Harris County and Texas Commission on Environmental Quality v. International Paper Company

• Court: Court of Appeals of Texas
• Decided: October 6, 2016
• Docket: 01-15-00354-CV
• Status: Published

Opinion

Opinion issued October 6, 2016

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-15-00354-CV ——————————— HARRIS COUNTY AND TEXAS COMMISSION ON ENVIRONMENTAL QUALITY, Appellants V. INTERNATIONAL PAPER COMPANY, Appellee

On Appeal from the 295th District Court Harris County, Texas Trial Court Case No. 2011-76724

MEMORANDUM OPINION

International Paper Company, through its predecessor Champion Paper,

operated a papermill in the 1960s. Its paper production process generated waste,

known as sludge, which it contracted with McGinnes Industrial Maintenance Corporation, through its predecessor Ole Peterson, to have removed from its

papermill site and permanently deposited in “pits” alongside a Harris County river.

Several decades later, Harris County and the Texas Commission on

Environmental Quality brought an environmental-civil-penalty suit against

International Paper and McGinnes over the release of dioxin from the long-existing

sludge pits, seeking $1.591 billion in daily-accruing penalties from each defendant

under later-enacted environmental statutes, plus almost $10 million in attorney’s

fees. At the conclusion of the lengthy trial, but before the case was submitted to the

jury, McGinnes settled. International Paper was the only remaining defendant. The

jury found no liability, and the trial court rendered a take-nothing judgment in

International Paper’s favor.

The County and TCEQ1 contend that the trial court committed three errors in

the court’s charge: (1) limiting the County’s Solid Waste Disposal Act claim to only

one of three bases for liability—a discharge—after refusing the County’s liability

question that included all three bases—a discharge, a nuisance, and an

endangerment; (2) instructing the jury that International Paper 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

1 The TCEQ is a necessary and indispensable party to this litigation, TEX. WATER CODE ANN. § 7.353, and also appeals the defense verdict. Its appellate issues mirror those of the County. For simplicity, we will refer to both appellants as “the County.” 2 waste and contracting for its disposal are not, alone, sufficient to establish that

International Paper is liable for a discharge. The County and TCEQ contend 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.

International Paper responds that the trial court did not err in any of these

respects and, to the extent there is any error, it is harmless. International Paper also

raises a cross-point, asserting that, even if the trial court erred, remand would be

unnecessary because it was entitled to judgment as a matter of law on its laches

affirmative defense and the trial court erred by denying its directed-verdict motion

on that defense.

We affirm.

Background

There are five dates or date ranges that are significant in this litigation. We

will give first an overview of their importance and then discuss each in more detail.

Next, we will provide an overview of the parties’ trial theories and discuss the key

rulings made by the trial court related to experts and the jury charge.

A. Significant historical dates

The first important time period is from 1965 to 1966, when International

Paper, through its predecessor Champion Paper (collectively, “IP”), contracted with

3 McGinnes, through its predecessor Ole Peterson, (collectively, “MIMC”) to

permanently dispose of papermill byproduct “sludge” in pits along the San Jacinto

River, with the belief that the sludge would quickly harden and the clay in the soil

would prevent any migration of the sludge into the river. The pits were dug in 1965

and were full by 1966, when MIMC “abandoned” them.

The second important date is 1973, when an aerial photograph was taken of

the sludge pit site. The photograph shows 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.

The third important period is the mid-1980s, when scientists discovered that

papermill sludge contains dioxin, which is an organic material that, while

“ubiquitous” in our environment, “may be harmful to the public health or the

environment.”2 According to an IP expert, dioxin is one of the “most hydrophobic

chemicals,” which means that it tends to adhere to organic materials and “doesn’t

want to leave that to go in the water.” But water can transport dioxin by

“mobiliz[ing] or mov[ing] particles which dioxin is attached to.” The Environmental

Protection Agency labeled dioxin a “dangerous substance” in 1985.

2 There is no evidence that any party to this litigation knew in the 1960s that paper mill sludge contained dioxin. 4 The fourth important period is the 2000s, when third parties engaged in

significant commercial dredging in the San Jacinto River near the sludge pits. The

dredging was authorized by dredging permits issued by the U.S. Army Corps of

Engineers. There is evidence that the commercial dredgers operated too close to the

shoreline and dredged away a portion of one of the pits. It is undisputed that the

dredging caused the release of dioxin into the river.

The fifth significant date is 2008, when the EPA designated this area of the

San Jacinto River a Superfund site subject to federally mandated cleanup due to the

presence of dioxin.

1965 to 1966

In the early 1960s, there were no environmental regulations concerning how

paper companies disposed of their waste products. It was common practice to allow

liquid waste to discharge into streams and flow into the Gulf and to bury solid and

mixed “sludge” waste on the producer’s land or, if there was limited space, at off-

site dumping grounds.

IP operated a papermill in Pasadena in the 1960s and was searching for an off-

site location to dispose of accumulated papermill sludge byproduct. This sludge was

over 90 percent water but also contains “long wood tree ligament fibers that . . .

intertwine to form a mat.” According to a 1966 State Department of Health report,

sludge would “solidify rapidly” after setting for “a short time,” so that “water will

5 not penetrate it—that is rain water will stand over it.” Robert Zoch, a chemical

engineer and one of IP’s experts, testified that, once papermill sludge hardens,

“water won’t seep into it . . . . The material actually has a very low permeability

approaching that of clay.” The sludge material becomes so hard that a “high pressure

water jet” is required to remove the material from surfaces.

IP conducted a survey comparing the costs and benefits “of the possible ways

by which sludge collected in [its on-site] settling basins might be disposed of

permanently.”

In 1965, IP hired MIMC to transport sludge from its Pasadena papermill. The

disposal agreement between IP and MIMC provided that MIMC would “remove”

the “waste sludge” and dispose of it on land that MIMC would purchase at its own

expense. MIMC was required to give IP “advance notice of the nature of [the

removal] equipment and the proposed route of such equipment” within IP’s facility.

The agreement required MIMC “to procure at its own expense a tract of land

acceptable to [IP] to be used by [MIMC] for depositing such sludge and to transport

such sludge by barge from [IP’s] facilities to said tract of land.” MIMC was hired

“as an independent contractor” with “full rights and authority to determine the means

and methods of carrying out the work.” The contract stated that “[t]he sludge to be

removed by [MIMC] is not considered by the parties to be inherently harmful or

dangerous but it is recognized that any spillage of the sludge would create an untidy

6 condition and impede the use of the road or ground upon which such spillage

occurred.” MIMC was also required to “secure and keep in effect all permits and

licenses required in connection with the performance of the work” and “comply with

all governmental laws, rules and regulations.”

MIMC purchased a 20-acre area of land on the bank of the San Jacinto River

and constructed pits to contain the sludge. The parties dispute whether MIMC or

Virgil McGinnes (an MIMC officer) owned the land where the pits were located.

After the conclusion of the evidence, the trial court granted IP’s motion for directed

verdict on the issue of ownership of the waste, concluding that Virgil McGinnes

owned the land because his name was listed on the deed, though in a “trustee”

capacity.

The County’s expert environmental engineer, John Pardue, testified that IP

did not own the property or transport the waste. Instead, it hired MIMC to dispose

of the waste “permanently” at the agreed location. Zoch, a chemical-engineer expert

witness retained by IP, testified that, in the 1960s, the producer of such sludge did

not have any legal or industry-imposed duty to conduct ongoing maintenance after

the waste was transported off the producer’s property. IP had no involvement with

the sludge pits after MIMC filled them.

During the 1960s, no permits were required for the disposal of industrial

sludge nor did the State or County issue disposal permits. Zoch testified that “most

7 plants had an area . . . in the back of the plant where they could just bury [solid waste

or sludge] on the site.” According to Zoch, in the 1960s, it was “unusual” for a

company like IP to go “above and beyond normal practice at that time” and seek

approval for its waste disposal plans. Nonetheless, IP conferred with the County’s

officials as it developed its disposal plan. Zoch testified that the County “assisted in

the design and then the approval of the proposed operations.” One of the County’s

experts, Pardue, who examined the site and the history of the waste disposal,

conceded that the County “was aware of the process that was going to be used to

dispose of waste in these impoundments” and “approved the process.”

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. In a Texas Water Pollution Control board meeting, the Director

stated that he “was originally involved with the original contractor in helping to

design the present pits.” The original contractor’s notes from a telephone

conversation with the Director stated that the Director “indicated an awareness of

our potential contracting to dispose of sludge from the settling basins,”

acknowledged that he “inspected” the equipment, “ventured an opinion that this

equipment was the best he had seen,” and as a result, “approved” the contractor’s

method of developing the pits.

8 The Director wrote two letters discussing his approval of the disposal plan. In

the first letter, written in May 1965, the Director stated that the “location of the

proposed spoil pond . . . seems to be ideal for the purpose for which you intend to

use it” because the soil along the river is “composed of clay, which should render it

practically impossible for seepage to escape and enter into the San Jacinto River.”

This letter, according to Robert Allen, the current Director, is the closest that IP

could get to a permit under Texas law at that time.

The same letter discusses IP’s duty to ensure that the “waste handling

operation should be done in a manner which would not allow any liquid waste to

leave the property and escape into the river.” IP asserts that this provision only

applied to the transportation of the waste. Its expert, Zoch, testified that the County

was concerned about “liquid waste during the operation leaving the site” and the

County was telling IP “that while you are out there doing this waste disposal at this

site . . . you got to make sure that that operation doesn’t allow liquid waste,

contaminated material, contaminated liquids to leave the property.” Consistent with

the Director’s statement that seepage would be “practically impossible” because of

the clay in the soil, MIMC did not separately line or cover the pits it constructed.

The Director wrote a second letter several months later that was addressed to

MIMC and discussed transportation of waste to the pits. It states that the County

gave its “approval” to the pits “only under the condition that the waste handling

9 operation should be done in a manner which would not allow liquid waste to leave

the property and escape into the river.” The letter set a 24-hour deadline for MIMC

to repair the dikes used to contain the waste.

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 1968, MIMC determined that the land

had become “worthless in that it had no present sales value,” and, as a result, its

stated book value was reduced from “the cost of $50,000 to the nominal sum of $1.”

The County’s expert, Pardue, testified that, after the waste was deposited, MIMC

“abandoned” the land and conducted “no further maintenance activities” after 1966.

The structure of the pits and the contours of the river as it flowed past them

changed after the land was abandoned. An aerial photograph taken in 1973 shows

that the river intruded into the pits. There was no evidence of water or soil testing

from the 1970s to determine if dioxin was released into the water as it washed over

the pits. Nonetheless, the County presented expert testimony that dioxin was

released into the water at least by 1973 because of the water intrusion. IP presented

expert testimony disputing that contention, arguing that the properties of dioxin

prevent it from simply “washing away” with the tide.

10 1980s

In 1985, the EPA labeled dioxin as a “dangerous substance” that “may be

harmful to the public health or the environment.” In the late-1980s the EPA took

part in two studies of papermills—the “Five Mill Study” and the “104 Mill Study”—

that revealed the presence of dioxin in papermill sludge. One of the mills analyzed

in the studies was an IP papermill. Those findings led to changes in paper production

processes to eliminate dioxin.

Early 2000s

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 such 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.

Aerial photographs taken after dredging began reveal “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 show significantly more water flowing over

the pits in the 2000s than was seen in the 1973 photograph.

11 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 IP 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 EPA designated the pits as a “Superfund” site, which means that

the area became a national priority for environmental remediation because of known

or threatened releases of hazardous substances at the site. See Int’l Paper Co. v.

Harris Cty., 445 S.W.3d 379, 395 (Tex. App.—Houston [1st Dist.] 2013, no pet.)

(citing 42 U.S.C. §§ 9601–9626).

B. The parties’ theories at trial

The County sued IP and MIMC3 and sought daily civil penalties for violations

of various statutes, none of which were in existence at the time of the waste disposal.

The first of those statutes is the Solid Waste Disposal Act, which states as follows:

[N]o person may cause, suffer, allow, or permit the collection, handling, storage, processing, or disposal of industrial solid waste or municipal hazardous waste in such a manner so as to cause (1) the discharge or

3 The County also sued Waste Management, which had acquired all of MIMC’s shares in 2003. Waste Management settled at the same time MIMC settled, just before final arguments.

12 imminent threat of discharge of industrial solid waste or municipal hazardous waste into or adjacent to the waters in the state without [necessary authorization]; (2) the creation and maintenance of a nuisance; or (3) the endangerment of the public health and welfare.

30 TEX. ADMIN. CODE § 335.4. The date range during which IP could be assessed

penalties for alleged violations of the SWDA was from 19754 to 2008.5

The second statute is Water Code section 26.121, which prohibits the

“discharge” of “industrial waste into or adjacent to any water in the state.” TEX.

WATER CODE ANN. § 26.121(a)(1). It also states that “[n]o person may cause, suffer,

allow, or permit the discharge of any waste or the performance of any activity in

violation of this chapter . . . .” Id. § 26.121(c). The date range during which IP could

be assessed penalties for violations of this Water Code provision was from 19736 to

2008.7 The trial court instructed that the penalties that could be imposed under these

two statutes8 were daily penalties and the amount that could be imposed changed

over time, ranging from a low of $50 to a high of $25,000 per day of violation.

4 The 1975 date corresponds to the effective date of the Solid Waste Disposal Act. 5 The 2008 date is when the EPA Superfund clean-up efforts began. 6 An aerial photograph dated February 1973 shows a breach in the levee and water in contact with the pits. There was no evidence of a breach before 1973; therefore, 1973 was designated as the beginning penalty-period date for this statute. 7 See supra, note 5. 8 The County pleaded violations of the Spill Act as well, but that theory was not included in the jury charge. See TEX. WATER CODE ANN. § 26.266. No party alleges error in its omission. 13 The parties do not dispute that at least some of the dioxin found in the river

came from the pits. All parties agree that the dredging activities in the early 2000s

cut into the sludge pits and removed sludge, thereby releasing some dioxin into the

river. But the County contends that dioxin was released into the river even earlier

when water first washed across the top of the sludge pits and that the release

continued, thereafter, every day for decades. The County, therefore, argued for daily

penalties from the earliest documented date of water inundation (1973, according to

the aerial photograph admitted into evidence) to the date the EPA designated the

area as a Superfund site (2008).

Pardue, the County’s expert environmental engineer, testified that aerial

photos showed that “dioxin did leave the impoundments starting in 1973 and going

to the end of the penalty period on a daily basis.” He stated that there had been “a

break in the levee that allowed the water to get in” and, as a result, “the whole

impoundment was completely submerged.” He testified that the flow of tidal water

over the pits released dioxin into the river.

IP’s expert, Zoch, testified that “the cause of the dioxin released from the pits

is 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 County’s theory that the dioxin release was due

to water inundation or that dioxin was being released every day during the assigned

14 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.”

IP proffered, in support of its theory that it was the dredging that released the

dioxin and not water inundation, a 2005 email from a Texas Parks and Wildlife

employee, which stated, “In looking over the more recent data I believe more firmly

that the recent sand mining was responsible for the increase in dioxin levels at the

site noted between 1994 and 2002.”

Johns also testified that not all of the dioxin in the area came from the pits. At

least some of the dioxin “fingerprints” in the river did not match the dioxin in the

pits. A County expert, Pardue, agreed that there are 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.

C. Expert testimony and the parties’ stipulation

Before trial and over the County’s objections, the trial court excluded

evidence, including some expert testimony, governmental reports, and other

literature, indicating that dioxin is a carcinogen that presents health risks.

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

15 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.

D. Trial court’s instruction on ownership

At the close of the evidence, the trial court granted IP’s motion for directed

verdict on the issue of waste ownership, holding that IP “did not own the waste after

the waste was placed at the San Jacinto Site.” Over the County’s objection, the trial

court included a jury instruction with both the SWDA- and Water Code-based

liability questions that “as of 1966, [IP] no longer owned the waste and no longer

had a contract for disposal at the Site.” It also instructed the jury that IP’s relationship

with MIMC ended in 1973 and that “the mere fact that [IP] generated the waste and

contracted with an independent waste disposal company for its disposal is not, by

itself, sufficient to establish that [IP] is liable for any discharge.”

E. Trial court’s refusal of the County’s proposed liability question and definition of nuisance

At the charge conference, the County requested an SWDA-based liability

question that included nuisance and endangerment as bases for liability. See 30 TEX.

ADMIN. CODE § 335.4 (including three categories of SWDA violations: (1) discharge

16 or imminent threat of discharge; (2) creation and maintenance of nuisance; and

(3) endangerment of public health and welfare). The court submitted two liability

questions—Jury Questions One and Four. In Question One, which was based on the

Water Code, the jury was asked whether IP “caused, suffered, allowed, or permitted

the discharge of industrial waste containing dioxin into or adjacent to any water in

the State . . . .” (Emphasis added.)

In Question Four, which was based on the SWDA, the jury was asked whether

IP “caused, suffered, allowed, or permitted the handling or disposal of industrial

solid waste containing dioxin in such a manner so as to cause the discharge or

imminent threat of discharge of industrial solid waste containing dioxin into or

adjacent to the water in the State . . . .” (Emphasis added.)

The trial court included a definition of “cause, suffer, allow or permit” that

informed the jury that a person “‘causes, suffers, allows, or permits’ an event when

that person had the power to prevent an event at the time of the event, but failed to

do so.”

F. Defense verdict

After a 16-day trial, consisting of 14 witnesses and 365 exhibits totaling over

4,200 pages, the jury answered the liability questions against IP “no,” and the trial

court entered a take-nothing judgment. The County appeals.

17 Charge Error Jury Question Refused

In its first issue, the County contends that the trial court erred when it did not

include nuisance or public endangerment in the SWDA-based liability question.

IP argues that the trial court did not abuse its discretion by refusing to submit

nuisance and public endangerment because (1) the theory of SWDA-based liability

pleaded by the County was premised on a discharge of dioxin into the river, (2) the

only evidence the County offered at trial to support its theory that IP had violated

the SWDA was evidence of a daily discharge of dioxin into the river, and thus,

(3) any liability for nuisance or endangerment was subsumed within the broad form

definitions of liability that were submitted to the jury and which the jury rejected.

A. Standard of review

The trial court “shall submit the questions, instructions and definitions . . .

raised by the written pleadings and the evidence.” TEX. R. CIV. P. 278. “Whether the

charge submits the controlling issue in the case, in terms of theories of recovery or

defense, is a question of law which is reviewed de novo.” Hamid v. Lexus, 369

S.W.3d 291, 295 (Tex. App.—Houston [1st Dist.] 2011, no pet.). A legal-sufficiency

standard applies: if there is more than a scintilla of evidence to support a finding in

favor of the party that pleaded the issue, it is error to refuse the submission. Elbaor

v. Smith, 845 S.W.2d 240, 243 (Tex. 1992); Roy v. Howard-Glendale Funeral Home,

820 S.W.2d 844, 846 (Tex. App.—Houston [1st Dist.] 1991, writ denied).

18 “Conclusions of law will be upheld on appeal if the judgment can be sustained on

any legal theory supported by the evidence.” P.V.F., Inc. v. Pro Metals, Inc., 60

S.W.3d 320, 323 (Tex. App.—Houston [14th Dist.] 2001, pet. denied).

Failure to submit an issue cannot be a ground for reversal unless the party with

the burden of proof has requested the issue in “substantially correct wording.” TEX.

R. CIV. P. 278; Perez v. Weingarten Realty Inv’rs, 881 S.W.2d 490, 493 (Tex.

App.—San Antonio 1994, writ denied). A request is not substantially correct if it is

too vague or contains a term that requires a definition but the party fails to tender the

definition. Perez, 881 S.W.2d at 493; see Select Ins. Co. v. Boucher, 561 S.W.2d

474, 479 (Tex. 1978).

If the charge is legally correct, the trial court has broad discretion regarding

how to submit the issues, including the wording of questions, definitions, and

instructions. Cont’l Cas. Co. v. Baker, 355 S.W.3d 375, 382 (Tex. App.—Houston

[1st Dist.] 2011, no pet.). Thus, an appellate court reviews allegations of charge error

under an abuse-of-discretion standard. Indian Beach Prop. Owners’ Ass’n v. Linden,

222 S.W.3d 682, 703 (Tex. App.—Houston [1st Dist.] 2007, no pet.); Howell Crude

Oil Co. v. Donna Refinery Partners, 928 S.W.2d 100, 110 (Tex. App.—Houston

[14th Dist.] 1996, writ denied). Under the abuse-of-discretion standard, we may not

substitute our judgment for the trial court’s and, instead, decide only whether the

19 trial court’s action was arbitrary or unreasonable. European Crossroads’ Shopping

Ctr., Ltd. v. Criswell, 910 S.W.2d 45, 54 (Tex. App.—Dallas 1995, writ denied).

Charge error requires reversal when it “probably caused the rendition of an

improper judgment.” TEX. R. APP. P. 44.1(a)(1). When determining whether charge

error probably caused an improper judgment, we examine the entire record.

Transcon. Ins. Co. v. Crump, 330 S.W.3d 211, 225 (Tex. 2010). “Charge error is

generally considered harmful if it relates to a contested, critical issue.” Columbia

Rio Grande Healthcare, L.P. v. Hawley, 284 S.W.3d 851, 856 (Tex. 2009). An

omitted jury question is immaterial, and cannot be said to have probably caused the

rendition of an improper judgment, if its answer can be found elsewhere in the jury’s

answers to submitted questions or when its answer would not affect the outcome of

the verdict. City of Brownsville v. Alvarado, 897 S.W.2d 750, 752 (Tex. 1995);

MEMC Pasadena, Inc. v. Riddle Power, LLC, 472 S.W.3d 379, 393–94 (Tex.

App.—Houston [14th Dist.] 2015, no pet.); Hilsher v. Merrill Lynch, Pierce, Fenner

& Smith, Inc., 717 S.W.2d 435, 439 (Tex. App.—Houston [14th Dist.] 1986, no

writ).

Finally, in preparing a jury charge, “[t]he goal is to submit to the jury the

issues for decision logically, simply, clearly, fairly, correctly, and completely.” Cal

Dive Offshore Contractors Inc. v. Bryant, 478 S.W.3d 914, 920 (Tex. App.—

Houston [14th Dist.] 2015, no pet.); see Hyundai Motor Co. v. Rodriguez, 995

20 S.W.2d 661, 664 (Tex. 1999). There is no indication in the record of the trial court’s

reason for refusing the County’s requested jury question. That refusal will not be an

abuse of discretion if the questions submitted fairly place the disputed issues before

the jury, considering the pleadings, the evidence, and the charge in its entirety. See

Rosell v. Cent. W. Motor Stages, Inc., 89 S.W.3d 643, 653 (Tex. App.—Dallas 2002,

pet. denied); cf. Luxenberg v. Marshall, 835 S.W.2d 136, 142 (Tex. App.—Dallas

1992, orig. proceeding) (“A trial court cannot abuse its discretion if it reaches the

right result, even for the wrong reasons.”).

B. The County’s requested jury question compared with the questions and instructions in the court’s charge

At the charge conference, the County requested an SWDA-based liability

question that asked whether IP caused or allowed9 the “handling or disposal” of

waste in such a manner so as to cause a discharge or imminent threat of discharge, a

nuisance, or a public endangerment at any time from December 31, 1975, until

March 30, 2008. See 30 TEX. ADMIN. CODE § 335.4. Along with its proposed liability

question, the County submitted a proposed instruction that would have instructed the

jury that “nuisance” means “a condition that substantially interferes with the use and

9 The question included the entire list of active and passive verbs from the statute but, because the inclusion of these terms or exclusion of other terms is not being challenged by any party, for simplicity and to maintain focus on the alleged error, we will refer to the list of “caused, suffered, allowed, or permitted” as “caused or allowed.” 21 enjoyment of property by causing unreasonable discomfort or annoyance to persons

of ordinary sensibilities.” This is the established and accepted definition of a “private

nuisance.” See Crosstex N. Tex. Pipeline, L.P. v. Gardiner, No. 15–0049, 2016 WL

3483165, at *6 (Tex. June 24, 2016); Holubec v. Brandenberger, 111 S.W.3d 32, 37

(Tex. 2003). The County did not submit a proposed definition of “endangerment.”

The trial court refused the County’s proposed liability question and its proposed

private-nuisance definition without explanation.

In the liability question the trial court included in its charge, it asked the jury

whether IP caused or allowed the “handling or disposal” of waste in such a manner

so as to cause the “discharge or imminent threat of discharge” of waste containing

dioxin into or adjacent to the water in the State at any time during the agreed date

range.

C. The County’s pleadings supported the submission of a discharge-based theory of liability

SWDA liability can be premised on a variety of actions related to waste,

including the “collection, handling, storage, processing, or disposal” of waste.

30 TEX. ADMIN. CODE § 335.4. If a defendant causes or allows any of those actions

and a discharge, nuisance, or public endangerment results, civil penalties may be

imposed. See id.

The County’s third amended petition—its live pleading at the time of trial—

asserts that “[t]he citizens of Harris County can no longer enjoy camping, picnicking

22 or eating fish or blue crabs in the San Jacinto River free from fear.” According to

the County, “[t]he harm to Harris County and its residents” was caused by IP’s

“actions and inactions . . . in causing, allowing and permitting the release of dioxin

waste . . . and the conscious and intentional abandonment of the waste and pollutants

into the environment and food chain being consumed by the people of Harris

County.” The defendants, the County argued, “left a legacy of pollution in Harris

County by causing and allowing dioxin to be released into the San Jacinto River

. . . .” These statements culminated in the assertion that, “[i]n essence, these entities

‘caused, suffered, allowed and permitted’ the waste to be released into the waters of

the State on a daily basis.” Throughout its pleading, the County focused on its

assertion of a daily discharge of dioxin into the river over several decades and the

resulting environmental harms.

Although the petition focuses on the alleged discharge of dioxin into the river

and the negative impact that discharge had on the safety of the water for public

recreation and as a food source, the County pleaded its cause of action more broadly

to assert that IP violated the statute by allowing “the storage and discharge” of waste,

not just a discharge. Thus, we address whether the inclusion of the term “storage”

supports the County’s argument that it was entitled to the question it proposed rather

than the one the court submitted. We conclude that it does not for two reasons.

23 First, the liability question the County requested would not have permitted the

jury to find liability based on a “storage” theory. The term “storage” was not in the

County’s proposed question. Instead, its proposed question conditioned a liability

finding on the “handling” or “disposal” of waste. The difference is significant

because the SWDA provides different definitions for each of these actions. Id.

§ 335.1(47) (disposal); § 335.1(152) (storage).

Second, the claim the County pleaded—a “storage” causing a nuisance or

endangerment—was not supported by the evidence under the statutory definition of

the term. In the SWDA, “storage” means “[t]he holding of solid waste for a

temporary period, at the end of which the waste is processed, disposed of, recycled,

or stored elsewhere.” Id. § 335.1(152). Yet the County consistently argued that IP

contracted to have sludge “permanently” disposed of next to the San Jacinto River,

MIMC “abandoned” the sludge pits, no one maintained the pits over the next forty

years, and, by their inaction, both IP and MIMC caused or allowed dioxin to be

released into the river as its waters flowed over the engulfed pits decades later. The

County presented no evidence that the holding of waste in the pits was temporary.

The pleading of a “storage” of sludge next to the river, when the County pleaded

that IP allowed the “storage and discharge” of waste, did not support the submission

of a liability question broader than that submitted by the trial court, which asked

whether IP “caused, suffered, allowed, or permitted” the “handling or disposal” of

24 waste in a manner so as to cause the discharge or imminent threat of discharge. The

liability question proposed by the County restricted the penalty period to the years

between 1975 and 2008. But it is undisputed that IP generated and contracted for the

waste’s disposal before 1975 and had no involvement after that date. Any IP activity

in the 1960s that was intended to be temporary would not support liability under a

penalty period that did not begin until a decade later.

The county’s liability theory against IP was premised on its causing or

allowing waste to be discharged, not temporarily stored. Cf. Kane v. Cameron Int’l

Corp., 331 S.W.3d 145, 148 (Tex. App.—Houston [14th Dist.] 2011, no pet.)

(differentiating between claim actually asserted by plaintiff—physical invasion of

property by chemical discharge—and other claim that may have been available but

was not argued—reasonable fear of chemical discharge). We conclude that the

pleadings and the evidence do not support submission of the County’s proposed

liability question. The trial court properly charged the jury on the County’s theory.

D. The County’s failure to present evidence to support the submission of its proposed nuisance question

The SWDA permits civil penalties against those who cause or allow the

“collection, handling, storage, processing, or disposal of industrial solid waste” in

such a manner so as to cause the “discharge or imminent threat of discharge” of the

waste into or adjacent to the waters in the state without necessary authorization. 30

TEX. ADMIN. CODE § 335.4 The statute contains broad but distinct definitions of

25 “disposal” and “discharge.” “Disposal” means the “discharge, deposit, injection,

dumping, spilling, leaking, or placing of any solid waste . . . (whether containerized

or uncontainerized) into or on any land or water so that such solid waste . . . or any

constituent thereof may enter the environment or be emitted into the air or discharged

into any waters, including groundwaters.” Id. § 335.1(47). Or, more simply, one

disposes of waste by placing the waste so that it “may” enter any waters. See id.

“Discharge,” which is a term within the “disposal” definition as well as the first

category of adverse events in Section 335.4, means the “accidental or intentional

spilling, leaking, pumping, pouring, emitting, emptying, or dumping of waste into

or on any land or water.” Id. § 335.1(46). The trial court tracked these two statutory

terms in its jury charge.

Thus, the term “disposal,” as used in the statute and in the charge, reaches acts

that do not actually result in a discharge or imminent threat of discharge but “may”

do so,10 indicating a possibility that they would do so in the more distant future.11

Under these definitions, the County could prevail even if it did not prove a discharge,

provided the disposal of the sludge into the pits near the river created the risk that it

10 The definition of “disposal”—both in the statute and in the court’s charge—includes the term “discharge.” See 30 TEX. ADMIN. CODE § 335.4. 11 See WEBSTER’S NEW WORLD COLLEGE DICTIONARY, 903 (5th ed. 2014) (defining “may” as “used to express possibility or likelihood”).

26 might “enter the environment or be discharged into any waters” in the future and

there was evidence that this risk created a nuisance.12

The County contends, however, that the trial court’s instructions did not

encompass the theory of nuisance that it proposed with its requested instructions.

Therefore, we must address whether there was evidence of a nuisance13 from having

12 To the extent that the two definitions of disposal and discharge overlap—because both definitions include a discharge, as well as dumping, spilling, and leaking— when the jury rejected the discharge theory, it necessarily would have had to reject the nuisance theory to the extent that it depended on this same predicate, meaning the placement of waste that caused actual or imminent discharge of waste. Therefore, we limit our inquiry under the disposal-leading-to-a-nuisance-without-a- discharge theory to whether there is evidence that IP caused or allowed the placement of sludge in pits in a manner that caused a risk that sludge might “enter the environment or be discharged into any waters” but did not actually discharge or qualify as an imminent threat of discharge so as to cause a nuisance. See 30 TEX. ADMIN. CODE §§ 335.1, 335.4. 13 Contrary to its trial position, when it submitted an instruction on a private nuisance, the County now asserts that it was entitled to an issue on public nuisance, defined by the County as “a condition that amounts to an unreasonable interference with a right common to the general public.” See Crosstex N. Tex. Pipeline, L.P. v. Gardiner, No. 15–0049, 2016 WL 3483165, at *6 (Tex. June 24, 2016); see id. at *4 n.3 (stating that “public nuisance generally addresses conduct that interferes with ‘common public rights’ as opposed to private individual rights”); RESTATEMENT (SECOND) OF TORTS § 821B(1) (1979). This new position is significant for two reasons. First, charge objections and requests for instructions must comport with the arguments made on appeal. Cont’l Cas. Co. v. Baker, 355 S.W.3d 375, 383 (Tex. App.—Houston [1st Dist.] 2011, no pet.). Second, abandonment of the private-nuisance theory is a tacit acknowledgement by the County, in our view, that it presented no evidence in support of that theory. The County’s new proposed nuisance definition—a public nuisance—is consistent with the County’s presentation of its case, which was that the public’s use of the San Jacinto River had been interfered with unreasonably because of the discharge of dioxin-containing sludge into the river, but is not consistent with the instruction it requested at trial.

27 dioxin-containing sludge contained next to the river such that it “may enter the

environment or be . . . discharged into any waters” in the non-imminent future.14

The SWDA is a civil penalty statute that permits the accrual of daily penalties

for violations. The County was seeking daily penalties, not compensatory damages.

The daily penalties ranged from $50 to $25,000, and the County argued for the

maximum. To this end, the County sought to show that IP had engaged in wrongful

conduct that caused pollution to the river (i.e., a discharge). The County did not try

its case as though pollution might occur; it argued that pollution had occurred every

day for forty-plus years, and then argued that this wrongful conduct supported the

maximum penalty, over $1.5 billion.

The County presented expert testimony that there was a daily discharge of

dioxin into the water. The jury rejected that theory of liability. The County responds

that IP’s stipulation provided some evidence of a nuisance because it conceded that

dioxin is “dangerous.” But placement of a dangerous product in a location is not, per

se, a violation of the SWDA. More is required to prove a nuisance. The party on

14 We describe it as “non-imminent future” because a risk of an imminent release would fall within the “discharge” subsection that was submitted to the jury and rejected by it. See 30 TEX. ADMIN. CODE §§ 335.1, 335.4 (“[N]o person may cause, suffer, allow, or permit the collection, handling, storage, processing, or disposal of industrial solid waste or municipal hazardous waste in such a manner so as to cause [ ] the discharge or imminent threat of discharge of industrial solid waste or municipal hazardous waste into or adjacent to the waters in the state without [necessary authorization] . . . .”) (emphasis added).

28 which a penalty is assessed must have caused or allowed the placement so that it

may discharge into the water and create a nuisance. See 30 TEX. ADMIN. CODE

§ 335.4 (predicate requirements).

To establish a nuisance, the plaintiff must present evidence that the

interference with the use of property is substantial enough to demonstrate more than

a theoretical risk of some future harm. Otherwise, any land on which waste is placed

would per se constitute a private nuisance because of the theoretical possibility that

the waste will leak or escape onto a neighboring property.

Absent an actual, realized interference with another’s use of property (i.e., an

invasion on the ground or in the water, minerals, or air), there must be an objectively

reasonable and well-founded apprehension of danger from the specified risk caused

or allowed by the party against whom the nuisance claim is brought. See Kane, 331

S.W.3d at 148 (stating that private-nuisance claim can result from sufficiently

extreme invasion or “by using property in a way that causes reasonable fear in those

who own, lease, or occupy property nearby”); Maranatha Temple, Inc. v. Enter.

Prods. Co., 893 S.W.2d 92, 99 (Tex. App.—Houston [1st Dist.] 1994, writ denied)

(stating that something that causes “a well-founded apprehension of danger may be

a nuisance”); see also Crosstex, 2016 WL 3483165, at *8 (holding that

unreasonableness of discomfort or annoyance (or fear) “must be determined based

on an objective standard of persons of ordinary sensibilities, not on the subjective

29 response of any particular plaintiff”); id. at *11 (stating that “the standard for

determining whether the effects of the interference are unreasonable is an objective

one”).

The failure to prove an actual discharge cannot substitute for evidence of an

unrealized risk of a future discharge due to IP’s conduct. Cf. Kane, 331 S.W.3d at

148 (affirming summary judgment against plaintiff because plaintiff’s nuisance

claim was based solely on allegation of physical invasion of plaintiff’s property and

plaintiff had no evidence of that claim, even though nuisance claims also can be

based on other non-invasive acts). A risk of discharge due to IP’s conduct cannot be

presumed through the failure to prove an actual discharge.

The County points to the inability to dredge the river near the site or to fish

the area. Neither of these satisfies the evidentiary requirements for a broader

submission than the trial court gave under the facts here. Dredging was not halted

until after the penalty period; therefore, the inability to dredge in 2009 and beyond

cannot be an actionable nuisance between 1975 and 2008. The jury received no

explanation, through expert testimony, other evidence, or argument, of how a risk of

a future discharge that was not realized by the end of the penalty period (2008) could

rise to the level of a nuisance before 2008.

Fundamentally, the County cannot point to evidence that would not be

included in the broad causation instruction (cause, suffer, allow, or permit) and the

30 broad definition of discharge, which included the imminent threat of discharge. To

the extent the evidence proffered by the County indicates an inability to fish or

otherwise use or enjoy the river, it is because dioxin was discharged into the

environment. That theory is based on a discharge. The County points to no other

evidence of a non-discharge-based nuisance.

The evidence the County presented matched its case theory, summarized in

the County’s opening statements:

[I]t is [the] defendants’ position that they should pay not one dollar for one day of violation of any of the statutes . . . because none of the dioxin got out of these impoundments. . . . It’s Harris County’s position that every day after February 15th of 1973, paper mill sludge containing dioxin was released into the San Jacinto River . . . and that there has been 35 years of violations of the Texas environmental statutes and for that, these defendants should pay civil fines and penalties. So that’s the thumbnail sketch of our case.

The theory remained the same during closing argument:

This is . . . about a company that did not follow its obligations under the law and, as a result, it should pay a penalty, as required by the law. The law says that, if you cause, suffer, [or] allow pollution of the waters of our state, you should pay a penalty.

We conclude that the County was not entitled to a broader jury question on

whether IP caused or allowed a disposal of waste in a manner that caused a nuisance

than the one that the trial court submitted.

31 E. Outcome on refused public-endangerment question tied to that of nuisance and discharge questions

The County argues that the public-endangerment and nuisance issues are

“independent of one another.” Thus, according to the County, even if the trial court

did not err in refusing to submit the nuisance question, it erred in not submitting an

endangerment question. We disagree.

The County submitted these “independent” theories in a single proposed jury

question; therefore, the opposite is true: if the trial court did not abuse its discretion

in the refusal of one part of a singularly submitted liability question, then there is no

abuse of discretion in the refusal of the entire question. Cf. Crown Life Ins. Co. v.

Casteel, 22 S.W.3d 378, 388 (Tex. 2000) (concluding that trial court erred by

combining five invalid DTPA theories with eight valid DTPA theories in single jury

question). Accordingly, we hold that there is no reversible error in the court’s refusal

of the County’s proposed liability question.

We overrule the County’s first issue.

Evidentiary Challenges Excluded Evidence on Dangerousness of Dioxin

In its second issue, the County argues that the trial court erred by excluding

its 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.

32 A. Standard of review

We review a trial court’s exclusion of evidence under the abuse of discretion

standard. Caffe Ribs, Inc. v. State, 487 S.W.3d 137, 142 (Tex. 2016). A trial court

abuses its discretion if the court acts without reference to any guiding rules or

principles, that is, if it acts arbitrarily or unreasonably. Low v. Henry, 221 S.W.3d

609, 614 (Tex. 2007); Cire v. Cummings, 134 S.W.3d 835, 838–39 (Tex. 2004). A

trial court does not abuse its discretion by simply ruling differently than the appellate

court would. E.I. du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549, 558 (Tex.

1995); see Low, 221 S.W.3d at 620.

To obtain reversal of a judgment based on error in the exclusion of evidence,

the appellant must show (1) the trial court did in fact commit an error and (2) the

error probably resulted in an improper judgment. TEX. R. APP. P. 44.1(a); Interstate

Northborough P’ship v. State, 66 S.W.3d 213, 220 (Tex. 2001). This usually requires

a demonstration that the judgment turns on the excluded evidence. Interstate

Northborough, 66 S.W.3d at 220. We will uphold the trial court’s evidentiary ruling

if it is correct under any legal theory. Columbia Med. Ctr. Subsidiary, L.P. v. Meier,

198 S.W.3d 408, 411 (Tex. App.—Dallas 2006, pet. denied).

B. Exclusion of the County’s expert testimony on causation and public health hazard

Before trial, the trial court granted IP’s motions to exclude expert testimony

on two topics: (1) a general causation opinion that dioxin is capable of causing

33 cancer in humans15 and (2) a risk assessment opinion that dioxin at the sludge pits

created serious health risks, largely because of its carcinogenic nature.

IP’s first expert challenge addressed the opinions of James Olson, a

toxicologist. IP objected to his general causation opinion on the grounds of a lack of

a scientifically reliable foundation or methodology and that his “blind” reliance on

the Public Health Assessment document was unreliable. IP also asserted a Rule 403

objection, arguing that the evidence was properly excluded, given the minimal

probative value of the evidence to the liability question compared to the highly

prejudicial effect of “cancer” evidence, particularly given the cumulativeness of

such evidence in light of IP’s stipulation that dioxin is a “dangerous” substance. See

TEX. R. EVID. 403.

In support of its reliability challenge, IP relied primarily on Merrell Dow

Pharmaceuticals, Inc. v. Havner, 953 S.W.2d 706 (Tex. 1997), and its progeny to

argue that Olson’s opinion was inadmissible because he failed to (1) rely on

epidemiological studies that show a doubling of the risk and (2) compare the

exposure level modeled for the sludge-pit site with the exposure levels in

epidemiological studies. It further argued that Olson “made no effort to methodically

15 A general causation opinion is an opinion on “whether a substance is capable of causing a particular injury or condition in the general population.” Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 714 (Tex. 1997).

34 collect and review the primary epidemiological literature.” IP objected to his risk

assessment opinion on the grounds that he was not qualified and did not utilize a

reliable methodology.

The County does not argue that Olson’s opinions are based on

epidemiological studies that satisfy Havner. Instead, it argues that Havner does not

apply to either of Olson’s opinions. We only address Olson’s first opinion—the

causation opinion—because the County did not preserve its arguments on his second

opinion, the risk assessment opinion. IP argued in the trial court that Olson was not

qualified to offer his risk assessment opinion. It cited portions of his deposition in

which he conceded that he has “no regulatory experience,” and it argued that he

lacked credentials as a public health expert. The County does not address these

qualification arguments in its briefing, and therefore has not preserved any error on

the trial court’s exclusion of Olson’s risk assessment opinion. See TEX. R. APP. P.

38.1(i).

We turn, then, to Olson’s excluded general causation opinion—that dioxin is

capable of causing cancer in humans—and the excluded government reports,

including the October 2012 Public Health Assessment produced for the sludge-pit

site by the Agency for Toxic Substances and Disease Registry (“ATSDR”).16

16 The County also points to excluded fishing advisories, but those excluded documents discussed risk assessments, not a causal link between dioxin and cancer. 35 C. Exclusion of general causation opinion and documentary evidence, if error, was harmless

Even assuming the trial court erred by applying Havner in the civil-penalties

context and requiring the County to establish a doubling of the risk, we must

conclude, given our earlier holdings, that such error is harmless. The parties

stipulated that dioxin was a dangerous substance. Given that stipulation, the degree

to which dioxin might be considered dangerous, or even carcinogenic, is not the

material or dispositive issue in this case. The liability question properly submitted

to the jury did not ask it to find from among varying degrees of dangerousness.

Instead, it asked whether IP caused or allowed the disposal of waste containing

dioxin in such a manner so as to cause the discharge of waste containing dioxin. The

jury answered the question “no.”

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. See Interstate Northborough, 66 S.W.3d at

220 (discussing standard of review on evidentiary challenges).

As mentioned above, the County waived its argument regarding excluded risk- assessment evidence; therefore, we do not address the fishing advisories.

36 We overrule issue two.

Charge Error Instructions Given Over Objection

In its third and fourth issues, the County contends that the trial court erred by

including two instructions in the liability questions. The first instruction states that

IP no longer owned the waste. The second is an instruction that the “mere fact” that

IP generated the waste and contracted with a company for its disposal is not, by

itself, sufficient to establish that IP is liable for any discharge.

We review the decision of whether to submit a particular instruction for an

abuse of discretion. Shupe v. Lingafelter, 192 S.W.3d 577, 579 (Tex. 2006); Hamid,

369 S.W.3d at 295. A trial court abuses its discretion if it acts in an arbitrary or

unreasonable manner without reference to any guiding rules or principles. Walker v.

Gutierrez, 111 S.W.3d 56, 62 (Tex. 2003). “The essential inquiry is whether the

instruction or definition aids the jury in answering the questions.” Hamid, 369

S.W.3d at 295. A court has wide latitude to determine the sufficiency of explanatory

instructions and definitions. Plainsman Trading Co. v. Crews, 898 S.W.2d 786, 791

(Tex. 1995).

An instruction is proper if it assists the jury, is supported by the pleadings or

evidence, and accurately states the law. Union Pac. R.R. Co. v. Williams, 85 S.W.3d

162, 166 (Tex. 2002). A jury instruction is improper if it comments on the weight of

37 the evidence or “nudge[s]” or “tilt[s]” the jury. Wal–Mart Stores, Inc. v. Johnson,

106 S.W.3d 718, 724 (Tex. 2003); Hamid, 369 S.W.3d at 295. It can be error to give

a jury instruction even when the instruction is a substantially correct statement of

the law. Liberty Mut. Ins. Co. v. Camacho, 228 S.W.3d 453, 460 (Tex. App.—

Beaumont 2007, pet. denied).

Rule 277 provides as follows:

The court shall not in its charge comment directly on the weight of the evidence or advise the jury of the effect of their answers, but the court’s charge shall not be objectionable on the ground that it incidentally constitutes a comment on the weight of the evidence or advises the jury of the effect of their answers when it is properly a part of an instruction or definition.

TEX. R. CIV. P. 277. An impermissible comment on the weight of the evidence occurs

when, in light of the entire charge, the judge has “assumed the truth of a material

controverted fact or exaggerated, minimized, or [withdrawn] some pertinent

evidence from the jury’s consideration.” Tex. Mut. Ins. Co. v. Boetsch, 307 S.W.3d

874, 879–80 (Tex. App.—Dallas 2010, pet. denied). An instruction is also an

improper comment on the weight of the evidence if it suggests to the jury the trial

judge’s opinion concerning the matter about which the jury is asked. Id. at 880.

B. Ownership instruction was not erroneous

The County stated in its opening statement: “[This case] is not about whether

you own the property. . . . It’s not about whether you only generated the sludge. It is

about whether you caused, suffer, allow, or permit the pollution of the waters of the

38 State of Texas.” Later the County told the jury, “[Y]ou’re going to hear . . . an

interesting discussion between [IP] and MIMC about who owned the sludge,”

explaining that each would disclaim ownership. The County clarified, “Again, we

don’t think the law permits you to escape liability whether you claim you owned it

or didn’t own it. It’s whether you caused, suffered, allowed, or permitted the

pollution of the waters of the State of Texas.” Shortly after that, the County said

again that “the language ‘cause, suffer, allow’ doesn’t require anybody to own the

sludge. They just have to have the power to stop the sludge from getting into the

river.”

At the close of evidence, IP moved for a directed verdict on ownership,

requesting that the trial court determine as a matter of law that it did not own the

waste within the penalty period. During the discussion of the motion, the trial court

observed, “Harris County has always been very definite in the view that legal

ownership of the site . . . is not the key inquiry with regard to . . . these statutes.” The

trial court granted IP a directed verdict that it did not own the waste after the waste

was placed at the site. After the court’s decision to grant IP’s motion for directed

verdict and the charge conference, MIMC, which then faced the prospect that the

39 court or jury might determine that it owned the sludge, announced that it had settled

with the County.17

With MIMC out of the case, the County’s final argument focused on IP’s

failure to do anything to prevent the dioxin discharge.18 The County emphasized that

its case was not simply about a discharge happening, but about IP’s failure to stop

it.19 It focused on the same abandonment and failure-to-maintain theories it first

presented in opening statement.20 The County returned to its failure-to-warn theory,

17 The trial court, by that time, also had stated that it was “leaning” toward holding that MIMC had beneficial ownership or a purchase money resulting trust arising from the purchase of the 20-acre site by its employee Virgil McGinnes. 18 The County made the following assertions in its final argument:  “[IP] did nothing to contain the paper mill sludge laced with dioxin during the penalty period.”  “[IP] did nothing after the [EPA released its] ‘5 Mill Study,’” which analyzed five paper mills, including an IP mill, and found dioxin in the sludge.  “[After] the site was underwater, [IP] did nothing about that sludge to stop it from getting into the river.”  “[After the 1989 survey showed] these pits were inundated and submerged beneath the waters of the San Jacinto River, . . . [IP] did nothing with respect to this site.”  “[IP] did nothing in response to knowing about the pollution problem at the site, [it] did nothing to investigate, nothing to report, and nothing to follow up.” 19 The County argued, “This is a case . . . about a company that did not follow its obligations under the law and, as a result, it should pay a penalty, as required by the law. The law says that, if you cause, suffer, allow pollution of the waters of our state, you should pay a penalty.” 20 The County argued the following:  “[IP] has presented no evidence of anything [it] did to stop this sludge containing dioxin from getting out into the river that runs through the heart of our county.”  “[IP] left the sludge it produced in the waste pits and abandoned it.” 40 arguing that IP knew by the mid-1980s that paper mill sludge contained dioxin and

that dioxin was dangerous.21 It also argued its failure-to-inspect theory, stating that

IP never investigated the condition of the site after it was filled and abandoned.22

 “[T]he 1973 photo show[s] the breach in the berm because there was no maintenance, no action was taken with regard to this site, no concern about what might happen to it.”  “[Pardue] testified that there is no record of any maintenance of the berms from February 15th, 1973 through March 30th, 2008; that the breach in the impoundments from February 15th, 1973 forward caused daily releases.”

But the County’s failure-to-maintain theory was undermined by the testimony of both IP’s expert and its own. The County’s expert, Davis Ford, testified that IP had no legal duty to maintain the site. Zoch, an IP expert, also testified that there was no duty to maintain the site. 21 The County told the jury,  “From 1985 it was known that the paper mill sludge containing dioxin may be hazardous to people or in the environment; and neither Champion nor International Paper warned anyone about the hazardous dioxin in their sludge.”  “[IP] was part of th[e EPA] study [on paper mill sludge] and [IP] knew during that study that its paper mill sludge contained dioxin, which was hazardous— which the EPA had designated as a hazardous substance in 1985.”  “[After] 1973 . . . [IP made] no effort to warn anybody about what happened to the site.”  “[IP] did nothing with respect to warning anybody about dioxin at the site, didn’t so much as put up a sign, didn’t attempt to warn anybody, didn’t take any action with respect to stopping the dioxin at the site. [It] did nothing to warn anybody about dredging at the site. [It] didn’t alert anyone about the existence of this site. [It] washed [its] hands of the sludge that [it] produced from [its] mill and did nothing with respect to warning anybody about dredging, even though [it] knew that it was on the banks of the San Jacinto River.”  IP knew that “its paper mill sludge was laced with dioxin; and it did nothing to go back and figure out, to stop, to warn, to do anything to stop that from happening on a daily basis.” 22 According to the County,  “The evidence is also undisputed that after [the EPA study showed that paper mill sludge had dioxin in it], no one at [IP] went back and looked into what was 41 On appeal, the County contends that the trial court erred when it instructed

the jury that IP did not own the waste as of 1966 because there was “no evidence of

a contractual agreement that ownership would pass from the waste generator to

another entity” and there was at least some evidence that IP continued to own the

waste because IP generated this waste and arranged for its disposal. The County

asserts that IP “does not identify any bill of sale or other agreement transferring the

ownership of its sludge to another entity, and there is no such document in the

record.”

IP does not dispute that it generated the sludge and contracted for its disposal

but contends that ownership transferred as of 1966 as a matter of law because the

disposal agreement between IP and MIMC transferred ownership of the sludge to

MIMC. The disposal agreement between IP and MIMC did not directly state that it

transferred ownership of the sludge to MIMC. But IP argues that “the only

reasonable interpretation of the Disposal Agreement is that [IP] relinquished

ownership of the waste to the waste hauler (MIMC).”

When interpreting a contract, our primary concern is to give effect to the

parties’ intent as objectively manifested by the contract’s words. Frost Nat’l Bank

going on at the site where [it] had transported or had MIMC transport [its] sludge.”  “After [the EPA paper mill study, IP did not] go back to the site underlying this lawsuit and conduct any sort of investigation into what was contained within the parameters of the site.” 42 v. L & F Distribs., Ltd., 165 S.W.3d 310, 311–12 (Tex. 2005). Whether a contract is

ambiguous is a question of law, which we review de novo. Pitts & Collard, L.L.P.

v. Schechter, 369 S.W.3d 301, 313 (Tex. App.—Houston [1st Dist.] 2011, no pet.).

We must enforce an unambiguous contract as written. Tellepsen Builders, L.P. v.

Kendall/Heaton Assocs., Inc., 325 S.W.3d 692, 696 (Tex. App.—Houston [1st Dist.]

2010, pet. denied).

A contract is ambiguous if its meaning is uncertain or reasonably susceptible

to more than one meaning, but it is not ambiguous solely because a disagreement

exists over the contract’s meaning. DeWitt Cty. Elec. Coop., Inc. v. Parks, 1 S.W.3d

96, 100 (Tex. 1999). In determining whether a contract is ambiguous, we must

consider all of its provisions, the context of the agreement, and the circumstances

present when the contract was signed. Eun Bok Lee v. Ho Chang Lee, 411 S.W.3d

95, 104 (Tex. App.—Houston [1st Dist.] 2013, no pet.). If a contract is ambiguous,

we may then consider parol evidence of the parties’ intention. Id.

IP and the County disagree over whether IP transferred ownership or

possession of the sludge to MIMC under the disposal agreement. Texas law

distinguishes between ownership and possession; possession means the temporary

“control of the property” and does not, in itself, indicate ownership or title to the

property. Seigal v. Warrick, 214 S.W.2d 883, 884–85 (Tex. App.—Amarillo 1948,

writ ref’d n.r.e.). An owner has more rights than a “mere” possessor of property; for

43 example, it has the rights to title to the property and to “override or negate” the

possessor’s rights. See id.; In re Garza, 984 S.W.2d 344, 347 (Tex. App.—Amarillo

1998, no writ).

Three provisions of the disposal agreement establish that IP transferred

ownership—and not temporary control or possession—of the sludge to MIMC. First,

the disposal agreement classified the sludge as “waste sludge” and referred to the

sludge as “waste” several times. A person, generally, does not intend to continue to

own “waste” after the waste-hauler has removed it from the generator’s possession;

the waste-generator intends to divest itself permanently of ownership of the waste.

Cf. Ind. Waste Sys. of Ind., Inc. v. Ind. Dep’t of State Revenue, 644 N.E.2d 960, 961

(Ind. T.C. 1994) (trash collector “owns the garbage it removes from its customers”);

Waste Recycling, Inc. v. Se. Ala. Solid Waste Disposal Auth., 814 F. Supp. 1566,

1575 (M.D. Ala. 1993) (describing waste as “something [the generator of the waste]

most heartily do[es] not want”); Masgai v. Pub. Serv. Comm’n of Pa., 188 A. 599,

601 (Pa. Super. Ct. 1936) (“[E]ven though the owner desires to dispose of or destroy

such materials, the right of property continues until disposed of or destroyed.”). By

describing the sludge as “waste,” IP indicated its intent to relinquish ownership of

the sludge.

Second, the contract required that MIMC “procure” the land to deposit the

sludge, “transport” the sludge to that land, and “deposit” the sludge there. These

44 actions indicate that IP intended to permanently transfer ownership of the sludge to

MIMC; a waste-generator does not intend for a waste-hauler to “deposit” the waste

and later return that waste to the waste-generator. Cf. Franklin v. Jackson, 847

S.W.2d 306, 308–09 (Tex. App.—El Paso 1992, writ denied) (ownership does not

pass when contract “expressly or impliedly requires that the property be returned”

to original owner). At the time of its disposal, paper mill sludge deposited in a sludge

pit was understood to quickly solidify, such that heavy equipment would be

necessary to remove it. The contract does not indicate an intention to place or store

the waste in a manner for IP’s later extrication of it from the land.

Third, the contract stated that MIMC was an “independent contractor” that

had “full rights and authority to determine the means and methods of” disposing of

the sludge. This provision indicates that IP intended to rely on MIMC to lawfully

dispose of the sludge, similar to individuals who leave their waste for a trash

collection company and rely on it to lawfully dispose of the waste.

The County asserts that the disposal agreement could not transfer ownership

from IP to MIMC because (1) IP retained control over the waste through its contract

with MIMC and (2) a person cannot abandon toxic waste. We reject both arguments.

The County points to four provisions in the disposal agreement that it contends

show that IP retained control—and, thus, ownership—of the waste: (1) IP was

required to approve the tract of land on which MIMC would dispose the waste;

45 (2) the contract specified that the sludge would be transported by a barge; (3) the

contract required MIMC to comply with all laws, rules, and regulations; and (4) IP

had the right to audit MIMC’s financial records. None of these provisions show that

IP retained control of the waste.

The first contract provision—the provision granting IP the right to approve

the land—does not indicate that IP intended to retain ownership of or control over

the sludge. MIMC determined the land on which to dispose of the waste—not IP.

IP’s veto-power of the land selection did not indicate its desire to control the waste.

Instead it could have reserved that right to protect another of its interests: for

example, IP may have wanted to avoid negative publicity by allowing MIMC to

dispose of the sludge near a residential neighborhood or it may have wanted to

ensure the sludge did not interfere with its operations.

The second contract provision—the requirement that MIMC transport the

sludge “by barge” from IP’s facilities—also does not indicate that IP intended to

retain ownership of the sludge. Again, this provision may have been included to

protect IP by ensuring that its plant’s operations were not disturbed by MIMC’s

method of transporting the waste.

The third contract provision required MIMC to comply with “governmental

laws, rules and regulations,” and “secure and keep in effect all permits and licenses

required in connection with the performance of the work.” But these provisions do

46 not interfere with MIMC’s ability to “determine the means and methods of” lawfully

disposing of the waste or indicate that IP “controlled” the sludge. See Tri-State Grp.,

Inc. v. Ohio Edison Co., 782 N.E.2d 1240, 1246 (Ohio Ct. App. 2002) (holding that

contractual provision requiring waste-disposal company to carry insurance and obey

all laws but otherwise leaving open disposal method did not indicate that waste

generator retained ownership of waste).

The final provision required MIMC to “maintain suitable records of all

charges pertaining to this Agreement and make such records available to [IP] upon

its request.” This provision does not indicate that IP intended to retain control over

the sludge either. The contract only requires MIMC to maintain records of

“charges”—not of MIMC’s disposal activities. Thus, none of the contract provisions

that the County refers to indicate that IP retained ownership or control of the sludge.

Next, we turn to the County’s second ownership argument: that under

Railroad Commission of Texas v. Waste Management of Texas, Inc., a generator of

toxic waste cannot abandon the toxic waste because it has a continuing duty to ensure

that the waste is disposed of in accordance with the relevant environmental laws.

880 S.W.2d 835, 843–44 (Tex. App.—Austin 1994, no writ) (stating that, although

“it seems to us highly unlikely that a generator of asbestos-containing solid waste

could ever ‘abandon’ such waste in the true sense, because a generator has a

continuing duty to see that the waste is disposed of in accordance with the SWDA,”

47 appellate court need not decide that issue). According to the County, because IP

could not abandon toxic waste, the trial court erred by concluding that ownership

transferred as a matter of law in the absence of a contractual transference.

The County’s reliance on the Austin court’s “abandonment” statement, which

is dicta, is misplaced for two reasons. First, even if it is accurate that environmental-

protection laws do not permit an entity to “abandon” toxic waste, the existence of

such laws creating a continuing duty does not turn on the ownership issue and thus

does not resolve the ownership issue when IP and MIMC contracted to dispose of

waste (1) that both agreed at the time was non-toxic (2) in an era that predated the

environmental waste-disposal rules the County cites. In Waste Management, in

contrast, the parties knew the waste contained a toxic substance, asbestos. It is

undisputed that IP did not know that the sludge contained dioxin when the waste was

disposed. Nor was dioxin considered toxic at the time. The contract stipulated that

“[t]he sludge to be removed by Contractor is not considered by the parties to be

inherently harmful or dangerous but it is recognized that any spillage of the sludge

would create an untidy condition and impede the use of the road or ground upon

which such spillage occurred.” Because all parties believed that the sludge was non-

toxic common “waste,” the issue of whether an entity might be prohibited under

current laws from abandoning its waste reveals nothing about the parties’ intentions

as expressed in their contract.

48 Second, and more importantly, as the County acknowledges, the abandonment

analysis becomes relevant only if there is no contract that transferred ownership.23

We already have concluded that ownership was transferred under the terms of the

contract. Thus, the abandonment inquiry is irrelevant.

We conclude that the trial court did not misstate the law in instructing the jury

that IP did not own the sludge.24 In any event, the instruction is harmless given that

the County’s liability theory was that ownership was not required for it to prevail.

The County consistently took the position—both before and after the trial court

formulated its jury instructions—that the law did not require it to prove ownership

of the waste. The court’s instruction does not suggest otherwise; it aided the jury that

heard conflicting evidence on the ownership of the waste. Because ownership is not

23 The County states in its appellate brief the following:

Because there is no contractual agreement transferring the ownership of the sludge from [IP] to another entity, the only way the ownership could be transferred is by operation of law. . . . .

Under Texas law—absent an agreement transferring ownership—the ownership of waste is not transferred unless the waste owner has abandoned the waste. Because there was no agreement transferring ownership of the sludge, International Paper had to conclusively establish that it abandoned the sludge.

(Internal citations and footnotes omitted.) 24 Because we hold that the disposal agreement transferred ownership of the waste to MIMC, we do not address IP’s other ownership arguments. 49 an element for liability and the County made this clear throughout the case, even if

the instructions were error, it would be harmless.

We overrule the County’s third issue on the ownership instruction.

C. Generating-waste instruction was erroneous but harmless

In its fourth issue, the County challenges the trial court’s jury instruction in

the liability questions that “the mere fact that [IP] generated the waste and contracted

with an independent waste disposal company for its disposal is not, by itself,

sufficient to establish that [IP] is liable for any discharge.” We conclude that the

instruction was legally correct, but it was nonetheless error to include it. Such error,

however, was harmless and did not lead to an improper judgment.

Although legally correct, the instruction erroneously commented on the weight of the evidence

An impermissible comment on the weight of the evidence occurs when, in

light of the entire charge, the judge has “assumed the truth of a material controverted

fact or exaggerated, minimized, or [withdrawn] some pertinent evidence from the

jury’s consideration.” Boetsch, 307 S.W.3d at 879–80. An instruction is also an

improper comment on the weight of the evidence if it suggests to the jury the trial

judge’s opinion concerning the matter about which the jury is asked. Id. at 880.

IP argues that generating and contracting for disposal that eventually results

in a discharge is not, in itself, a violation of the SWDA. We agree. The SWDA is

not a strict liability statute in the sense that liability exists simply by proving that a

50 company generates and disposes of waste; it requires a finding tantamount to a

statutorily defined wrong. Under the SWDA, the wrong is causing or allowing the

disposal of waste in a manner that causes a discharge (or nuisance or endangerment).

30 TEX. ADMIN. CODE § 335.4. But the fact that a jury instruction is a correct

statement of the law does not mean it should be included in the court’s charge, nor

does it prevent the instruction from being an improper comment on the weight of the

evidence. See Acord v. Gen. Motors Corp., 669 S.W.2d 111, 116 (Tex. 1984) (in

closely contested case, jury instruction that stated that General Motors was neither

insurer nor guarantor of accident-proof product was impermissible comment on

case); Maddox v. Denka Chem. Corp., 930 S.W.2d 668, 671 (Tex. App.—Houston

[1st Dist.] 1996, no writ) (noting that every correct statement of law does not belong

in jury charge and holding that surplus instruction on duty tended to lead jury to

particular answer and suggested judge’s opinion on issue).

By singling out a particular fact with the expression “mere fact,” the court’s

instruction constituted a comment on the weight of the evidence. See Boetsch, 307

S.W.3d at 879–80 (“An impermissible comment on the weight of the evidence

occurs when, after examining the entire charge, it is determined that the judge . . .

exaggerated, minimized, or withdrew some pertinent evidence from the jury’s

consideration.”). The use of the adjective “mere” in a jury instruction—when the

court told the jury that the “mere fact” of generating and contracting for disposal “by

51 itself” is not sufficient to establish liability—is generally improper because it

highlights the instruction. See Lemos v. Montez, 680 S.W.2d 798, 801 (Tex. 1984)

(reversing based on jury instruction that “mere happening of a collision of motor

vehicles is not evidence of negligence.”); Acord, 669 S.W.2d at 116. We conclude

that the trial court erred in giving the instruction.

Error was harmless

Reversal is required if a jury charge includes an improper comment on the

weight of the evidence and the instruction was calculated to cause and probably did

cause the rendition of an improper judgment. M.N. Dannenbaum, Inc. v.

Brummerhop, 840 S.W.2d 624, 631 (Tex. App.—Houston [14th Dist.] 1992, writ

denied). In making this determination, we must consider the parties’ pleadings, the

trial evidence, and the charge in its entirety. Alleged error is reversible only if, when

viewed in the light of the totality of these circumstances, it amounted to such a denial

of the rights of the complaining party as was reasonably calculated to cause and

probably did cause the rendition of an improper judgment. TEX. R. APP. P.

44.1(a)(1); Island Recreational Dev. Corp. v. Republic of Tex. Sav. Ass’n, 710

S.W.2d 551, 555 (Tex. 1986). The Texas Supreme Court has “recognized the

impossibility of establishing a specific test for determining harmful error, and thus

ha[s] entrusted the matter to the sound discretion of the reviewing court.” Caffe Ribs,

487 S.W.3d at 145.

52 The court’s charge broadly defined the phrase “cause, suffer, allow or permit.”

After first stating that the jury should apply the ordinary meanings to these words,

the charge further explained that IP caused, suffered, allowed, or permitted a

discharge if it “had the power to prevent an event at the time of the event, but failed

to do so.” In other words, the jury was instructed, in effect, that IP was liable for a

discharge by a third person, if it “had the power to prevent an event at the time of

the event, but failed to do so.” With this broad definition, which is not challenged

on appeal, the court’s instruction told the jury that two facts—IP’s production of the

waste and IP’s hiring of MIMC to dispose it—did not, by themselves, establish that

IP caused, suffered, allowed, or permitted the discharge.

The instruction was consistent with the County’s theory of the case and was

what the County told the jury throughout the trial.25 The consistency between the

25 From the beginning of trial, the County readily accepted that something more than generating the waste and contracting for its disposal was required to establish liability. According to the County, IP was liable if it could prove that, in addition to generating the waste and contracting with MIMC to dispose of it in the pits next to the San Jacinto River, IP did any of the following four acts or omissions: (1) abandoning or failing to maintain the site, thereby allowing river water to mingle with the dioxin-containing sludge by 1973 despite the County’s earlier directions that the site was acceptable only if it did not allow waste into the river; (2) failing to take action to notify government authorities of the risks when the river was already beginning to cover the pits in 1973; (3) failing to notify government authorities when it learned in 1985 that dioxin is a hazardous substance; and (4) failing to notify government authorities when it learned in 1987 that papermill sludge contained dioxin or when the pits became more and more inundated with water. All of these theories required more than proof that IP generated and disposed of the waste and that a discharge occurred. Indeed, the date limitation included in the charge—1973 to 2008—informed the jury that liability required acts or 53 court’s instruction and the County’s liability theory is shown in the opening

statement that was given weeks before the trial court gave this instruction. During

its opening, the County repeatedly stated that IP’s liability was not based simply on

generating the sludge and disposing of it in the pits. It stated, “This case is not about

putting the paper mill sludge in the impoundments at the beginning.” It stated, “And,

again, I want to go back to the fact that this case is not about putting it in the site.”

Instead the case was “about [what] happened after and the failure to maintain and

look after the sludge for the next 35 years.” And, “This case is about letting it get

into the water for 35 years of violation.” Again, “This is about 35 years of violations,

not the early period of time.” In other words, the events that created liability were

not the generation and disposal in the 1960s (50 years ago) but acts and omissions

beginning in the 1970s (40 years ago).26 The County made numerous other

statements in the opening, asserting IP’s misconduct between 1973 and 2008.27 The

omissions between those dates, not when the waste was generated and disposed of in the pits in the 1960s. 26 To be precise, because the specified penalty period for SWDA-based liability was from 1975 to 2008, the County was suing for conduct over a 33-year period. 27 According to the County, MIMC and IP “abandoned [the pits] for 40 years” and failed to “warn anyone about the hazardous dioxin in their sludge.” IP “did nothing to stop their sludge laced with dioxin from getting into the river.” It failed to “maintain the [pits] or go back out to the site.” When the site became submerged, no one from MIMC or IP “went out to maintain it, to inspect it, to make sure that the paper mill sludge stayed out of the waters of the San Jacinto River.” “[T]he failure to maintain the levees resulted in a breach in the levees starting in 1973, and that’s how by mid-1989, 14.05 acres of the site of the 20 acres were submerged 54 County’s arguments required it to show something more than (1) a discharge and

(2) the generation and disposal of waste through a contract with MIMC.

Thus, long before the jury instruction, the County framed the issue to the jury

as whether IP had the power to prevent the discharge of dioxin from the pits, with

the County repeatedly explaining that what occurred in the 1960s—which was the

generating of the sludge and contracting for its disposal—was not what it was suing

over; instead, it was suing over what IP failed to do from 1973 to 2008. That was the

“something more” that the County told the jury it was required to prove. That is what

the jury rejected in its verdict. When the trial court gave this instruction, it was error

below the San Jacinto River, and how that contamination from 1973 continued to release daily for the next 35 years.”

Neither MIMC nor IP “told the public or the government that they had intentionally abandoned the pits.” When the EPA determined in the mid-1980s that paper mill sludge contained dioxin, MIMC and IP “didn’t go back at any time and determine what was in the sludge.” IP never went back after this paper mill study to see if the pits contained dioxin or to “do something about it.” For the entire penalty period, the County argued, IP “remained silent as waste ponds containing its dioxin waste were engulfed by the San Jacinto River.” It was silent from the mid-1980s on, when “it had to know that the dioxin was in its sludge” because “the EPA had determined that dioxin was hazardous. . . . For more than 35 years, [IP] caused, suffered, allowed, and permitted its dioxin to release into the San Jacinto River, and the law provides for a fine for every day of that release.”

Finally, the County contended that MIMC and IP ultimately were responsible for the commercial dredging in the early 2000s that the State of Texas permitted and that indisputably contributed to the dioxin discharge because the dredging would not have occurred if they had warned government authorities of the dioxin in the pits that were then covered by the San Jacinto River. No warning was given because neither company “continue[d] to maintain or inspect their sludge pits.” 55 because it highlighted for the jury that the early actions were not enough for liability

without more—but the error was harmless in the context of this record where this

statement had already been made repeatedly by the County.

We overrule the County’s third and fourth issues.

Conclusion

Harvey Brown Justice

Panel consists of Justices Bland, Brown, and Lloyd.