5 F. Supp. 3d 865
W.D. Ky.2014Background
- Diageo operates a Louisville whiskey distillery aging whiskey since 2000 (claims continuous aging since 1935).
- Whiskey aging allegedly emits ethanol that is regulated under the CAA, state, and local permits (Title V, LMAPCD).
- Plaintiffs, nearby property owners, allege whiskey fungus (Baudoinia compniacensis) grows on their property due to emissions and requires costly cleaning.
- LMAPCD issued a Notice of Violation to Diageo (Sept. 7, 2012) based on complaints of a black sooty substance from 2011–2012.
- Plaintiffs filed a putative class action seeking compensatory/punitive damages and injunctive relief; Diageo moved to dismiss (Rule 12(b)(6)) and sought supplemental authority on CAA preemption.
- Court granted in part: supplemental authority allowed; preemption issue addressed; Count I (negligence) dismissed; Counts II–V (nuisance, trespass, injunctive relief) survive.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| CAA preemption of state common law tort claims | Plaintiffs contend state tort claims are not preempted. | Diageo argues CAA preempts state nuisance/tort claims. | Not preempted; state claims survive (preemption rejected for source-state nuisance claims). |
| Whether Kentucky private nuisance claims are valid | Temporary/permanent nuisance claims supported by fungus/odor facts. | Args insufficient to show unreasonableness or actionable nuisance. | Temporary nuisance stated; permanent nuisance may be viable; timeliness/choice of theory forthcoming. |
| Whether negligent and intentional trespass claims survive | Ethanol entry onto property constitutes trespass. | Duty/breach not adequately pled for negligent trespass; intent for trespass disputed. | Intentional trespass pled adequately; negligent trespass viable with duty/breach shown. |
| Whether injunctive relief is pleaded with plausible certainty | Requests injunctive relief to abate emissions pursuant to statute and equity standards. | Contends standard (eBay test) or statutory framework should govern. | Pleading adequate for injunctive relief under both eBay framework or relevant statutes. |
Key Cases Cited
- Bell v. Cheswick Generating Station, 734 F.3d 188 (3d Cir.2013) (CAA preemption of state common law not mandatory)
- In re Methyl Tertiary Butyl Ether (MTBE) Prods. Liab. Litig., 725 F.3d 65 (2d Cir.2013) (preemption/savings clauses analyzed in context of CAA/CWA)
- Ouellette, Internat'l Paper Co. v. Vermont, 479 U.S. 481 (U.S. 1987) (source/affected state distinction under CWA as guide for CAA)
- Her Majesty the Queen in Right of the Province of Ontario v. City of Detroit, 874 F.2d 332 (6th Cir.1989) (CAA preemption considerations and savings clauses)
- American Electric Power Co., Inc. v. Connecticut, 131 S. Ct. 2527 (U.S. 2011) (CAA displaces federal common law claims; savings clauses preserve state actions)