United States: US Court Of Appeals Refuses To Apply CAFA's "Local Controversy" Exception, Dismisses Class Claims In Environmental Contamination Case

In a recent environmental contamination putative class action, Reece v. AES Corp, 1 the US Court of Appeals for the Tenth Circuit affirmed an Oklahoma district court's denial of two motions to remand. Both courts held that the plaintiffs had failed to meet the threshold citizenship requirement of the local controversy exception of the Class Action Fairness Act of 2005 (CAFA). The Tenth Circuit also affirmed the district court's dismissal of the plaintiffs' complaint for failure "to allege the element of injury." This case adds to a limited body of case law addressing fracking and related activities, highlights the need for substantive supporting evidence of "citizenship" to trigger CAFA's local controversy exception and adds to a growing trend among circuit courts to disallow "fear of contamination or injury" claims in the environmental tort context.

Reece Decision

The plaintiffs in this case alleged that fluid fracking waste, coal combustion waste and fly ash contaminated the environment in Oklahoma where it was generated, along the route it was transported, and where it was disposed of (allegedly in two abandoned and unlined former strip mines that leak contaminants into groundwater and nearby waterways). The plaintiffs' proposed class comprised individuals who live, work and recreate near those areas.

The amended complaint named as defendants various companies involved in the generation, transportation, and disposal of that waste. It alleged claims for strict liability, public and private nuisance, trespass, negligence, negligence per se, and unjust enrichment. The complaint sought compensatory and punitive damages, as well as injunctive relief. The plaintiffs allege that they suffer from "reasonable concern" about several health risks, including breathing contaminated air and "physical ailments consistent with disclosures and warning set forth in [Material Safety Data Sheets], including respiratory conditions, ... and skin and eye irritations."

Plaintiffs' Motions for Remand

The defendants removed the case to Oklahoma district court under CAFA, and the plaintiffs filed a remand motion arguing that their case fell under CAFA's "local controversy," "home state," and "interests of justice" exceptions. Each of these exceptions requires the plaintiffs to show that a threshold percentage of class members are Oklahoma citizens. The plaintiffs relied on summary exhibits that showed Oklahoma property ownership and residency statistics, though they did not provide the underlying data. In light of the lack of substantive evidence, the district court denied the motion on the ground that the plaintiffs had not met their burden of proof. As explained by the court, the plaintiffs' showing fell short because it tabulated Oklahoma property owners and residents, which are not necessarily "citizens" as required by the statutory exceptions. In addition, the proposed class spanned over 20 years—from the time the coal-related activity started in the mid-1990s. The plaintiffs made no effort to account for the fact that the citizenship composition of the proposed class would have changed over that lengthy time span.

The plaintiffs then filed a "renewed" motion for remand that included an affidavit from a local land records expert concluding that "at least two-thirds" of the members of the proposed class were "Oklahoma residents," but again did not include any supporting data. The district court characterized the plaintiffs' motion as a "motion for reconsideration" and denied it on the ground that the court would not consider newly added evidence.

In affirming the district court's decision, the Tenth Circuit focused on CAFA's "local controversy" exception. Under that exception, the plaintiffs bore the burden of showing by a preponderance of the evidence that "greater than two-thirds of the members" of the proposed class are "citizens of the State in which the action was originally filed." The plaintiffs were also working against "a strong preference that interstate class actions should be heard in a federal court if properly removed by any defendant." The court noted that "property owners" and "residents" are not necessarily "citizens" because the latter requires an "intent to remain in the state." Because the plaintiffs did not propose a narrower class of only "citizens," the Tenth Circuit agreed with the district court that the plaintiffs had to provide substantive evidence that the proposed class met the requisite citizenship threshold. The Tenth Circuit further agreed that the conclusory and unsubstantiated demonstratives used by the plaintiffs in connection with their first remand motion fell short.

Without resolving whether the plaintiffs' second remand motion was a "renewed" motion or a "motion for reconsideration," the Tenth Circuit affirmed the district court's denial of that motion as well. Even if the district court should have considered the evidence submitted with the plaintiffs' second motion (i.e., the affidavit of the local land records expert), the Tenth Circuit viewed that decision as, at worst, "harmless error" because the "affidavit falls numerically short of the standard." The expert concluded that the proposed class included "at least two-thirds Oklahoma residents," but the statute requires "greater than two-thirds." The affidavit was additionally ineffective in demonstrating that two-thirds of the proposed class members were Oklahoma citizens because the expert again accounted for "residency" and not "citizenship." 2

This outcome illustrates the heightened precision that courts require for plaintiffs to avail themselves of CAFA's local controversy exception and the steep evidentiary burden that plaintiffs face if they fail to define a proposed class that clearly meets that statutory standard. Where this exception arises and where plaintiffs do not limit their proposed class explicitly to "citizens," decisions like Reece provide defendants with ammunition for preventing remand. Note that the Tenth Circuit does not provide guidance about, and it is unclear how, these plaintiffs could have proven the "intent" aspect of citizenship in this case.

Defendants' Motion to Dismiss

The defendants filed individual motions to dismiss the plaintiffs' complaint. The district court sustained those motions, but allowed the plaintiffs 15 days to adequately allege injury. The plaintiffs filed an amended complaint that attempted to provide more detail. The court narrowed that amended complaint by dismissing certain parties from certain claims and again allowed the plaintiffs 15 days to adequately allege injuries for the remaining claims. The plaintiffs failed to supplement their pleading, so the court dismissed the complaint without prejudice.

The plaintiffs appealed the dismissal of their strict-liability, negligence and negligence per se claims—all three of which require "a specific allegation that the actions taken by the defendants caused an injury." Relying on Oklahoma law, the Tenth Circuit affirmed dismissal of these claims because "a plaintiff in a toxic tort case must prove that he or she was exposed to and injured by a harmful substance ... [a]lleging reasonable concern about an injury occurring in the future is not sufficient to allege an actual injury in fact ... a cause of action does not accrue until an injury in fact occurs." This decision is consistent with a growing trend among courts to deter "fear of contamination and injury claims" in the environmental tort context. For a discussion of a recent Eighth Circuit case rejecting environmental tort "fear of contamination" claims on similar grounds see our legal update " US Court of Appeals for the Eighth Circuit Refuses to Certify Nuisance Class Alleging Fear of Contamination but No Actual Contamination."

In addition to agreeing that the plaintiffs' allegations of potential future harm were insufficient to sustain a toxic tort claim, the Tenth Circuit likewise agreed that the plaintiffs' allegations of present physical harm were insufficient because "the general statement that plaintiffs suffer ailments consistent with exposure to [the contaminants at issue] is nothing more than a formulaic recitation." The Tenth Circuit agreed that without specific allegations of a plaintiff suffering the alleged injuries after coming into contact with the contaminants at issue, there was no basis to infer that the defendants are liable. Thus, it affirmed the district court's dismissal of all of the plaintiffs' remaining claims.

The Tenth Circuit's decision raises the bar for plaintiffs attempting to proceed as a class with these types of claims. Even at the complaint stage, the Tenth Circuit wanted to see "concrete examples" and "specific allegations of individual plaintiffs contracting the alleged ailments after coming into contact with" the contaminants at issue. The requirement that plaintiffs bringing environmental tort claims come forward with more specific allegations of injury may deter the filing of claims for "concern about a future injury" at the outset. Further, the decision likely will increase plaintiffs' litigation costs by requiring expert testimony to demonstrate exposure and actual injury.


1 Reece v. AES Corp., No. 14-7010, 2016 WL 521247 (10th Cir. Feb. 9, 2015).
After the district court denied the first remand motion, the plaintiffs attempted to modify the class definition to include only residents and/or property owners who are Oklahoma "citizens." The Tenth Circuit acknowledged that the modification may have been effective had it been included in the complaint, but held that "post-removal amendments are ineffective to divest a federal court of jurisdiction." Id. at 43.

Learn more about our Environmental practice.

Originally published on 3 March 2016

Visit us at mayerbrown.com

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2016. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.