Lawyers for Vale SA head into a Toronto courtroom on Monday to appeal a groundbreaking class-action ruling that ordered the company to pay homeowners in Port Colborne, Ont., $36-million in compensation for decades of pollution from an Inco nickel refinery.
The Brazilian mining giant, which took over Inco in 2006, is challenging a decision by Mr. Justice Joseph Henderson of the Ontario Superior Court that would see affected homeowners in the city of 18,000 compensated for the effect of the nickel pollution on their property values.
A three-judge panel of the Ontario Court of Appeal will hear the case, which is scheduled to last four days.
Judge Henderson’s ruling, issued last July, raised eyebrows. Some legal observers said it could mean more U.S.-style “toxic tort” class-action lawsuits against polluters, the kind of confrontation dramatized a decade ago in the Hollywood movie Erin Brockovich, starring Julia Roberts.
Some critics said the judgment should be “terrifying” to any industry with a smokestack, as it could expose even companies that follow all environmental rules to massive liabilities.
Inco was not found to have been negligent or to have broken any laws. And the company’s lawyers argue in their appeal that the nickel residue has not damaged people’s health or their properties.
While the health effects of the nickel fumes that came out of its smokestacks have been hotly debated among people in Port Colborne, the plaintiffs dropped their health claims in this class action.
The company disputes Judge Henderson’s use of an 1868 decision by Britain’s House of Lords called Rylands v. Fletcher to find Inco liable for the nickel residue that ended up in the soil of many of the town’s gardens and backyards.
In the Rylands case, a landowner was found liable after a water reservoir, deemed a “non-natural” use of land, flooded a neighbour’s mine. Vale argues that legally operating a nickel refinery should be considered a “natural” activity.
The company also criticizes the calculations the court used to compare property values in Port Colborne with those in a nearby town.
And Vale disagrees with the judge’s decision to stretch the standard time-limitation period for a lawsuit like this one. Normally, plaintiffs would have six years after the pollution ceased to make their claims. Inco stopped refining nickel at its Port Colborne plant in 1984, but the lawsuit wasn’t filed until 2001.
Judge Henderson ruled that the limitation period should start around 2000, when concerns about nickel pollution became widely known after new government testing, potentially creating a precedent for other pollution cases. But Vale’s lawyers argue the town’s residents knew full well what was coming out of Inco’s 150-metre smokestack for decades.
In written arguments, a lawyer for the plaintiffs says Vale’s appeal should be tossed out: “This was a fact-driven case and the facts drove the result. The trial judge’s decision should be sustained and the appeal should be dismissed.”