Court Declines To Certify Damages Class In West Virginia Water Contamination Case
In the litigation following the interruption of the Charleston, West Virginia water supply caused by a leaking chemical storage tank in January 2014, the U.S. District Court for the Southern District of West Virginia ruled yesterday that the plaintiffs could certify a class for determining liability, but refused to certify a class for purposes of establishing damages.
The plaintiffs had asked the court to establish a class of affected businesses and water company customers to adjudicate the issue of damages suffered by the class resulting from the loss of tap water caused by the chemical leak. In coming to this conclusion, the court granted the defendants’ motions to exclude the testimony of the two expert witnesses offered by the plaintiffs to establish the value of the proposed class’s damages. The proposed experts purported to establish a class-wide method to estimating the aggregate damages due to lost profits, wages, and residential water service and to establish a “mechanical” method of determining individual class members’ damages following the determination of class-wide damages. After finding multiple deficiencies in the experts’ estimates, the court stated, “Even if the estimates were corrected to account [for the errors], it is a leap at best to propose that a decline in value added in the affected area is a reasonable proxy for business losses.”
The court also rejected the plaintiffs’ argument that the methods were reliable because FEMA uses a similar formula to carry out a regulatory cost-benefit analysis: “Plaintiffs have cited no instance in which the FEMA method has been used to calculate actual damages resulting from an interruption of water service or similar incident. While the FEMA studies attempt to estimate economic losses, the regulatory context allows for simplifying assumptions not appropriate to a civil proceeding for monetary damages.”
The court separately concluded that the plaintiff’s expert witness on the chemical manufacturer’s compliance with the standards of care in the chemical industry was appropriately qualified to bypass a Daubert challenge.
