2008 WI App 128
court of appeals of
published opinion
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2007AP1400 |
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†Petition for review filed |
2008 WI App 128
COURT OF APPEALS DECISION DATED AND FILED July 30, 2008 David R. Schanker Clerk of Court of Appeals |
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This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports. A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See Wis. Stat. § 808.10 and Rule 809.62. |
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2004CV3064 |
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Arthur D. Dyer, Russell Moeller, Vern Moeller, Anthony Vitrano, Betty Vitrano, Thomas Vitrano, and Renee Vitrano,
Plaintiffs-Appellants, v. Blackhawk Leather LLC, Transportation Technologies Industries Inc., E Z Paintr, Litton Systems Inc., and Ispat Inland Mortgage Acceptance Corporation,
Defendants-Respondents, Waste Management of Wisconsin, Inc. and Groundwater Remediation Group, Defendants. ------------------------------------------------------------ Waste Management of Wisconsin, Inc.,
Plaintiff-Respondent, v. Russell Moeller,
Defendant-Appellant. |
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APPEAL
from an order of the circuit court for
Before Brown, C.J.,
¶1 BROWN, C.J. This
lawsuit concerns a now-closed landfill in
Factual and Procedural Background
¶2 This case was litigated for more than five years in the
circuit court before this appeal, and has generated a prodigious record. There are many disputed facts and to explain
why there are no genuine issues of material fact, we will need to present
more detail than we ordinarily would in a summary judgment appeal. The original permit for a dump on the site in
question was issued in 1954. Waste
Management (or its corporate predecessor) began leasing and operating the
¶3 After the closure, the state DNR continued to investigate and
monitor the landfill and, in 1985, the federal Environmental Protection Agency
added the site to the National Priorities List, bringing it within the
Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).
See 42 U.S.C.A. § 9601-9675 (West 2008). CERCLA requires potentially responsible
parties (PRPs) to conduct cleanup or pay for the cleanup performed by others. See Johnson
Controls, Inc. v. Employer’s Ins. of Wausau, 2003 WI 108, ¶5 n.4, 264
Wis. 2d 60, 665 N.W.2d 257. PRPs include
those who disposed of their hazardous substances at the facility in
question. See 42 U.S.C.A. § 9607(a)(3) (West 2006). The EPA identifies the PRPs at each site,
negotiates with PRPs to do the cleanup, and recovers from PRPs the cleanup
costs spent by the EPA. Johnson
Controls, 264
¶4 Additionally, one PRP has a statutory right to seek contribution from other parties that contributed to the contamination. See 42 U.S.C.A. § 9613(f)(1) (West 2008). In 1986, the EPA requested information from Waste Management about sources of the waste in the landfill, and in response Waste Management identified numerous companies, including the Generators. The Generators (along with other parties not a part of this suit) therefore formed a group to oppose Waste Management’s effort to seek contribution for cleanup costs. This group ultimately reached a mediated agreement with Waste Management allocating these costs between the parties. This agreement resulted in Waste Management, the Generators, and other parties forming the Muskego Site Groundwater Remediation Group (MSGRG) in 1996.
¶5 In late 1997 and early 1998, the DNR collected water samples from the wells of Dyer, the Moellers and the Vitranos and detected levels of vinyl chloride exceeding state and federal drinking water standards. The DNR notified the landowners of the results and advised them to use bottled water for drinking and cooking. Along with the notification letters, the DNR enclosed a fact sheet about vinyl chloride which stated that “[e]xposure to vinyl chloride may increase a person’s risk of developing cancer. Human and animal studies have shown higher rates of liver, lung and several other types of cancer.” Immediately after the test results, MSGRG provided bottled water to the affected landowners and, in 1999, it paid for their residences to be connected to the municipal water supply.
¶6 In 2001, Dyer, the Moellers, and the Vitranos sued Waste Management, MSGRG, and the Generators for contamination of their groundwater. They alleged claims of negligence, trespass, and nuisance, and among other damages requested compensation for their fear of developing cancer. Ultimately, in 2007, the circuit court granted summary judgment dismissing the individual Generators (though not Waste Management or MSGRG) from the case. This appeal followed.
Attorney-Client and Mediation Privileges
¶7 Before we address the summary judgment at the heart of this appeal, we will consider two evidentiary rulings also appealed by the plaintiffs. In the first, the trial court excluded a 1986 memorandum sent by an in-house Waste Management attorney to several managers and attorneys at Waste Management or its corporate parent. The circuit court excluded this memo because it held it subject to the attorney-client privilege.[1] The second ruling concerns documents generated during the mediation process between Waste Management and the Generators (the “allocation documents”). The circuit court concluded that these documents are subject to both state and federal mediation privileges. We have reviewed the memorandum and those portions of the mediation documents to which the parties have referred us. We affirm both rulings for reasons we will now give, though we may be hampered a bit by our effort not to publicize the contents of these confidential documents.
¶8 First, the memo.
¶9 There is no dispute that the memo here at issue was a communication from an attorney to a client. However, the plaintiffs argue that there is no evidence that the memo was communicated “for the purpose of facilitating the rendition of professional legal services to the client.” Rather, they contend, the memo only “memorialized a business decision already made by [Waste Management].” We disagree. The memo itself provides ample evidence of its privileged nature. It notes the status of Waste Management’s situation vis-à-vis the Wisconsin DNR—which in 1986 had already been exerting its legal authority over the landfill for more than a decade. The memo describes concerns about the landfill that the DNR had communicated to the company and describes a selected course of action in responding to the agency’s concerns. The fact that this communicated course of action could be characterized as relating to the “business” of Waste Management does not mean that it is not also a communication for the purpose of rendering legal services. As the court noted, “[v]irtually all ‘legal’ advice involves a modicum of business advice ….” We have no trouble concluding that the memo constitutes a privileged attorney-client communication.
¶10 The plaintiffs submit, however, that Waste Management waived any privilege attached to the memo by disclosing it in response to a discovery request. Waste Management, upon realizing that it had produced the document, moved the circuit court to direct the plaintiffs to return it. Waste Management alleged that the production was inadvertent and noted that it had produced over 300 boxes of documents in the litigation. The circuit court granted Waste Management’s motion and ordered the plaintiffs to return the document and destroy any copies of it. Our supreme court held in Harold Sampson Children’s Trust v. Linda Gale Sampson 1979 Trust, 2004 WI 57, ¶31, 271 Wis. 2d 610, 679 N.W.2d 794, that because the lawyer-client privilege belongs to the client, and not the lawyer, only the client can waive it. Thus, in that case, an attorney’s voluntary[2] disclosure of documents that he had erroneously determined not to be privileged did not constitute waiver. See id., ¶¶7, 31. The plaintiffs contend, however, that in this case it was the client, Waste Management, and not the lawyer that disclosed the document. We reject this contention. The plaintiffs’ only factual support for it is the fact that Waste Management’s assistant general counsel is listed as “Of Counsel” on the signature page of the discovery responses (as he is on other filings and on the appellate briefs in this case). The attorney did not sign the response and there is no evidence that he was involved in any way in the production of the document.
¶11 The plaintiffs further argue that the privilege was waived on three other occasions: when Waste Management filed a copy of the document as a part of its motion for the document’s return in the circuit court; when it filed a copy with this court in an earlier proceeding;[3] and when it turned over a copy as part of a defense expert’s file. As for the two court filings, both were under seal. With respect to the expert’s file, Waste Management submits, and the plaintiffs do not dispute, that the memo was in Waste Management’s expert’s file only because the plaintiffs had given a copy to their own expert, who then turned over his file to Waste Management, which gave it to its expert for review. All of this occurred long after the court had originally ordered the plaintiffs to return or destroy all copies of the document. Thus, this production of the memo occurred only because of the plaintiffs’ failure to obey the court’s order. We hold that none of these events waived the attorney-client privilege. We further order that, within thirty days of remittitur, the plaintiffs account to the circuit court for any copies of the memo that they may presently have in their possession, whether paper or electronic, including any archive or backup copies.
¶12 The plaintiffs also appeal the circuit court’s ruling excluding
the allocation documents, which were exchanged in the process of the
Generators’ mediation with Waste Management, as subject to a mediation
privilege.
¶13 The plaintiffs note that the mediation privilege was not
enacted until 1994, after much, if not all, of the allocation mediation had
already been completed. See S. Ct. Order 93-03, 179
¶14 Though all parties treat whether the mediation privilege applies as a question of retroactivity, we are not convinced that retroactivity is really the issue. The statute states that no “communication relating to a dispute in mediation made or presented in mediation … is admissible in evidence or subject to discovery or compulsory process in any judicial or administrative proceeding.” Wis. Stat. § 904.085(3)(a). The focus of the statute is on the courts and on judicial proceedings: it directs the courts not to admit certain communications into evidence and excludes those same communications from discovery. Thus, in our view, the statute is “applied” when the communications are sought to be introduced or discovered in court, not when they are originally made during mediation. The court was not reaching backward in time to attach a rule of law to the pre-1994 mediation; rather, it was refusing to allow present-day discovery of mediation communications because the statute, which was in effect at that moment, barred it.[6]
¶15 The plaintiffs argue that applying the privilege in this case cannot fulfill the stated purpose of the statute, which is to “encourage the candor and cooperation of disputing parties, to the end that disputes may be quickly, fairly and voluntarily settled.” See Wis. Stat. § 904.085(3)(a). The plaintiffs are of course correct that we cannot “encourage … candor and cooperation” in mediations that have already occurred. Neither, however, does applying the privilege in any way undermine this goal. There is no language in the statute limiting the privilege to mediations occurring after the date of adoption. Instead, the statute gives the plain directive that “no oral or written communication … made or presented in mediation … is admissible in evidence or subject to discovery,” id., and we decline the invitation to negate this specific language simply because the mediation in this case predated the existence of the privilege.
¶16 The plaintiffs also note Wis. Stat. § 904.085(4)(c), which states that the privilege “does not prohibit the admission of evidence otherwise discovered, although the evidence was presented in the course of mediation.” The plaintiffs contend that this provision means that certain of the allocation documents are not subject to the privilege because the plaintiffs obtained them “outside formal discovery via sources other than [Waste Management] and the Generators.” We cannot condone the plaintiffs’ flagrant abuse of the English language. “[O]therwise discovered” in this context quite obviously means “discovered outside of mediation,” not “discovered outside the bounds of formal civil discovery.” By its terms, § 904.085(4)(c) is intended to prevent a party from making pre-existing, unprivileged information privileged, simply by communicating in the course of a mediation. If the plaintiffs’ reading were correct, then the mediation privilege would not apply to communications received by a party to a mediation in the course of that mediation, since a mediation is not formal civil discovery. Since this is precisely what the privilege is designed to protect, see § 904.085(1), the plaintiffs’ reading is clearly wrong.
¶17 The plaintiffs finally argue that even if the mediation privilege applies in the first instance, the circuit court should have allowed the discovery of the allocation documents under Wis. Stat. § 904.085(4)(e), which states that a court “may admit evidence otherwise barred by this section if necessary to prevent a manifest injustice of sufficient magnitude to outweigh the importance of protecting the principle of confidentiality in mediation proceedings generally.” We note that the statute states only that a court may “admit” such evidence and does not, on its face, create an exception to the rule against discovery. We further note that the use of the word “may” generally denotes a discretionary decision for the trial court. See Liberty Grove Town Bd. v. Door County Bd. of Supervisors, 2005 WI App 166, ¶10, 284 Wis. 2d 814, 702 N.W.2d 33. In any case, having reviewed the final report of the allocation mediator and considered the “facts” that the plaintiffs claim to find therein, we find no basis whatsoever for the plaintiffs’ claims that the “manifest injustice” exception should apply in this case. As we have noted, the special master already sifted through the documents and provided many of them to the plaintiffs. The only documents held back were those “written by lawyers and arguments by lawyers and position papers by lawyers.” Whether such documents constitute evidence of anything is questionable, but certainly they are not the sort of evidence whose denial here will work a “manifest injustice.”
Summary Judgment
¶18 We now turn to the central issue in this case: whether the circuit court properly granted
summary judgment dismissing all of the plaintiffs’ claims against the
Generators. Summary judgment is proper
where there are no genuine issues of material fact and one party is entitled to
a judgment as a matter of law. Wis. Stat. § 802.08(2). Though the plaintiffs made trespass and
nuisance claims below, they do not mention the elements of these causes of
action or otherwise discuss them in any depth in their appellate briefs. As the plaintiffs do, we will address the
summary judgment under the rubric of general negligence law. In
¶19 All of the plaintiffs’ claims against the Generators are premised on three general sets of alleged acts and omissions: (1) the Generators’ dumping of “liquid, toxic, and hazardous waste” at the landfill; (2) the Generators’ failure to properly investigate and remediate the contamination; and (3) the Generators’ failure to warn the owners of nearby properties that the contamination existed. The circuit court granted summary judgment because it held that the plaintiffs had presented “no proof” that the Generators had dumped any waste into the landfill containing vinyl chloride or its chemical precursors. Without such evidence, there was nothing linking the Generators to the plaintiffs’ harm: that is, there was no causal connection between any alleged breach of duty on the Generators’ part and the harm the plaintiffs suffered. On appeal, the plaintiffs do not exactly admit that this is correct, but they come very close. They only claim that the allocation documents, if discovered, “would provide the landowners with further discovery and evidence on each Generator’s dumping in the landfill.” But these documents are privileged and, as we have discussed, the plaintiffs have already received any documents that the special master determined to contain “factual information.” If the plaintiffs cannot make the case with the facts, we fail to see how they will make it with “position papers by lawyers.” We conclude that the negligence claims based on the Generators’ dumping were properly dismissed.
¶20 The second theory of liability advanced by the plaintiffs is
that the Generators failed to properly investigate and remediate the
contamination. The plaintiffs assert
that by forming MSGRG, the Generators assumed a duty to take responsive action
to remedy the contamination and prevent its further spread. They cite Nischke v. Farmers & Merchs.
Bank & Trust, 187
¶21 Nischke itself relied on the Restatement
(Second) of Torts § 323 (1965), which requires that one of two
conditions be met for liability: that
the defendant’s failure to exercise reasonable care increases the risk of harm
to the plaintiff, or the harm is suffered because of the plaintiff’s reliance
upon the defendant’s undertaking. Nischke,
187
¶22 The plaintiffs’ last theory of liability is that the Generators
violated a duty to warn them about the spread of vinyl chloride contamination.
¶23 Like the plaintiffs’ other theories, this one suffers from a paucity of evidence. The plaintiffs assert that
[i]t is undisputed that at least by 1996, when they joined MSGRG … the Generators knew or reasonably should have known that the contamination was spreading downgradient from the landfill to off-site properties.
[i]t is reasonable to infer that at least by that point, the Generators knew or should have known that the contamination was migrating downgradient, yet failed to warn ….
Yet in support of this claim the plaintiffs cite only their expert’s report, which itself states only general conclusions and opinions for which it does not provide a factual basis. The Generators vigorously dispute that there was any reason to think that the plaintiffs’ properties were at risk at any time before the testing in 1997, after which the plaintiffs were warned, by letter, of the situation.
¶24 But even if the plaintiffs could provide some evidence of the Generators’ knowledge or constructive knowledge of the vinyl chloride contamination, public policy considerations would preclude recovery on this theory. Again, the Generators are involved in MSGRG because the landfill is the subject of state and federal cleanup laws and procedures. As we have discussed, there is no evidence that any of the defendant Generators is responsible for the vinyl chloride in the plaintiffs’ wells. If the plaintiffs’ theory of recovery were allowed, any PRP in a CERCLA cleanup would have an affirmative duty at all times to notify all persons who might potentially be harmed in any way by the area under cleanup. This would be true regardless of that particular party’s responsibility for causing the harm. We conclude that this would place an unreasonable burden on PRPs and would enter a field with no sensible or just stopping point. See id. Further, it would provide a disincentive for PRPs to cooperate with the government in cleanup efforts. The plaintiffs’ “failure to warn” theory is contrary to public policy.
¶25 The plaintiffs finally claim that as a result of their exposure
to vinyl chloride, they are afraid that they will develop cancer and that they
are entitled to compensation for this fear.
They cite Babich v. Waukesha Memorial Hospital, Inc., 205
¶26 The plaintiffs seize on the words “contaminated source” and seem to believe that Babich means that their “cancer-fear” claims are valid as a matter of law, because their groundwater constitutes a “contaminated source” of water. We note that the analysis in Babich, by its own terms, is specific to needlesticks and HIV. We reached the result in that case by considering the public policy factors for cutting off liability in negligence cases. See id. at 707-09. Simply identifying an object in any given case and labeling it a “contaminated source” ignores these public-policy factors. Further, as we have discussed above, the plaintiffs have produced no evidence that the Generators had anything to do with the vinyl chloride contamination in their wells. Having failed to show causation, the plaintiffs cannot receive damages, whether for physical harm to their property or for emotional distress.
Abuse-of-Process Claim; Nonfinal Order
¶27 There is one last issue we must address. During discovery, Waste Management learned that Plaintiff Russell Moeller had, at some point, deposited waste at the landfill and had done so after hours. Waste Management sued Moeller for trespass, and also for contribution in the event that Waste Management was held liable in the plaintiffs’ suit. Moeller responded to this suit with a motion for summary judgment, and also filed a complaint alleging abuse of process, claiming that Waste Management’s suit was intended to “intimidate and/or deter [Moeller] from pursuing his own claims.” The circuit court apparently consolidated these cases, as they share a caption in the record and were heard in the same proceeding and decided by the same order. Along with the summary judgment dismissing the Generators, the circuit court granted summary judgment dismissing both Waste Management’s claims against Moeller and Moeller’s abuse of process claim against Waste Management.
¶28 The plaintiffs argue on appeal that the circuit court erred in
dismissing the abuse of process claim; the Generators contend that the summary
judgment was proper and should be affirmed.
We conclude, however, that we lack jurisdiction to address it. This court always has a duty to resolve, even
sua sponte, the question of whether it has jurisdiction over an issue on
appeal. See
¶29 With the exception of the abuse of process claim, which we do not consider, we affirm the trial court in all respects. We further order that, within thirty days of remittitur, the plaintiffs account to the circuit court for any copies of the attorney-client memo that they may presently have in their possession.
By the Court.—Order affirmed and cause remanded with directions.
[1] The Generators contend that the exclusion of the memo is not properly before us as the evidence involved is relevant only to the claims against Waste Management, which are still pending in the circuit court. We disagree. The Plaintiffs’ theory of the Generators’ liability, as we will discuss below, depends in part upon the Generators having failed to remediate the contamination of the landfill. Plaintiffs allege that the Generators adopted the policy that Plaintiffs see reflected in the excluded memo. The memo’s admissibility is thus properly before us as a prior nonfinal ruling adverse to appellants and favorable to respondents. See Wis. Stat. § 809.10(4) (2005-06). (This stands in contrast with the circuit court’s dismissal of Moeller’s abuse of process claim against Waste Management, which is unconnected with the respondents and is thus not properly before us, as we discuss below.)
All references to the Wisconsin Statutes are to the 2005-06 version unless otherwise noted.
[2] The
supreme court noted that the privilege waiver statute refers only to
disclosures that are made “voluntarily.”
Harold Sampson Children’s Trust v. Linda Gale Sampson 1979 Trust,
2004 WI 57, ¶27, 271 Wis. 2d 610, 679 N.W.2d 794; Wis. Stat. § 905.11.
Thus, the court held that cases from other jurisdictions discussing
“inadvertent disclosure” were not apposite.
Sampson, 271
[3] See Dyer v. Waste Mgmt. of Wis., No. 2006AP2396 (WI App Dec. 15, 2006) (leave to appeal denied).
[4] Some
federal courts have also adopted a mediation privilege. See,
e.g., Folb v. Motion Picture Indus. Pension & Health Plans, 16 F.
Supp. 2d 1164, 1170-80 (C.D. Cal. 1998); Hays v. Equitex, Inc. (In re RDM Sports
Group, Inc.), 277 B.R. 415, 430 (Bankr. N.D.
[5] The special master also spoke of having turned over to the plaintiffs all documents containing “factual information” and the plaintiffs dispute that this is so. The plaintiffs are not entitled to any documents simply because they contain “factual information”; if such documents constitute communications “made or presented in mediation,” they are privileged. Wis. Stat. § 904.085(3).
[6] But cf. State v. Pelley, 828
N.E.2d 915, 918-19 (