Justia U.S. 6th Circuit Court of Appeals Opinion Summaries

In addition to about $4 million invested through his family corporation, Nonneman personally invested about $15 million in OKO for domestic oil and gas exploration, although he had no experience in such businesses, was showing signs of dementia, and suffered disabilities. In 2003, Nolfi assumed management of Nonneman’s affairs and it was apparent that the OKO investments would yield no returns. Of 128 wells, only 11 produced oil, and did not produce enough to recoup the investment. Nolfi filed suit in Ohio state court and learned facts that gave rise to federal and state securities claims. He filed in federal court, alleging violations of the Securities Act of 1933, 15 U.S.C. 78j(b) and 77l(a)(1); violations of the Ohio Blue Sky laws by the sale of unregistered securities; federal securities fraud; misrepresentation; common law fraud; breach of fiduciary duties; and breach of contract. The cases were consolidated and, after complicated rulings concerning limitations periods, the district court entered judgment for Nonneman. Despite having stated rescissory damages as more than $7 million, the jury only listed an award of $1,777,909 on its verdict form. The court held that plaintiffs had waived their right to challenge the verdict. Sixth Circuit affirmed.

Nonneman, acting through Fencorp, a family investment corporation, invested $3,980,345.50 in OKO for domestic oil and gas exploration, although he had no experience in such businesses, was showing signs of dementia, and suffered disabilities. In 2003, Nolfi assumed management of Nonneman’s affairs and it was apparent that the OKO investments would yield no returns. Of 128 wells, only 11 produced oil, and did not produce enough to recoup the investment. Nolfi filed suit in Ohio state court. During discovery plaintiffs learned facts indicating federal and state securities violations and filed in federal court, alleging violations of the Securities Act of 1933, 15 U.S.C. 77l(a)(1); violations of the Ohio Blue Sky laws by the sale of unregistered securities; federal securities fraud; common law fraud; misrepresentation; breach of fiduciary duties; and breach of contract. After a complicated set of rulings, the district court awarded Fencorp $1,012,835.50, the maximum not barred by the statute of repose. The Sixth Circuit affirmed in part, upholding rulings concerning the statute of repose, but setting aside the verdict on the state common law fraud claim and directing reinstatement of the verdict on the federal securities claim ($847,858).

An underground pipeline leaked gasoline five times between 1948 and 1962. After tests revealed benzene in wells, not including the plaintiffs' well, the company conducted remediation and monitoring and purchased the property now owned by the plaintiffs. The plaintiffs bought the property and a low level of benzene was detected in the well in 1996. The company installed a new well, which tested free of benzene 22 times between 1997 and 2002. Benzene was detected at a very low level in 2003 and the plaintiffs moved in 2005. In 2002 one of the plaintiffs was diagnosed, at age 48, with non-Hodgkins lymphoma. The district court entered summary judgment for the company. The Sixth Circuit affirmed. The district court acted within its discretion in excluding, as unreliable under the Daubert standard, an expert's specific-causation opinion. The expert did not ascertain the level of plaintiff's exposure and the level of benzene in the well never exceeded the EPA's standard; the expert did not rule out other possible causes, such as the plaintiff's smoking.