Dioxin in the Courts

October 24, 2016 | Commercial Litigation | Complex Torts & Product Liability

Texas Appeals Court, Affirming Decision in San Jacinto Waste Pits Case, Upholds Exclusion of General Causation Opinion and Documentary Evidence About Dioxin

An appellate court in Texas, affirming a trial court’s decision in favor of International Paper Company in a lawsuit involving potential liability for dioxin contamination in the San Jacinto Waste Pits, has upheld the trial court’s exclusion of general causation opinion that dioxin is capable of causing cancer in humans and its exclusion of certain documentary evidence about dioxin.

Background

As the court of appeals explained, International Paper Company, through its predecessor, Champion Paper, operated a paper mill in the 1960s. Its paper production process generated waste, known as sludge. International Paper contracted with McGinnes Industrial Maintenance Corporation, through its predecessor, Ole Peterson (together with McGinnes, “MIMIC”), to have the sludge removed from its paper mill site and permanently deposited in “pits” alongside the San Jacinto River in Harris County, Texas, believing that the sludge would quickly harden and the clay in the soil would prevent any migration of the sludge into the river.

MIMC constructed the pits on a 20-acre area of land on the bank of river. The county’s director of Air and Water Pollution Control was involved in the design of the pits, approved their location, and physically inspected them as they were constructed.

Between 1965 and 1966, MIMC dumped between 125,000 and 130,000 cubic yards of sludge into the pits alongside the San Jacinto River. The pits became “full” in 1966, and the disposal activities ended.

In 1973, an aerial photograph was taken of the sludge pit site. The photograph showed that the levee surrounding the sludge pits no longer divided the pits from the river. Therefore, the surface of the sludge pits was in contact with the flowing river at that date.

In the early 2000s, commercial dredging began in the river near the sludge pits. The dredging was performed under U.S. Army Corps of Engineers permits. Before the dredging could begin, the public had to be informed and certain agencies had to approve the operations. Despite its involvement with the selection of this location for the pits and its notice of proposed dredging activity, the county did not object to issuance of dredging permits for this area of the river.

The court of appeals explained that there was evidence that the commercial dredgers operated too close to the shoreline and dredged away a portion of one of the pits, and that the dredging caused the release of dioxin into the river.

Aerial photographs taken after dredging began revealed “inundation areas along the edge of the river,” with much of the pits “completely and totally submerged.” The original site was 20 acres; 15 or 16 of those were submerged and had river water flowing over them. These photographs showed significantly more water flowing over the pits in the 2000s than was seen in the 1973 photograph.

Testing near the site in 2005 revealed high amounts of dioxin in the area with lower levels upstream and downstream from the site. The sludge itself was also tested. According to Mark Johns, an International Paper expert, the sludge continued to demonstrate its earlier properties, meaning that it still had low permeability, similar to “typical liners used in hazardous waste landfills currently,” and would not “dissolve away when it came into contact with water.”

In 2008, the U.S. Environmental Protection Agency (the “EPA”) designated the pits as a “Superfund” site.

Harris County and the Texas Commission on Environmental Quality (the “TCEQ”) brought an environmental-civil-penalty lawsuit against International Paper and McGinnes over the release of dioxin from the sludge pits, seeking $1.591 billion in daily-accruing penalties from each defendant under environmental statutes that had not existed at the time of the waste disposal, plus almost $10 million in attorneys’ fees.

The parties agreed that the dredging activities in the early 2000s had cut into the sludge pits and had removed sludge, thereby releasing some dioxin into the river. The county and the TCEQ contended that dioxin had been released into the river even earlier, when water first washed across the top of the sludge pits, and that the release had continued, thereafter, every day for decades. Therefore, the county and the TCEQ argued for daily penalties from the earliest documented date of water inundation (1973, according to the aerial photograph admitted into evidence) to the date in 2008 that the EPA designated the area as a Superfund site.

The Experts

One of International Paper’s experts, Robert Zoch, a chemical engineer, testified that “the cause of the dioxin released from the pits [was] the sand dredging.” A second IP expert, Johns, explained that “the dredging actually dug into the dikes in the northwest corner and into the waste material.” Johns testified that no data supported the theory put forth by the county and the TCEQ that the dioxin release was due to water inundation or that dioxin had been released every day during the assigned penalty period. According to Johns, the sludge could not have been carried away by mere contact with water because “water is not able to penetrate it very easily from the outside.”

Johns also testified that not all of the dioxin in the area had come from the pits. At least some of the dioxin “fingerprints” in the river did not match the dioxin in the pits, he said. An expert for the county and the TCEQ, John Pardue, an environmental engineer, agreed that there were other sources of “ubiquitous” dioxin in the area, including automobile exhaust from cars traveling on the I-10 bridge over the river and factories along the river.

Before trial and over the objections of the county and the TCEQ, the trial court excluded evidence, including some expert testimony, governmental reports, and other literature, indicating that dioxin is a carcinogen that presents health risks. In particular, it granted International Paper’s motions to exclude expert testimony consisting of a general causation opinion that dioxin is capable of causing cancer in humans and to exclude government reports, including an October 2012 public health assessment produced for the site by the Agency for Toxic Substances and Disease Registry (“ATSDR”).

Before opening statements, the trial court instructed the jury that the parties had stipulated to certain matters that were “not going to be litigated in this case” and that were “not going to be in dispute. . . .” The following was part of the stipulation read by the trial court to the jury:

In July 1985, the EPA listed dioxin as a hazardous substance. As a result of its determination that dioxin may be harmful to the public health or the environment, the EPA listed the site as a Superfund site in 2008, due to the presence of dioxin. The fact that the EPA designated the site as a Superfund site is not a factor for you to consider in this case in determining whether any Texas statute has been violated. 

The Jury Verdict

After a 16-day trial, consisting of 14 witnesses and 365 exhibits totaling over 4,200 pages, but before the case was submitted to the jury, McGinnes settled. International Paper was the only remaining defendant.

The jury answered the liability questions against International Paper “no,” and the trial court entered a take-nothing judgment in International Paper’s favor.

The county and the TCEQ appealed, contending among other things that the trial court had erred by excluding expert testimony and scientific literature evidence labeling dioxin as a carcinogen, based on an improper interpretation of expert testimony requirements.

The Texas Appellate Court’s Decision

The appellate court affirmed, rejecting the argument by the county and the TCEQ that the trial court had erred by excluding their evidence of dioxin’s dangerousness to people and the environment, including erroneously excluding expert testimony and government reports on the dangers presented by dioxin and, by extension, the sludge pits.

In its decision, the appellate court reasoned that, assuming that exclusion of the general causation opinion and the documentary evidence was error, it was harmless. The appellate court noted that the parties had “stipulated that dioxin was a dangerous substance.” Given that stipulation, the appellate court continued, the degree to which dioxin might be considered dangerous, or even carcinogenic, was “not the material or dispositive issue in this case.”

The appellate court pointed out that the liability question submitted to the jury did not ask it to find from among varying degrees of dangerousness but, rather, whether International Paper had caused or had allowed the disposal of waste containing dioxin in such a manner so as to cause the discharge of waste containing dioxin – to which the jury had answered, “no.”

The appellate court concluded:

The degree of dangerousness of the substance alleged to have been discharged does not bear on the initial determination of whether it was discharged in violation of the statute. Accordingly, the excluded evidence of dangerousness was not controlling on a material issue dispositive to the case and cannot be said to probably have resulted in an improper judgment.

For further information, please contact James V. Aiosa, Paul V. Majkowski, Lawrence S. Han, or your regular Rivkin Radler attorney.

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