Case Study: Res Judicata Bar and Defeat of Class Certification in Federal Case

Defeated class certification in a federal court case in which property and business owners sued a former mineowner seeking to recover alleged stigma property damages and business losses based on historic conditions and conditions during the ongoing CERCLA remediation. Claims included: trespass, nuisance, negligence, and violations of federal environmental statutes.  The U.S. District Court for Colorado, 778 F.Supp. 505, granted partial summary judgment for the former mine owner on grounds that plaintiffs’ claims were barred under the doctrine of res judicata by a CERCLA consent decree between the former mineowner and the State of Colorado in a prior action. Plaintiffs appealed. The Tenth Circuit Court of Appeals, 7 F.3d 1464, held that plaintiffs' claims against the former mineowner were not barred to the extent they involved only injuries to purely private interests but were barred to the extent they were based on injury to public resources.  On remand, the District Court, 1996 WL 1062376, denied class certification and determined that tort damages based solely on stigma or proximity to contamination were barred as a matter of law.  The case was ultimately settled.

(Of Counsel: Tom Nichols; Partner: Gail Wurtzler)