In his post, “Ruling allows Oregon National Guard toxic exposure case against KBR to go forward“, civil trial lawyer and recently featured guest blawger , David Sugerman updates his toxic tort case: Bixby v. KBR, U.S. District Court Case No. CV 09-632-PK (D. Or.)
The Oregon court’s decision in Bixby v. KBR provides insight on how to establish jurisdictional facts to allow the court to assert jurisdiction over non-resident defendants from multiple jurisdictions. The result also underscores why a coherent litigation strategy based upon bullet-proof pleadings and a strong evidentiary record has nothing to do with luck.
By way of background, the defendants, KBR, Inc., Kellogg, Brown & Root Service, Inc., KBR Technical Services, Inc., Overseas Administration Services, Ltd., and Service Employees International, Inc., (the “KBR defendants”) performed work in 2003 in Southern Iraq under the terms of various governmental contracts. During this time, the Oregon National Guard was the only military force assigned to the Doha Operations Center in Kuwait. Some or all of the KBR defendants would regularly contact the Doha Operations Center asking for help with security issues with the on the expectation that Oregon National Guard members would be dispatched to offer assistance and would identify themselves as such. The plaintiffs and other members of the Oregon National Guard also received security assignments at the Qarmat Ali water plant which pumped water into oil wells for oil harvesting operations. The KBR defendants assumed control of the plant after area combat operations ceased. The plaintiffs alleged that the Qarmat Ali plant was contaminated with sodium dichromate containing high levels of the toxic carcinogen, hexavalent chromium and that the KBR defendants knew of the danger of contamination resulting in several soldiers experiencing characteristic effects of hexavalent chromium poisoning, including bleeding from the nos. Conversely, the KBR defendants advised that their symptoms were caused by “dry desert air or by sand allergies.”
The plaintiffs further alleged that 2008 Congressional hearings revealed that KBR was “wholly aware of the dangers of hexavalent chromium poisoning at the plant at all material times, and actively concealed the extent of the Oregon National Guard soldiers’ exposure to it. Plaintiffs have all subsequently experienced symptoms characteristic of acute hexavalent chromium poisoning.” (Bixby v. KBR, at p.8 )
Judge Patak reviewed the relevant case law and applied the “effects” tests applicable to tort claims. The effects test allows a court to exert personal jurisdiction over a defendant if they: (i) commit intentionally tortious actions; (ii) which are expressly aimed at the forum state; (iii) which cause harm to the plaintiff in the forum state, of which the defendant knows is likely to be suffered. (see, Calder v. Jones, 465 U.S. 783 (1984 (USSC).
At the outset, Judge Patak ruled that the Oregon court lacked general personal jurisdiction over the KBR defendants based upon a lack of business activity and physical presence within the state. However, the learned judge concluded that the Oregon court had specific personal jurisdiction, based upon the Ninth Circuit’s three-pronged test for asserting specific personal jurisdiction over a non-resident defendant:
(1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws;
(2) the claim must be one which arises out of or relates to the defendant’s forum-related activities; and
(3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable. Schwarzenegger, 374 F.3d at 802, quoting Lake v. Lake, 817 F.2d 1416, 1421 (9th Cir. 1987).
Judge Patak concludes:
“[The] affirmative, calculated misrepresentation [that the site was contaminated with hexavalent chromium] clearly constitutes an intentional act, satisfying the first prong of the so-called “effects” test for determining whether purposeful direction has taken place. “
Given the allegation that defendants knew the persons to whom they intentionally directed their misrepresentations and failures to disclose were soldiers of the Oregon National Guard, plaintiffs have further satisfied their burden with respect to the second prong of the effects test, that the intentional act was expressly aimed at Oregon….
Finally, defendants’ alleged misrepresentations and failures to disclose caused harm to plaintiffs, whom defendants are alleged to have known were residents of Oregon. Defendants’ alleged knowledge that plaintiffs were all residents of Oregon, and therefore that any long-term harm suffered by plaintiffs would be felt in Oregon, satisfies the third prong oft he effects test.
Satisfaction of all three prongs of the effects test satisfies the first prong of the test for specific personal jurisdiction….
As to the forum state’s interest, Oregon has a clear interest in protecting the health and safety not merely of its citizens, but also of its employees, the Guardsmen, whose health concerns are specifically addressed in Oregon legislation, see O.R.S. 396.366. This factor therefore weighs heavily in favor of exercising jurisdiction.
…the court may properly exercise specific personal jurisdiction over each defendant, based on the allegations that each defendant intentionally withheld from the plaintiffs, whom defendants knew to be Oregon residents, the information that Qarmat Ali was contaminated with hexavalent chromium. The motion to dismiss for lack of personal jurisdiction is therefore denied.”
Interestingly, similar claims by the Indiana National Guard against KBR were recently dismissed on jurisdictional grounds: McManaway, et al v KBR, Inc. [McManaway v. KBR”]. At page 12-13 of the McManaway v. KBR decision, Judge Richard L. Young held:
“In the instant case, Plaintiffs argue that Defendants’ tortious actions were expressly aimed at Indiana because Defendants knew that after being exposed to sodium dichromate at Qarmat Ali, Plaintiffs would then return to Indiana, where they would subsequently experience health problems, such as cancer and kidney damage. (See Plaintiffs’ Surreply at 7). This argument is simply too tenuous to support a finding that Defendants expressly targeted the State of Indiana.
The court finds two problems with Plaintiffs’ argument.
First, while Plaintiffs have presented evidence that Defendants knew Plaintiffs were from Indiana, Plaintiffs have not established that Defendants knew Plaintiffs intended to return to Indiana after leaving Iraq. In fact, several of the Plaintiffs are currently residing in other states. (See Complaint ¶ 2.1). Second, Plaintiffs allege that Defendants concealed the presence of sodium dichromate at Qarmat Ali to prevent their restoration project from being suspended while the danger was addressed. (See Plaintiffs’ Response Brief at 2). According to this theory, Defendants’ alleged tortious conduct was directed at any individuals who visited Qarmat Ali, regardless of their permanent residence. In fact, Plaintiffs’ Complaint notes that there were individuals at Qarmat Ali from other states and countries who were affected from Defendants’ “knowing acts and omissions.” (Complaint ¶ 1.2). It appears to the court that Defendants “targeted” any and all individuals passing through Qarmat Ali – that some of those individuals happened to be residents of Indiana was merely fortuitous.” (at pp.12-13)