United States District Court, M.D. North Carolina
JACKIE BRASWELL, JUDY BRASWELL, HAROLD COLLINS, BONNIE COLLINS, Individually and as Executor of the Estate of HOMER WADE YARBROUGH, HAYMON HICKS, PENNY HICKS, GINA MYERS SHAW, JAMES SLONE, DEBBIE SLONE, JERRY SMITH, KAREN SMITH, PAMELA LOVELESS, KATHY MILLER, JOEY SMITH and SHANIA SMITH, Plaintiffs,
COLONIAL PIPELINE COMPANY, and APEX COMPANIES, LLC, Defendants.
MEMORANDUM OPINION AND ORDER
Carlton Tilley, Jr. Senior United States District Judge.
action arises from alleged damage to Plaintiffs'
properties after several petroleum releases at a booster
station in Lexington, North Carolina owned and operated by
Defendant Colonial Pipeline Company (“Colonial”).
Plaintiffs allege against Colonial a violation of North
Carolina's Oil Pollution and Hazardous Substances Control
Act of 1978 (“OPHSCA”) (First Claim for Relief),
negligence and willful and reckless conduct (Second Claim for
Relief), trespass (Third Claim for Relief), private recurrent
nuisance (Fourth Claim for Relief), and strict liability for
ultrahazardous activity (Fifth Claim for Relief), for which
they seek punitive damages (Sixth Claim for Relief) and
declaratory and injunctive relief (Seventh Claim for Relief).
Before the Court is Colonial's Motion to Dismiss, [Doc.
#15], pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure. Colonial argues that the statute of repose bars
Plaintiffs' claims based on historical
releases, Plaintiffs have failed to allege injury
from the April 2013 release, North Carolina law does not
recognize a strict liability claim under these circumstances,
and Plaintiffs have failed to plead sufficiently the
essential elements of gross negligence and punitive damages.
For the reasons that follow, the motion is granted in part
and denied in part.
alleged in the Complaint, Colonial “is the
largest-volume pipeline transporter of refined petroleum
products in the world, moving millions of gallons of
petroleum products each day through an underground
pipeline” from Texas to New Jersey passing through
North Carolina, among other states. (Compl. ¶ 35.)
Because “the pipeline is thousands of miles
long”, “pumping stations or booster stations are
positioned throughout the length of the pipeline to adjust
the pressure, keep the product moving, and monitor flow and
other information.” (Id. ¶¶ 43, 44.)
A booster station “includes aboveground features and
fixtures” and has “a greater danger of incurring
mechanical damage and operator error.” (Id.
¶¶ 48, 49.) One such booster station is at 667
Helmstetler Road in Lexington, North Carolina (“the
Lexington Booster Station”). (E.g.,
id. ¶ 50.)
the pertinent times”, Plaintiffs “have resided on and
used land in proximity to [Colonial's] Lexington Booster
Station”. (Id. ¶ 2.) On April 10,
2013, approximately 500 gallons of “hydraulic fluid was
released to the soil in the manifold area [of the Lexington
Booster Station] when an aboveground one-inch central
hydraulic line failed.” (Id. ¶ 57.)
Colonial retained Defendant Apex Companies LLC “to engage
in certain remedial and remediation efforts” and
“conduct a site assessment report.” (Id.
¶¶ 58, 61.) Excavation activities were completed,
but soil containing “constituents of concern”
above North Carolina's regulatory standards, known as the
2L and 2B standards, remained. (Id. ¶ 61.)
These constituents of concern included benzene, toluene,
ethylbenzene, xylenes, and naphthalene, while dichloromethane
was also measured above “Gross Contamination
Levels”. (Id. ¶ 62.) Contaminants
exceeded “Soil-to-Groundwater” “maximum
soil contaminant concentrations” and Industrial Health
Based Standards, and results from fourteen of twenty-one
monitoring wells were above 2L and 2B standards.
(Id.) All soil samples taken on April 24 contained
“total petroleum hydrocarbon diesel range
organics” exceeding the “action level” of
the North Carolina Department of Environmental Quality
(“NCDEQ”), as did additional samples taken from a
new site on May 22. (Id. ¶¶ 63-65.)
highest levels” were found on the “southern side
of the manifold area” where the
soil's odor was more akin to a tar-like
substance. (Id. ¶¶ 66-67.) “Due to
the relatively low migration characteristics of hydraulic
oils, it was determined that significant, unreported
historical spills had occurred at the [Lexington] Booster
Station.” (Id. ¶ 67.) Yet, Apex could not
identify any site reports related to those historical
releases, and “[n]ever during the pertinent times did
[Colonial] alert nearby Plaintiff property owners of the
releases of contaminants”. (Id. ¶¶
68, 69.) Nevertheless, “[u]pon [Plaintiffs']
information and belief, [Colonial's] documents indicate
that the [Lexington] Booster Station had four prior releases
dating back to 1989.” (Id. ¶ 56.)
recent sampling from July 2017 detected five contaminants in
surface water above “laboratory detection
limits”. (Id. ¶ 75.) In December 2017,
two contaminants were detected in surface water above
“laboratory detection limits” and fifteen
constituents of concern were detected in water supply wells
above 2L standards. (Id. ¶¶ 76-77.)
Pam Loveless, Kathy Miller, and Karen Smith jointly own
property at 551 Helmstetler Road after inheriting it in 2017.
(Id. ¶¶ 92, 98.) February 26, 2016
sampling results revealed “petroleum fuel-related
contaminants” in the groundwater beneath that property.
(Id. ¶¶ 93, 95.) Specifically benzene
levels tested well above the “permitted level”.
(Id. ¶¶ 93, 95.) March 28, 2017 sampling
results similarly detected the presence of “petroleum
fuel-related contaminants” in the groundwater
approximately forty feet beneath the property in amounts that
exceed the 2L standards. (Id. ¶¶ 93, 99.)
The well water had been used for years to water the
family's garden on the property. (Id. ¶
James and Debbie Slone own property at 247 Yarborough Drive
which has two wells - one active and the other abandoned due
to contamination. (Id. ¶ 101.) On December 4,
2017, the Slones received a letter from Colonial informing
them that sampling results from their water supply well
showed “petroleum fuel-related compounds” in the
groundwater approximately twenty-two feet beneath their
property at levels exceeding 2L standards. (Id.
Jackie and Judy Braswell and Harold and Bonnie Collins have
suffered the loss of use and value of their property as a
result of Colonial's conduct. (Id. ¶¶
85-90.) Plaintiffs Haymon and Penny Hicks' property
“has existing environmental concerns, including but not
limited to, deep groundwater contamination.”
(Id. ¶ 91.) Similarly, Plaintiffs Joey and
Shania Smith's property, which the pipeline crosses,
“has existing environmental concerns, including but not
limited to, shallow and deep water contamination, [and]
potential vapor intrusion concerns”. (Id.
¶ 103.) Property that Plaintiff Gina Myers Shaw owns is
inside “the contamination plume”. (Id.
allege that “[d]uring the pertinent times”,
Colonial failed “to take adequate measures to remediate
the contaminated water and soil affected by the historic
spills”, “to adequately inform Plaintiffs about
the migrating contamination and . . . to accurately explain
the significant amounts of contaminants found in the
area”, “to submit site reports to NCDEQ”,
to submit “CSA Report” addenda, and “to
take action” so that contaminated soils would not
remain on site. (Id. ¶ 73.) Because Colonial
failed “to identify and control the release
sites”, there have been “recurrent
releases”. (Id. ¶ 81.)
survive a Rule 12(b)(6) motion, the complaint “must
contain sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its
face.'” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 570 (2007)). “A claim has facial
plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”
Id. (citing Twombly, 550 U.S. at 556);
see also McCleary-Evans v. Md. Dep't of Transp.,
State Highway Admin., 780 F.3d 582, 585 (4th Cir. 2015)
(noting that a complaint must “contain sufficient
factual matter, accepted as true, to state a claim to relief
that is plausible on its face in the sense that the
complaint's factual allegations must allow a court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged”). However, when a complaint
states facts that are “'merely consistent with'
a defendant's liability, it ‘stops short of the
line between possibility and plausibility of
‘entitlement to relief.''”
Iqbal, 556 U.S. at 678 (quoting Twombly,
550 U.S. at 557). When evaluating whether the complaint
states a claim that is plausible on its face, the facts are
construed in the light most favorable to the plaintiffs and
all reasonable inferences are drawn in their favor. U.S.
ex rel. Oberg v. Pa. Higher Educ. Assistance Agency, 745
F.3d 131, 136 (4th Cir. 2014). Nevertheless, “labels
and conclusions[, ]” “a formulaic recitation of
the elements of a cause of action[, ]” and “naked
assertions . . . without some further factual
enhancement” are insufficient. Twombly, 550
U.S. at 557. In other words, “[f]actual allegations
must be enough to raise a right to relief above the
speculative level”. Id. at 555. Both parties
apparently presume North Carolina law applies to
Plaintiffs' claims, and the Court agrees. See Klaxon
Co. v. Stentor Elec. Mfg. Co., Inc., 313 U.S. 487, 496
(1941), superseded by statute on other grounds
(providing that a federal court sitting in diversity must
apply the choice of law rules of the state in which it sits);
Boudreau v. Baughman, 368 S.E.2d 849, 854 ( N.C.
1988) (recognizing that North Carolina's Supreme Court
“has consistently adhered to the lex loci rule”
and that “the state where the injury occurred is
considered the situs of the claim”).
Colonial argues that North Carolina's applicable statute
of repose bars Plaintiffs' claims based on the historical
releases, which Colonial defines as the “Prior
Releases”. (Mem. of Law in Supp. of Mot. to Dismiss
(“Def.'s Br. in Supp.”) at 5-9.) A statute of
limitation creates “'a time limit for suing in a
civil case, based on the date when the claim
accrued'”, but a statute of repose “puts an
outer limit on the right to bring a civil action . . .
measured . . . from the date of the last culpable act or
omission of the defendant.” CTS Corp. v.
Waldburger, 573 U.S. 1, 7, 8 (2014) (quoting Black's
Law Dictionary 1546 (9th ed. 2009)). It “'bar[s]
any suit that is brought after a specified time since the
defendant acted . . ., even if this period ends before the
plaintiff has suffered a resulting injury.'”
Id. (quoting Black's 1546) (alteration in
original). In other words, a statute of repose is
“'a cutoff'” or “'absolute
bar' on a defendant's temporal liability”.
Id. (quoting Lampf, Pleva, Lipkind, Prupis &
Petigrow v. Gilbertson, 501 U.S. 350, 363 (1991) &
54 C.J.S., Limitations of Actions § 7, p. 24 (2010)).
Carolina law provides that “no cause of action [for
physical damage to claimant's property] shall accrue more
than 10 years from the last act or omission of the defendant
giving rise to the cause of action.” N.C. Gen. Stat.
§ 1-52(16). This statute of repose, which applies to
Plaintiffs' claims, Wilson v. McLeod Oil Co.,
Inc., 398 S.E.2d 586, 513-14 ( N.C. 1990),
“defines substantive rights to bring an action”,
Colony Hill Condo. I Ass'n v. Colony Co., 320
S.E.2d 273, 276 ( N.C. Ct. App. 1984). “Failure to file
within that period gives the defendant a vested right not to
be sued.” Id.
June 20, 2014, the General Assembly amended this statute to
create an exception for injury “caused or contributed
to by groundwater contaminated by a hazardous substance,
pollutant, or contaminant”, which means that “the
concentration of the hazardous substance, pollutant, or
contaminant exceeds a groundwater quality standard set forth
in” North Carolina regulations. N.C. Gen. Stat. §
130A-26.3. This exception applies to actions “filed,
arising, or pending” on or after June 20, 2014. 2014
N.C. Sess. Laws 2014-44, § 1(c) (amending 2014 N.C.
Sess. Laws 2014-17, § 4). However, because a statute of
repose is substantive in nature, § 130A-26.3 does not
apply retroactively; to do so would “divest [Colonial]
of a vested right, ” Bryant v. United States,
768 F.3d 1378, 1385 (11th Cir. 2014) (applying North Carolina
law to multi-district litigation arising from alleged
exposure to toxic substances in drinking water at Marine
Corps Base Camp Lejeune). See also Colony Hill Condo. I
Ass'n, 320 S.E.2d at 276 (“Once the . . .
statute of repose barred the plaintiffs' suit, . . . a
subsequent statute could not revive it” because
“a vested right cannot be impaired by the retroactive
effect of a later statute.”).
equitable doctrines may toll statutes of limitations, they do
not toll substantive rights created by statutes of
repose.” Monson v. Paramount Homes, Inc., 515
S.E.2d 445, 449 ( N.C. Ct. App. 1999). Stated another way, a
statute of repose like that in § 1-52(16) containing
“'no action' language” bars “all
claims, including claims seeking to extend liability for
subsequent repairs or remedial measures.” Hodge v.
Harkey, 631 S.E.2d 143, 146 ( N.C. Ct. App. 2006).
“To allow the statute of repose to toll or start
running anew each time a repair is made would subject a
defendant to potential open-ended liability for an indefinite
period of time, defeating the very purpose of statutes of
repose”. Monson, 515 S.E.2d at 449.
support of its motion to dismiss, Colonial attaches an
Interim Comprehensive Site Assessment Report from Apex
Companies LLC to NCDEQ dated March 7, 2016 as evidence of the
dates of the Prior Releases. (See Ex. A to
Def.'s Br. in Supp.) Colonial argues that the report is
integral to and expressly referenced in the Complaint such
that it may be considered. (Def.'s Br. in Supp. at 7 n.3
(citing Compl. ¶¶ 9, 64).) A document is integral
to the complaint when “its very existence, and not the
mere information it contains, gives rise to the legal rights
asserted.” Walker v. S.W.I.F.T. SCRL, 517
F.Supp.2d 801, 806 (E.D. Va. 2007). Integral documents
include those containing alleged material misrepresentations
in a fraud action, an article reporting alleged fraudulent
statements in a securities fraud action, and an alleged
libelous magazine article in a libel action based on that
article. Id. ...