Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS:Between 1963 and 1984, Crown Zellerbach Corp. owned a 78-acre tract of land located outside Poplarville, Miss., in an area known as Serenity Lane. Crown Zellerbach later sold the property to appellee Fort James Corp. Fort James sold the land in 1990 to a developer who subdivided the property for home sites. Homeowners (appellants) who bought these sites sued, alleging that Crown Zellerbach once used the land as a dump for hazardous waste and that Fort James never adequately disclosed this fact to the appellants. The appellants maintain that the contents of the dump have begun to surface and that they have suffered health consequences as a result. The appellants filed their original complaint in Mississippi state court on Oct. 31, 2003, alleging eleven claims against Fort James. The first of these was a fraud claim. The appellants refer to the remaining 10 claims collectively as traditional tort claims. After removing the case to federal court, Fort James moved the district court to dismiss the fraud claim or in the alternative to require the appellants to replead that claim with greater specificity pursuant to Federal Rule of Civil Procedure 9(b). The district court granted the appellants leave to amend their pleading accordingly. On Nov. 17, 2004, the appellants filed their First Supplemental and Amending Complaint. The appellants included in this new complaint several new paragraphs about their fraud claim. They also added a new claim that would require Fort James to conduct appropriate environmental tests of the land in question. In addition, this First Supplemental and Amending Complaint purported to reurge and reallege all of the allegations as set forth and contained in the original complaint, including the traditional tort claims. Fort James moved to dismiss the fraud and testing claims pursuant to Federal Rule of Civil Procedure 12(b)(6). The district court granted the motion on April 12, 2005. The court issued an order giving its reasons for dismissing the fraud and testing claims and ultimately concluded that the appellants’ case was dismissed. Appellants filed a motion pursuant to Rule 59(e) and Rule 60 arguing that the court either overlooked the traditional tort claims or in the alternative that they were dismissed sua sponte without providing adequate notice to the parties and should be reinstated. Fort James responded that the First Supplemental and Amending Complaint actually superseded the original complaint and that the appellants’ attempt to incorporate all earlier allegations by reference was void. The district court denied the appellants’ post-dismissal motions in a brief order that did not clarify that court’s view of the issue. The homeowners appealed. HOLDING:Affirmed in part, reversed in part. First, the court considered whether the appellants pled their fraud allegation with enough specificity to satisfy Rule 9(b). Noting that the appellants conceded that they did not acquire their land from Fort James, that they never had any interaction with Fort James and that Fort James never made any affirmative misrepresentations to them, the court held that the appellants failed to make out a fraud claim that could satisfy Rules 12(b)(6) and 9(b). Second, the court considered whether the district court abused its discretion in denying the appellants’ motion for leave to amend. Under Federal Rule of Civil Procedure 15(a), the court stated, once a party has amended its complaint once, it may amend again only by leave of the court or by written consent of the adverse party. According to the court, the district court granted appellants permission to amend their pleadings but the changes were not presented to the district court by the specified deadline. In light of this history, the court held that that the district court did not abuse its discretion in denying the appellants leave to file another amended complaint. Third, the court examined appellants’ attempt to incorporate their earlier pleadings by reference. The court held that the district court committed reversible error in failing to provide the appellants with notice or opportunity to be heard before it dismissed the traditional tort claims. The court stated that the district court did not mention the traditional tort claims in its order of dismissal, despite purportedly disposing of them. The district court’s treatment of those claims did not provide adequate fairness to the appellants, the court stated. OPINION:Benavides, J.; Jolly, Davis and Benavides, J.J.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.