Contamination ‘Stigma’ Won’t Lead to Damages

     AUSTIN (CN) – The “stigma” of environmental contamination that has already been removed does not merit damages for a Texas ranch, the state’s high court ruled.
     Mel Acres Ranch, of Chappell Hill, Texas, had filed suit in Washington County Court, accusing its neighbor, Houston Unlimited Inc. Metal Processing, of illegally dumping hazardous waste that contaminated its rainwater stock tank.
     Birth defects and deaths among new calves brought the dumping to light in 2007. The Texas Commission on Environmental Quality later investigated and Houston Unlimited’s general manager admitted to inspectors that barrels of spent blast media were dumped behind its facility for 25 years.
     Houston Unlimited later constructed a bern to stop contaminated water from flowing onto the neighboring ranch and repaired two pipe leaks in its processing system. An environmental consultant for Mel Acres later disputed the conclusion by Houston Unlimited’s consultant that the metal processor’s activities had no ongoing adverse impact on water quality in the stock tank.
     The ranch’s consultant said property had been “devastated” as a “functioning property.” Mel Ranch argued the property was permanently damaged, but Houston Unlimited said the construction of the bern meant that the pollution was temporary.
     A jury later awarded Mel Ranch more than $349,000 in lost market value for negligence. The 14th District Court of Appeals later affirmed.
     Reversing that award Friday, the Supreme Court of Texas declined to rule on whether “stigma” damages are allowable.
     “Even when it is legally possible to recover stigma damages, it is often legally impossible to prove them,” Justice Jeffrey Boyd wrote for the mostly unanimous court. “Evidence based on ‘conjecture, guess or speculation’ is inadequate to prove stigma damages, not only as to the amount of the lost value but also as to the portion of that amount caused by the defendant’s conduct. In this case, even if Texas law permits recovery of stigma damages, Mel Acres’ evidence was legally insufficient to prove them.”
     The ranch’s expert did not make or explain adjustments made in comparing the value of the ranch with those of two other sites, according to the ruling.
     “The sales-comparison analysis has two fundamental considerations: the comparison and accounting for differences,” the 29-page opinion states. “McKinney did neither in her reliance on the Sebastian and Sheridan sites. Without that or some other reliable foundation, her opinions cannot constitute evidence sufficient to support the award of damages in this case.”
     Justice Jeff Brown abstained from the opinion. He was a member of the 14th Court when it heard Houston Unlimited’s appeal.
     Mel Ranch could not be reached for comment Sunday evening.

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