Court Revives Locals’ Suit Over Toxic Fumes

CHICAGO (CN) - A federal judge should not have used procedural grounds to dismiss Indiana residents' class action against a wood-recycling plant, the 7th Circuit ruled.

VIM Recycling grinds wood waste into animal bedding and mulch at the Elkhart, Ind., plant. A group of residents from the community filed suit, claiming that fumes, dust and plant emissions threaten their health and are contaminating the area.

The dispute started after the Indiana Department of Environmental Management discovered VIM illegally dumping wood waste on company grounds in 2008. When VIM failed to comply with a settlement, the department filed suit in Indiana state court.

A class of Elkhart residents then intervened to block all waste-disposal operations at the site and remediate the property to its original condition. The plaintiffs also sought damages, claiming that the plant releases harmful vapors and dust that cause respiratory ailments, skin rashes, severe itching and sinus irritation.

After an Indiana federal judge narrowed the interveners' claims, however, the plaintiffs voluntarily withdrew from the dispute and filed a federal complaint under the Resource Conservation and Recovery Act's citizen-suit provision.

As the 50-page 7th Circuit ruling explains: "The plaintiffs took care to differentiate their federal claims from the claims the state asserted in the first ... lawsuit."

Meanwhile, ongoing violations by VIM culminated in a second lawsuit by the state's environmental department in 2009.

With three cases pending, VIM moved to dismiss the federal class action, arguing that it was precluded by state-enforcement litigation.

U.S. District Judge Philip Simon agreed, but a three-judge panel for the 7th Circuit reversed Tuesday.

"Based on a close examination of the lawsuits, including the state court's rejection of the plaintiffs' efforts to pursue their claims by intervening in the first IDEM suit, we conclude that RCRA allows plaintiffs to pursue their claims that are beyond the scope of the first IDEM suit," Hamilton wrote, using the acronyms for the state environmental department and the Resource and Conservation and Recovery Act.

The statutory bar against citizen suits under RCRA is not jurisdictional, the court ruled.

"The district court may certainly coordinate its efforts with the state courts ... but it must allow these plaintiffs to proceed with their case in the forum they have chosen and that Congress has authorized," the decision states.

Judge Kenneth Ripple partly concurred and dissented from the panel, saying his colleagues have eliminated the discretion to stay federal RCRA proceedings while state claims are litigated.

Rather than dismissing the suit, the District Court should have stayed the proceedings, the 11-page opinion states.

"I view the position taken by my colleagues to be an overly rigid one, which under the circumstances of this case, produces a result contrary to the overall intent of RCRA and a procedural straightjacket for district courts in future cases," Ripple wrote.

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