HOUSTON (CN) — Contamination from toxic sludge pits next to the San Jacinto River in Houston was not the fault of the paper mill that produced the waste, a state appeals court ruled.
Harris County and the Texas Commission on Environmental Quality sued International Paper Co. and McGinnes Industrial Maintenance Corp. after the Environmental Protection Agency classified the waste pits as a federal superfund site in 2008. The EPA found that the pits, which are right next to the river, near a bridge for Interstate 10 in east Houston, had leaked dioxin into the river.
The county sought $1.5 billion in civil penalties against McGinnes and International Paper under the 1965 Solid Waste Disposal Act: penalties for every day since 1975, the effective date of the solid waste act, to the date of the EPA's superfund designation.
Just before closing arguments in the 2014 trial, McGinnes settled for $29 million, McGinnes's parent company Waste Management said in a statement.
International Paper contracted with McGinnes in 1965 to dispose of waste from its Pasadena, Texas paper mill. McGinnes was to transport the sludge and dispose of it on land McGinnes purchased.
McGinnes abandoned the site after one year, considering it worthless, the three-judge panel of the First District of Texas said in its Oct. 6 ruling. At the time, paper mill waste was not considered toxic; dioxin was not classified as a dangerous substance until 1985.
The Harris County trial court instructed the jury that International Paper did not own the waste, and the "mere fact" that it had contracted with McGinnes for its disposal was not enough to support the county's discharge theory. The county objected to both instructions.
"Again, we don't think the law permits you to escape liability whether you claimed you owned it or didn't own it," an attorney for the county said during opening statements. "It's whether you caused, suffered, allowed or permitted the pollution of the waters of the State of Texas."
But the jury found International Paper not liable for the leaking sludge pits, and said the county should take nothing on its claims.
The county appealed, arguing that International Paper should be liable for the sludge because there was no contract transferring the waste's ownership.
Appeals Court Judge Harvey Brown, writing for the appeals panel, said that the contract referred to the sludge as waste many times.
"A person, generally, does not intend to continue to own 'waste' after the waste-hauler has removed it from the generator's possession," Brown wrote. "The waste-generator intends to divest itself permanently of ownership of the waste."
Because dioxin was not considered toxic in 1965, the county cannot rely on environmental laws that prevent a company from abandoning waste it knows to be toxic, the judge said.
Harris County also argued that that the trial court should have included nuisance or public endangerment in the jury question regarding liability under the waste disposal act.
But Brown said the county's pleadings support a question about the discharge of toxins, not their storage, and that the difference between the two words is significant because the solid waste act defines them in different ways.
"The county's liability theory against IP [International Paper] was premised on its causing or allowing waste to be discharged, not temporarily stored," Brown ruled.
In September, the EPA announced a plan to clean up the superfund site.
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