim that is in essence environmental enforcement. That issue has yet to be addressed.