MEMORANDUM OPINION
This matter is before the court on the following motions of the defendant, Diageo Americas Supply, Inc. (“Diageo”):
(1) Motion to dismiss Plaintiffs’ First Amended Class Action Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim (DN 18); and
(2) Motion for leave to file supplemental authority (DN 28).
Also before the court is Plaintiffs’ motion to strike Diageo’s notice of supplemental authority. (DN 38). For the reasons set forth herein, Diageo’s motion for leave to file supplemental authority (DN 28) will be granted, and Plaintiffs’ motion to strike (DN 38) will be denied. The court will also grant in part and deny in part Dia-geo’s motion to dismiss the First Amended Class Action Complaint (DN 18).
I. BACKGROUND
Diageo is a New York corporation that operates a whiskey distillery in Louisville, Kentucky. Diageo has aged whiskey in Louisville since 2000, and it contends that whiskey has been aged continuously in its Louisville facilities since at least 1935. In 2008, Diageo leased and converted additional warehouses to be used for aging whiskey. Plaintiffs
As a natural result of the whiskey aging processes that occur in Diageo’s ware
Plaintiffs claim that once this ethanol is emitted from Diageo’s facilities, it combines with condensation on Plaintiffs’ real and personal property to “cause an invisible, naturally occurring fungal spore to ‘germinate’ (start growing) and become a living organism, visible to the naked human eye.” According to Plaintiffs, this fungus is Baudoinia compniacensis, colloquially referred to as “whiskey fungus.”
On June 15, 2012, Plaintiffs filed a Class Action Complaint on the basis of diversity jurisdiction. (Compl., DN 1). Plaintiffs subsequently amended the complaint to include additional factual allegations to support their claims. (First Am. Compl., DN 15). In the First Amended Complaint, Plaintiffs seek to recover compensatory and punitive damages from Diageo under the following common law theories: (1) negligence and gross negligence; (2) temporary nuisance and permanent nuisance; and (3) trespass. Plaintiffs also seek injunctive relief on the theory that Diageo can correct or abate its ethanol emissions by implementing ethanol control technology in its warehouses. Plaintiffs
Diageo has moved to dismiss Plaintiffs’ First Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). (Mot. to Dismiss, DN 18). Plaintiffs have asked the comí; to deny Diageo’s motion to dismiss or, in the alternative, convert the motion to one for summary judgment. Nearly a year after filing this motion, Dia-geo asked the court for leave to file supplemental authority consisting of two recent cases from the Jefferson and Franklin Circuit Courts. These state trial court decisions also involved claims brought by property owners against whiskey distilleries for property damage that was allegedly caused by whiskey fungus. (DNs 28, 31). In both cases, the Kentucky lower courts addressed the issue of whether the plaintiff property owners’ state common law tort claims were preempted by the Clean Air Act. Plaintiffs subsequently filed a motion to strike Diageo’s notice of supplemental authority. (DN 38). These motions are now before the court.
II. STANDARD
Pursuant to Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a short and plain statement of the claims showing that the pleader is entitled to relief. The pleading standard in Rule 8(a)(2) does not require detailed factual allegations, but “demands more than an unadorned, the defendant-unlawfully-harmed me accusation.” Ashcroft v. Iqbal,
To withstand a Rule 12(b)(6) motion to dismiss for failure to state a claim, it is not enough that the complaint contains “facts that are merely consistent with a defendant’s liability;” rather, a plaintiff must allege “facts — not legal conclusions or bald assertions — supporting a ‘plausible’ claim for relief.” Id. at 687,
As a general rule, a district court may not consider matters outside the pleadings when ruling on a Rule 12(b)(6) motion to dismiss without converting the motion into one for summary judgment. J.P. Silverton Indus. L.P. v. Sohm,
III. DISCUSSION
A. Diageo’s Motion for Leave to File Supplemental Authority
The court will first address Diageo’s motion for leave to file supplemental authority. (DN 28). In that motion Diageo argues — for the first time in this action— that Plaintiffs’ state law claims are preempted by the Clean Air Act (“CAA”), 42 U.S.C. § 7401 et seq., a federal statute that contains various provisions aimed at reducing and limiting emissions, including ethanol emissions. Diageo asks that the court consider two cases recently decided by the Kentucky trial courts which are centered on facts and claims similar to the claims currently pending before this court. In these cases, the Jefferson and Franklin Circuit Courts reached differing conclusions regarding whether the CAA preempts state common law tort claims brought by property owners against whiskey distilleries.
Diageo also filed a notice of supplemental authority on December 2, 2013, in which it seeks to introduce an additional order from the Jefferson Circuit Court. (DN 37). In response, Plaintiffs filed a motion to strike Diageo’s notice of supplemental authority. (DN 38). Plaintiffs argue that the court should refuse to consider Diageo’s supplemental authority because: (1) Diageo’s request for leave is untimely; (2) Kentucky state trial court opinions are not binding on this court; and (3) the Jefferson Circuit Court’s order is flawed because it only provides a minimal analysis of preemption. (DN 38-1, P- 2).
Plaintiffs ask the court to deny Diageo’s motion, but a district court generally has the discretion to grant a request to supplement the pleadings. See Fed.R.Civ.P. 15(d); Schuckman v. Rubenstein,
B. Preemption Analysis
“Federal preemption is an affirmative defense upon which the defendants bear the burden of proof.” Brown v. Earthboard Sports USA, Inc.,
The Supreme Court has, however, addressed preemption of state common law tort claims under the provisions of the Clean Water Act (“CWA”), 33 U.S.C. § 1251 et seq. Internat'l Paper Co. v. Ouellette,
[t]he CWA precludes only those suits that may require standards of effluent control that are incompatible with those established by the procedures set forth in the Act. The saving clause specifically preserves other state actions, and therefore nothing in the Act bars aggrieved individuals from bringing a nuisance claim pursuant to the law of the source State.
Id. at 497,
Athough it recognized that a source state’s “nuisance law may impose separate standards and thus create some tension with the permit system,” the Court ultimately determined that the application of the source state’s law would “not disturb the balance among federal, source-state, and affected-state interests.” Id. at 499,
The Sixth Circuit has addressed the issue of preemption with regard to state statutory claims. See Her Majesty the Queen in Right of the Province of Ontario v. City of Detroit,
On appeal, the Sixth Circuit first addressed the plaintiffs’ motion to remand. The court noted that the CAA establishes minimum air quality standards and gives states the discretion to adopt more stringent standards. Id. at 336 (citing the savings clauses contained within the CAA, 42 U.S.C. §§ 7416, 7604). In reviewing the district court’s finding of preemption, the Sixth Circuit noted that “the plain language of the CAA’s savings clause compels the conclusion” that the CAA did not preclude the plaintiffs’ statutory claims. Id. at 343. The Sixth Circuit supported this assertion with language from the CAA, which it found to “clearly indicate[] that Congress did not wish to abolish state control.” Id. The court also considered the Supreme Court’s holding in Ouellette. Id. (“[T]hat Congress did not seek to preempt actions such as involved in this appeal is clearly indicated by the Court’s holding in [Ouellette.]”). Ultimately, the Sixth Circuit ordered that the action be remanded to the district court. Id. at 344.
Judge Boggs issued a strong dissent in Her Majesty, in which he voiced his disapproval with the effect of the court’s holding, primarily as it related to the particular facts of the case. Id. at 344 (Boggs, J., dissenting). In particular, Judge Boggs believed it improvident to allow the plaintiffs to retroactively question the propriety of permits that had been granted to the incinerator by federal and state agencies several years prior to the initiation of the lawsuit. Id. Judge Boggs did, however, cite approvingly to the panel’s conclusion that the language of the CAA and the Supreme Court’s decision in Ouellette weigh against a finding of complete preemption. Id. at 344-45 (“Congress’s decision to give states a role in the regulation of air pollution requires that federal courts allow state environmental actions against alleged polluters, even if those parties who are accused of polluting are in compliance with federal standards.”).
Keeping in mind these principles developed in Ouellette and Her Majesty, the court will also consider the conflicting rulings of other courts that have addressed the specific issue that is before this court. Some courts have held that the CAA does not preempt state common law tort claims. See Bell v. Cheswick Generating Station,
The Third Circuit has rendered the most recent opinion on this topic. In Bell, a group of property owners brought a putative class action against a power company in Pennsylvania state court. The property owners sought to recover compensatory and punitive damages under the following common law theories: (1) nuisance; (2) negligence and recklessness; (3) trespass; and (4) strict liability.
The Third Circuit overturned the district court’s decision on appeal and held that the property owners’ state law tort claims were not preempted by the CAA. Id. at 190. The Third Circuit reached this holding after tracing the line of authority that addressed preemption under the CAA. The Third Circuit found that the Supreme Court’s decision in Ouellette was controlling, and it used that Court’s analysis in reaching its holding. Though Ouellette addressed the issue of preemption in the context of the CWA, the Third Circuit concluded that any variation between the CAA and the CWA was negligible and, thus, it could apply the Ouellette Court’s analysis in determining the CAA’s preemptive effect. Id. at 196-97. The Third Circuit reasoned that both the CAA and the CWA contain “savings clauses” which provide states and private citizens with the right to sue entities or individuals who are alleged to have violated the provisions of the CAA or CWA. See 33 U.S.C. §§ 1365(e), 1370; 42 U.S.C. §§ 7604(e), 7416. Similarly, the Sixth Circuit has found that the CAA’s savings clauses are virtually identical to the CWA’s savings clauses. See Her Majesty,
After adopting the Ouellette Court’s method of differentiating between source state and affected state law, the Third Circuit concluded that the CAA did not preempt the plaintiff property owners’ source state common law claims. Bell,
The Third Circuit concluded its opinion by finding that there is “nothing in the Clean Air Act to indicate that Congress intended to preempt source state common law tort claims. If Congress intended to eliminate such private causes of action, ‘its failure even to hint at’ this result would be ‘spectacularly odd.’” Id. at 198 (citing Medtronic, Inc. v. Lohr,
The Fourth Circuit, in contrast, has interpreted Ouellette in a different light. See North Carolina ex rel. Cooper v. Tenn. Valley Auth.,
The Fourth Circuit reversed the district court’s decision and remanded the case with directions to dismiss the action against the TVA. Id. at 312. Regarding the issue of preemption, the Fourth Circuit recognized that the Ouellette Court “explicitly refrained from categorically preempting every nuisance action brought under source state law.” Id. at 303. Yet the Fourth Circuit held that it could state “with assurance that Ouellette recognized the considerable potential mischief in those nuisance actions seeking to establish emissions standards different from federal and state regulatory law and created the strongest cautionary presumption against them.” Id. The Fourth Circuit opted to exercise this cautionary presumption, and it held that North Carolina’s nuisance claim was preempted by the CAA. In reaching its decision, the court expressed concern that “[t]o replace duly promulgated ambient air quality standards with standards whose content must await the uncertain twists and turns of litigation will leave whole states and industries at sea and potentially expose them to a welter of conflicting court orders across the country.” Id. at 301.
The Fourth Circuit’s opinion expressly enumerates the problems that may arise if the CAA is not deemed to preempt state common law tort claims. This court is responsive to those concerns. However, after considering Supreme Court and
Our local courts have also discussed the possibility of CAA preemption in cases involving the same facts as are pending before this court. See Mills v. Buffalo Trace Distillery, Inc., No. 12-CI-00743 (Franklin Cir. Ct., Div. 2, Aug. 27, 2013) (hereinafter “Buffalo Trace ”); Merrick, v. Brown-Forman Corp., No. 12-CI-3382 (Jefferson Cir. Ct., Div. 9, July 30, 2013) (hereinafter “Brown-Forman”). Though these state court decisions are merely useful for persuasive purposes, the court will engage in a brief discussion of their holdings.
Brown-Forman involves the same plaintiffs as are named in the action before the court, who brought similar common law tort claims against Brown-Forman Corp. and Heaven Hill Distillers, Inc. Brown-Forman, No. 12-CI-3382, at 2. As in the present case, the plaintiffs in Browrir-For-man alleged that the defendant distilleries “have a duty to minimize and prevent the ethanol emissions through the use of ethanol-capture technology....” Id. The defendants sought to dismiss the action on the grounds of preemption. Id. at 1.
The Jefferson Circuit Court found that the plaintiff property owners’ state law claims were preempted by the CAA, and it granted the defendants’ motion to dismiss. Id. at 4. In reaching this decision, the court only considered authority issued pri- or to the Third Circuit’s decision in Bell. The plaintiffs subsequently filed a motion to reconsider in which they asked the court to reexamine the issue of preemption in light of the Third Circuit’s holding in Bell. See Merrick v. Brown-Forman Corp., No. 12-CI-3382 (Jefferson Cir. Ct., Div. 9, Nov. 26, 2013). Although it acknowledged the Third Circuit’s analysis and holding, the Jefferson Circuit Court declined to reconsider its prior order and elected to follow the Fourth Circuit’s reasoning in Cooper. Id. As did the Fourth Circuit, the Jefferson Circuit Court similarly expressed the concern that if it did not find that the plaintiffs’ claims were preempted, its ruling would have “the ‘potential to undermine [the] regulatory structure’” established by the CAA, as well as state and local laws. Id. at 2 (citing Ouellette,
In contrast, the Franklin Circuit Court rejected a defendant whiskey distillery’s motion to dismiss on preemption grounds.
As the Franklin Circuit Court noted in Buffalo Trace, the federal circuits — and, indeed, the Kentucky lower courts — have reached differing conclusions regarding the issue of CAA preemption of state common law tort claims. The Sixth Circuit has only peripherally addressed this issue. See Her Majesty,
We find that the analysis as set forth by the Third Circuit, coupled with the Sixth Circuit’s analysis in Her Majesty, captures the prevailing law for CAA preemption. In the years since the Supreme Court’s ruling in American Electric Power that the CAA displaces federal common lav/ claims, courts have increasingly interpreted the CAA’s savings clauses to permit individuals to bring state common law tort claims against polluting entities. This interpretation has been cited with approval by a Kentucky trial court, and it corresponds with longstanding Sixth Circuit precedent. Moreover, even the dissent in Her Majesty recognized that a cause of action for pollution might be available to private litigants. For these reasons, and the reasons stated above, this court finds that Plaintiffs’ state common law tort claims against Diageo are not preempted by the CAA. We will now consider whether Plaintiffs’ state common law tort claims can survive Diageo’s motion to dismiss.
C. Plaintiffs’ State Law Claims
As an initial matter, Diageo has offered materials outside the pleadings concerning its federal and state permits, as well as materials which discuss the feasibility of implementing technologies to control its ethanol emissions. (Mot. To Dismiss, DN 18, Ex. 3-21). Plaintiffs argue that the court must, therefore, convert Diageo’s motion to a motion for summary judgment. (DN 24, p. 1-2). See Fed.R.Civ.P. 12(d) (“If, on a motion under Rule 12(b)(6) ..., matters outside the pleadings are present
Here, however, the above-referenced items are not necessary for the resolution of the issues argued in Diageo’s motion to dismiss, and the court will exclude them from its consideration. Therefore, the court will not treat Diageo’s motion to dismiss as one for summary judgment under Rule 56, and Plaintiffs need not be given additional time to respond. See Tackett v. M & G Polymers, USA, LLC,
1) Count I: Negligence and Gross Negligence
Plaintiffs attempt to assert claims against Diageo for both negligence and gross negligence. Under Kentucky law, a negligence action requires proof of the following: “(1) a duty on the part of the defendant; (2) a breach of that duty; and (3) consequent injury.” Mullins v. Commonwealth Life Ins. Co.,
Diageo contends that Plaintiffs have failed to plead facts which show that Diageo owed them a duty, or that it breached any such duty. We agree. Plaintiffs have not identified the source of Dia-geo’s purported duty to minimize and prevent its ethanol emissions from entering Plaintiffs’ property, nor have they identified the source of Diageo’s alleged duty to prevent whiskey fungus from accumulating on Plaintiffs’ property. Moreover, Plaintiffs have failed to show how they, as property owners, could maintain a private cause of action based on Diageo’s alleged violation of a city ordinance or regulation. Indeed, “Kentucky courts have held that a property owner has no private cause of action to bring suit against another property owner for a violation of an ordinance .... because the property owner owes a duty to follow the ordinance to the municipality, not to another party.” Baker v. Warren Cnty. Fiscal Court,
2) Counts II and III: Temporary and Permanent Nuisance
Diageo also seeks to dismiss Counts II and III of Plaintiffs’ First Amended Complaint, which allege nuisance claims. A nuisance can be either private or public. Brockman v. Barton Brands, Ltd.,
To distinguish between temporary and permanent nuisances, Kentucky courts will consider “whether the cause of the nuisance results from some improper installation or method of operation [of the structure] which can be remedied at reasonable expense.” Lynn Mining Co.,
We will first address Plaintiffs’ temporary nuisance claim. Diageo argues that Plaintiffs’ allegations of unreasonable conduct must be disregarded as speculative and conclusory. However, we find that the complaint states a claim for temporary nuisance. The complaint alleges that Diageo’s operations cause whiskey fungus to accumulate on Plaintiffs’ property, and that this fungus unreasonably interferes with Plaintiffs’ private use and enjoyment of their property. (DN 15, ¶ 88). The complaint also alleges that the value of use or rental value of Plaintiffs’ property has been reduced as a result of Diageo’s operations. (Id. at ¶ 89). To satisfy the final element of their claim for temporary nuisance, Plaintiffs allege that Diageo’s ethanol emissions can be corrected or abated at reasonable expense to Diageo. (Id. at ¶¶ 86-87). Although Diageo questions the feasibility of implementing Plaintiffs’ proposed ethanol emission control technologies to abate the nuisance, we find that Plaintiffs have provided adequate factual allegations to state a claim for a tempoi’ary nuisance.
Plaintiffs can also proceed with their claim for permanent nuisance, albeit as an alternative theory, although they will eventually have to elect between temporary and permanent nuisance. Diageo argues that this claim should be dismissed because Plaintiffs failed to plead any unreasonableness with regard to Diageo’s conduct. In response, Plaintiffs contend that the complaint does, in fact, allege that Diageo’s use of its property unreasonably interferes with Plaintiffs’ use of their property. The complaint alleges that Diageo’s facilities emit ethanol, which combines with condensation on Plaintiffs’ property to create a fungus that “appears as a black stain, black dots, and soot” and “is very visible on homes, businesses and vehicles.... ” (DN 15, ¶ 31). The complaint further al
While Plaintiffs have technically complied with the pleading requirements and provided sufficient facts to state a claim for permanent nuisance under Twombly, we note that this claim may be time barred under the applicable statute of limitations. The parties have not addressed this issue, so we decline to go further than remark that a claim for permanent nuisance is subject to Kentucky’s five-year statute of limitations. See KRS § 413.120(7); Donaway v. Rohm and Haas Co., Louisville Plant,
Further, the court notes that a private nuisance can be classified as either temporary or permanent, but a plaintiff can only recover damages under one theory. See KRS § 411.520(2) (“A private nuisance shall be either a permanent nuisance or a temporary nuisance, but shall not be both.”). Moreover, whether a nuisance is temporary or permanent is a question of fact. Huffman,
3) Count IV: Trespass
Plaintiffs appear to bring claims for both intentional and negligent trespass. Kentucky courts distinguish between intentional and negligent trespass by requiring actual harm for negligent trespass. Mercer v. Rockwell Int’l Corp.,
“To support an action for trespass, an object or thing must actually enter the person’s property and harm it.” Dickens v. Oxy Vinyls, LP,
Diageo cites to Rudy v. Ellis,
Therefore, Plaintiffs can state a claim for intentional trespass if they allege that an object or thing entered on and caused harm to their property. Dickens,
Diageo next argues that Plaintiffs failed to state a claim for negligent trespass because there is no allegation that Diageo owed a duty to Plaintiffs or that Diageo was in breach of such duty. Under Kentucky law, the tort of negligent trespass requires proof of three basic elements: “(1) the defendant must have breached its duty of due care (negligence); (2) the defendant caused a thing to enter the land of the plaintiff; and (3) the thing’s presence causes harm to the land.” Rockwell Int’l Corp.,
Plaintiffs, in substance, appear to allege that as a result of its operations, Diageo breached a duty of care to not cause ethanol to physically invade Plaintiffs’ property. They further allege that Diageo did not comply with this duty because it allowed ethanol to enter their property. This constitutes an allegation of a duty of care and subsequent breach of that duty. We offer no opinion as to the origin of this duty, or its legal basis, but we note that it is enough to state a claim for negligent trespass. Therefore, Plaintiffs’ claims for negligent and intentional trespass will survive Diageo’s motion to dismiss.
4) Count V: Injunctive Relief
Finally, Diageo argues that the court should dismiss Plaintiffs’ request for in-junctive relief because Plaintiffs failed to plead this remedy with sufficient factual matter so as to make their right to relief plausible, rather than speculative. The parties also disagree as to the appropriate standard for stating a right to injunctive relief. Diageo contends that the factors set forth in eBay Inc. v. MercExchange, LLC,
Plaintiffs’ First Amended Complaint alleges facts which are sufficient to state a claim under either standard. (See DN 15, ¶¶ 73, 114, 116, 137-41). Therefore, we find that the complaint adequately pleads a right to injunctive relief.
IY. CONCLUSION
For the reasons set forth above, the court will grant Diageo’s motion to file supplemental authority (DN 28) and deny Plaintiffs’ motion to strike (DN 38). Dia-geo’s motion to dismiss (DN 18) is granted as to Count I and denied as to Counts II, III, IV, and V. A separate order will be entered this date in accordance with this Memorandum Opinion.
Notes
. Plaintiffs filed this lawsuit as a putative class action, alleging that there are potentially hundreds of residents living near Diageo’s facilities that could bring similar claims against Diageo.
. Ethanol is categorized as an air pollutant, or "volatile organic compound,” under both state and federal regulations. See 40 C.F.R. § 51.100; 401 KAR 50:010(135).
. Plaintiffs allege that they were not aware that the black material forming on their property was a fungus — or that it was caused by Diageo’s ethanol emissions — until the Courier-Journal newspaper published an article describing the fungus in May 2012.
. The First Amended Complaint alleges that Diageo’s warehouses emit thousands of tons of ethanol per year. According to Plaintiffs, between six and ten pounds of ethanol evaporate from a 50-gallon oak barrel during the aging process. Plaintiffs contend that Diageo had a monthly inventory of 426,141 barrels of aging bourbon in its Louisville facilities in 2009, as compared to the 176,000 barrel per month inventory it maintained in 2006.
. Plaintiffs request additional time to brief the issue of preemption. However, the court finds that this issue has been fully vetted in the parties’ briefs on the motions to file supplemental authority.
. In its opinion, the Supreme Court intentionally refrained from deciding whether state nuisance claims were preempted because the parties had not briefed the issue. Am. Elec. Power Co.,
. The paper mill was located in New York, but discharged effluents into a lake that was bordered by both New York and Vermont.
. Both claims were brought as putative class action suits by private property owners who alleged that neighboring companies emitted substances into the atmosphere. Bell,
. The complaint was filed by a putative class of property owners who brought claims against a whiskey distillery for negligence, temporary nuisance, permanent nuisance,
. In eBay Inc., the Supreme Court established a four-factor test to determine if a party is entitled to permanent injunctive relief. eBay Inc.,
. Pursuant to these statutory provisions, a private citizen is entitled to enjoin a violation of an LMAPCD regulation or a violation of KRS §§ 77.150 through 77.175.