     Case: 10-20871     Document: 00511673347         Page: 1     Date Filed: 11/22/2011




            IN THE UNITED STATES COURT OF APPEALS
                     FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                     Fifth Circuit

                                                                            FILED
                                                                        November 22, 2011

                                       No. 10-20871                        Lyle W. Cayce
                                                                                Clerk

EDWARD HALL; CHARLES HENDERSON; BRENDA BENNETT,

                                                  Plaintiffs - Appellants
v.

EL DORADO CHEMICAL COMPANY, INCORPORATED,

                                                  Defendant - Appellee



                   Appeal from the United States District Court
                        for the Southern District of Texas
                             USDC No. 4:09-CV-2528


Before SMITH, BARKSDALE, and BENAVIDES, Circuit Judges.
PER CURIAM:*
        Edward Hall, et al. (Hall), contest this action against El Dorado Chemical
Company, Inc., being dismissed pursuant to Federal Rule of Civil Procedure
12(b)(6) (failure to state claim).
        In 2009, a fire at El Dorado’s fertilizer factory in Brazos County, Texas,
destroyed a warehouse containing chemicals. The fire created a smoke plume
containing toxic and hazardous materials. The fire and the plume are alleged
to have been caused by negligence. As a result of the plume, county officials

        *
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
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                                 No. 10-20871

evacuated more than 20,000 residents, forcing businesses to close and
individuals to leave their homes.
      Under theories of negligence, res ipsa loquitur, and nuisance, Hall filed
this putative class action for compensatory and exemplary damages claimed to
have been caused by the plume and resulting evacuation. Hall did not claim
personal injury or physical property damage. The district court referred this
action to a magistrate judge for a report and recommendation. El Dorado moved
under Rule 12(b)(6) for dismissal for failure to state a claim upon which relief
could be granted.
      The magistrate judge recommended, inter alia, dismissal for the following
reasons: res ipsa loquitur is not a cognizable claim; absent physical harm to
property, negligence and negligently-caused-nuisance claims must fail; and
exemplary damages are not recoverable without an underlying tort. Edward
Hall, et al. v. El Dorado Chemical Co., No. 4:09-CV-2528, Memorandum and
Recommendation at 6, 17 (S.D. Tex. 26 Oct. 2010). In doing so, one of the Texas
state-court opinions relied upon by the magistrate judge was City of Alton v.
Sharyland Water Supply Corp., 277 S.W.3d 132, 152 (Tex. App. 2009), aff’d in
part, rev’d in part, No. 09-0223, 2011 WL 5042023 (Tex. 21 Oct. 2011). Following
objections being filed against the memorandum and recommendation, the
district court adopted it. Edward Hall, et al. v. El Dorado Chemical Co., No.
4:09-CV-2528, Order Adopting Memorandum and Recommendation at 1 (S.D.
Tex. 30 Nov. 2010).
      Hall contends the district court erred by: relying on statements by counsel
from the class-certification hearing when deciding the Rule 12(b)(6) motion;
classifying damages for “annoyance and discomfiture” as mental-anguish
damages, rather than property damages; concluding physical destruction of
property was required for negligence and nuisance claims under Texas law; and
concluding no underlying tort existed to support exemplary damages. El Dorado

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                                  No. 10-20871

responds, inter alia, that the district court: did not improperly rely on matters
outside of the complaint in granting the motion; correctly concluded actionable
negligence requires physical harm to property; and correctly concluded a
nuisance claim requires actionable negligence.
      As reflected above, the Texas intermediate appellate court decision in
Sharyland has recently been partially reversed by the Texas Supreme Court. It
did so approximately two weeks after oral argument here. Accordingly, this
court directed the parties to file supplemental letter briefs on the effect vel non
on this action by the Texas Supreme Court’s opinion.
      Having considered the recent Texas Supreme Court opinion in Sharyland
and the parties’ supplemental briefs, the judgment is VACATED and this matter
is REMANDED for reconsideration in the light of City of Alton v. Sharyland
Water Supply Co., No. 09-0223, 2011 WL 5042023 (Tex. 21 Oct. 2011), to include
such further filings and proceedings as the district court deems appropriate.




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