Arlington Forest Associates v. Exxon Corp.
1991 WL 183775, 774 F. Supp. 387, 1991 U.S. Dist. LEXIS 13224 (1991)
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Rule of Law:
The storage and removal of gasoline in underground tanks does not constitute an "abnormally dangerous activity" for which common law strict liability applies in Virginia, because the associated risks can be sufficiently mitigated by the exercise of reasonable care and the activity is considered common usage and appropriate for its location.
Facts:
- From 1947 to 1987, Exxon Corporation and its predecessor corporations leased a gasoline station located at 4831 N. First Street in Arlington, Virginia.
- Exxon and its predecessor corporations, in turn, subleased the station to independent operators, who continuously operated the station and its equipment, including five underground gasoline storage tanks (four installed in 1947, one in 1957).
- In November 1982, Exxon renewed a sublease with independent operator William Bryden, stipulating that Bryden allow Exxon to replace all storage tanks.
- In 1983, Arlington Forest Associates (AFA) purchased the property, but the storage tanks had not yet been removed.
- In 1988, after the lease had expired, the underground storage tanks were finally removed.
- In 1989, AFA discovered elevated concentrations of organic vapors in the property’s subsurface soil, indicating gasoline contamination.
- AFA contended that Exxon had been aware of gasoline leakage in the tanks since 1979 but failed to remove them, leading to contamination, and noted the property's proximity to a residential community (approximately 60 feet from the nearest basement and 1000 feet from Lubber Run Creek).
Procedural Posture:
- Exxon Corporation and its predecessors leased a property for a gasoline station from 1947 to 1987.
- Exxon subleased the station to independent operators who utilized underground gasoline storage tanks.
- Arlington Forest Associates (AFA) purchased the property in 1983.
- In 1989, AFA discovered gasoline contamination on the property.
- AFA filed a complaint against Exxon, including claims for common law strict liability (Count II) and contractual indemnity (Count V).
- Exxon filed a motion for partial summary judgment with respect to Counts II and V of AFA's complaint.
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Issue:
Does the storage and removal of gasoline in underground tanks constitute an "abnormally dangerous activity" under Virginia common law, thereby warranting the imposition of strict liability for resulting contamination?
Opinions:
Majority - Ellis, District Judge
No, the storage and removal of gasoline in underground tanks does not constitute an abnormally dangerous activity under Virginia common law, and therefore strict liability should not be imposed. The Court, predicting the stance of the Supreme Court of Virginia, adopted the Restatement (Second) of Torts §§ 519 and 520 as the applicable standard for determining strict liability. Strict liability applies only to "abnormally dangerous activities," which are characterized by factors listed in § 520. A central factor is whether the risk of harm can be eliminated by the exercise of reasonable care. The Court reasoned that underground gasoline storage tanks, when properly maintained, monitored, and used with due care (including sound tanks, timely replacement, modern corrosion control, and adequate leakage testing), present "virtually no risk of injury from seepage." The alleged injury in this case was attributed to the tanks' "preventable state of disrepair," indicating negligence rather than an inherent, unavoidable danger. Furthermore, the Court found that gasoline stations with underground tanks are a "matter of common usage" (§ 520(d)) and "appropriate to the place" (§ 520(e)) due to their widespread presence and necessity in communities. The Court rejected AFA's argument to characterize the activity as storing gasoline in "moribund" (decaying) tanks, stating that strict liability applies to activities dangerous in their normal, non-defective state, not to those made dangerous by negligence or defect. If a risk can be avoided through reasonable care, negligence provides a sufficient remedy, and strict liability is reserved for activities where the danger persists despite utmost care. The Court also held that AFA could not recover under the contractual indemnity provision of the lease, as it covered damage to Exxon, its agents, or third parties, not damage sustained by AFA's own property.
Analysis:
This case significantly clarifies the parameters of common law strict liability in Virginia by formally adopting and applying the Restatement (Second) of Torts §§ 519 and 520. It establishes a precedent that common industrial activities, even those involving hazardous materials like gasoline, will not be deemed "abnormally dangerous" if their risks can be substantially mitigated through reasonable care and if they are considered common and appropriate for their location. The ruling underscores that strict liability is an exceptional remedy reserved for truly unavoidable dangers, not for harms resulting from negligence or defective maintenance. This limits the application of strict liability in environmental contamination cases where proper operation and maintenance could prevent the harm, placing the burden on plaintiffs to prove negligence rather than inherent danger.
