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Eastman v. Coffeyville Resources Refining & Marketing, LLC.

United States District Court, Tenth Circuit

August 2, 2013

BENJAMIN M. EASTMAN and MARCITA K. EASTMAN, as Trustees of the Eastman Family 1999 Revocable Trust, Plaintiffs,
v.
COFFEYVILLE RESOURCES REFINING & MARKETING, LLC, Defendant.

MEMORANDUM AND ORDER

MONTI L. BELOT UNITED STATES DISTRICT JUDGE

This case comes before the court on defendant’s motion for summary judgment on plaintiffs’ claim for punitive damages. (Doc. 57). The motion has been fully briefed and is ripe for decision. (Docs. 58, 62, 65). Defendant’s motion is denied for the reasons herein.

I. Facts

The relevant and material facts of this case are not in dispute. The Coffeyville Resources refinery, located adjacent to the Verdigris River in Coffeyville, Kansas, processes crude oil and its constituents on a continuous basis. Plaintiffs are trustees of property located near Coffeyville, Kansas, in close proximity to the Verdigris River, approximately two or more miles downstream of the Coffeyville Resources refinery.

On July 1, 2007, an unprecedented 100 year flood of the Verdigris River necessitated an emergency shutdown of the Coffeyville Resources refinery. During the emergency shutdown, approximately 80, 000 gallons (over 1900 barrels) of crude oil, 5, 000 gallons of diesel oil, and 4, 000 gallons of crude oil fractions were accidentally released into the flood waters. The crude oil release was terminated within an hour or two of its inception.

Defendant mobilized clean-up crews, while monitored by the Environmental Protection Agency (EPA), to clean up oil on public and private property. Plaintiffs filed this lawsuit on June 30, 2010, alleging that oil carried by the flood waters impacted their pecan grove and that defendant has not cleaned up the oil. Plaintiffs allege that oil remains on their property and continues to impact their annual pecan harvests.

Plaintiffs bring a statutory claim pursuant to K.S.A. 65–6203. In addition to actual damages, plaintiffs seek punitive damages. In the proposed pretrial order, plaintiffs assert that defendant should have known that predicted severe flooding would cause serious damage to downstream neighbors and defendant’s employees wantonly and recklessly[1] failed to close a valve on one of the oil storage tanks which allowed crude oil, diesel and other pollutants to flow downstream, damaging plaintiff’s property.

Defendant moves for summary judgment on plaintiffs’ punitive damages claim on the basis that the statute does not allow punitive damages.[2]

II. Summary Judgment Standard

The rules applicable to the resolution of this case, now at the summary judgment stage, are well-known and are only briefly outlined here. Federal Rule of Civil Procedure 56(c) directs the entry of summary judgment in favor of a party who "show[s] that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). An issue is “genuine” if sufficient evidence exists so that a rational trier of fact could resolve the issue either way and an issue is “material” if under the substantive law it is essential to the proper disposition of the claim. Adamson v. Multi Community Diversified Svcs., Inc., 514 F.3d 1136, 1145 (10th Cir. 2008). When confronted with a fully briefed motion for summary judgment, the court must ultimately determine "whether there is the need for a trial–whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). If so, the court cannot grant summary judgment. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).

III. Analysis

The statute at issue in this case states as follows:

It shall be the duty of any person responsible for an accidental release or discharge of materials detrimental to the quality of the waters or soil of the state to: (1) Compensate the owner of the property where the release or discharge occurred for actual damages incurred as the result of the release or discharge, or as the result of corrective action taken or access to take corrective action, if the release or discharge occurred without any contribution to the contamination and without any causal connection to the release or discharge by any action of the owner or owner-permitted occupant of the property; and (2) comply with all existing rules and regulations and requirements ...

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