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The Water Works and Sewer Board of Gadsden v. 3M Co.

United States District Court, N.D. Alabama, Middle Division

September 25, 2017

THE WATERS WORKS AND SEWER BOARD OF GADSDEN, Plaintiff,
v.
3M COMPANY, et al. Defendants.

          MEMORANDUM OPINION

          KARON OWEN BOWDRE CHIEF UNITED STATES DISTRICT JUDGE.

         Plaintiff Waters Works and Sewer Board of Gadsden brought suit against more than thirty manufacturers, distributors, and users of chemicals in Etowah County Circuit Court; the Board alleged that the Defendants had contaminated the Board's water source with perfluorinated chemicals. The Defendants represent the majority of the carpet industry in North America and are concentrated around Dalton, Georgia. However, Defendant Industrial Chemicals is an Alabama corporation based in Birmingham. Defendant Shaw Enterprises removed the case to federal court, alleging that the Board had fraudulently joined Industrial Chemicals to defeat diversity jurisdiction. The Board moved to remand the case, arguing that Industrial Chemicals was properly joined and, therefore, complete diversity did not exist and thus the court lacked subject matter jurisdiction.[1]

         Because the court agrees that Industrial Chemicals was not fraudulently joined, it will grant the Board's motion and remand this case to state court.

         I. BACKGROUND

         A. Allegations in the Complaint

         Despite the scope of this action, the allegations in the complaint are simple. Plaintiff Water Works and Sewer Board of the City of Gadsden is the public water supplier to the City of Gadsden, Alabama, and the surrounding area. The Board draws its source water from the Coosa River at a point downstream from Dalton, Georgia, and has recently learned that its water supply is contaminated with perfluorinated chemicals (PFCs), including perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS).

         The Board has named manufacturers, suppliers, and users of PFCs as Defendants it believes are jointly liable to it for negligence, nuisance, trespass, and wantonness for causing the presence of the chemicals in the Board's water source. Because of the contamination, the Board says it has lost profits as customers have switched to other sources of water. Further, the Board says its current water filtration system cannot remove or reduce PFC levels in the water to the level recommended by the EPA.

         B. Evidence Provided to the Court

         1. Evidence Submitted by the Plaintiff

         The Board submitted evidence about industrial use of PFCs, including a white paper from the Association of State and Territorial Solid Waste Management Officials (ASTSWNO) Federal Facilities Research Center's Remediation and Reuse Focus group on PFCs. See (Doc. 164-2). The paper notes that PFOA and PFOS are the two most prevalent types of PFCs, and that PFCs have been used by companies to make fluropolymer coatings and products that are oil and water repellent, including clothing, upholstery, paper, carpets, and non-stick cookware. Additionally, the National Institute of Environmental Health says that PFCs can be used to ensure that products, such as carpet and sofas, are resistant to stains. See (Doc. 164-3 at 2).

         PFCs are also used in other compounds. An OECD/UNEP[2] Global PFC Group Synthesis Paper submitted by the Board also mentions that PFCs are sometimes components of foaming agents and hydraulic fluids. See (Doc. 164-6). According to research cited by the ASTSWNO paper, the highest concentrations of PFCs are found in areas with direct discharge from industries that utilize PFCs.

         The Board also submitted an Environmental Protection Agency question and answer document on PFC contamination in Dalton, Georgia. The EPA believes that PFC contamination in Dalton results from industrial discharge by carpet manufacturers. See (Doc. 164-4 at 5). Finally, the Board has also submitted evidence regarding Industrial Chemicals' business and its potential relationship to PFCs. Industrial Chemicals, an Alabama corporation, maintains a distribution site in Dalton, and its advertising materials say it sells “textile chemicals, ” “surfactants, ” and “polymers, ” as well as foaming agents, hydraulic fluids, and metal plating and finishing chemicals. (Doc. 164-5 at 2-3). Industrial Chemicals is also a distributor for Omni-Chem136, which supplies over 5, 000 different chemical products.

         The Board also notes that distribution is not the sole focus of Industrial Chemicals' business. According to the company's website, it also transports and disposes of waste materials. See (Doc. 193-5).

         2. Evidence Submitted by the Defendants

         In the notice of removal and also in opposition to the Board's motion to remand, the Defendants provided numerous affidavits to establish that the Board fraudulently joined Industrial Chemicals. The affidavits fall into three general categories: Industrial Chemicals officers; expert testimony; and the other Defendants stating they did not buy chemicals containing PFCs from Industrial Chemicals.

         The Defendants have provided two affidavits from Chip Welch, the CEO/President of Industrial Chemicals. In his first affidavit, Mr. Welch says that Industrial Chemicals has never used PFCs during a manufacturing process or marketed or sold chemicals designed to create water or stain resistance. Industrial Chemicals had records of sales dating from 2005. Mr. Welch reviewed sales made to Defendants and ...


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