A city alleged it had to spend millions to lower the concentration of a toxic chemical in its water supply to meet state-mandated safe levels. The city claimed a specific fertilizer was the cause and sued the company that imported and sold it. A jury determined 1) the fertilizer was defective, 2) the defect caused the city to spend millions to remove the chemical, and 3) $48.1 million would compensate the city for its past and future treatment costs. The company appealed.
The 9th Circuit Court of Appeals said the evidence supported the findings of defect and causation, but not all of the damages.
Evidence Supported Defect
In determining the evidence supported the finding of defect, the 9th Circuit said the parent company, which manufactured the fertilizer in a foreign country, admitted it could have kept the toxic chemical’s concentration to 0.1% or lower, but routinely made and sold fertilizer with up to five times the concentration.
Evidence Supported Causation
Evidence that this fertilizer accounted for 88% of the toxic chemical in the city’s water and that the water would have met the standard had the fertilizer contained 75% less of the chemical supported causation. The jury was able to consider even those risks that were not and could not have been known when the fertilizer was sold, because the city was not required to prove that the contamination was foreseeable.
Issue with Damages
The 9th Circuit held that evidence supported $30.2 million in damages but not the $48.1 million found by the jury. While the trial judge offered explanations to support $48.1 million, these were not adequate. On remand, the trial court has the option to 1) provide new explanations to support $48.1 million, 2) reform the judgment to award $30.2 million, or 3) hold a new trial only on damages. The language of the opinion suggests the 9th Circuit favors but does not require the last option.
To see the opinion https://cdn.ca9.uscourts.gov/datastore/memoranda/2023/04/28/22-55219.pdf