USA – ALABAMA Law and Practice Contributed by: John M. Johnson, Lana A. Olson, W. Larkin Radney IV and Brian P. Kappel, Lightfoot, Franklin & White, LLC
sure and avoidance of post‑foreclosure pollution crea- tion or exacerbation. 9.2 Lender Protection Alabama law includes statutory protections for lend- ers with the goal of encouraging financing for real property transactions that promote economic rede- velopment and site rehabilitation of contaminated properties. Lenders should understand the scope of those protections as well as the federal law standards upon which they are based. Additional protections may be found in contract law and the broad use of indemnity and similar contractual covenants. Prior to issuing financing, lenders should focus on performing comprehensive due diligence on potential borrowers as well as the property in question. Post-financing monitoring of the collateral is also advisable, as is use of intermediaries to manage and divest of collateral in the event of foreclosure. Statutory claims for environmental damage may be available to a plaintiff under Alabama law depending on the circumstances, the specific statute at issue, and whether the plaintiff can make the required show- ing of standing to bring the claim. Alabama’s nuisance statutes codify common law principles. Common law claims are often asserted in environmental disputes, such as nuisance, negligence, trespass and fraud. Transactional claims for environmental damage can include statutory or common law fraud and breach of warranty/contract. 10.2 Exemplary or Punitive Damages 10. Civil Liability 10.1 Civil Claims Punitive damages are allowed in Alabama if there is proof by clear and convincing evidence of fraud, malice, wantonness or oppression. Such damages are intended to punish the defendant and deter simi- lar conduct in the future. Punitive damages are not intended to compensate a plaintiff for a loss. Alabama has statutory caps on punitive damages for certain types of claims depending on the net worth of the corporate defendant (Ala Code §6-11-21). Alabama courts are more likely to uphold limitation of liability clauses that waive punitive damages in commercial
contracts if they are clearly written, are not uncon- scionable, and do not otherwise violate public policy. However, these waivers are not bulletproof and can be deemed unenforceable in certain circumstances. 10.3 Class or Group Actions Class actions and multi-plaintiff/mass tort suits are permitted under Alabama procedures and may be used in environmental and toxic tort matters. 10.4 Landmark Cases Several decisions are significant in the analysis of environmental claims applying Alabama law. Borland v Sanders Lead , an air and particulate matter case, compared the elements of both trespass and nuisance claims, and also set out the elements of an indirect trespass claim. The Borland case also made clear that compliance with environmental statutes does not shield a defendant from liability for damages. Rus- sell Corp. v Sullivan analysed trespass and nuisance claims in the water pollution context, pointing out the distinction between public and private nuisance and emphasising that proof of “actual substantial damage” is required to prevail on a trespass claim. Later deci- sions, including West Morgan-East Lawrence Water & Sewer Authority v 3M , continue to follow Borland and Russell Corp. in the context of “newer” alleged pollut- ants like PFAS. In the personal injury context, Hinton ex rel. Hinton v Monsanto recognised that Alabama requires a manifest, present injury before a plaintiff can recover in tort. Black Warrior Riverkeeper v East Walker County Sewer Authority confirmed the right of any person with an interest that is or may be adversely affected to intervene as a matter of right in any civil action brought by ADEM pursuant to Ala. Code §22- 22A-5 (18)b. 11. Contractual Agreements 11.1 Transferring or Apportioning Liability Alabama is a joint and several liability state. Appor- tionment of judgments is not allowed, and there is no contribution or common law indemnity in Alabama. See “Phelps & Johnson, Indemnity in Alabama Prod- ucts Liability cases” (34 Alabama Law Review 1:23). Actions for contribution are not allowed. Indemnity is allowed under very specific circumstances. Express
420 CHAMBERS.COM
Powered by FlippingBook