Trial Magazine

Cuppels v. Mountaire Corp., No. S18C-06-009 CAK (Del. Super. Ct. Apr. 12, 2021).

Gary Cuppels returned to his Millsboro, Del., home one day in 2017 and found a pallet of bottled water on his front porch with a note that it was courtesy of the local poultry processing plant. He quickly connected the dots that his home’s drinking water might be contaminated and the source of the repeated debilitating illnesses that he and his wife had been suffering from.

Cuppels contacted a local law firm for help. An investigation into the plant, Mountaire Farms, uncovered two decades of environmental noncompliance and violations of the federal drinking water standard for nitrates. The facility generated more than 2 million gallons of wastewater daily that was contaminated with feathers, feces, blood, and animal parts and disposed of it through spray irrigation and land application—dispersing the improperly treated wastewater over hundreds of acres of land.

The wastewater, which traveled to neighboring properties and into the groundwater and nearby waterways, contained high levels of pollutants such as nitrates. The spray irrigation disposal technique also released dangerous amounts of pollutants into the air, including hydrogen sulfide. These contaminants are known to cause gastrointestinal illnesses and cancers.

Cuppels and other residents filed a class action in Delaware state court in 2018 on behalf of hundreds of residents living near the plant, alleging claims for water and air pollution, personal injury, and property damage. This April, the parties reached a $205 million settlement that will ensure the defendant overhauls the plant to reduce the contamination to acceptable levels. The settlement also includes a compensation fund for residents’ injuries and diminution in property values. The actions required under the settlement will have long-term impacts for the community, ensuring that its water is safe to use and stopping future pollution, said two of the plaintiffs’ attorneys, Philip Federico, of Baltimore, and Chase Brockstedt, of Lewes, Del.

The plant—owned and operated by parent company Mountaire Corp., based in Arkansas—was already on the radars of the EPA and the Delaware Department of Natural Resources and Environmental Control (DNREC). The attorneys explained that the defendant knew about existing environmental noncompliance issues with the plant when it purchased the facility in 2000 and that the facility had been cited multiple times over the years for violations of the Safe Drinking Water Act and failure to limit nitrogen discharge levels under its permits. Rather than upgrading outdated water treatment systems, the defendant increased its processing capacity, creating more wastewater that the facility could not handle.

At the time the plaintiffs filed their class action, DNREC had already proposed a consent decree in federal court with the defendant to address the noncompliance, which the plaintiffs’ attorneys characterized as “woefully inadequate” to remediate the environmental harm. The plaintiffs intervened in the case and sought a preliminary injunction to prevent the court from approving the consent decree.

As the litigation developed, the attorneys identified three leverage points that they believe encouraged Mountaire to come to the negotiating table. First, the defendant lost its motion to dismiss the case for lack of personal jurisdiction. The Delaware Superior Court held that while the parent company is based in Arkansas, it was heavily involved in the operations of its Delaware subsidiary—even the leadership teams for both entities were nearly identical.

Second, a prolonged discovery fight ended with the defendant having to disclose millions of pages of documents and having sanctions assessed against it for improperly redacting certain documents. Finally, as the plaintiffs raised questions about the consent decree’s ability to redress the harm the defendant caused, it became increasingly likely that the court would not rubberstamp the agreement. And that could cut into the defendant’s bottom line.

“The one thing that Mountaire understood better than anything was profits, which is what motivated them for the last two decades to ignore environmental compliance. And if we were going to succeed, it would lead to cutting into their profits,” Federico said.

The settlement will ensure that Mountaire upgrades the plant with new technology that will properly clean the wastewater before it is discharged. “Essentially what’s going to change is that the water that is coming out of the pipe, the water that they are disposing of, will be significantly cleaner than the federal drinking water standard requires,” Brockstedt explained.

The settlement also provides for the installation of water treatment systems in residents’ homes, a plan for compensating class members for personal injuries and the diminution in property values, and a set-aside fund for latent injuries that may manifest in the future. It also requires an amended consent decree to be entered in the federal case.

“Ending the pollution and cleansing the groundwater will change the trajectory of Millsboro for generations to come,” Brockstedt said. And because of the nature of environmental contamination, the remediation benefits will extend beyond the geographical area identified in the settlement—meaning cleaner water, a lower risk of negative health effects, and higher property values for others in the community too.

The case also highlights the critical role trial lawyers play by stepping into the regulatory gap and holding corporations accountable for their misconduct. Often, Federico and Brockstedt noted, the government agencies responsible for ensuring environmental compliance do not have the financial and personnel resources they need—and as a result, even repeated violations are not always fully remediated.

“I’m starting to get why corporations feel so emboldened to go into a community and do what they want—but you can get away with it until you can’t,” Federico said.

Federico noted that his mantra throughout the litigation was “truth, transparency, and accountability.” He and Brockstedt believe the settlement agreement achieved that goal.

“I’m hoping that the greater legal community will realize that if firms pool their resources and work together to target this kind of wrongdoing, we can make a difference globally and long term where the environment’s concerned—but absent that accountability, this will continue.”

Kate Halloran is the senior associate editor for Trial.