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Downstream Litigation: Henry v. Dow Chemical Co. and Claim Accrual in Toxic Tort Cases

Allison M. CollinsBrandon M. H. SchumacherPublished in Michigan Environmental Law Journal, Fall 2018, Vol. 36, No. 2, Issue 105 [view full issue].
Cite: 36 Mich Env Law J 2 (2018)

by Brandon M. H. Schumacher & Allison M. Collins, Associates, Foster Swift Collins & Smith, PC

On January 24, 2018, the Michigan Supreme Court overturned the Court of Appeals majority opinion in Henry v. Dow Chemical Co (Henry III), and adopted the lone dissenting judge’s rationale in remanding the case to the Saginaw County Circuit Court for further proceedings.[1] The issue for the circuit court to resolve was when did the plaintiffs’ toxic tort claim accrue: 1984 or 2002? Filed in 2003, the Henry case’s complex, prolonged litigation history has addressed novel issues of Michigan law, ranging from the viability of medical monitoring claims[2] to the standard for class certification in a class action.[3] While the Henry III order is only one page and unsigned, the order adopting the Court of Appeals’ dissent is significant because it reinforces when a toxic tort claim accrues, and therefore when the statute of limitations begins to run on such claims. Moreover, Henry III also makes clear why early recognition of an accrued claim is essential to circumvent Michigan’s statutory barriers in place to avoid a wait-and-see approach to toxic tort litigation. However, the case also leaves several concerns for the Michigan Legislature to consider.

Dioxins in the Tittabawassee Flood Plain

The Dow Chemical Company (defendant) has maintained a facility in Midland, Michigan (the Midland facility) on the bank of the Tittabawassee River since 1897.[4] For decades, the Midland facility has produced numerous products, including “styrene, butadiene, picric acid, mustard gas, Saran Wrap, Styrofoam, Agent Orange, and various pesticides.”[5] The Midland facility’s production of chlorine-based products resulted in the creation of by-products commonly known as dioxins.[6] Dioxins can be created both intentionally and unintentionally by varying methods, such as burning trash, manufacturing chemicals, or smoking a cigarette.[7] Once created, dioxins can contaminate soil, air, and water, and can be transferred to humans via direct contact with skin, inhalation, or consumption of animal fats or breast milk.[8] Dioxins are considered carcinogenic and are described as “hazardous chemical[s] believed to cause a variety of health problems such as cancer, liver disease, and birth defects.”[9]

Dioxin presence in the Tittabawassee flood plain has been public knowledge since the 1970s, and Dow’s Midland facility is believed to be the most significant producer of dioxins on the waterway.[10] Once discovered and confirmed, governmental response to the dioxin contaminated Tittabawassee floodplain was swift:

[S]tate and federal regulatory notices were released, Congressional hearings were held, a Michigan Attorney General Special Task Force was formed, an EPA study released in 1985 confirmed that defendant’s wastewater was the source of the dioxin in the river, and a 1986 publication of the DNR warned residents to avoid contact with floodwater downstream from defendant’s Midland plant.[11]

Eventually, the U.S. Environmental Protection Agency (EPA) selected the Tittabawassee flood plain as a Superfund site in 1987, and EPA has since maintained oversight over Dow’s cleanup efforts.[12]

In 2000, General Motors Corporation was testing soil samples near the Tittabawassee and Saginaw Rivers when it discovered dioxin contaminated soil.[13] By 2001, the Michigan Department of Environmental Quality (MDEQ) confirmed dioxin contamination in the soil, and indicated that Dow’s Midland facility was the dioxin’s likely source.[14] MDEQ published a public bulletin in February 2002 informing residents in the floodplain of its environmental assessment and findings related to dioxin contamination.[15]

The residents who lived in the flood plain and along the river subsequently filed suit in the Saginaw County Circuit Court in March 2003. After years of litigation, and numerous appearances in the Michigan Supreme Court, Dow moved for summary disposition on July 17, 2015, under MCR 2.116(C)(7) arguing that the statute of limitations had run on the plaintiffs’ nuisance and negligence claims.[16] The Saginaw County Circuit Court denied the motion.[17] Dow sought leave to appeal the Circuit Court’s decision in the Court of Appeals, which was denied. The Michigan Supreme Court, on application for leave, remanded the case to the Court of Appeals for consideration of Dow’s previously denied application.[18] This set the stage for the beginning of the end of Henry.

The Majority, the Dissent, and the Reversal

Unlike other orders in the Henry v. Dow Chemical Co saga, the Henry III order is only one page. However, the order’s ramifications on toxic tort litigation are immense. Understanding the brevity of the Henry III order requires examination of the Court of Appeals’ decision, and why the Supreme Court reversed in short form. 

The Court of Appeals was to decide whether the Saginaw County Circuit Court’s denial of summary disposition under MCR 2.116(C)(7) was appropriate.[19] Neither the plaintiffs nor Dow disputed that the plaintiffs’ nuisance and negligence claims were controlled by a three-year statute of limitations.[20] Moreover, the parties did not dispute the plaintiffs’ claims were subject to the claim accrual statute, MCL 600.5827, which provides, “[e]xcept as otherwise expressly provided, the period of limitations runs from the time the claim accrues. The claim accrues . . . at the time the wrong upon which the claim is based was done regardless of the time when damage results.”  

Trentadue abrogated the discovery doctrine after finding ‘the statutory scheme is exclusive and thus precludes th[e] common-law practice of tolling accrual based on discovery.’”

The parties’ dispute instead centered on when the plaintiffs’ claims accrued for purposes of the three-year statute of limitations.[21] Dow argued the claims accrued in 1984, thus making them untimely, while plaintiffs argued the claims were timely because they did not accrue until 2002 when the MDEQ published its bulletin regarding dioxin contamination of the soil. To settle this dispute, the Court of Appeals had to determine where Henry III fit within two Michigan Supreme Court precedents interpreting MCL 600.5805(2) and 5827: Garg v. Macomb Co Community Mental Health Servs, 472 Mich 263; 696 NW2d 646 (2005) and Trentadue v. Buckler Automatic Lawn Sprinkler Co, 479 Mich 378; 738 NW2d 664 (2007).

In Garg, the Michigan Supreme Court held that Michigan law does not recognize the “continuing violations” doctrine. The Court explained that nothing in the applicable statute of limitations “permits a plaintiff to recover for injuries outside the limitations period when they are susceptible to being characterized as ‘continuing violations.’ To allow recovery for such claims is simply to extend the limitations period beyond that which was expressly established by the Legislature.”[22] Furthermore, the Michigan Supreme Court in Trentadue interpreted MCL 600.5827, and explained that the “wrong is done when the plaintiff is harmed rather than when the defendant acted.”[23] As a consequence of this statutory language, the Court in Trentadue abrogated the discovery doctrine after finding “the statutory scheme is exclusive and thus precludes th[e] common-law practice of tolling accrual based on discovery in cases where none of the statutory tolling provisions apply.”[24] In the Court’s view, while the Michigan Legislature had provided for limited circumstances where a discovery rule could apply,[25] the lack of such a rule was dispositive of the Legislature’s intent to have the statute of limitations run immediately rather than upon a plaintiff’s discovery.[26] 

Based on Garg and Trentadue, the Henry plaintiffs could not piggyback a new claim on a previous claim, and there was no argument to be made for tolling the statute of limitations. The plaintiffs needed to articulate that their claims accrued within three years of when they filed suit in 2003, or the claims were time barred. Dow argued that the plaintiffs’ alleged injury, dioxin contamination of their property, accrued no later than 1984 when the public, and by extension property owners on the Tittabawassee flood plain, was made aware and put on notice of dioxin presence in the Tittabawassee River, meaning the statute of limitations expired well before 2003.[27] But, while plaintiffs conceded they knew of the 1984 contamination, they argued that they were not harmed until 2002 when MDEQ confirmed toxic levels of dioxin on their particular property miles downstream from the original area of contamination.[28] The Court of Appeals majority agreed with the plaintiffs, albeit for a different reason.

The Court of Appeals majority in Henry III reiterated that a claim does not accrue until all elements of a claim are present, and cited the plaintiffs’ damages—loss of use and enjoyment of their property and diminution in property value—as markers for when the claims accrued.[29] Although dioxin was present in the Tittabawassee River, the Henry III majority reasoned the plaintiffs were not “damaged” until 2002 when MDEQ notified them of soil contamination, which resulted in diminished property values.[30] Prior to such notification, plaintiffs were free to sell their properties for economic gain and use the property fully; afterwards, no such enjoyment was feasible.[31] The Court of Appeals majority rejected Dow’s argument that mere knowledge of contamination in the Tittabawassee River in the 1980s was sufficient to put all property owners on notice that their properties were potentially affected by dioxin.[32] In other words, damages did not occur when potential dioxin contamination was disclosed, but only when there was concrete evidence of toxic levels of dioxin in the soil. Because public notification of toxic dioxin levels in soil did not occur until 2002, the Court of Appeals majority did not invoke the abrogated common law discovery rule or continuing violations doctrine in finding the plaintiffs’ claims timely.[33]

The lone dissenting judge to the Court of Appeals opinion started with the same basic premises of claim accrual as the majority, but took a different approach to the role plaintiffs’ damages played in determining the claims’ accrual date.[34] The Court of Appeals dissent looked to the plaintiffs’ alleged injury and presence of dioxin on their property, and reasoned that the 2002 MDEQ notice informed the plaintiffs of the extent of their harm and damages, but was not dispositive of when the plaintiffs’ injuries and damages initially occurred.[35] The harm, the Court of Appeals dissent concluded, occurred “when the dioxin dumped into the river by defendant reached plaintiffs’ properties or otherwise reached a particular plaintiff. A claim then accrued, regardless of whether it was possible at that time to calculate the level of monetary damage.”[36] Drawing from Trentadue, the Court of Appeals dissent implied that the majority applied a form of the discovery rule based on the newly discovered and more extensive damages to judicially toll the statute of limitations, instead of abiding by the strict accrual requirements of MCL 600.5827.[37] As such, the dissent would have remanded to the circuit court to determine when the dioxin first reached each of the plaintiffs’ properties, since this was the proper measure of when the harm occurred.[38]

Despite the lengthy divided decision of the Court of Appeals, the Michigan Supreme Court unanimously reversed and remanded the case to the circuit court by adopting the dissenting judge’s opinion.[39] Fifteen years after the Henry lawsuit commenced, the Saginaw County Circuit Court dismissed the lawsuit as barred by the statute of limitations because the plaintiffs’ claims accrued well before 2002.[40]

Is Henry III Consistent with Existing Law, and What Does a Textualist Construction of the Claim Accrual Statute Mean for Toxic Tort Litigation?

The Henry III order and its reasoning fit well within Michigan’s current law and jurisprudence. Since the early 2000’s, the Michigan Supreme Court has embodied a textualist approach to interpreting and constructing statutes. The textualist approach focuses on the text of the statute to instruct judicial decisions. Unless the text is ambiguous, the textualist method requires a judge to apply the statute as written.[41] The Michigan Supreme Court usually adheres to this method of statutory interpretation, most commonly referred to as textualism The Michigan Supreme Court, for better or worse, used this method of interpretation in deciding Henry III.

In Henry III, the text at issue was MCL 600.5827. Again, the statute reads “[e]xcept as otherwise expressly provided, the period of limitations runs from the time the claim accrues. The claim accrues . . . at the time the wrong upon which the claim is based was done regardless of the time when damage results.” This text is unambiguous: a claim accrues when the wrong is done, not when damages result.[42] While the statute does not answer when exactly a claim accrues in every single case, it directs a court to pinpoint the starting date for the statute of limitations at some point in the facts—when the plaintiff is initially harmed.

Henry III may have created a publicly unpopular result, but the fact remains that the Michigan Supreme Court is consistent in its textualist determinations of claim accrual, from the decision in Garg denouncing the continuing violations doctrine, to Trentadue abrogating the discovery rule, and now Henry III strictly reinforcing statutory mandates for claim accrual. If the statute does not provide for tolling the statute of limitations, then the statute will run from the moment the harm occurs, even if the full extent of the harm is not discovered for years—or in the case of Henry—for decades.

“Determining when a plaintiff’s toxic tort claim accrues may present challenges that are not present in the typical personal injury or property damage tort case.”

But what does a textualist construction mean for toxic tort litigation? Determining when a plaintiff’s toxic tort claim accrues may present challenges that are not present in the typical personal injury or property damage tort case. Henry III’s strict adherence to the claim accrual statute necessarily means that as soon as a plaintiff is harmed or plausibly believes that he or she may have been harmed by environmental contamination, an attorney must act promptly to file a lawsuit within the appropriate statute of limitations, even if the full extent of the harm or damages is unknown and may not be known for some time. This raises the obvious concern of determining when the potential plaintiff’s claim crosses the threshold from speculative to plausible to sufficiently state a claim for which relief can be granted. After all, not every toxic tort is a conspicuous oil spill that intrudes onto beach front property; sometimes the plaintiff’s harm is concealed for long latency periods. For example, Erin Brockovich’s infamous PGE hexavalent chromium case (contamination in the 1960’s) was unknown to the plaintiffs until medical conditions caused further inquiry years later. Additionally, strict adherence to statutory claim accrual leaves open the possibility that individuals harmed by substances that are not currently considered contaminants, but that are later classified as such, are left with limited recourse under state law.

What are the possible consequences of Henry III? There may be increased pressure on the Legislature to amend MCL 600.5827 to address the somewhat unique claim accrual concerns presented by toxic tort litigation. Michigan courts may also see more reliance on other statutory provisions, such as the fraudulent concealment exception to the statute of limitations embodied in MCL 600.5855, or in the appropriate context, the harsh and unreasonable consequences exception,[43] both of which relieve a plaintiff from strict compliance with applicable statutory notice requirements and/or the statute of limitations under certain, specified circumstances. Other possibilities include lawsuits being increasingly filed shortly after reports of potential contamination events, regardless of concrete evidence of injury or damage, in an effort to preserve potential claims, particularly for claims against state agencies or officials that are subject to the Court of Claims’ notice provision, MCL 600.6431. There may also be a shift toward federal lawsuits to address toxic tort claims. In any event, the impact of Henry III will surely be felt downstream by future toxic tort litigation, with issues regarding claim accrual increasingly in the limelight.

[1] Henry v. Dow Chemical Co, 501 Mich 965, 905 NW2d 601 (2018) (Henry III).

[2] Henry v. Dow Chemical Co, 473 Mich 63, 67–68, 81–83; 701 NW2d 684 (2005) (Henry I).

[3] Henry v. Dow Chemical Co, 484 Mich 483, 496–507; 772 NW2d 301 (2009) (Henry II).

[4] Henry I, 473 Mich at 69; United States Environmental Protection Agency, Superfund Site: Tittabawasseee River, Saginaw River & Bay (accessed October 2, 2018).

[5] Id., quoting Michigan Department of Community Health, Division of Environmental and Occupational Epidemiology, Pilot Exposure Investigation: Dioxin Exposure in Adults Living in the Tittabawassee River Flood Plain, Saginaw County, Michigan, May 25, 2004, p 4.

[6] See United States Environmental Protection Agency, Superfund Site: Tittabawasseee River, Saginaw River & Bay (accessed October 2, 2018); see also United States Environmental Protection Agency, Learn About Dioxin (accessed October 2, 2018) (“Dioxins refers to a group of toxic chemical compounds that share certain chemical structures and biological characteristics . . . . Several hundred of these chemicals exist and are members of three closely related families: Chlorinated dibenzo-p-dioxins (CDDs), Chlorinated dibenzofurans (CDFs) and Certain polychlorinated biphenyls (PCBs). CDDs and CDFs are not created intentionally, but are produced as a result of human activities like the backyard burning of trash. Natural processes like forest fires also produce CDDs and CDFs. PCBs are manufactured products, but they are no longer produced in the United States.”).

[7] Id.

[8] See Minnesota Department of Health, Facts About Dioxins (accessed October 2, 2018).

[9] Henry I, 473 Mich at 69.

[10] See United States Environmental Protection Agency, Risk Management Recommendations for Dioxin Contamination at Midland, Michigan, December 1988, pp 5–8 (detailing dioxin investigation from 1978 to 1988).

[11] See Henry v. Dow Chemical Co, 319 Mich App 704, 731; 905 NW2d 422 (2017) (Gadola, J., dissenting), rev’d in part by Henry v. Dow Chemical Co, 501 Mich 965; 905 NW2d 601 (2018).

[12] See United States Environmental Protection Agency, Superfund Site: Tittabawasseee River, Saginaw River & Bay (accessed October 2, 2018).

[13] Henry I, 473 Mich at 69.

[14] See Michigan Department of Environmental Quality, Final Report, Phase II Tittabawassee/Saginaw River Dioxin Flood Plain Sampling Study, June 2003, p 42.

[15] Henry, 319 Mich App at 731 (Gadola, J., dissenting).

[16] Id. at 709.

[17] Id. at 712–14.

[18] Id.

[19] Id. at 714.

[20] See MCL 600.5805(2), as amended by 2018 PA 183 (formerly MCL 600.5805(10)).

[21] Henry, 319 Mich App at 715.

[22] Garg, 472 Mich at 282.

[23] Trentadue, 479 Mich at 388 (citation omitted).

[24] Id. at 389.

[25] See MCL 600.5838 (malpractice discovery rule), 5838a (medical malpractice discovery rule), 5839 (gross negligence on the part of contractors, licensed architects, or professional engineers discovery rule), and 5855 (discovery rule for fraudulently concealed claims). 

[26] Trentadue, 479 Mich at 391–93.

[27] Henry, 319 Mich App at 717.

[28] Id. at 719.

[29] Id. at 719–20.

[30] Id.

[31] Id.

[32] Id. at 717–19.

[33] Id. at 720–22. The Court of Appeals majority also evaluated other arguments by the defendant, but they are unimportant to the claim accrual focus of this article.

[34] Id. at 734–36 (Gadola, J., dissenting).

[35] Id. at 735 (“The MDEQ bulletin did not place the dioxins in plaintiff’s soil.”).

[36] Id. at 736.

[37] Id. at 735–36.

[38] Id. at 736.

[39] Henry III, 501 Mich at 965.

[40] See Terry Camp, Judge Quietly Dismisses Henry vs. Dow Chemical Lawsuit Over River Contamination, ABC News 12 (August 8, 2018).

[41] See Gardner v. Dep’t of Treasury, 498 Mich 1, 6; 869 NW2d 199 (2015).

[42] A statute’s text is ambiguous when a term contained therein “is equally susceptible to more than a single meaning.” Lansing Mayor v. Pub Serv Comm, 470 Mich 154, 166; 680 NW2d 840 (2004).

[43] See Rusha v. Dep’t of Corrections, 307 Mich App 300, 311; 859 NW2d 735 (2014).