Stoll vs Kraft Food Global Inc on Vapor Intrusion - Term Paper Example

1. The case: Susan and Patrick Stoll, Mary and Charles Bowles, individually and on behalf of all persons similarly situated vs. Kraft Foods Global, Inc.  Case No. 1:09-cv-0364-TWP-DML

Background

The lawsuit revolves around environmental pollution that came from the plant operation of the 20-acre Radio Materials Corporation (RMC) site in Attica, Indiana.  RMC manufactures television tubes and ceramic capacitors in the area until 2001 when it had to cease its operation due to financial problems.  In 1980, through a series of mergers and acquisitions, Kraft became a successor in the interest of RMC and thus liable for the contamination of the Attica, Indiana site. 

The operation at the Attica, Indiana site produces potentially hazardous chemicals that include trichloroethylene (TCE) and tetrachloroethylene (PCE).  These pollutants have migrated off the site which became the basis of the case.

Summary

In late 2008, families in the small town of Attica, Indiana learned that toxic chemical vapors were entering the air inside their homes.  After getting the bad news, these families turned to The Pollution Lawyers for help.  A class suit was then filed against Kraft Foods Global, Inc. alleging that the volatile organic compounds trichloroethylene (TCE), perchloroethylene (PCE), and vinyl chloride (VC) that was dumped at the manufacturing site by Kraft seeped into the groundwater and traveled underneath over one-hundred nearby homes (Manzke, 2011). 

It was alleged that once these chemicals are underneath these homes, the chemicals worked their way into the indoor air.  This process is commonly known as vapor intrusion (Manzke, 2011).  Vapor intrusion occurs when volatile chemicals from contaminated groundwater or soil “intrude” into an overlying building.  These chemicals contaminate the air, causing a potential health hazard to individuals in the building who are subject to prolonged exposure to the chemicals (Nichols et al., 2011).

1. The judicial ruling

After two years of litigation, a settlement was then reached.  The court approved the amount of $8.1 million out of court settlement of the class action brought by 124 families in Attica, Indiana, against Kraft Foods alleging pollution from a nearby factory contaminated groundwater and caused vapor intrusion in their homes (Stoll v. Kraft Foods Global Inc., S.D. Ind., No. 1:09-cv-00364, 5/20/11). Also, the U.S. District Court for the Southern District of Indiana approved the $2.7 million attorney’s fees that were requested, plaintiffs. In addition to the monetary compensation, Kraft has contractually agreed to remediate the groundwater and indoor air contamination of the site (Manzke, 2011).

• Economic analysis of the issue

The $9.8 million ($8.1 million out-of-court settlement plus $2.7 million attorneys fees may be steeped but considering that this is a class action involving 124 families, the settlement was relatively reasonable.

For Kraft Food Global Incorporated, it was a sound decision to have an out-of-court settlement before the case will be blown out of proportion.  If the case is picked up by the media, this will have an irreversible repercussion and damage against the brand of Kraft Food Global whose economic drawback will be more than the $9.8 million settlement.  The case has the potential of damaging the Kraft Food Global brand because it involves dumping chemical contaminants which is an anathema to a food company with which Kraft conducts business.  The case can damage its brand by having the perception in the market that Kraft is not only an environmentally irresponsible company because it dumps its waste everywhere but worst, the market may have the negative impression that its products are unhygienic which will make the market averse to it.  If this will happen, Kraft Food Global might fold up due to market aversion and non-patronage of its products.  The $9.8 million out-of-court settlement and attorney’s fees are small prices to pay compared to the potential damage that the case may inflict to the company.

      I believe that Kraft Food Global should pay the damages even if its predecessor, RMC was the one who dumped the contaminants.  As a successor of interest of the site, Kraft should have taken remedial measures to cure the site of the contaminants when it assumed operation of the plant.  But it did not.  It took a class action against the company and a court mandate before it was compelled to apply remedial measures to clean the pollutants.  It deserved to pay the $9.8 million damage and attorney’s fees.

      The hazard posed by trichloroethylene (TCE), perchloroethylene (PCE), and vinyl chloride (VC) chemicals is not only limited to health but also includes safety hazards.  The high vapor presence of such chemicals can start a fire and even an explosion that could cause instant death among the inhabitants of those houses with strong vapor presence.

      It will be hard to believe that Kraft did not know the contamination issue.  Most likely, it turned a blind to the issue due to the costs associated with cleaning the chemicals.  It ended however paying a bigger sum of money when it was sued for being environmentally irresponsible.  The settlement it paid will serve as a lesson to Kraft Food Global Inc. to be environmentally responsible in its operation.