Jeana Parko v. Shell Oil C O.

In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 13‐8023 & 13‐8024
J EANA P ARKO, et al.,
Plaintiffs,
v.
S HELL OIL C O., et al.,
Defendants.
P ETITIONS OF C ONOCOP HILLIPS C O., et al.
__________________________
Petitions for Permission to Appeal
from the United States District Court
for the Southern District of Illinois.
No. 3:12‐cv‐00336 — G. Patrick Murphy, Judge.
__________________________
SUBMITTED OCTOBER 23, 2013 — DECIDED J ANUARY 17, 2014
_________________________
Before WOOD, Chief Judge, AND P OSNER and SYKES , Cir‐
cuit Judges.
P OSNER , Circuit Judge. The district court certified a class of
property owners in Roxana (a tiny village in southwestern
Illinois, across the Mississippi River from St. Louis) in a suit

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2 Nos. 13‐8023 & 13‐8024
against Shell Oil Company, which (together with Shell sub‐
sidiaries also joined as defendants) until 2000 owned and
operated an oil refinery (the Wood River Refinery, built in
1918) that is adjacent to the village. The suit is also against
ConocoPhillips (and some of its subsidiaries), which bought
the refinery from Shell that year and is its current owner and
operator. The plaintiffs claim that the refinery has leaked
benzene and other contaminants into the groundwater un‐
der the class members’ homes. The suit, a diversity suit,
charges nuisance and related torts in violation of Illinois
common law, and seeks by way of remedy damages meas‐
ured primarily by the effect of the groundwater contamina‐
tion on the value of the class members’ properties.
The defendants have petitioned us for leave to appeal the
certification of the class. Fed. R. Civ. P. 23(f). We have decid‐
ed to grant their request in order to clarify class action law,
see Blair v. Equifax Check Service, Inc., 181 F.3d 832, 835 (7th
Cir. 1999), with respect to district courts’ responsibility to
perform a “rigorous analysis” before determining that issues
common to the class predominate over issues that differ
among the individual class members. Comcast Corp. v. Beh‐
rend, 133 S. Ct. 1426, 1432 (2013); General Telephone Co. of the
Southwest v. Falcon, 457 U.S. 147, 161 (1982). Because the peti‐
tions and response address the certification issue compre‐
hensively, we proceed to resolve the issue without requiring
further briefing.
The defendants also challenge—and we’ll discuss this
challenge briefly before getting to the issue of predomi‐
nance—the district judge’s ruling that the class is large
enough to satisfy the “numerosity” requirement of Rule
23(a)(1) (that is, that it’s too large for joinder of plaintiffs to

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Nos. 13‐8023 & 13‐8024 3
be a feasible alternative to a class action). There appear to be
about 150 class members. The defendants do not argue that
such a class is small enough for joinder to be a feasible, let
alone a superior, alternative to a class action. But they say
that a number of the class members were not injured—either
their groundwater was not contaminated by leakage from
the refinery or the contamination did not affect the value of
their property—and so lack standing to obtain relief and
therefore don’t belong in the class. And if those class mem‐
bers are subtracted, the defendants contend, there are no
longer enough members to make a class action a superior
procedural vehicle to joinder of individual plaintiffs.
We reject the argument. To require the district judge to
determine whether each of the 150 members of the class has
sustained an injury—on the theory that if 140 have not, and
so lack standing, and so should be dropped from the class,
certification should be denied and the 10 remaining plain‐
tiffs be forced to sue (whether jointly or individually)—
would make the class certification process unworkable; the
process would require, in this case, 150 trials before the class
could be certified. The defendants are thus asking us to put
the cart before the horse. How many (if any) of the class
members have a valid claim is the issue to be determined
after the class is certified.
The district judge identified a question common to the
class—namely whether the defendants’ “failure to contain
petroleum byproduct at the refinery result[ed] in contamina‐
tion to Roxana property.” The defendants argue that this rul‐
ing does not establish the predominance of issues common
to the entire class over issues that vary among the members
of the class. And predominance is of course one of the re‐

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4 Nos. 13‐8023 & 13‐8024
quirements for class certification if damages are sought. Fed.
R. Civ. P. 23(b)(3).
Predominance is a qualitative rather than a quantitative
concept. It is not determined simply by counting noses: that
is, determining whether there are more common issues or
more individual issues, regardless of relative importance. In
Amgen Inc. v. Connecticut Retirement Plans & Trust Funds, 133
S. Ct. 1184, 1196 (2013), the Supreme Court said that the re‐
quirement of predominance is not satisfied if “individual
questions … overwhelm questions common to the class.”
And in Amchem Products, Inc. v. Windsor, 521 U.S. 591, 623
(1997), the Court said that the “predominance inquiry tests
whether proposed classes are sufficiently cohesive to war‐
rant adjudication by representation.” See also In re Inter‐Op
Hip Prosthesis Liability Litigation, 204 F.R.D. 330, 345 (N.D.
Ohio 2001) (“common issues need only predominate, not
outnumber individual issues”).
Predominance of issues common to all class members,
like the other requirements for certification of a suit as a
class action, goes to the efficiency of a class action as an al‐
ternative to individual suits. If resolving a common issue
will not greatly simplify the litigation to judgment or settle‐
ment of claims of hundred or thousands of claimants, the
complications, the unwieldiness, the delay, and the danger
that class treatment would expose the defendant or defend‐
ants to settlement‐forcing risk are not costs worth incurring.
Mere assertion by class counsel that common issues pre‐
dominate is not enough. That would be too facile. Certifica‐
tion would be virtually automatic. And so Rule 23 “does not
set forth a mere pleading standard.” Wal‐Mart Stores, Inc. v.
Dukes, 131 S. Ct. 2541, 2551 (2011). Rather, when factual dis‐

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Nos. 13‐8023 & 13‐8024 5
putes bear on issues vital to certification (that is, to whether
the suit should be allowed to be litigated as a class action),
such as predominance, the court must “receive evidence …
and resolve the disputes before deciding whether to certify
the case.” Szabo v. Bridgeport Machines, Inc., 249 F.3d 672, 676
(7th Cir. 2001); see also Comcast Corp. v. Behrend, supra, 133 S.
Ct. at 1432; Butler v. Sears, Roebuck & Co., 727 F.3d 796, 800–
01 (7th Cir. 2013).
The defendants contend that the contamination alleged
by the plaintiffs occurred over a 90‐year period and involved
acts and omissions charged against the six defendants, and
maybe other polluters as well (because the area in which the
refinery is located is industrial, and the defendants have
identified oil leaks by gas stations and other companies), and
that in consequence class members could well have experi‐
enced different levels of contamination, implying different
damages, caused by different polluters. See Gates v. Rohm &
Haas Co., 655 F.3d 255, 261 (3d Cir. 2011). Nor could it be as‐
sumed that every class member has experienced the same
diminution in the value of his property even if every one has
experienced the same level of contamination. For the greater
the variance in property values (about which the district
judge made no findings), the less likely it is that contamina‐
tion would affect the value of all or most properties by the
same amount of money or the same percentage of market
value. Also this doesn’t appear to be one of those small‐
claims suits that as a practical matter can proceed only as a
class action (e.g. overcharges of $5.50 for rental cars). The
damages may not be huge, but may well be sizable enough
for individual (or joined) suits to be a feasible alternative to a
class action.

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6 Nos. 13‐8023 & 13‐8024
It’s not even clear that the plaintiffs have identified a
common issue. Their expert, a hydrogeologist, intends to
measure contamination by the benzene levels in the
groundwater beneath the class members’ property, even
though their water supply doesn’t come from groundwater
(which they don’t even own, though they have the right to
use it, Bridgman v. Sanitary District of Decatur, 517 N.E.2d 309,
312–13 (Ill. App. 1987)) but instead from Roxana’s uncon‐
taminated aquifer. And there is no suggestion that the vil‐
lage supplies them from the aquifer because the groundwa‐
ter is polluted (though what difference that would make to
the property owners is unclear). If the expert’s evidence is
rejected, there will be no basis for the claim that the benzene
levels in the groundwater are the common cause of the loss
of property values that the class alleges, a loss it has not
specified.
Real estate values have taken a drubbing in recent years,
with the collapse of the housing bubble and the ensuing fi‐
nancial crisis. It can’t be assumed that a decline in the value
of residential property in Roxana (if in fact there’s been a de‐
cline) is the result of proximity to a refinery that for all one
knows has been leaking contaminants for the last 95 years
without causing detectable harm. There are many things
commonly found in soil beneath rural or suburban houses
that homeowners would very much like not to enter their
home (such as earthworms, fungi, ants, beetles, slugs, radon,
chemical residues, thousands of different types of microbe—
and groundwater), but as long as there is no danger of such
unwanted visitors their underground presence should not
affect property values. Benzene in the water supply is one
thing; benzene in groundwater that does not feed into the
water supply is quite another.

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Nos. 13‐8023 & 13‐8024 7
The district judge did not explore any of these issues. He
treated predominance as a pleading requirement. He
thought it enough at this stage that the plaintiffs intend to
rely on common evidence and a single methodology to
prove both injury and damages, and that whether the evi‐
dence and the methodology are sound and convincing is a
question going to the strength of the plaintiffs’ case and
should be postponed to summary judgment proceedings or
trial. But if intentions (hopes, in other words) were enough,
predominance, as a check on casting lawsuits in the class ac‐
tion mold, would be out the window. Nothing is simpler
than to make an unsubstantiated allegation. A district judge
may not “refus[e] to entertain arguments against respond‐
ents’ damages model that bore on the propriety of class certi‐
fication, simply because those arguments would also be per‐
tinent to the merits determination.” Comcast Corp. v. Behrend,
supra, 133 S. Ct. at 1432–33. The judge should have investi‐
gated the realism of the plaintiffs’ injury and damage model
in light of the defendants’ counterarguments, and to that end
should have taken evidence. For if the defendants are right,
there is no common issue, only individual issues that will
vary from homeowner to homeowner: is there benzene in
the groundwater beneath his home at a level of concentra‐
tion that if the groundwater were drunk would endanger
health (and is there any possibility it would enter the water
supply); what is the source of the benzene in the groundwa‐
ter beneath a given home (that is, who is the polluter who
caused the groundwater to become polluted); could the
presence of the benzene in that concentration cause any oth‐
er form of harm; has the presence of the benzene reduced the
value of his property; if so, how great has the reduction
been. It is difficult to see how these issues can be managed in

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8 Nos. 13‐8023 & 13‐8024
the class action format. But in any event they must be en‐
gaged by the district judge before he can make a responsible
determination of whether to certify a class.
So the certification order must be reversed, with direc‐
tions that the judge revisit the issue of certification in con‐
formity with the analysis in this opinion. But in so ruling we
unsay nothing that we said in Mejdrech v. Met‐Coil Systems
Corp., 319 F.3d 910 (7th Cir. 2003), where we approved class
certification in a suit that was superficially like this one be‐
cause it involved a class of homeowners who were com‐
plaining about contamination of groundwater caused in that
case by a solvent called TCE (trichloroethylene), which is be‐
lieved dangerous to human health and which had been
leaked by a nearby storage container. We said that “the
questions whether Met‐Coil leaked TCE in violation of law
and whether the TCE reached the soil and groundwater be‐
neath the homes of the class members are common to all the
class members. The first question is particularly straightfor‐
ward, but the second only slightly less so. The class mem‐
bers’ homes occupy a contiguous area the boundaries of
which are known precisely. … [T]he two questions … are
not especially complex.” Id. at 911–12.
In that case unlike this one, there was a single source of
pollution (the storage container). And in that case unlike this
one the leakage of the noxious solvent was claimed to have
contaminated the water supply, as noted by the district
court. Mejdreck v. Lockformer Co., No. 01 C 6107, 2002 WL
1838141, at *1, *3 (N.D. Ill. Aug. 12, 2002). Our opinion indi‐
cates that only homes that relied on wells for their water
would be affected by the TCE in the groundwater, see 319
F.3d at 911, yet a fall in the value of those homes because of

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Nos. 13‐8023 & 13‐8024 9
the contamination could affect the value of adjacent homes.
The plaintiffs in this case have presented no theory, let alone
credible evidence, of a connection between the leaks proper‐
ty values, or between specific defendants and the leaks and
property values, that would justify a class action on behalf of
all the property owners whose properties sit above ground‐
water that contains an amount of benzene considered dan‐
gerous to human health by regulatory authorities (more than
5 micrograms per liter)—if drunk. But, to repeat, there is, as
yet anyway, no evidence that any of it is ever drunk.
R EVERSED.

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