Janet Leichling v. Honeywell International, Inc , 842 F.3d 848 ( 2016 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 15-2263
JANET D. LEICHLING, individually, surviving spouse, and
Personal Representative of the Estate of John G. Leichling;
DAWN M. ROSE, surviving daughter of John G. Leichling;
GREGORY A. LEICHLING, surviving son of John G. Leichling;
CATHERINE L. TIMMS, surviving daughter of John G. Leichling;
HELEN CATTERTON, surviving daughter of John G. Leichling;
JOHN R. LEICHLING, surviving son of John G. Leichling,
Plaintiffs - Appellants,
v.
HONEYWELL INTERNATIONAL, INC.,
Defendant - Appellee.
Appeal from the United States District Court for the District of
Maryland, at Baltimore. Richard D. Bennett, District Judge.
(1:14-cv-02589-RDB)
Argued: October 25, 2016 Decided: December 2, 2016
Before AGEE, DIAZ, and THACKER, Circuit Judges.
Affirmed by published opinion. Judge Thacker wrote the opinion,
in which Judge Agee and Judge Diaz joined.
ARGUED: Jeffrey John Utermohle, LAW OFFICES OF PETER G. ANGELOS,
P.C., Baltimore, Maryland, for Appellants. Michael David
Daneker, ARNOLD & PORTER LLP, Washington, D.C., for Appellee.
ON BRIEF: Gary J. Ignatowski, Patrick A. Ciociola, LAW OFFICES
OF PETER G. ANGELOS, P.C., Baltimore, Maryland, for Appellants.
Anne P. Davis, Eric A. Rey, Allyson Himelfarb, ARNOLD & PORTER
LLP, Washington, D.C., for Appellee.
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THACKER, Circuit Judge:
The survivors of John R. Leichling sued Honeywell
International, Inc., alleging that Mr. Leichling’s fatal lung
cancer resulted from exposure to toxins during his employment at
the Dundalk Marine Terminal in Baltimore, Maryland, where
Honeywell operates a chemical manufacturing plant. Decades
earlier, Honeywell began using chemical refuse to create a
landmass on which the Marine Terminal later sat. The district
court dismissed the suit pursuant to Maryland’s 20-year statute
of repose, which bars untimely claims for injuries resulting
from a “defective and unsafe condition of an improvement to real
property.” Md. Code Ann., Cts. & Jud. Proc. § 5-108(a). The
court reasoned that, because the refuse filled otherwise aquatic
areas and allowed development of the Marine Terminal, it was an
improvement to real property. This appeal followed and, for the
reasons below, we affirm.
I.
A. 1
From 1854 through 1985, Honeywell International, Inc.
(“Appellee”) manufactured chromium, a heavy metal, at a plant in
1Because we are ruling on a motion to dismiss, we assume as
true the facts as stated in the complaint. See A Soc’y Without
A Name v. Virginia, 655 F.3d 342, 346 (4th Cir. 2011).
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an area now known as Harbor Point in Baltimore, Maryland. 2 This
operation produced as much as 100,000 tons of waste per year,
including chromium ore processing residues (“COPR”). COPR
contains hexavalent chromium, which the Environmental Protection
Agency classifies as a powerful carcinogen. Hexavalent chromium
is water soluble and thus may spread through surface water,
groundwater, and drinking water, and exposure may also occur
through dust and dirt. The complaint states Appellee knew of
the dangers associated with COPR as early as the 1930s.
Beginning in the 1940s, Appellee stockpiled COPR
waste for extended periods at and around docks, piers, wharves,
and other work areas at Harbor Point. During the same period,
Appellee owned 85 acres of land adjacent to the Dundalk Marine
Terminal. The following decade, Appellee began using COPR waste
and other material as fill to expand this area.
In 1967, the Maryland Port Authority bought Appellee’s
85-acre property and used it to expand the Marine Terminal. 3 The
2 According to the complaint, Appellee bears successor
liability for predecessor corporations that maintained chromium
processing and production operations at Harbor Point, including
Mutual Chemical Company, Allied Chemical & Dye Corporation,
Allied Chemical Corporation, and Allied Signal, Inc., the last
of which merged with Appellee in 1999.
3Appellee provided its agreement with the Port Authority as
an attachment to its briefing in support of dismissal. See J.A.
220–26. Citations to the “J.A.” refer to the Joint Appendix
filed by the parties in this appeal.
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contract between Appellee and the Port Authority required
Appellee to deposit in the Marine Terminal any COPR fill
Appellee produced at its Baltimore plant, aside from quantities
Appellee required for its own use, or pay the Port Authority for
failing to do so. The Port Authority continued to utilize COPR
fill for the Marine Terminal expansion until 1976.
B.
The survivors of John R. Leichling (“Appellants”)
brought various tort claims against Appellee in the Circuit
Court for Baltimore City, Maryland, asserting Mr. Leichling’s
2012 death from lung cancer resulted from COPR exposure during
his employment as a longshoreman from 1973 through 2001 at the
Dundalk Marine Terminal.
Appellee removed the case to the United States
District Court for the District of Maryland and moved to
dismiss, arguing Maryland’s statute of repose bars Appellants’
claims and, alternatively, Appellants fail to state plausible
claims for relief. While the motion was pending, Appellants
filed a Second Amended Complaint, to which Appellee responded
via reply brief rather than a second motion to dismiss. The
district court agreed with Appellee, holding Maryland’s statute
of repose bars Appellants’ claims. The district court thus
dismissed the claims with prejudice and this appeal followed.
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II.
Dismissal under Federal Rule of Civil Procedure
12(b)(6) is subject to de novo review. See King v. Rubenstein,
825 F.3d 206, 214 (4th Cir. 2016). An affirmative defense
permits 12(b)(6) dismissal if the face of the complaint includes
all necessary facts for the defense to prevail. See Goodman v.
Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007). A court
passing on a motion to dismiss may consider attachments to a
complaint or the motion to dismiss if “integral to the complaint
and authentic.” Philips v. Pitt Cty. Mem’l Hosp., 572 F.3d 176,
180 (4th Cir. 2009). Because this is a diversity case, Maryland
law applies. See 28 U.S.C. § 1652; Erie R.R. Co. v. Tompkins,
304 U.S. 64, 78 (1938).
III.
In the 1960s and 1970s, the demise of privity of
contract as a defense and the introduction of the discovery rule
increased liability for defective or unsafe conditions in
improvements to real property. See Rose v. Fox Pool Corp., 643
A.2d 906, 912–13 (Md. 1994). In response, states enacted
statutes protecting those who would be particularly susceptible
to claims arising from such improvements; Maryland’s statute of
repose is one such statute. See id. The statute provides, with
limited exceptions,
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no cause of action for damages accrues and a person
may not seek contribution or indemnity for damages
incurred when wrongful death, personal injury, or
injury to real or personal property resulting from the
defective and unsafe condition of an improvement to
real property occurs more than 20 years after the date
the entire improvement first becomes available for its
intended use.
Md. Code Ann., Cts. & Jud. Proc. § 5-108(a). After courts
applied the statute to bar claims against asbestos
manufacturers, the Maryland General Assembly adopted an
amendment to exclude asbestos from the protection of the statute
of repose. This exception was adopted only after “considerable
debate within the legislature.” Rose, 643 A.2d at 914
(discussing § 5-108(d)(1)).
Otherwise, the statute bars suits in which (1) a
plaintiff’s alleged injuries resulted from an “alleged defective
and unsafe condition of ‘an improvement to real property’”; and
(2) 20 years have elapsed “since the ‘entire improvement first
be[came] available for its intended use.’” Rose, 643 A.2d at
910 (alteration in original) (quoting § 5-108(a)). Here,
Appellants only challenge the district court’s analysis of the
first prong.
To determine whether an item is an “improvement,”
courts apply a “common sense” test, which defines an improvement
as
[a] valuable addition made to property (usually real
estate) or an amelioration in its condition, amounting
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to more than mere repairs or replacement, costing
labor or capital, and intended to enhance its value,
beauty or utility or to adapt it for new or further
purposes. Generally has reference to buildings, but
may also include any permanent structure or other
development, such as a street, sidewalks, sewers,
utilities, etc. An expenditure to extend the useful
life of an asset or to improve its performance over
that of the original asset. Such expenditures are
capitalized as part of the asset’s cost.
Rose, 643 A.2d at 918 (alteration in original) (quoting Black’s
Law Dictionary 757 (6th ed. 1990)). In making this
determination, courts consider “the nature of the addition or
betterment, its permanence and relationship to the land and its
occupants, and its effect on the value and use of the property.”
Id. (citing Allentown Plaza v. Suburban Propane, 405 A.2d 326,
332 (Md. 1979)).
Courts should not “artificially extract each component
from an improvement to real property and view it in isolation.”
Hickman, ex rel. Hickman v. Carven, 784 A.2d 31, 38 (Md. 2001)
(quoting Hilliard v. Lummus Co., 834 F.2d 1352, 1356 (7th Cir.
1987)). Instead, an item may be “an improvement if it is an
integral component of a project that itself would qualify as an
improvement.” Id. 4 For example, in Hickman, ex rel. Hickman v.
4 Although the Hickman court merely assumed that the
integral component doctrine applied for purposes of resolving
that case, the doctrine has been widely accepted in other
jurisdictions. See, e.g., Associated Elec. & Gas Ins. Servs. v.
BendTec, Inc., 822 F.3d 420, 424 (8th Cir. 2016); Ambrosia Land
Invs., LLC v. Peabody Coal Co., 521 F.3d 778, 781–83 (7th Cir.
(Continued)
8
Carven, the Maryland Court of Appeals held that the statute of
repose did not bar claims of residential subdivision lot owners
against subdivision developers for demolishing a burial site.
See id. at 38–39. The court reasoned that, though the
developers may have removed the burial site while developing the
land, doing so was not only unnecessary for development but also
illegal and thus not an integral component of development. See
id. Conversely, Rose applied the statute to bar a swimmer’s
claims for injuries against a pool manufacturer because the pool
was “a permanent addition, excavated and built into the real
property, which enhances the value of the entire premises.” 643
A.2d at 918. 5
2008); Durham v. Herbert Olbrich GMBH & Co., 404 F.3d 1249,
1255–57 (10th Cir. 2005); Adair v. Koppers Co., Inc., 741 F.2d
111, 114–16 (6th Cir. 1984). We thus have little reason to
doubt that it would find favor with Maryland courts.
5This is not our first occasion to interpret Maryland’s
statute of repose. In Pippin v. Reilly Industries, Inc., for
example, we applied the statute to bar wrongful death claims
against a utility pole designer stemming from the decedent’s
collision with a utility pole. See 64 F. App’x 382, 386 (4th
Cir. 2003) (per curiam). We reasoned, because the wires and
transformers had to sit in a safe position, “the pole was
integral to provision of electricity.” Id. We also noted that
although the company could have used other means to achieve this
end, the pole was nonetheless an “ordinary and reasonable means”
of doing so. Id.; see also Lewis v. Weldotron Corp., 5 F. App’x
265, 268–69 (4th Cir. 2001) (barring claims stemming from shrink
wrap system in brick manufacturing plant that required labor and
capital for installation, enhanced value and utility of
(Continued)
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Here, like the district court, we are satisfied that
Appellee’s use of COPR to expand and develop the Dundalk Marine
Terminal is -- if not an improvement to real property standing
alone -- at least an integral component of the project. See
Hickman, 784 A.2d at 38.
Appellants argue against this conclusion, stating,
“Honeywell’s toxic dumping made the area unsuitable for human
use and development because it posed a tremendous and known
threat to human health and the environment.” Appellants’ Br. 13
(emphasis in original). But neither the statute’s text nor its
legislative history support this theory as grounds for rendering
the statute inapplicable. The language of the statute does not
except hazardous conditions, much less known hazardous
conditions. Indeed, such an exception would swallow the rule,
which only applies to an “alleged defective or unsafe
condition.” § 5-108(a). Moreover, in enacting the exception
for asbestos manufacturers, the Maryland legislature was quite
clear that the exception was limited to asbestos. See Rose, 643
A.2d at 917 (“The General Assembly expressly identified certain
defendants to which subsection (a) does not apply.”). We are
property, and was affixed to property with gas lines and bolts
in concrete floor).
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not positioned to create an additional exception for chromium
manufacturers.
Appellants further argue the use of COPR has decreased
the value of the land in comparison to its hypothetical value
with less hazardous fill. See Appellants’ Br. 17. The “common
sense” test Maryland courts derive from the statute, however,
belies this assertion. Rose, 643 A.2d at 918. Appellants’
allegations establish that Appellee utilized COPR fill to create
a vast 85-acre parcel and transferred the parcel to the Maryland
Port Authority, which used -- and continues to use -- the parcel
as an active marine terminal. This expansion thus bestowed
greater utility to both Appellee and the Maryland Port
Authority, see id., regardless of the wisdom of using hazardous
materials to exact the expansion.
Indeed, viewing the expansion as a whole rather than
the COPR fill “in isolation,” the record establishes that the
fill was, in fact, an “integral component” to developing the
parcel for its use as the Marine Terminal. Hickman, 784 A.2d at
38. Appellants’ reliance on Hickman is unavailing; there, the
defendant’s burial site removal was not only “unlawful and
prohibited” but also “not necessary” to develop the land. Id.
at 38–39. Here, however, Appellee could not have developed the
parcel into the Marine Terminal without a surface on which to
build. The crucial difference between these cases thus lies in
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the purpose of the alleged improvement, not its alleged legal
status. To hold otherwise would render the statute inapplicable
merely if a plaintiff could concoct an allegation of illegality,
as Appellants have done here. See, e.g., Appellants’ Reply Br.
7–9.
The agreement between Appellee and the Port Authority
shows the crucial roles -- both functional and financial -- the
COPR fill played in expanding the Marine Terminal. Indeed, the
agreement deemed the 85-acre parcel “required” for the “purpose
of expanding the Dundalk Marine Terminal.” J.A. 221. Moreover,
the agreement entitled the Port Authority to payment if Appellee
failed to deposit COPR fill at the Marine Terminal, see id. at
223, indicating the financial significance of the fill to the
Port Authority.
Appellee’s use of COPR fill in creating the landmass
that later became the base for a large portion of the Dundalk
Marine Terminal is thus an improvement to that property pursuant
to Maryland’s statute of repose. Because Appellants concede
that they brought their claims outside of the statute’s 20-year
time bar, the district court did not err in dismissing these
claims.
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IV.
For the foregoing reasons, we affirm the district
court’s dismissal.
AFFIRMED
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