Barg Coffin Lewis & Trapp, LLP Articles

December 1993

California Supreme Court Issues Opinion in Potter v. Firestone Tire and Rubber Company, Supreme Court No. S018831

by Richard C. Coffin

On December 27, 1993 the California Supreme Court released its long-awaited decision in Potter v. Firestone Tire and Rubber Company. The 77-page opinion (along with 33 pages of concurring and dissenting opinions) addresses six important issues for Landels’ clients. Those issues are:

What is the standard of proof for an award of emotional distress damages for fear of cancer or other serious physical illness or injury . . ." following exposure to a carcinogenic or other toxic substance in the absence of actual physical injury?
Does alleged immune system or cellular impairment manifesting no physical symptoms qualify as a "physical injury" justifying associated emotional distress damages?
What is the standard of proof required to show an "intentional" infliction of emotional distress by a toxic tort defendant?
What is the standard of proof for recovery of the costs of medical monitoring to detect the onset of disease when, as a result of a defendant’s negligence, a plaintiff has an increased risk of future illness, but suffers no present physical injury or illness?
Should any comparative fault be assigned to a plaintiff who has negligently ingested other toxic substances or carcinogens than those upon which the lawsuit is based, such as cigarettes?
In what circumstances are punitive damages recoverable against a toxic tort defendant?

Factual and Procedural Background

Potter arises out of the operations of Firestone’s tire manufacturing plant near Salinas, California. In 1967, Firestone contracted for disposal of its industrial waste at the Crazy Horse Landfill – a municipal Class 11 sanitary landfill. At that time, Firestone was advised that no solvents, cleaning fluids, oils or liquids were permitted at the landfill. Despite Firestone’s specific assurances to the contrary, over the years, it sent "large quantities" of the prohibited wastes to Crazy Horse.

In 1977, Firestone adopted an internal policy prohibiting disposal of liquid wastes at Crazy Horse. Later, however, a plant manager became angered over the high costs of the waste disposal program and renewed shipments of liquid waste to Crazy Horse, knowing it was against California law.

The Potter plaintiffs were four individuals whose private drinking water wells were contaminated with chemicals – two known to be human carcinogens, and others merely suspected to be carcinogens – emanating from Crazy Horse. In a court trial, the relevant findings were:

Firestone acted negligently in disposing of its liquid waste at Crazy Horse from 1967 to 1974.
Firestone was liable for intentional infliction of emotional distress, because its decision to dump waste at Crazy Horse in violation of its own policy (which demonstrated Firestone’s increased knowledge about the dangers of toxic waste) in order to reduce costs was "outrageous" conduct.
Though it was "not possible to demonstrate with sufficient certainty a causal connection..." between plaintiffs’ alleged physical ailments and their contaminated groundwater, their fear of contracting cancer was reasonable.
Plaintiffs were awarded $800,000 for fear of cancer.
Plaintiffs were awarded $142,975 as the present value of the cost of future medical monitoring.
Plaintiffs were awarded $269,500 for psychiatric illness and cost of treatment.
Plaintiffs were awarded $108,100 for disruption of their lives.
Plaintiffs were awarded $2.6 million in punitive damages based on the Court’s conclusion that Firestone’s disposal of toxic wastes at Crazy Horse after 1977 was despicable conduct in "conscious disregard of the rights and safety of others" within the meaning of Civil Code §3294.

The California Court of Appeal reversed the award for medical monitoring, but otherwise affirmed the judgment. The Court of Appeal held:

It was unnecessary for the plaintiffs to establish a present physical injury, or to prove that they were likely to develop cancer, in order to recover for fear of cancer, as long as plaintiffs’ fear was serious and reasonable under the facts.
Firestone was properly held liable for intentional infliction of emotional distress.
Medical monitoring damages could not be awarded because plaintiffs did not establish that cancer was reasonably certain to occur.
The trial court’s other compensatory and punitive damage awards were affirmed.

Executive Summary

With regard to the issues before it, the Supreme Court held:

1. Fear of Cancer. Recognizing the inherent uncertainty and speculation involved in claims of future harm which may or may not ultimately materialize, the Court held that, before a plaintiff can recover for emotional distress damages based upon fear of cancer in the absence of a present physical injury, he or she must prove:

"(1) as a result of the defendant’s negligent breach of a duty owed to the plaintiff, the plaintiff is exposed to a toxic substance which threatens cancer; and (2) the plaintiffs fear stems from a knowledge, corroborated by reliable medical or scientific opinion, that it is more likely than not that the plaintiff would develop the cancer in the future due to the toxic exposure. Under this rule, a plaintiff must do more than simply establish knowledge of a toxic ingestion or exposure and a significant increased risk of cancer. The plaintiff must further show that based upon reliable medical or scientific opinion, the plaintiff harbors a serious fear that the toxic ingestion or exposure was of such magnitude and proportion as to likely result in the fear of cancer." Slip Opinion at 47-48. [Emphasis added.]

Of particular interest is the Court’s creation of a different standard which significantly reduces a plaintiff’s burden of proof in those instances where he or she can plead and prove that the defendant’s conduct in causing toxic exposure rises to the level of oppression, fraud or malice within the meaning of Civil Code Section 3294, which authorizes the imposition of punitive damages. In such cases, the plaintiff must still demonstrate that his fear of cancer is reasonable, genuine and serious; however, he need not demonstrate that cancer is "more likely than not" so long as he has shown that the defendant is guilty of despicable conduct within the meaning of Section 3294. Slip Opinion at 50.

In arriving at its decision, the Court reviewed current California law regarding claims of emotional distress, noting:

in an ordinary negligence action for physical injury, recovery for emotional distress caused by that injury is available as an item of parasitic damages. Slip Opinion at 16.
There is no independent tort of negligent infliction of emotional distress; thus, there is no duty to avoid negligently causing emotional distress to another. Damages for emotional distress are recoverable only if the defendant has breached some other duty to plaintiff. The appropriate tort is negligence, an essential element of which is a duty to the plaintiff. The Court found the requisite breach of duty present in this case in Firestone’s violation of regulations mandating disposal of toxic waste only in Class I landfills and its violation of laws prohibiting contamination of underground water. The Court also found that plaintiffs’ fear of cancer was proximately caused by Firestone’s conduct, which threatened serious physical injury. Slip Opinion at 22.
It has already been decided that physical injury is not a prerequisite for recovering damages for serious emotional distress where there exists some guarantee of genuineness in all the circumstances of a case. Burgis v. Superior Court (1992) 2 Cal.4th 1064, 1074, 1079; Molien v. Kaiser Foundation Hospitals (1980) 27 Cal.3d 916, 925-26. Slip Opinion at 25-26.

The Court rejected the Court of Appeal’s reasoning that in this case, plaintiffs’ knowledge that their water supply was contaminated by any amount of a carcinogen, by itself, would likely cause emotional distress to most reasonable persons. The Court warned that such an approach attaches undue significance to the mere ingestion of a carcinogen or increased risk of cancer without due consideration of the "nature, magnitude and proportion of the exposure or its likely consequences," a necessity given our virtual daily exposure to carcinogens in the modern world.

2. Immune or Cellular Damage as Physical Injury. The Court declined to decide the issue of whether impairment of the immune system and cellular damage that does not give rise to clinical symptoms constitute "physical injuries" for which parasitic damages for emotional distress should be available. The Court concluded that it was not clear from the record before it that these plaintiffs’ emotional distress claims were parasitic to this type of supposed injury, and thus, that it lacked an appropriate factual record for resolving the issue. Slip Opinion at 20.

Defendants can anticipate that the plaintiffs’ bar will use this result to support their reliance on .phenotypic" and "functional" immune assays to demonstrate physical injury justifying emotional distress damages.

3. Intentional Infliction Of Emotional Distress. The Court reversed the trial court and appellate court rulings that Firestone was liable for intentional infliction of emotional distress based upon the trial court’s failure to make a finding that Firestone’s conduct was directed at the plaintiffs or that Firestone was aware of plaintiffs’ presence and their consumption of water. The Court cited its 1991 opinion in Christensen v. Superior Court, 54 Cal.3d 868, where it held that it is not sufficient to sustain a claim for intentional infliction of emotional distress that the defendant’s conduct is intentional and outrageous; such conduct must also be directed at the plaintiff or occur in the presence of a plaintiff of whom the defendant is aware. Slip Opinion at 56-57.

For the guidance of the lower courts in the event of retrial on the issue, the Court held that recovery of fear of cancer damages in actions for intentional infliction of emotional distress should not necessitate the more stringent threshold showing of a medically corroborated belief that it is more likely than not that the plaintiff will develop the feared cancer. Nevertheless, it must be established that the plaintiff’s fear of cancer is reasonable, genuine and serious. Slip Opinion at 59-60.

4. Medical Monitoring Costs. In reversing the Court of Appeal’s ruling on medical monitoring costs, the Supreme Court adopted the analysis in Miranda v. Shell Oil Co. (1993) 17 Cal.App.4th 1561. Slip Opinion at 63-64. The Court rejected the premise that medical monitoring damages should be dependent upon a showing of present physical injury or that a particular cancer or disease is reasonably certain to occur in the future (Slip Opinion at 69), and held that the cost of medical monitoring is a compensable item of damages if the plaintiff can demonstrate, through reliable medical expert testimony, that the need for future monitoring is a reasonably certain consequence of the plaintiff’s toxic exposure and that the recommended monitoring is reasonable.

The determination of the reasonableness and necessity of monitoring should include consideration of at least five factors: (1) the significance and extent of plaintiffs exposure to chemicals; (2) the relative toxicity of the chemicals; (3) the seriousness of the disease for which plaintiff is at an increased risk; (4) the relative increase in the chances of onset of disease in the exposed plaintiff as a result of the exposure, when compared to (a) plaintiffs chances of developing the disease had he or she not been exposed, and (b) the chances of members of the public at large of developing the disease; and (5) the clinical value of early detection and diagnosis.

Under this holding, the trier of fact must decide, based upon competent medical testimony, whether and to what extent the particular plaintiff’s exposure to toxic chemicals justifies periodic medical monitoring. The Court noted, however, that the plaintiff may recover only for monitoring which is beyond that which an individual should pursue as a matter of general good sense and foresight. Thus, there can be no recovery for preventive medical care and checkups to which members of the public at large should prudently submit. Slip Opinion at 72.

5. Plaintiff’s Comparative Fault. All four plaintiffs in the Potter case were long-time cigarette smokers. Firestone argued that under comparative fault principles, their voluntary exposure to cigarettes – a toxic substance much more likely than the materials in groundwater to cause cancer – should reduce or entirely preclude their recovery for fear of cancer.

The Supreme Court concluded that Firestone had failed to establish any causal link between plaintiffs’ smoking and their fear of a significantly increased risk of cancer. However, the Court noted that when a defendant demonstrates that a plaintiff’s smoking is negligent and that a portion of the plaintiff’s fear of developing cancer is attributable to the smoking, comparative fault principles may be applied in determining the extent to which the plaintiff’s emotional distress damages for fear should be reduced to reflect the proportion of such damages for which the plaintiff should clearly bear responsibility. Slip Opinion at 73-76.

6. Punitive Damages. The Court also reversed the trial court opinion awarding punitive damages against Firestone. However, it did so solely because the punitive damages had been awarded as an adjunct to the intentional infliction of emotional distress claim. The Court noted that it concurred with the trial court that there was sufficient evidence to support a determination that Firestone acted reprehensibly in conscious disregard of the rights and safety of others within the meaning of Civil Code §3294 when it sent toxic waste to Crazy Horse in violation of its own policy and California law. The Court suggested that, upon retrial, punitive damages could be assessed against Firestone for non-intentional torts under California law. Slip Opinion at 61-62.

CONCLUSION

The Court’s holdings in Potter are, at best, a mixed blessing for the manufacturing community. Though the Court imposed a significant barrier to fear of cancer claims by requiring plaintiffs to demonstrate that they are "...more likely than not..." to develop cancer as a result of exposure, the Court simultaneously opened the floodgates with regard to claims for medical monitoring, left "immune system" claims unresolved, and gave substantial indication that punitive damages may be appropriate where a defendant is demonstrated to have violated any environmental regulation.

This article was authored with the assistance of Landels Ripley & Diamond, LLP attorney Beth S. Jordan.
These materials are provided for information purposes only and are not intended as and cannot be considered legal advice. Before taking action based upon this information, you should consult your legal counsel.

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