Exxon Mobil Corp. v. Ford
2013 Md. LEXIS 695, 433 Md. 426, 71 A.3d 105 (2013)
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Rule of Law:
This case clarifies and applies Maryland's standards for recovering emotional distress damages for fear of cancer, medical monitoring costs, and diminution in property value in toxic tort cases, emphasizing requirements for actual exposure, objective reasonable fear, physical injury, particularized expert testimony, and generally precluding emotional distress for property damage alone.
Facts:
- On January 13, 2006, an underground gasoline line at an Exxon Mobil-owned service station in Jacksonville, Maryland, developed a puncture, leading to a gasoline leak.
- The leak detection system at the station failed to detect the punctured line, causing approximately 26,000 gallons of gasoline to leak into the underground aquifer over more than thirty days.
- The contaminated aquifer supplied water to a number of residential potable wells in the Jacksonville neighborhood.
- Residents of the impacted Jacksonville neighborhood learned of the leak after local media reported the story on February 21, 2006, though Exxon contends it notified state environmental officials on February 17, who then contacted a local community association president.
- Following notification of the leak, the Maryland Department of the Environment (MDE) ordered Exxon to implement immediate and long-term remediation efforts, including drilling monitoring and recovery wells and taking water samples from both monitoring and residential potable wells.
- Residents (Respondents) owned properties located at varying distances from the source of the leak and alleged that their properties had decreased in value, and their health was threatened by exposure to toxic chemicals (specifically MTBE and benzene) from using water from their potable wells.
Procedural Posture:
- Eighty-four households (Respondents) filed a single complaint on October 17, 2006, in the Circuit Court for Baltimore County against Exxon Mobil Corporation (Petitioner), alleging various claims including fraudulent concealment, strict liability, trespass, private nuisance, and negligence.
- Respondents sought compensatory damages for diminution in property value, non-economic damages for emotional distress (including fear of cancer), and costs for future medical monitoring, as well as punitive damages.
- Petitioner admitted liability for trespass, private nuisance, negligence, and strict liability, but denied liability for fraud and punitive damages, and maintained that certain compensatory damages were not compensable under Maryland law.
- The Circuit Court consolidated the cases for a jury trial, which began on October 14, 2008, and lasted until March 12, 2009, focusing on whether Respondents suffered compensable injuries and what compensatory damages should be awarded, as well as liability for fraud warranting punitive damages.
- On March 12, 2009, the jury returned verdicts in favor of Exxon regarding fraudulent concealment and punitive damages, but found in favor of all remaining plaintiffs for compensatory damages, awarding full pre-leak value for property diminution (finding properties worthless), non-economic damages for emotional distress (including fear of cancer), and future medical monitoring costs, totaling approximately $147 million.
- Petitioner filed six post-judgment motions (for judgment notwithstanding the verdict, new trial, or remittitur) challenging the damages awards, which the Circuit Court denied, though it reduced non-economic awards for four plaintiffs due to a statutory cap.
- On September 9, 2009, Exxon appealed to the Court of Special Appeals (intermediate appellate court), challenging the sufficiency of the evidence for property value, emotional distress, and medical monitoring damages, and the jury instructions; Respondents cross-appealed, arguing that Exxon's counsel had waived its right to challenge the compensatory damage awards.
- On January 6, 2010, the Court of Special Appeals consolidated the eighty-eight appeals and, after an initial three-judge panel did not issue a decision, ordered an en banc rehearing on June 9, 2011.
- On February 9, 2012, an en banc panel of the Court of Special Appeals, consisting of nine incumbent members, issued a per curiam opinion and attributed opinions, affirming in part and reversing in part the Circuit Court's judgment, which had the effect of reducing the total damages by more than half.
- The intermediate appellate court unanimously rejected Respondents' contention that Petitioner was estopped from challenging the compensatory damages awards and affirmed the admission of Respondents' expert testimony regarding property values.
- Different majorities of the Court of Special Appeals panel reversed all judgments for emotional distress (remanding some for a new trial due to faulty jury instructions and others based on insufficient evidence) and reversed all judgments for medical monitoring costs.
- On February 27, 2012, Respondents filed a motion for reconsideration of the en banc decision, arguing that portions supported by fewer than seven judges violated CJP § 1-403(c); the Court of Special Appeals denied this motion on March 6, 2012.
- On March 26, 2012, Exxon filed a Petition for Writ of Certiorari with the Court of Appeals of Maryland, and Respondents filed a cross-petition on March 27, 2012; this Court granted both petitions on May 9, 2012.
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Issue:
1. Does Maryland law permit recovery of emotional distress damages for fear of contracting cancer or for medical monitoring costs due to toxic exposure, and if so, what standards of proof for actual exposure, objective reasonable fear, physical injury, and significantly increased risk must be met? 2. Was expert testimony regarding property value diminution admissible, and was there sufficient evidence to uphold a jury's verdict that properties affected by a toxic leak were "worthless"? 3. Does Maryland law permit awards for emotional distress damages arising solely from injury to real property, absent fraud or malice?
Opinions:
Majority - Harrell, J.
Yes, this Court has the authority to review the merits of the appeals before it, regardless of any potential procedural non-compliance in the intermediate appellate court's en banc decision. Even if the Court of Special Appeals' en banc panel did not achieve the requisite majority concurrence under CJP § 1-403(c), this Court's grant of certiorari enables it to bypass any such procedural defect and consider all issues that would have been cognizable by the intermediate appellate court, as established by Wildwood Med. Ctr., LLC v. Montgomery Cnty. and Maryland Rule 8-131(b)(2). No, Petitioner's counsel did not waive Exxon's right to appeal the compensatory damage awards. Waiver requires an express or implied intentional relinquishment of a known right. Statements made by counsel during opening and closing arguments, indicating a willingness to take responsibility and pay for actionable and proven harm, were strategic advocacy and did not constitute an acquiescence to the jury's verdict. Waiver by acquiescence applies to post-judgment conduct, as a party cannot knowingly relinquish a right to appeal the nature and effect of a judgment before it is rendered. No, the evidence was legally insufficient to support Respondents' claims for emotional distress damages based on a fear of contracting cancer, and the jury instructions were erroneous. Following Exxon Mobil Corp. v. Albright, recovery for fear of latent disease requires: (1) actual exposure to a toxic substance due to tortious conduct; (2) objectively reasonable fear of contracting a latent disease; and (3) a physical injury capable of objective determination resulting from that fear. Seventeen properties showed no measurable MTBE contamination in potable wells, precluding actual exposure for ingestion or skin contact, and speculative future exposure is insufficient. For sixty-three households with MTBE levels below the MDE's 20 ppb aesthetic action level, there was no objective reasonable fear, as the MDE deemed the water safe. Furthermore, none of the Respondents provided legally sufficient evidence of a demonstrable physical injury (as per Vance v. Vance) resulting from exposure and fear, with subcellular changes alone being non-compensable without symptoms of disease or actual impairment. All judgments for emotional distress are reversed. No, the evidence was insufficient to sustain the jury's awards for medical monitoring costs. Following Albright, medical monitoring requires showing: (1) significant exposure to a proven hazardous substance due to tortious conduct; (2) a significantly increased risk of a latent disease as a proximate result of exposure (requiring particularized, quantifiable expert medical testimony); (3) reasonable necessity of periodic diagnostic exams; and (4) existence of beneficial early detection/treatment procedures. Properties with no potable well contamination failed to show exposure, and the possibility of future contamination was too speculative. Respondents exposed to MTBE or benzene at well-recognized safety levels (below 20 ppb) did not face a significantly increased risk compared to the general population. For the remaining households, expert testimony failed to provide particularized evidence of an individual's significantly increased risk, offering only generalized assessments. All judgments for medical monitoring costs are reversed. No, Maryland law does not ordinarily recognize recovery for emotional distress resulting solely from injury to real property, absent evidence of fraud or malice. Since the jury found in favor of Petitioner on the fraudulent concealment claims, the judgments for emotional distress damages related to fear of lost property value were erroneous and are reversed. Yes, the trial court was correct in admitting Kenneth Acks’ expert testimony regarding property value diminution. Under Maryland Rule 5-702, Acks' methodology, which combined various approaches and considered (rather than ignored) comparable sales and market fluctuations, was deemed reliable, with criticisms going to weight rather than admissibility. However, no, the jury's verdict that all properties were "worthless" was not supported by competent evidence. The record showed properties retained substantial value (e.g., successful post-leak sales, refinancing, expert testimony of some retained value). Lay testimony on property value lacked probative value for market diminution. Thus, a new trial for property damage claims based on diminution in value is required, including an individualized assessment. Judgments for Andrea and Veronica Greco are reversed as they withdrew their claims but received damages. Claims for non-detect properties also failed to show substantial interference for nuisance, negligence, strict liability, or trespass.
Analysis:
This case, building upon the precedent set in Exxon Mobil Corp. v. Albright, significantly tightens the legal requirements for plaintiffs seeking damages in toxic tort claims in Maryland. By demanding higher thresholds for demonstrating 'actual exposure,' 'objective reasonable fear,' 'demonstrable physical injury,' and 'significantly increased risk' backed by particularized expert testimony, the court establishes a more conservative framework for non-economic and future damages. The ruling effectively curtails speculative or generalized claims of fear and risk, emphasizing the necessity of objective medical and scientific proof, and clarifies that emotional distress arising solely from property damage is generally unrecoverable in the absence of egregious conduct. It also provides important guidance on the admissibility of expert testimony in property valuation in environmental contamination cases and the evidentiary standards needed to prove diminution in property value.
