## Facts

- Velsicol Chemical Corporation purchased a rural 242-acre tract in Hardeman County, Tennessee, in 1964 and used it as a chemical-waste landfill for byproducts from producing chlorinated hydrocarbon pesticides.
- Velsicol disposed of ultrahazardous liquid and dry chemical wastes in unlined trenches, depositing roughly 300,000 drums between 1964 and 1973.
- Before disposal began, Velsicol did not perform hydrogeological studies or install monitoring wells to detect contamination.
- A 1967 federal study reported chlorinated hydrocarbons had migrated into subsoil and adjacent environments and warned of danger to local groundwater.
- Tennessee regulators initiated proceedings that resulted in orders to stop toxic-chemical disposal by 1972 and other disposal by 1973.
- Nearby residents who used private wells alleged contaminants leaked from the landfill, polluted groundwater, and caused personal injuries (including fear of future disease) and property damage (including diminished value).
- The case proceeded as a class action; the district court found Velsicol liable under strict liability, negligence, trespass, and nuisance, awarded compensatory damages to representative class members, awarded class-wide punitive damages, and added prejudgment interest.

## Issues

1. Whether the district court properly exercised diversity jurisdiction where Velsicol challenged whether many class members met the amount-in-controversy requirement.
2. Whether Rule 23(b)(3) certification was proper when liability stemmed from a single course of conduct but damages varied among class members.
3. Whether expert evidence (including groundwater modeling and medical testimony) sufficiently established causation for class-wide liability and for individual injuries to the required degree of medical certainty.
4. Whether the district court erred in awarding and calculating damages, including increased risk of future disease, mental distress based on fear of disease, immune-system impairment, PTSD, prejudgment interest, and punitive damages.

## Decision

- The Sixth Circuit affirmed in part, reversed in part, and remanded for recalculation of certain damages.
- The court affirmed class certification, holding liability could be resolved on a class-wide basis because the alleged contamination arose from a single course of conduct common to all class members.
- The court affirmed the liability findings and upheld the use of groundwater modeling and related proof as sufficient to establish general causation and contamination.
- The court reversed damages for increased risk of future disease where the evidence showed only a probabilistic increase (about 25–30%) and did not establish that disease was medically reasonably certain to occur.
- The court held mental-distress damages based on fear of future disease were recoverable when foreseeable as a natural consequence of a present injury, but it reduced excessive awards.
- The court reversed awards for immune-system impairment and PTSD for insufficient scientific acceptance or evidentiary support.
- The court reversed prejudgment interest on personal-injury damages as inconsistent with Tennessee law and ordered modification.
- The court upheld punitive damages in principle due to egregious conduct but required recalibration because part of the punitive rationale improperly relied on litigation conduct.

## Legal Principles

- In mass-exposure cases, Rule 23(b)(3) certification may be appropriate when common liability questions predominate due to a single defendant course of conduct, even if damages require individualized determinations.
- Environmental fate-and-transport modeling and related expert testimony can support causation for contamination, but individual damage components must still be proven as proximately caused to a reasonable medical certainty.
- Under the governing state-law standard applied, damages for increased risk of future disease are not recoverable absent medical reasonable certainty that the disease will occur; a mere statistical increase in risk is insufficient.
- Emotional distress based on fear of future disease may be compensable if it is a foreseeable consequence of a present injury, even when increased-risk damages are unavailable; excessive awards may be reduced on review.
- Claimed medical conditions must be supported by generally accepted science and adequate proof; speculative or weakly supported diagnoses cannot sustain damages.
- Prejudgment interest on personal-injury damages depends on state law and may be unavailable even when other damages are awarded.
- Punitive damages may be supported by grossly wrongful conduct, but the basis and calculation must rest on proper considerations rather than the defendant’s conduct during litigation.

## Conclusion

The Sixth Circuit sustained class-wide liability for groundwater contamination caused by hazardous-waste disposal but narrowed recovery by disallowing speculative future-disease risk damages, rejecting inadequately supported medical-injury theories, reducing excessive emotional-distress awards, correcting prejudgment-interest errors under Tennessee law, and requiring a recalculated punitive-damages award based on proper grounds.


Sterling v. Velsicol Chem. Corp., 855 F.2d 1188 (6th Cir. 1988)