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

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

November 7, 2017

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

          MEMORANDUM OPINION

          KARON OWEN BOWDRE CHIEF UNITED STATES DISTRICT JUDGE.

         Plaintiff Waters Works and Sewer Board of the Town of Centre brought suit against various manufacturers, suppliers, distributors, and users of chemicals in Cherokee County Circuit Court, alleging the Defendants had contaminated the town's water source with perfluorinated chemicals. (Doc. 1-2 at 3). 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 Centre had fraudulently joined Industrial Chemicals to defeat diversity jurisdiction. Centre moved to remand the case, arguing that Industrial Chemicals was properly joined and, therefore, complete diversity did not exist, preventing the court from having subject matter jurisdiction. (Doc. 112).

         Shaw lodged the same fraudulent joinder argument in the nearly identical case of The Water Works and Sewer Board of Gadsden v. 3M Co., No. 4:16-cv-1755-KOB, 2017 WL 4236371 (N.D. Ala. Sept. 25, 2017), which this court remanded to state court on September 25, 2017. That case involved the same issues, allegations, and defendants as this case. Shaw's argument was also the same-that the Alabama plaintiff fraudulently joined Industrial Chemicals, an Alabama corporation, to destroy complete diversity. This court again rejects Shaw's argument for fraudulent joinder for the same reasons it rejected it in the Gadsden case. Because the court agrees that Industrial Chemicals was not fraudulently joined, it will GRANT Centre'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 Town of Centre provides drinking water directly to its own residential and commercial customers in Cherokee County, Alabama. Centre 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).[1]

         Centre 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 Centre's water source. Because of the contamination, Centre says it has lost profits as customers have switched to other sources of water and faces future expenses associated with installing and operating a water filtration system because its current 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

         Centre 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. 112-1). The paper notes that PFOA and PFOS are the two most prevalent types of PFCs; companies have used PFCs 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, resist stains. See (Doc. 112-2 at 2).

         PFCs are also used in other compounds. An OECD/UNEP[2] Global PFC Group Synthesis Paper submitted by Centre also mentions that PFCs are sometimes components of foaming agents and hydraulic fluids. See (Doc. 112-5). 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.

         Centre 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. 112-5 at 5).

         Finally, Centre 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. 112-4 at 5-11). Industrial Chemicals is also a distributor for Omni-Chem136, which supplies over 5, 000 different chemical products.

         Centre 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. 167-2).

         2.Evidence Submitted by the Defendants

         In the notice of removal and also in opposition to Centre's motion to remand, the Defendants provided numerous affidavits to establish that Centre 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 the other Defendants since 2005, ...


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