Gravel2Gavel Construction & Real Estate Law Blog
In a decision released on October 6, 2016, the Court of Appeals for the First District of Texas, sitting in Houston, unanimously affirmed the jury’s verdict that International Paper Company (IP) was not liable for large civil penalties as a result of the discharge of dioxin-contaminated paper mill waste into the San Jacinto River. The case is Harris County and Texas Commission on Environmental Quality v. International Paper Company. This is an important case with respect to the application of the Texas Solid Waste Disposal Act.Champion Paper, IP’s predecessor, operated a paper mill near the river in the 1960s, and contracted with McGinnes Industrial Maintenance Corporation (McGinnes) to remove the waste generated by the mill’s operations and permanently deposit it elsewhere. McGinnes purchased property for the purposes of disposal, and buried the waste in pits especially constructed for this waste that, at the time, satisfied the Harris County authorities.
Several years later, Harris County and the Texas Commission on Environmental Quality (TCEQ) brought an environmental-civil penalty lawsuit against IP and McGinnes over the release of dioxin from the sludge pits, which may have occurred as a result of dredging activities conducted by the U.S. Army Corps of Engineers in the early 2000s. A large penalty in the amount of at least $ 1.6 billion in penalties was sought by Harris County and TCEQ. A few years ago, the San Jacinto Waste Pits were placed on the Environmental Protection Agency’s national priorities list (NPL) of active Superfund sites, and that EPA-directed cleanup is continuing.
After a long jury trial, McGinnes settled with the Harris County and TCEQ, but IP chose not to do so. The jury found that IP was not liable, and the trial court rendered a take-nothing judgment in IP’s favor. On appeal, the Harris County and TCEQ argued that the trial court committed reversible errors in the court’s charge: “(1) limiting [Harris] County’s Solid Waste Disposal Act claim to only one of three bases for liability—a discharge—after refusing [Harris] County’s liability question that included all three bases—a discharge, a nuisance, and an endangerment; (2) instructing the jury that [IP] did not own the sludge after 1966, which was the year McGinnes completed the project to permanently place the sludge in the pits; and (3) instructing the jury that generating.” They further contended “that the trial court committed a fourth error by excluding expert testimony and scientific literature evidence labeling dioxin as a carcinogen, based on an improper interpretation of expert testimony requirements.” The Court of Appeals was not convinced, and the jury’s verdict and the trial court’s instructions were affirmed.