By James M. Beck, Senior Life Sciences Policy Analyst with Reed Smith LLP in its Philadelphia, PA office, and founder of, and a regular contributor to, the award-winning Drug and Device Law blog.
At the tail end of 2021, the Pennsylvania Commonwealth Court laid this rotten egg: Commonwealth v. Monsanto Co., ___ A.3d ___, 2021 WL 6139209 (Pa. Cmwlth. Dec. 30, 2021) (“CvM”). The Commonwealth Court is a unique Pennsylvania judicial body, mostly devoted to hearing appeals from state governmental bodies; however, it does have original (as opposed to appellate) jurisdiction over certain matters brought by statewide governmental units. CvM is an original jurisdiction case, and in that posture cannot be appealed any further at this time.
Four state agencies, led by the Department of Environmental Resources, banded together to sue defendants which, prior to 1977, had manufactured certain chemicals (polychlorinated biphenyls (“PCBs”)) that allegedly had “toxic and environmental persistence.” 2021 WL 6139209, at *1-2. Thus, CvM is a civil lawsuit over chemicals made 45 or more years ago. That explains why the suit was brought by state agencies—nullum tempus occurrit regi—or “no time runs against the king,” which in the United States, means that the state is not subject to any civil statute of limitations.
State reliance on an unlimited amount of time to pursue a civil claim is not unusual in Pennsylvania, but the Commonwealth’s collectivized use of product liability theories—which cannot be aggregated privately through class actions—as a weapon of mass litigation is unusual and troubling. Instead of utilizing government regulatory programs or relying on other existing environmental remedies, CvM permits the sweeping use of product liability and similar tort theories in situations involving “widespread contamination” from products sold several decades earlier. Id. at *3.
The state alleges public nuisance, trespass, design defect, failure to warn, negligence, and unjust enrichment. Id. at *4. The defendants moved to dismiss (called “preliminary objections in the nature of a demurrer” in Pennsylvania). Id. at *5. Only trespass and unjust enrichment—minor theories in most litigation—were dismissed.
First, the defendant challenged the Commonwealth’s ability to pursue “parens patriae” standing, essentially to seize and pursue for itself otherwise time-barred claims supposedly possessed by Pennsylvania citizens, while simultaneously alleging “damages to Commonwealth property in its proprietary capacity.” 2021 WL 6139209, at *5. CvM had no problem with such mixed representation. That had never happened in Pennsylvania before, but:
Other jurisdictions have afforded states standing in parens patriae to bring common law actions and/or for tort damages against companies that purportedly contaminated the states’ natural resources.
Id. at *8 (finding “persuasive” three federal district courts purporting to apply state law, and a New Hampshire Supreme Court opinion). Not only had the Commonwealth “sufficiently asserted its own quasi-sovereign interest in preserving its waters, soils, air, fish, wildlife, and the health and well-being of its citizens,” id. at *9, but it could claim standing as a “trustee” under the Environmental Rights Amendment to the Pennsylvania Constitution. Id. at *10-11. This is another unprecedented holding. Id. at *10 (“[i]n the absence of Pennsylvania-specific case law, Plaintiffs rely on court decisions from other jurisdictions”).
In addition to allowing unprecedented product liability by parens patriae and the newfound trusteeship, CvM further found that the state could also sue private entities in tort under both the Pennsylvania Hazardous Substances Control Act and its Clean Streams Law. Id. at *11. Neither act expressly conveyed such power to sue, but CvM implied causes of action under general enforcement provisions. Id. (citing provisions allowing “other appropriate actions,” actions “to compel compliance,” “orders necessary to enforce,” and to “assess civil penalties”). See id. at *12 (allowing suit by a state agency despite it being “more of an advocate and less of an enforcer” under its organic statute). Implying a right of action from such general provisions is supposed to be improper. E.g., MERSCORP, Inc. v. Delaware County, 207 A.3d 855, 870 (Pa. 2019). Moreover, “the fact that the agencies’ various enabling statutes offer enforcement options does not necessarily preclude common law actions.” Id. at *14. In sum, CvM found lots of mouseholes in which to hide elephantine civil litigation.
After laboring mightily to create an extremely broad implied rights of action, the CvM court turns to the state’s various causes of action. Here are the results, in a nutshell:
Public nuisance: Allowed. A cause of action exists under Restatement (Second) of Torts §821B (1978), and the Clean Streams Law (which authorizes public nuisance declarations). Water pollution is “nuisance per se.” Where a product’s “marketed uses” “inevitably” cause harm the product can expose its manufacturer to public nuisance liability after leaving the manufacturer’s control. Nuisance liability does not require that the “defendants themselves” engaged in polluting activities. 2021 WL 6139209, at *15-20.
Trespass: Disallowed. This claim fails because the complaint does not allege “an intentional entrance upon land in the possession of another without a privilege to do so.” No “trespassory intent” is pleaded. Id. at *20-21.
Strict Liability Design Defect: Allowed. A duty exists to cease further distribution of a product when the manufacturer knows or should know that it is too dangerous to be used by anyone. Nothing in Pennsylvania law prohibits the duty from being owed to the general public. The state is not a “casual bystander.” “[D]umping, spillage, and disposal” can be an actionable intended use of a product. Id. at *21-29.
Strict Liability Failure To Warn: Allowed. “A failure to warn includes a continuing duty to warn of dangers of which the manufacturer becomes aware after the product is sold.” The duty to warn “extends . . . to third persons whom the supplier should expect to be endangered” by a product’s use, which in the case of a pollutant can include a “duty to warn the general public.” Id. at *29-33.
Negligence: Allowed. Anyone doing an “affirmative act” owes a duty of reasonable care to others to protect them against unreasonable risk of harm arising out of the act. The duty is “not to expose others to risks which are reasonably foreseeable.” Plaintiffs have pleaded “a sufficient relationship” between the defendants’ actions and the state, its citizens, and the state’s natural resources such that the defendant manufacturers owed a duty to the state and its citizens as a whole. Id. at *33-36.
Unjust Enrichment: Disallowed. This claim fails because the complaint does not allege any benefit conferred on the defendant by the plaintiffs. Id. at *36-37.
Continuing Tort: Allowed. Violation of a post-sale duty to warn can be a continuing tort. Id. at *37-38.
Not only does CvM permit, on a wholesale basis, the state to pursue a host of novel—at least for a governmental plaintiff—supposedly “common-law” tort claims based on an unprecedented form of statutory standing, it allows expansive damages as well. First CvM disposes of the “municipal cost recovery rule” despite precedent recognizing this limitation on governmental recovery. 2021 WL 6139209, at *40. Finding no binding Pennsylvania precedent specifically addressing “environmental damage,” CvM exempted all such claims:
The municipal recovery rule does not expressly prohibit public entities, or a state trustee of natural resources, in particular, from recovering damages for injuries to public resources.
Nor is the state, as a plaintiff, limited to “recovery costs” as provided by the statutes that CvM previously cited as the basis for its standing to sue.
The [statute] does not expressly limit damages to only natural resources belonging to the Commonwealth but, rather, appears to authorize damages for natural resources that the Commonwealth and/or the federal government and/or any local governments manage, hold in trust, or otherwise control. . . . Further, [the Statute] declares that it does not estop the Commonwealth from seeking other existing and cumulative rights and remedies.
Id. at *41 (citation omitted). As parens patriae, the Commonwealth could also “recover damages for harm to natural resources that it does not own.” Id. at *42. Indeed the state’s “interest in its natural resources that surpasses its citizens’ titles.” Id. (citation omitted).
[W]hile possessory interests are usually for individual owners themselves to protect, when the harm to such interests is as widespread as alleged in the state’s complaint, it counts as injury not just to the affected individuals, but to the state as a whole.
Id. (citations omitted). CvM thus allowed the Commonwealth simply to take for itself now-time-barred claims purportedly possessed by private landowners. Once again, CvM cites no Pennsylvania precedent in support of these rulings. Thus CvM allows the state to usurp any private claims that might also exist, and to avoid the statute of limitations for claims that private owners can no longer assert.
Finally, in another unprecedented ruling, CvM holds that the economic loss rule also does not apply to actions for environmental damage—despite at least three contrary decisions by the co-equal Pennsylvania Superior Court. Id. at *42 (rejecting defendants’ reliance on Duquesne Light Co. v. Pennsylvania American Water, Co., 850 A.2d 701 (Pa. Super. 2004), General Public Utilities v. Glass Kitchens of Lancaster, Inc., 542 A.2d 567 (Pa. Super. 1988), and Aikens v. Baltimore & Ohio Railroad Co., 501 A.2d 277, 279 (Pa. Super. 1985)). Instead, “by implication,” CvM extends to environmental torts a case that had limited the economic loss rule in cases of private financial losses to claims brought by the government. 2021 WL 6139209, at *42.
By implication, where the Pennsylvania Supreme Court has not expressly settled an issue of public policy, there is no basis on which the intermediate appellate courts must foreclose the complainants’ opportunity to prove their case.
Id. at *42.
CvM is a seldom, if ever, seen expansive judicial fiat. At least in the environmental field, the Pennsylvania government is now a litigation Leviathan, permitted to sue just about anybody, over anything, at any time—whether or not it even owns the property allegedly injured. And the Commonwealth may do so using theories of liability, and in particular negligence and strict liability, that were previously limited to private product liability litigation. Make no mistake about it, if this unprecedented tour de force stands, claims involving a chemical that hasn’t been sold in 45 years are only the opening gambit in what could result in socialism by litigation. If the government can use theories of liability previously limited to private litigants, then private litigants will also certainly try to wield these weapons of mass litigation—and they will take aim at any business, too, not just environmental (including climate change) defendants.