Bruzek v. Husky Oil Operations Ltd.

520 F.Supp.3d 1079

Jasen BRUZEK, Hope Koplin, and Christopher Peterson, individually and on behalf of all others similarly situated, Plaintiffs,

v.HUSKY OIL OPERATIONS LIMITED and Superior Refining Company LLC, Defendants.

18-cv-697-wmc

United States District Court, W.D. Wisconsin.

Signed February 19, 2021

John Gordon Rudd, Jr., Patricia A. Bloodgood, Charles Toomajian, III, June P. Hoidal, Zimmerman Reed, P.L.L.P., Minneapolis, MN, Christopher P. Ridout, Zimmerman Reed LLP, Manhattan Beach, CA, for Plaintiffs Jasen Bruzek, Hope Koplin.

Patricia A. Bloodgood, John Gordon Rudd, Jr., Zimmerman Reed LLP, Minneapolis, MN, Christopher P. Ridout, Zimmerman Reed LLP, Manhattan Beach, CA, for Plaintiff Christopher Peterson.

Colleen M. Kenney, Kara McCall, Maja Eaton, Sidley Austin LLP, Chicago, IL, Dino L. LaVerghetta, Sidley Austin, Washington, DC, Joseph Louis Olson, Michael Best & Friedrich, LLP, Milwaukee, WI, for Defendants.

OPINION AND ORDER

WILLIAM M. CONLEY, District Judge

On the morning of April 26, 2018, an explosion occurred at a refinery in Superior, Wisconsin, and the resulting fire advanced within 150 to 200 feet of a tank of hydrogen fluoride ("HF"). As a precaution against the potential release of HF into the air, which can travel and cause injury to those who inhale it, a mandatory evacuation order was issued to the community surrounding the refinery. The named plaintiffs are residents of Superior who were forced to evacuate as a result of the explosion and seek to bring this action on behalf of themselves and two putative classes against defendants Husky Oil Operations Limited ("Husky Oil") and Superior Refining Company, LLC ("SRC") as owner of the subject refinery ("Superior Refinery" or "Refinery").

Now before the court are a number of related motions. First, defendants move for partial summary judgment, arguing that plaintiffs’ claims seeking injunctive relief as to the continued use of HF at the Superior Refinery must be dismissed. (Dkt. #137.) Second, plaintiffs seek to certify two classes. (Dkt. #108.) Third, defendants move to exclude the expert testimony of Dr. Charles L. Baum II.¹ (Dkt. #134.) Dr. Baum opines as to an hourly compensation rate for economic losses for annoyance, inconvenience, and discomfort for the typical resident subject to the evacuation order. He also testifies that a per diem rate is appropriate to compensate evacuated residents for expenses incurred.

Defendants argue that this testimony is neither reliable nor helpful to a fact-finder, and thus should be ruled inadmissible. Finally are motions from both parties seeking to seal and unseal various documents. (Dkts. #121, 133.)

As explained in the discussion that follows, the court will grant defendants’ motion for partial summary judgment because plaintiffs have failed to proffer adequate facts to show that defendants’ use and storage of HF poses an ongoing or imminent threat of injury, as is required to establish standing for injunctive relief. This conclusion necessarily requires the court to deny certification of plaintiffs’ Rule 23(b)(2) class, the stated purpose of which is to seek declaratory and injunctive relief requiring HF-related safety improvements. However, the court will certify the remaining proposed Rule 23(b)(3) class for the purposes of determining the defendants’ alleged liability, while reserving for individual hearings issues of causation and damages since the distinct factual issues would appear to predominate over common ones. As for defendants’ motion to exclude the expert testimony of Dr. Baum, plaintiffs’ motion to unseal certain documents, and defendants’ motion for leave to file certain documents and exhibits under seal, the court will reserve on each at this time.

I. Defendants’ Motion for Partial Summary Judgment

A. The Explosion, Fire, and Evacuation

Husky Energy, Inc. is an integrated parent company that owns various subsidiaries and portfolio companies, including defendants Husky Oil and SRC. In turn, SRC is the current owner of the Refinery, having purchased it on November 8, 2017, just five months before the explosion and fire at issue in this case. The Refinery was originally built in 1950 and had been in operation for over sixty years.

On April 26, 2018, the Refinery began shutting down a fluid catalytic cracking unit ("FCCU") as a part of a routine, five-year maintenance cycle. At 10 a.m., two explosions occurred downstream of the FCCU, which caused a metal fragment to puncture a hole in an asphalt tank, releasing asphalt. At approximately noon, the asphalt ignited, which caused a large fire that was not extinguished until around 7 p.m.

As previously noted, hydrogen fluoride or HF is stored and used at the Refinery, and if released into the air, it has the potential to travel and pose a risk to those in its path. Specifically, inhalation of HF can cause severe respiratory irritation, immediate injury to the lining of the lungs, and/or death. As a result, facilities handling HF must submit a risk management plan ("RMP") to the U.S. Environmental Protection Agency, which includes the toxic extent of the "worst case" scenario for HF.² According to the Refinery's RMP, the "worst case" scenario for the release of the HF stored at the Refinery could "affect" up to 180,000 people within a 22-mile radius.

While the fire got within 150-200 feet of the tank, no HF was released. Still, as a precaution, the Douglas County Emergency Management System issued a mandatory community evacuation order. The evacuation zone was determined based upon the potential risk of a release of HF.

B. Disputed Facts Related to HF

The parties dispute whether the release of HF was ever actually "threatened." (See Defs.’ Resp. to Pls.’ PFOFs (dkt. #203) ¶ 1.) In particular, defendants point out that: (1) the fire never came within 150 feet of the HF tank; (2) there were numerous safety system in place to prevent any release of HF; and (3) the evacuation order was issued only out of an abundance of caution. Defendants further note that the United States Chemical Safety and Hazard Investigation Board ("CSB") did not identify the release of HF as a "near miss," nor did any other governmental agency.

A "near miss" incident is described by the International Association of Oil and Gas Producers in the following way:

Near misses include those events with consequences that do not meet the company's criteria for recordable incidents such as a spill of less than one barrel. Near misses also provide simple observations of an unsafe condition with no consequences. These are recognised [sic] as events which had the potential – in other slightly different circumstances – to result in consequences that would have been recordable, particularly ‘high potential events’ where a major incident would have been a realistic worst case scenario. Therefore, near miss events provide leading information on the likelihood of actual incidents and also provide lagging information on barrier weaknesses. Near miss investigations can contribute significantly to continuous improvement of asset integrity and process safety, whether used to identify barrier weaknesses or as a warning of a potential catastrophe.

(Int'l Ass'n of Oil & Gas Producers’ Recommended Practice on Key Performance Indicators (dkt. #183-1) 3.)³

Plaintiffs point out that their expert John A. Williams opines as an engineer in his expert report that "the explosion resulted from abnormally dangerous conditions which propagated into a near catastrophe with extreme endangerment to the workers and community." (Williams Rep. (dkt. #109-18) 11.) In addition, Bill Demchuck, who led defendants’ investigation into the explosion, testified that: (1) the Husky Energy corporate incident management procedure -- which states that it is initiated in response to an "actual or near miss incident" -- guided his investigation; (2) the primary purpose of his investigation was to avoid future, catastrophic incidents; and (3) the explosion was the worst incident he had encountered in terms of destruction, injuries, property damage, and safety risks to the public.

Plaintiffs further note that HF had previously been released at the Refinery in the past, including:

• In April 2013, a liquid containing HF was spilled and created an HF cloud which two contractor employees were exposed to. They were transported to the ER and received treatment for their inhalation exposure.

• In November 2013, an employee was sprayed with HF acid vapors due to a leaking value. The operator was wearing "class C alky gear" at the time and there is no evidence that he required any subsequent medical attention.

• In December 2014, an "alky unit operator" had a brief exposure to HF. He apparently experienced throat irritation, but no subsequent medical care was required.

• In October of 2015, operators discovered a valve hole leaking from an HF storage tank. No HF appears to have been released, however, as the tank had been pumped out previously and was under nitrogen pressure at the time of the leak.

• In November of 2015, the Refinery restricted employees’ access and blocked the roads near the HF alkylation unit due to a release of HF vapors from the acid storage tank.

Understandably enough, the named plaintiffs in this case have also testified as to their personal fears regarding defendants’ continued use of HF at the Refinery as follows:

• Mr. Peterson would like the Refinery "not to use hydrogen fluoride in my town where my family lives. I'd like them to switch over to the ionic liquids that are a lot safer." (Pls.’ PFOFs (dkt. #203) ¶ 49.)

• Mr. Bruzek expressed his hope that "hopefully they can get rid of that tank." (Id. ¶ 50.) He continued: "I want my kids to be safe. I want my family to be safe. I want our community to be safe. That's all I want .. is the future to be better. Because we shouldn't have to live in fear of this ever again." (Id. ¶ 51.)

• Ms. Koplin feels that defendants "didn't have proper safety precautions in line, and that maybe

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