Newell Brands v. Scott Bosgraaf , 690 F. App'x 393 ( 2017 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 17a0341n.06
Nos. 16-2331/2403
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
NEWELL BRANDS, INC., fka Newell Rubbermaid, ) FILED
Inc., )
Jun 19, 2017
)
DEBORAH S. HUNT, Clerk
Plaintiff-Appellee/Cross-Appellant, )
)
v. )
) ON APPEAL FROM THE
SCOTT T. BOSGRAAF, dba Kirsch Lofts, LLC, ) UNITED STATES DISTRICT
) COURT FOR THE WESTERN
Defendant, ) DISTRICT OF MICHIGAN
)
KIRSCH LOFTS, LLC, )
)
Defendant-Appellant/Cross-Appellee. )
Before: COOK, KETHLEDGE, and DONALD, Circuit Judges.
KETHLEDGE, Circuit Judge. In 2009, Kirsch Lofts, LLC bought land in Sturgis,
Michigan, planning to redevelop the land into condos and office space. Kirsch knew that the
land, and the groundwater running through it, was contaminated by chemical pollutants. Under
Michigan law, Newell Brands, Inc.—a prior owner of the land—is responsible for cleaning up
those pollutants. See Mich. Comp. Laws § 324.20126. To do so, Newell needs access to
Kirsch’s property, which Kirsch has generally granted since 2009. For years, Kirsch postponed
construction, waiting for Newell to clean up the property’s soil. Newell did testing on the
property during that time, but did not take any steps to clean up the pollution. Kirsch wanted
Newell to speed up the remediation, because Kirsch would lose state tax credits worth millions
No. 16-2331/2403, Newell Brands v. Bosgraaf, et al.
of dollars if it did not complete its project by 2018. Kirsch had other time-sensitive funding as
well—the longer Newell took to clean up the soil, the more money Kirsch would lose.
In 2014 and 2015, Kirsch denied Newell access to a couple of groundwater-testing wells
on the property. Newell sued Kirsch in federal court under M.C.L. § 324.20135a, which says
that any person (like Newell) who must remediate contaminated land under § 324.20126 may
petition a court for access to that land. Kirsch counterclaimed for damages under
§ 324.20135a(1)(a). Under that section, a court that grants a petition for access “may[,]” among
other things, “[p]rovide compensation to the property owner or operator for damages related to
the granting of access to the property, including compensation for loss of use of the property.”
Kirsch argued that it was entitled to $9.75 million—i.e., the value of the tax credits Kirsch would
lose because Newell had “fail[ed] to remediate the contamination . . . in a responsible and timely
manner.” Eventually, Newell and Kirsch stipulated to an order granting Newell access, which
the district court entered.
Newell moved for summary judgment on Kirsch’s counterclaim, making two alternative
arguments. First, it argued that Kirsch was not entitled to any damages because Kirsch had
known about the contamination when it bought the property. Second, Newell argued that
Kirsch’s damages, if any, should be limited to the market value of a license to access the
property for the expected duration of Newell’s remediation activities, which amounted to
$72,964. The district court granted Newell’s motion for summary judgment and awarded Kirsch
$72,964. Kirsch appealed and Newell cross-appealed.
We review de novo the district court’s interpretation of state law and its grant of
summary judgment. See Ventas, Inc. v. HCP, Inc., 647 F.3d 291, 322, 324 (6th Cir. 2011). And
we have little to add to the district court’s thorough and well-reasoned statutory analysis here.
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No. 16-2331/2403, Newell Brands v. Bosgraaf, et al.
The district court correctly interpreted § 324.20135a(1) to require that damages be “fairly
traceable or connected to” the court’s grant of access, as opposed to damages caused by “the
ongoing presence of contamination itself” or the need for remediation generally. As the district
court explained, this standard requires Kirsch’s damages to be “tether[ed]” to the time the court
granted Newell access, rather than to the time before that grant. We agree with the district court
that, throughout this litigation, Kirsch has “[n]ot even once . . . articulate[d] a theory linking its
claimed damages” to the court’s grant of access, as opposed to the pre-existing contamination
itself. Rather, Kirsch has consistently attempted to “stretch the statutory language to provide
compensation for a responsible party’s failure to remediate, rather than for the access incursion
necessary to effect remediation.” Thus, under § 324.20135a at least, Kirsch was not entitled to
the damages it requested here.
Newell, in its cross appeal, argues that Kirsch was likewise not entitled to the $72,964
that the district court awarded Kirsch. Newell admits that those damages fell within the scope of
§ 324.20135a, but contends that Kirsch was barred from recovering them because it assumed the
risk of construction delay when it chose to buy contaminated land. But § 324.20135a(1) does not
limit its relief to property owners who lacked notice of contamination at the time they purchased
their properties. And the statute would make little sense if it did. The Michigan legislature itself
recognized that § 324.201 (which includes the access statute at issue here) was “intended to
foster the redevelopment and reuse of vacant manufacturing facilities and abandoned industrial
sites that have economic development potential[.]” Mich. Comp. Laws § 324.20102(l). The
legislature thus recognized that many property owners seeking damages under § 324.20135a
would be like Kirsch—trying to redevelop land that they bought knowing it was polluted. Hence
the district court properly rejected Newell’s argument.
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No. 16-2331/2403, Newell Brands v. Bosgraaf, et al.
The district court’s judgment is affirmed.
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