Harris County v. International Paper Company

Opinion

ACCEPTED

01-15-00354-CV

FIRST COURT OF APPEALS

HOUSTON, TEXAS

11/13/2015 11:19:52 AM CHRISTOPHER PRINE

CLERK

No. 01-15-00354-CV

In the First Court of Appeals FILED IN 1st COURT OF APPEALS

Houston, Texas HOUSTON, TEXAS 11/13/2015 11:19:52 AM CHRISTOPHER A. PRINE

Clerk

HARRIS COUNTY, TEXAS

PLAINTIFF/APPELLANT/CROSS-APPELLEE

V.

INTERNATIONAL PAPER CO.

DEFENDANT/APPELLEE/ CROSS-APPELLANT

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

APPELLANT HARRIS COUNTY’S BRIEF AND APPENDIX

Rock W.A. Owens Debra Tsuchiyama Baker Texas Bar No. 15382100 Texas Bar No. 15089600 Vince Ryan Earnest W. Wotring Harris County Attorney Texas Bar No. 22012400 Texas Bar No. 99999939 John Muir Terence L. O’Rourke Texas Bar No. 14630477 Special Asst. Harris County Attorney David George Texas Bar No. 15311000 Texas Bar No. 00793212 OFFICE OF HARRIS COUNTY ATTORNEY BAKER•WOTRING LLP VINCE RYAN 700 JPMorgan Chase Tower 1019 Congress, Room 1547 600 Travis Street Houston, Texas 77002 Houston, Texas 77002 Telephone: (713) 755-5908 Telephone: (713) 980-1700 Fax: (713) 437-4211 Fax: (713) 980-1701 rock.owens@cao.hctx.net dbaker@bakerwotring.com

Counsel for Appellant Harris County, Texas

ORAL ARGUMENT REQUESTED

IDENTITY OF PARTIES AND COUNSEL

Parties Counsel

Plaintiff/Appellant/ Rock W.A. Owens Cross-Appellee Practice Group Manager Harris County, Texas Environment & Infrastructure Group Harris County Attorney’s Office Vince Ryan Harris County Attorney Terence L. O’Rourke Special Asst. Harris County Attorney OFFICE OF HARRIS COUNTY ATTORNEY VINCE RYAN 1019 Congress, Room 1547 Houston, Texas 77002

Debra Tsuchiyama Baker Earnest W. Wotring John Muir David George BAKER•WOTRING LLP 700 JPMorgan Chase Tower 600 Travis Street Houston, Texas 77002

Defendant/Appellee/ Winstol D. Carter, Jr. Cross-Appellant Allyson N. Ho International Paper Co. Craig A. Stanfield MORGAN, LEWIS & BOCKIUS LLP 1000 Louisiana Street, Suite 4000 Houston, Texas 77002

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Necessary and Mary E. Smith Indispensable Party Anthony Benedict The State of Texas, Assistant Attorney General acting by and through OFFICE OF THE ATTORNEY Texas Commission on GENERAL OF TEXAS Environmental Quality ENVIRONMENTAL PROTECTION DIVISION P.O. Box 12548, Capitol Station Austin, Texas 78711

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TABLE OF CONTENTS

Identity of Parties and Counsel .................................................................................... ii Table of Contents .......................................................................................................... iv Index of Authorities ..................................................................................................... vii Record Citation Abbreviations .................................................................................... xii Statement of the Case ................................................................................................ xiii Statement Regarding Oral Argument ....................................................................... xiv Issues Presented ......................................................................................................... xvi Statement of Facts ......................................................................................................... 1 In the 1960s, International Paper dumped its dioxin-contaminated paper-mill sludge into Pits next to the San Jacinto River. .................................. 1 The Pits failed, releasing dioxin into the San Jacinto River. .............................. 5 The EPA designated the Pits as a Superfund site in 2008 because of dioxin contamination from the sludge. .......................................................................... 10 Harris County sued International Paper for civil penalties because the company caused, suffered, allowed, or permitted violations of Texas environmental laws. ............................................................................................ 11 The trial court refused to allow evidence regarding the dangers of dioxin at trial. ................................................................................................................. 13 The trial court refused to submit to the jury questions on whether International Paper caused, suffered, allowed, or permitted a public endangerment or a nuisance. .............................................................................. 21 The trial court instructed the jury that International Paper no longer owned its dioxin-contaminated paper-mill sludge after it was dumped in the Pits. ............................................................................................................ 22 The other defendants settled at the end of the trial before closing arguments. ........................................................................................................... 24 The jury found for International Paper. ............................................................. 25 Standard of Review ...................................................................................................... 26 Summary of Argument ................................................................................................ 28

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Argument ..................................................................................................................... 30 I. The trial court erred when it refused to submit to the jury Harris County’s claims for endangerment of the public health and for nuisance. ...................................................................................................... 31 A. The trial court erred when it refused to submit Harris County’s claim for endangerment of the public health. .................................... 31 B. The trial court erred when it refused to submit Harris County’s claim for nuisance. ............................................................................... 35 1. International Paper’s stipulation is evidence that the dioxin in the Pits created a nuisance. .................................................... 36 2. There is sufficient evidence in the record regarding nuisance in addition to International Paper’s stipulation......................... 36 C. The trial court erred when it excluded evidence on endangerment and nuisance. ....................................................................................... 39 1. The trial court erred when it excluded the government reports on dioxin’s health risks. .................................................. 40 2. The trial court erred in using Havner to determine the admissibility of evidence regarding dioxin’s health risks. ......... 41 3. Harris County provided evidence that International Paper’s dumping of the dioxin-laced sludge in the Pits endangered the public health and created a nuisance. .................................. 46 4. The trial court’s improper exclusion of the evidence regarding the dangers of dioxin was reversible error. ............... 48 D. The endangerment and nuisance issues are not “functionally identical” to the submitted discharge question. ................................. 49 II. The trial court erred in the jury instructions that it gave regarding International Paper causing, suffering, allowing, or permitting a discharge or imminent threat of discharge of waste. ................................. 56 A. The trial court erred when it instructed the jury that International Paper no longer owned the sludge as of 1966.............. 56 1. International Paper did not conclusively establish that the ownership of its sludge passed to MIMC when MIMC took the sludge to the Pits. .................................................................. 58 2. International Paper did not conclusively establish that the sludge became a fixture to the real property after it was dumped in the Pits. ..................................................................... 63 a. The sludge cannot be a fixture because it was not an improvement. ....................................................................... 65

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b. There was no intent to incorporate the sludge into the soil, so it is not a fixture................................................ 67 c. International Paper failed to conclusively establish that removing the sludge would materially damage the Site. ................................................................................ 70 3. The trial court’s erroneous instruction was reversible error because it related to a contested, critical issue. ......................... 71 B. The trial court erred when it instructed the jury that generating waste and contracting for disposal is not sufficient to establish liability. ................................................................................................ 74 Prayer ........................................................................................................................... 74 Certificate of Service.................................................................................................... 76 Certificate of Compliance ............................................................................................ 76 Appendix Verdict (63 CR 35172-35199) ................................................................................ A Final Judgment (64 CR 35217-35222) .................................................................. B Order Denying Harris County’s Motion for New Trial (64 CR 35637-35638) ............................................................................................. C Harris County’s Notice of Appeal (63 CR 35681-35684) ..................................... D Harris County’s Requested Questions and Instructions Regarding Endangerment of the Public Health and Creation of a Nuisance (63 CR 35097-35098) ............................................................................................. E State’s Requested Questions and Instructions Regarding Endangerment of the Public Health and Creation of a Nuisance (63 CR 35127)......................................................................................................... F Harris County’s Requested Questions and Instructions Regarding whether Sludge was a Fixture (63 CR 35113-35116) .......................................... G Stipulation Regarding Dioxin (62 RR 9-11) ......................................................... H

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INDEX OF AUTHORITIES

Cases Avanti Sales Int’l, Inc. v. Pycosa Chem., Inc., No. 01-04-00983-CV, 2005 WL 2670740 (Tex. App.—Houston [1st Dist.] Oct. 20, 2005, no pet.) ........................................................... 50 BIC Pen Corp. v. Carter, 346 S.W.3d 533 (Tex. 2011) .................................................................... 43 Borg-Warner Corp. v. Flores, 232 S.W.3d 765 (Tex. 2007) .................................................................... 43 Bostic v. Georgia-Pac. Corp., 439 S.W.3d 332 (Tex. 2014) .............................................................. 42, 44 Brown & Root, Inc. v. Shelton, No. 12-01-00259-CV, 2003 WL 21771917 (Tex. App.—Tyler July 31, 2003, no pet.) ............................................................................ 65 City of Brownsville v. Alvarado, 897 S.W.2d 750 (Tex. 1995) .............................................................. 27, 48 City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) .................................................................... 59 Columbia Rio Grande Healthcare, LP v. Hawley, 284 S.W.3d 851 (Tex. 2009) .................................................................... 71 Cox v. Rhodes, 233 S.W.2d 924 (Tex. Civ. App.—El Paso 1950, writ ref’d n.r.e.) ....... 68 Dow Chem. Co. v. Abutahoun, 395 S.W.3d 335 (Tex. App.—Dallas 2013, no pet.) ............................... 65 Dubin v. Carrier Corp., 731 S.W.2d 651 (Tex. App.—Houston [1st Dist.] 1987, writ dism’d) ........................................................................................ 65-66 Elbaor v. Smith, 845 S.W.2d 240 Tex. 1992) ................................................... 26, 31, 35, 48

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Gulley v. Davis, 321 S.W.3d 213 (Tex. App.—Houston [1st Dist.] 2010, pet. denied) ........................................................................................ 27, 48 Hamid v. Lexus, 369 S.W.3d 291 (Tex. App.—Houston [1st Dist.] 2011, no pet.) .......... 26 Hansen v. Academy Corp., 961 S.W.2d 329 (Tex. App.—Houston [1st Dist.] 1997, writ denied) .. 34 Hiles v. Arnie & Co., 402 S.W.3d 820 (Tex. App.—Houston [14th Dist.] 2013, pet. denied) .............................................................................................. 34 Houston Bldg Serv., Inc. v. Am. Gen. Fire and Cas. Co., 799 S.W.2d 308 (Tex. App.—Houston [1st Dist.] 1990, writ denied) .. 70 Hyundai Motor Co. v. Rodriguez, 995 S.W.2d 661 (Tex. 1999) .................................................................... 49 In re Dep’t of Family & Protective Servs., 273 S.W.3d 637 (Tex. 2009) .................................................................... 27 In re J.P.B., 180 S.W.3d 570 (Tex. 2005) .................................................................... 27 In re Premcor Ref. Group, Inc., 233 S.W.3d 904 (Tex. App—Beaumont 2007) (orig. proceeding) ...................................................................35-37, 39, 54 Indiana Waste Sys. of Indiana, Inc. v.

Indiana Dept. of State Revenue, 633 N.E.2d 359 (Ind. T.C. 1994) ............................................................ 59 Jamail v. Stoneledge Condominium Owners Ass’n, 970 S.W.2d 673 (Tex. App.—Austin 1998, no pet.) .............35-37, 39, 54 Lee v. Lee, 411 S.W.3d 95 (Tex. App.—Houston [1st Dist.] 2013, no pet.) ............ 63 Melendez v. State, 902 S.W. 2d, 132 (Tex. App.—Houston [1st Dist.] 1995, no writ) ....... 70

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Merck & Co. v. Garza, 347 S.W.3d 256 (Tex. 2011) .................................................................... 43 Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706 (Tex. 1997) .............. v, xiv, xvii, 20-21, 29, 40-45, 47, 74 Meyer Waste Sys., Inc. v. Indiana Dept. of State Revenue, 741 N.E.2d 1 (Ind. T.C. 2000) ................................................................ 59 Moore v. Carey Bros. Oil Co., 269 S.W. 75 (Tex. Comm’n App. 1925) .................................................. 68 Parker v. Employers Mut. Liab. Ins. Co., 440 S.W.2d 43 (Tex. 1969) ...................................................................... 42 R.R. Comm’n of Tex. v. Waste Mgmt. of Tex., 880 S.W.2d 835 (Tex. App.—Austin 1994, no writ) ......................... 59-60 R.R. St. & Co. v. Pilgrim Enter., 166 S.W.3d 232 (Tex. 2005) .................................................................... 45 Reames v. Hawthorne-Seving, Inc., 949 S.W.2d 758 (Tex. App.—Dallas 1997, pet. denied) ................... 65-66 Rosenboom Mach. & Tool, Inc. v. Machala, 995 S.W.2d 817 (Tex. App.—Houston [1st Dist.] 1999, pet. denied) ... 34 Russell v. Am. Real Estate Corp., 89 S.W.3d 204 (Tex. App.—Corpus Christi 2002, no pet.) ................... 60 Sharpe v. Turley, 191 S.W.3d 362 (Tex. App.—Dallas 2006, pet. denied) ................... 59-60 Shupe v. Lingafelter, 192 S.W.3d 577 (Tex. 2006) .................................................................... 26 Sonnier v. Chisholm-Ryder Co., 909 S.W.2d 475 (Tex. 1995) .........................................................65, 67-68 State ex rel. Wear v. Springfield Gas & Elec. Co., 204 S.W. 942 (Mo. 1918) ......................................................................... 38 Texas Gulf Sulphur Co. v. State, 16 S.W.2d 408 (Tex. Civ. App.—Galveston 1929, no writ) .................. 38

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TH Inv., Inc. v. Kirby Inland Marine, LP, 218 S.W.3d 173 (Tex. App.—Houston [14th Dist.] 2007, pet. denied) .............................................................................................. 38 Thota v. Young, 366 S.W.3d 678 (Tex. 2012) .................................................. 27, 58, 71, 73 Trust Co. Bank v. U.S. Gypsum Co., 950 F.2d 1144 (5th Cir. 1992) ................................................................ 65 Union Pac. R.R. Co. v. Williams, 85 S.W.3d 162 (Tex. 2002) ...................................................................... 27 Walker v. Gutierrez, 111 S.W.3d 56 (Tex. 2003) ...................................................................... 27 Westchester Fire Inc. Co. v. Roan, 215 S.W.985 (Tex. Civ. App.—Fort Worth 1919, writ ref’d) ................ 69

Statutes Acts 1961, 57th Leg. 1st C.S., ch. 42, § 9 ................................................. 11 Former TEX. WATER CODE § 7.107 (amended by Acts 2015, 84th Leg., ch. 542, § 1) ................................... 12 TEX. WATER CODE § 7.101 .................................................................... 11, 44 TEX. WATER CODE § 7.102 .................................................................... 11, 44 TEX. WATER CODE § 7.107 .......................................................................... 12 TEX. WATER CODE § 7.351(a) ..................................................................... 11 TEX. WATER CODE § 7.353 .......................................................................... 12 TEX. WATER CODE § 26.121(a) ............................................................. 12, 25

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Rules TEX. R. APP. P. 9.7 ...................................................................................... 74 TEX. R. CIV. P. 278 ................................................................................ 26, 50 TEX. R. EVID. 401 ........................................................................................ 40 TEX. R. EVID. 803(8) ............................................................................. 40, 41

Regulations 30 TEX. ADMIN. CODE § 335.1(140) ............................................................ 32 30 TEX. ADMIN. CODE § 335.1(80) ........................................................ 32, 33 30 TEX. ADMIN. CODE § 335.4 ...................................... 12, 25, 31-32, 35, 52

Other Authorities BLACK’S LAW DICTIONARY 2 (6th ed. 1990) ............................................... 60 RESTATEMENT (SECOND) OF TORTS § 821B(1) ................................. 35-39, 54

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RECORD CITATION ABBREVIATIONS

“RR” refers to the Reporter’s Record.

“CR” refers to the Clerk’s Record.

“SCR” refers to the Supplemental Clerk’s Record. One volume of the Supplemental Clerk’s Record has been filed. The District Clerk did not include certain documents that Harris County requested to be included in the Clerk’s Record. Harris County, therefore, has requested an additional Supplemental Clerk’s Record, but it has not been filed as of the time of the filing of this brief. Harris County will cite to those documents as “2 SCR ___.”

“PX” refers to the Plaintiff’s Exhibits, which are located in volume 82 of the Reporter’s Record.

“DX” refers to the Defendants’ Exhibits, which are located in volumes 83 and 84 of the Reporter’s Record.

“OPX” refers to Harris County’s exhibits for its offer of proof on November 10, 2014, which are located in volume 86 of the Reporter’s Record.

“CX” refers to the exhibits that were admitted for the trial court’s use only, which are located in volume 87 of the Reporter’s Record.

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STATEMENT OF THE CASE

Nature of This is an appeal after a jury trial in an environmental the Case civil-penalty case brought by Harris County.

Trial Court Hon. Caroline E. Baker 295th District Court of Harris County, Texas

Course of Harris County sued International Paper Co. and other Proceedings companies for civil penalties for their decades-long pollution of the San Jacinto River with dioxin.1 The other defendants settled before the case was submitted to the jury.2

Trial Court The trial court refused to submit Harris County’s Disposition requested jury question on whether International Paper caused, suffered, allowed, or permitted a threat to public health or a nuisance, even though it had not granted a directed verdict on the issue.3 The trial court instructed the jury that International Paper ceased to own the waste at issue in the 1960s, even though that was a disputed issue.4 Based on the trial court’s charge, the jury found for International Paper.5 The trial court entered a take-nothing judgment against Harris County based on the jury’s verdict.6 It denied Harris County’s motion for new trial.7

1 1 CR 73. 2 77 RR 7. 3 63 CR 35097-35098 (App. E); 63 CR 35127 (App. F). 4 63 CR 35177, 35183 (App. A). 5 Id. 6 64 CR 35217 (App. B). 7 64 CR 35637 (App. C).

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STATEMENT REGARDING ORAL ARGUMENT

Harris County believes that this case presents the most

significant issues of Texas environmental law within the last twenty-

five years, if not since the Texas Water Code was amended in 1967 to

permit local governments to bring civil-penalty actions.

The case presents an issue of first impression under Texas law on

the appropriate scope of Merrell Dow Pharmaceuticals, Inc. v. Havner 8

applied in this government civil-penalty case: Whether the trial court

must exclude a governmental entity in an environmental civil-penalty

case from introducing any evidence that the defendants endangered

public health and the environment unless the evidence meets Havner’s

doubling-of-the-risk requirement for establishing causation in a toxic-

tort suit. Resolving that issue will include addressing:

● Whether Harris County should have been permitted to introduce evidence that dioxin in the San Jacinto River Waste Pits posed a danger to human health that was less than a doubling of the risk, and

● Whether reports and findings of governmental agencies (including The Texas Department of Health, United States Centers for Disease Control, the International Agency for Research on Cancer, and the United States EPA) are “junk science”

8 Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706 (Tex. 1997).

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because they do not demonstrate a doubling of the risk of cancer or other diseases.

In addition, this case involves unsettled issues regarding the

ownership of contaminated waste. The trial court determined that the

generator of dioxin-laced sludge can transfer ownership of that sludge

to a third-party as a matter of law by having the sludge deposited on

the third-party’s land and walking away. This Court must determine

whether the trial court correctly held that generators of dangerous

waste can absolve themselves of legal responsibility by having the

waste dumped on a third party’s land and wishing it away.

Harris County requests oral argument to present these issues to

this Court and to respond to any questions that this Court might have

about these compelling issues. Given that International Paper has

taken the extraordinary step of filing its own notice of appeal from the

take nothing judgment in its favor, Harris County is confident that both

sides can agree on this point, if perhaps no other.

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ISSUES PRESENTED

1. The trial court erred when it refused to submit Harris County’s issues to the jury on whether International Paper endangered the public health and welfare or caused a nuisance. Harris County’s pleadings contained these causes of action, and the record contained evidence supporting them.

2. The trial court erred when it excluded evidence of the threat that dioxin poses to public health and welfare. The trial court incorrectly excluded this evidence based upon its determination that Havner required it to exclude all evidence that dioxin posed a public-health risk unless the evidence demonstrated a doubling of the risk. This improperly added a causation standard used in toxic-tort cases into this government civil-penalty action.

3. The trial court erred when it determined that International Paper did not own the dioxin-laced sludge dumped in the Pits. Before and during trial, the trial court determined that there was a fact issue on whether International Paper owned the sludge. When it charged the jury, the trial court changed its mind on this issue, and it instructed the jury that International Paper did not own the waste. Because the trial court misinterpreted the law on waste ownership and fixtures, it incorrectly found that International Paper transferred ownership of its sludge by having its sludge dumped on a third party’s land.

4. The trial court erred when it instructed the jury that generating waste and contracting for disposal is not sufficient to establish liability. (Harris County adopts the State’s brief on this issue)

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STATEMENT OF FACTS

This case involves decades-long contamination of the San Jacinto

River in Harris County with dioxin from International Paper’s paper

mill in Pasadena.9

In the 1960s, International Paper dumped its dioxin- contaminated paper-mill sludge into Pits next to the San Jacinto River.

The process that International Paper used to manufacture paper

created waste, which it called “sludge.”10 The process also created a

type of dioxin called 2,3,7,8-tetrachlorodibenzo-p-dioxin—commonly

referred to as 2,3,7,8-TCDD—as a waste byproduct. 11 The dioxin was

part of International Paper’s sludge.12

Dioxins are a broad category of organic chlorinated hydrocarbons,

meaning they are organic compounds containing hydrogen, carbon, and 9 Champion Paper Co. was the entity that created the sludge at its paper mill in Pasadena, Texas, and that contracted to have the sludge dumped in the Pits. DX 1436. In 2000, Champion merged into International Paper, thereby becoming part of International Paper. 65 RR 37, 65. For simplicity, this brief will refer to both Champion Paper and International Paper as International Paper. 10 PX 43 (International Paper referred to its waste byproduct as “sludge.”). 11PX 922; DX 1451 at 1-3. For convenience, this brief will refer to 2,3,7,8-TCDD as “dioxin.” 1270 RR 197-199. Science and industry’s knowledge of dioxin has grown over the years, but by the mid-1980s International Paper knew that its papermaking process created dioxin as a waste byproduct and that the dioxin was in the sludge. 70 RR 197-199; PX 922; DX 1451 at 1-3. The EPA designated dioxin as a hazardous substance in 1985. 70 RR 197.

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chlorine atoms.13 Dioxins are hazardous substances, and even scientists

working with dioxins in the laboratory must use special precautions. 14

Laboratory scientists often use other substances with similar chemical

properties as substitutes for dioxin because of its dangers. 15

The EPA has determined that out of all the types of dioxin,

2,3,7,8-TCDD—the dioxin found in International Paper’s sludge—”is

considered the most toxic of the dioxins.”16 The danger of dioxin is

illustrated by the fact that the maximum contaminant level for dioxin

in drinking water is 30 picograms—30 trillionths of a gram—per liter.17

The process that International Paper used to make paper created

a great deal of waste, including sludge-filled waste water. 18 The

Pasadena mill “used 26 million gallons of water every day.”19 As early

as the mid-1950s, International Paper needed a way to dispose of its

13 63 RR 38. 14 Id. 15 63 RR 40. 16OPX 11 at 6. This statement comes from an EPA report that the trial court excluded from evidence at trial. 74 RR 53-54, 57. 17 40 C.F.R. § 141.61(c)(33); 63 RR 149. 18 63 RR 51-52. 19 63 RR 51.

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sludge.20 In 1965, International Paper decided to dump its sludge in

open pits on the bank of the San Jacinto River in Harris County, Texas

(the “Pits”).21 International Paper chose a location on the west bank of

the San Jacinto River, just north of where Interstate 10 crosses the

River (the “Site”).22

International Paper hired a company called McGinnes Industrial

Maintenance Corp. (“MIMC”) to barge the sludge from its Pasadena

paper mill to the Site, but International Paper—through its contract

with MIMC—retained control over the dumping.23 The contract

specified that the sludge would be dumped at “a tract of land acceptable

to” International Paper.24 The contract specified that the sludge would

20PX 43; see also PX 17 at 2 (by 1966, International Paper created a barge load of sludge per day). 21 PX 17. 22 Id. at 5; 64 RR 188. 23 International Paper initially hired a company called the Ole Peterson Construction Co., Inc. to dump the sludge in the Pits at the Site in April 1965. DX 1436. Ole Peterson soon ran into financial difficulties, and the contract was assigned to MIMC in August 1965. PX 128; 68 RR 13, 43-44. At trial, there was a dispute as to who owned the Site. MIMC contended that it did not actually own the Site, but that the Site was instead owned by its owner Virgil McGinnes. See, e.g., 68 RR 55-61. Harris County provided documents from Virgil McGinnes and his heirs stating that the site was owned by MIMC. CX 4; 57 CR 32303-32312. The trial court ultimately ruled that, as a matter of law, Virgil McGinnes and his heirs owned the Site. 62 CR 34702. 24 DX 1436 at 1.

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be transported by barge.25 The contract required MIMC to have all

necessary permits and licenses and to comply with all laws, rules, and

regulations.26 International Paper required MIMC to perform the work

“in a good and workmanlike manner.”27 International Paper also had

the right to audit MIMC’s records.28 International Paper even withheld

15% of the contract payment to make sure that MIMC paid for all of its

labor, material, and equipment costs.29

International Paper had MIMC pick up the sludge in its barges,

transport the sludge to the Site, and dump the sludge in the Pits. 30

After the sludge—which was mixed with water so that it could be

transported more easily—settled in the Pits, the remaining water from

the sludge/water slurry was barged back to International Paper’s paper

mill.31

25 Id. 26 Id. at 6; 68 RR 18. 27 DX 1436 at 6; 68 RR 18. 28 DX 1436 at 6. 29 Id. at 2. 30 PX 17; 68 RR 41. 31 70 RR 110-111, 119-120; PX 17 at 3.

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Between 1965 and 1966, International Paper dumped between

125,000 and 130,000 cubic yards of sludge in the Pits.32 That is the

equivalent of filling 38 olympic-sized swimming pools with sludge. 33

The only waste dumped at the Site was International Paper’s sludge

from its Pasadena paper mill.34

The Pits failed, releasing dioxin into the San Jacinto River.

The Pits were dug into the soil, with dirt piled up to create walls

known as levees or berms. 35 The Pits were not covered.36 The Pits were

not lined, so there was nothing separating the sludge from the ground. 37

There was conflicting evidence on the properties of the soil underneath

the sludge. Some evidence showed that the soil was made of clay. 38 But

Harris County provided evidence showing that the soil had a low clay

63 RR 48. The dumping took place between September 1965 and May 1966. 68 32

RR 14. 33 63 RR 48. 34 68 RR 14, 51; 70 RR 120. 35 PX 16; PX 17 at 1; 63 RR 46. 36 PX 17; 71 RR 15. 37 71 RR 25-26. 38 PX 30; 70 RR 134.

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content, which meant that the soil did not create an impermeable

barrier.39

At the beginning of the disposal, Harris County officials stressed

that the sludge could not be allowed to enter the San Jacinto River. 40

Harris County’s Pollution Control Director reiterated 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.” 41 He

made clear that protecting the River “would require some careful

handling.”42

The Pits began to fail soon after they were constructed. By the

end of 1965—just months after the dumping began—International

Paper learned that “heavy rains had washed away a portion of the

outside slope so that the top of the levee had been reduced to about one-

half its original width at two points.”43 A 1966 inspection reflected that

the Pits were already showing signs of seepage. 44

39 63 RR 121-122, 127-130, 134. 40 PX 30 41 Id.; 63 RR 78. 42 PX 30. 43 PX 16 at 1. 44 PX 17 at 2.

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Internal MIMC documents show that by mid-1968, the Pits were

“completely filled with waste materials and could no longer serve as a

dump site.”45 MIMC’s board of directors determined that the sludge in

the Pits made the land where the Pits were located “worthless.” 46 In

August 1968, MIMC’s board of directors officially determined that the

Pits would “be abandoned as a dump site” and that the land, which had

cost $50,000 to purchase, was now worth “the nominal sum of $1.” 47

No further maintenance was ever done on the Pits after they were

abandoned in 1968.48

Aerial photos show that there was a breach of the levees in 1973. 49

With that breach, water from the San Jacinto River entered the Pits. 50

That breach was never repaired; instead, it actually grew larger over

45 PX 143 at 4. 46 Id. 47 Id. at 4. 48 63 RR 115, 142; 66 RR 34; 68 RR 49-51, 61. 49 63 RR 109. 50 65 RR 162.

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time.51 Once the Pits were partially covered with water, the dioxin in

the sludge would release into the water daily.52

Surveyor reports show that by July 1, 1989, most of the Pits were

submerged under water.53 Those parts of the Pits remained submerged

through at least March 30, 2008 (the end of the period at issue in this

lawsuit).54 The Site was approximately twenty acres, and only four or

five acres remained above water.55 So approximately 75% of the Site

was submerged under water as of mid-1989, allowing the dioxin in the

sludge to release into the water daily.56 In addition, the area of the San

Jacinto River around the Pits is influenced by the tides, and the action

5165 RR 162 (“[F]rom ‘73 onward all the way into the 2000s, the breach was there and it stayed there and it enlarged through time.”). 5263 RR 116; 66 RR 37. Dioxin is “hydrophobic,” which means it does not readily dissolve in water. 63 RR 146. But it would still partially dissolve in water. 63 RR 146, 155, 157. In addition, the dioxin would become attached to microscopic particles—known as colloids—which would leave the Pits and enter the water. 63 RR 116, 155. So once the Pits were covered with water, the dioxin-contaminated colloids would readily leave the Pits and enter the surrounding water. Id. 53 PX 1005; 63 RR 107-108; 65 RR 163. 5463 RR 107-108. Harris County ended its claim for civil penalties as of March 30, 2008. 1 SCR 67-68. 55 63 RR 109. 56 Id.; 65 RR 164 (“[T]here is no question in my mind that there were releases of dioxin coming out of these—these pits. They’re in direct connection now, inundation from the river on a daily basis, subject to wind, tide, flood, all of that.”).

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of the tides caused more movement of dioxin from at least the time the

Site was submerged in mid-1989.57

Testing of the San Jacinto River showed that “by far and away the

highest” amount of 2,3,7,8-TCDD was near the Pits, with the dioxin

levels lowering the farther one went from the Pits. 58 The Pits,

therefore, were the dioxin “hot spot,” meaning they were the source of

the dioxin.59 As Harris County’s expert hydrologist explained, “you are

getting these very hot samples, much higher concentrations in and

around and close to the pit, and then significantly decreasing as we go

upstream or downstream.” 60 That leads to the conclusion that “dioxin

from inside the impoundments got outside the impoundments.”61

There was evidence that dredging in the area by a third party also

caused damage to the Pits in the 1990s.62 A dredging barge was

conducting sand-mining activities in the area near the Site, and it

57 65 RR 164-166. The trial court ruled that the jury could not “consider whether tidal action had any impact at the site before July 1st of 1989.” 66 RR 20. 58 66 RR 26-28. 59 Id. 60 66 RR 30. 61 66 RR 29-30. 62 70 RR 169-174, 195-196.

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appears that the dredging machine accidentally dug into the Pits. 63

Harris County, however, provided evidence that dredging was not the

sole source of the dioxin in the San Jacinto River.64 And dredging would

not have caused dioxin contamination before the 1990s.65

The EPA designated the Pits as a Superfund site in 2008 because of dioxin contamination from the sludge.

In 2008, the EPA listed the Site as a Superfund site because of the

dioxin contamination.”66 The EPA ordered International Paper and

MIMC to construct a temporary cap over the Site to prevent ongoing

releases of dioxin.67 This lawsuit does not involve claims for violations

that took place after the EPA listed the Site as a Superfund site.68

The EPA is currently considering the appropriate permanent

remedy that will prevent the dioxin from seeping into the San Jacinto

River in the future.69

6370 RR 169-174. It appears that the dredging that cut into the Pits took place around 1996 or 1997. 70 RR 205-206. 64 66 RR 75. 65 70 RR 205-206. 66 62 RR 10-11 (App. H). 67 8 CR 4735. 68 1 SCR 67-68. 69 8 CR 4736.

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Harris County sued International Paper for civil penalties because the company caused, suffered, allowed, or permitted violations of Texas environmental laws.

In December 2011, Harris County sued International Paper,

MIMC, and MIMC’s corporate parents Waste Management, Inc. and

Waste Management of Texas, Inc. for civil penalties based on their

violation of Texas environmental laws.70

The Texas Water Code imposes civil penalties on those who

“cause, suffer, allow, or permit” violations of Texas environmental laws

or Texas Commission on Environmental Quality (“TCEQ”) rules.71 The

civil penalty is between $50 and $25,000 per day per violation, “as the

court or jury considers proper,” and “[e]ach day of a continuing violation

is a separate violation.”72

The Texas Water Code allows local governments to sue for civil

penalties for violations that occur in their jurisdiction. 73 The TCEQ is

“a necessary and indispensable party” to the suits brought by local

70 1 CR 73. 71TEX. WATER CODE § 7.101; TEX. WATER CODE § 7.102. Texas environmental laws have been amended several times over the past decades, but since at least 1961 it has been illegal to cause or allow the discharge of pollution into the waters of the State without a permit. Acts 1961, 57th Leg. 1st C.S., ch. 42, § 9. 72 TEX. WATER CODE § 7.102. 73 TEX. WATER CODE § 7.351(a).

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governments.74 The civil penalties recovered are divided equally

between the local government and the State.75

Harris County sued International Paper for violating the provision

of the Texas Water Code that prohibits discharging industrial waste

into, or adjacent to, the waters in the State without a permit. 76 Harris

County also sued International Paper for violating the provisions of the

Texas Administrative Code that prohibit causing, suffering, allowing, or

permitting the disposal of industrial solid waste in a manner that (1)

causes the discharge, or imminent threat of discharge, of industrial

solid waste into, or adjacent to, the waters in the State without a

permit; (2) endangers the public health and welfare; or (3) causes the

creation or maintenance of a nuisance.77

74 TEX. WATER CODE § 7.353. 75Former TEX. WATER CODE § 7.107 (amended by Acts 2015, 84th Leg., ch. 542, § 1). Texas Water Code § 7.107 was amended in 2015 to limit the local governments’ recovery to half of the first $4.3 million in civil penalties, with any amount above $4.3 million awarded to the State. TEX. WATER CODE § 7.107. This new provision applies only to violations that take place on or after September 1, 2015, so it does not apply to this case. Acts 2015, 84th Leg., ch. 542, § 3. 76 1 SCR 67-69; TEX. WATER CODE § 26.121(a). 77 1 SCR 69-70; 30 TEX. ADMIN. CODE § 335.4.

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The trial court refused to allow evidence regarding the dangers of dioxin at trial.

Because this case was about the effect of dioxin contamination on

the public health and welfare, Harris County attempted to introduce

evidence regarding the dangers of dioxin exposure. 78 The trial court,

however, expressly refused to allow Harris County or the State to

introduce “evidence related to dioxin’s health effects, toxicology, and

dangerousness.”79 The trial court prohibited any statement to the jury

about the risk of harm from dioxin exposure except for the following

stipulation: “[i]n 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.”80

Harris County attempted to introduce Texas Department of

Health Fish and Shellfish Consumption Advisories for the San Jacinto

78 See OPX 3; OPX 7; OPX 15; OPX 18; OPX 19; 74 RR 47-60. 79 62 CR 34775 (“[T]he Court EXCLUDES evidence related to dioxin’s health effects, toxicology, and dangerousness except as set forth in the parties’ stipulation read to the jury at the beginning of trial”) (first emphasis in original; second emphasis added); 62 CR 34777 (same); 62 CR 34793 (same). 80 62 RR 10-11 (App. H); 62 CR 34775; 62 CR 34777; 62 CR 34793.

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River.81 The first advisory, which was issued in 1990, warned of the

dangers of eating catfish and blue crabs because of the dioxin

contamination.82 The second advisory, which was issued in 2001,

warned of the dangers of eating any fish caught from “the San Jacinto

River downstream of the U.S. Highway 90 bridge,” which includes the

area of the Pits.83 The trial court refused to admit the advisories.84

Harris County attempted to introduce a Texas Department of

State Health Services’ Public Health Assessment that specifically

addressed public-health effects from exposure to dioxin at the Site. 85

The Public Health Assessment concluded that prolonged exposure to

contaminated sediments from the Site could increase the risk of

cancer.86 The Public Health Assessment stated that “[d]ioxins have

been detected in sediments at the [Site] at levels that would possibly

cause unacceptably high risks for cancer (greater than one out of 10,000

81 74 RR 57; OPX 15. 82 OPX 15 at 3. 83 Id. at 2. 84 74 RR 57. 85 74 RR 51-52; OPX 7. 86 OPX 7 at 10.

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people exposed).” 87 The Public Health Assessment also concluded that

“[c]onsuming fish or crabs caught near the [Site] for periods of one year

or longer could harm people’s health by increasing possible risks for

cancer.” 88

The Public Health Assessment also addressed the dangers of

dioxin in general. It stated that the International Agency for Research

on Cancer and the World Health Organization have listed 2,3,7,8-

TCDD—the type of dioxin found in International Paper’s sludge—as a

Class 1 carcinogen, which means there is sufficient evidence that it is

carcinogenic to humans.89 The Public Health Assessment also

explained that exposure to dioxin can cause chloracne, which is a skin

rash with acne-like lesions that occur mainly on the face, neck, and

upper body.90 The trial court refused to admit the Public Health

Assessment, or any reference to its existence, or any statement from the

87 Id. 88 Id. at 13-14. 89 Id. at 40. 90 Id. at 38.

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International Agency for Research on Cancer about dioxin being a Class

1 carcinogen.91

Harris County attempted to introduce the EPA’s Decision

Document for the Time Critical Removal Action at the Site. 92 This EPA

report discussed releases from the Site and the public-health hazards

associated with the Site.93 The trial court refused to admit the EPA

report.94

Harris County attempted to introduce the EPA’s Unilateral

Administrative Order that required International Paper and MIMC to

conduct a remedial investigation and feasibility study regarding the

Site.95 The EPA’s order found that “[a] large portion of the ponds [at

the Site] are continually inundated by the San Jacinto River and

contaminated sediment within the source area are in direct contact with

the river water.”96 The EPA’s order also found that “[c]hemical analysis

confirms that dioxin … contaminants are entering the San Jacinto

91 74 RR 51-52, 55. 92 74 RR 49; OPX 3. 93 74 RR 49; OPX 3. 94 74 RR 55. 95 74 RR 53-54; OPX 11. 96 OPX 11 at 5.

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River. Chemical analysis documented the presence of numerous dioxin

congeners in the source sediments.”97 The EPA’s order further found

that “[b]oth human and ecological health is threatened by releases of

hazardous substances from the [Site].”98

The EPA’s order also found that 2,3,7,8-TCDD—the type of dioxin

in International Paper’s sludge—“is considered the most toxic of the

dioxins.”99 The EPA noted that the toxicities of other dioxins “are

usually expressed as a fraction of the toxicity attributed to 2,3,7,8-

TCDD.” 100 The EPA’s order found that the “most common health effect

in people exposed to large amounts of dioxins, in particular 2,3,7,8-

TCDD, is chloracne.”101 The EPA’s order noted that the “World Health

Organization has determined that 2,3,7,8-TCDD is a human

carcinogen.”102 The trial court refused to admit the EPA’s order or the

determination of the World Health Organization.103

97 Id. 98 Id. at 6. 99 Id. 100 Id. 101 Id. 102 Id. at 7. 103 74 RR 55.

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Harris County also attempted to introduce testimony from several

expert witnesses regarding the dangers of the dioxin contained at the

Site, but the trial court excluded their testimony.104 Harris County

designated three experts on dioxin’s dangers: Dr. Arnold Schecter, Dr.

Wayne Snodgrass, and Dr. James Olson.105 Dr. Schecter was a

professor in the Environmental and Occupational Medicine Program at

the University of Texas School of Public Health. 106 He has published

over 100 scientific papers on dioxins in peer-reviewed scientific

journals.107 Dr. Snodgrass, a medical doctor with a PhD in

pharmacology, is a professor in the Department of Pharmacology and

Toxicology at the University of Texas Medical Branch, medical director

of the Texas Poison Control Center—Houston/Galveston, and the past

president of the American Academy of Clinical Toxicology. 108 Dr. Olson

is a distinguished professor in the Department of Pharmacology and

104 62 CR 34775; 62 CR 34777; 62 CR 34793. 105 37 CR 21916. 1062 SCR ___ (Harris County’s Reply to Defendants’ Motion to Exclude Drs. Olson, Schecter, and Snodgrass (“Harris County’s Reply”) at Ex. D) (filed Aug. 20, 2014). 107 Id. 108 2 SCR ___ (Harris County’s Reply at Exs. 271 & F).

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Toxicology at the University of Buffalo School of Medicine. 109 For over

35 years, his research has concentrated on the pharmacokinetics and

toxicology of dioxin and related compounds. 110 He has assisted the EPA

in setting ambient water quality criteria for dioxin, and has written

over 50 peer-reviewed studies on dioxin and related compounds. 111

These witnesses would have provided evidence showing that:

● The International Agency for Research on Cancer—one of the primary scientific bodies for determining which substances cause cancer in humans—has determined that there is sufficient evidence that 2,3,7,8-TCDD can cause cancer in humans.112

● The United States Department of Health and Human Services’ National Toxicology Program has determined that 2,3,7,8-TCDD can cause cancer in humans.113

● The World Health Organization has determined that 2,3,7,8-TCDD can cause cancer in humans. 114

● Studies in humans have reported that low-level exposure to TCDD produces adverse female reproductive effects, changes in immune system

109 2 SCR ___ (Harris County’s Reply at Exs. C & E). 110 Id. 111 Id. 112 Id. 113 2 SCR ___ (Harris County’s Reply at Ex. C). 114 2 SCR ___ (Harris County’s Reply at Ex. D).

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components, developmental dental defects, and diabetes.115

International Paper sought to exclude this testimony regarding

the dangers of dioxin because the experts did not have epidemiological

studies showing a doubling of the risk of specific cancers or other

diseases.116 International Paper argued that the Texas Supreme

Court’s ruling in Merrell Dow Pharmaceuticals, Inc. v. Havner applied

in this government civil-penalty case.117 Havner held that

epidemiological studies showing a doubling of the risk of a disease are

required to show causation in toxic-tort personal-injury cases.118 Over

Harris County’s objections, the trial court granted International Paper’s

motions and excluded the testimony of Dr. Schecter, Dr. Snodgrass, and

Dr. Olson and any other evidence of the harmful effects of dioxin, except

for two sentences contained in the stipulation referenced above. 119

115 2 SCR ___ (Harris County’s Reply at Ex. C). 11623 CR 14409, 14416-14425; 24 CR 15373, 15381-15388; 26 CR 16172, 16183- 16196. 117Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706 (Tex. 1997); 23 CR 14409, 14416-14425; 24 CR 15373, 15381-15388; 26 CR 16172, 16183-16196. 118 Havner, 953 S.W.2d at 714. 11962 CR 34775; 62 CR 34777; 62 CR 34793. At trial, Harris County made an offer of proof regarding the testimony of Dr. Schecter, Dr. Snodgrass, and Dr. Olson. 74 RR 58-60. In its offer, Harris County adopted by reference the affidavits and deposition testimony contained in its response to the motions to exclude those

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So in this case in which Harris County was seeking to establish

that International Paper caused a threat to public health and welfare

and a nuisance, the trial court excluded all evidence regarding dioxin’s

dangers, except for two sentences contained in the stipulation. The trial

court ruled that the findings of the following agencies were junk science

under Havner and not entitled to consideration by a Harris County jury:

The Texas Department of Health, the United States Department of

Health and Human Services’ National Toxicology Program, the

International Agency for Research on Cancer, the World Health

Organization, and the United States EPA.120

The trial court refused to submit to the jury questions on whether International Paper caused, suffered, allowed, or permitted a public endangerment or a nuisance.

Neither International Paper, nor the other defendants, moved for

directed verdict on Harris County’s endangerment-of-public-health or

nuisance claims, and the trial court did not dismiss those claims sua

sponte. But even though Harris County pled those claims, and the

witnesses. 74 RR 59; see 37 CR 21916; 2 SCR ___ (Harris County’s Reply at Exs. 271, 307, & C-F). 120 74 RR 55.

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stipulation and other evidence supported those claims, the trial court

refused to submit them to the jury. 121

At the formal charge conference, Harris County requested that the

trial court submit the endangerment-of-public-health and nuisance

claims to the jury, but the trial court refused those requests. 122 The

record does not contain any explanation.

The trial court instructed the jury that International Paper no longer owned its dioxin-contaminated paper-mill sludge after it was dumped in the Pits.

International Paper claimed that even though it created the

sludge as a byproduct of its papermaking process, it did not own the

sludge when it was dumped in the Pits.123 There was no bill of sale or

other document stating that the ownership of the sludge transferred

from International Paper to another entity. Instead, International

Paper claimed that the ownership of the sludge either (1) passed to

MIMC when MIMC picked the sludge up for disposal, or (2) passed to

121 63 CR 35172- 35199 (App. A). 122 63 CR 35097 (App. E); see also 63 CR 35127 (App. F). 123 34 CR 20513; 56 CR 31747; 57 CR 32187.

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Virgil McGinnes, the owner of the Pits, when the sludge was dumped

there, because it supposedly became a fixture of the real property. 124

International Paper moved for summary judgment on the ground

that it did not own the sludge and, therefore, could not have caused,

suffered, allowed, or permitted the violations of environmental law

related to the sludge. 125 The trial court denied the motion, stating that

there was a fact issue on who owned the sludge.126 Harris County tried

its case to the jury based upon the trial court’s determination that there

was a fact issue on whether International Paper owned the sludge. 127

After denying International Paper’s summary-judgment and

directed-verdict motions, the trial court changed its mind on this issue

at the end of the case and instructed the jury in the charge that “as of

1966, [International Paper] no longer owned the waste.” 128 Harris

County objected to that instruction on the ground that the ownership of

the sludge after disposal was a disputed issue and that International

124 34 CR 20513; 56 CR 31747; 57 CR 32187. 125 34 CR 20513. 126 62 CR 34781; 62 CR 34784; 57 RR 123; 59 RR 8-10. 127See 62 RR 41 (Harris County told the jury during opening statement that International Paper “continued to own the sludge after delivering it to MIMC.”). 128 63 CR 35177, 35183 (App. A).

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Paper had not conclusively established that it ceased to own the

sludge.129 Harris County also requested that the trial court ask the jury

questions regarding whether the sludge had become a fixture. 130 The

trial court overruled Harris County’s objections, refused its requests,

and instructed the jury that International Paper did not own the

sludge.131

The other defendants settled at the end of the trial before closing arguments.

After the conclusion of the evidence—and right before closing

arguments—Defendants Waste Management and MIMC settled with

Harris County.132 Harris County’s claims against the defendants other

than International Paper were severed into a separate cause of action,

leaving International Paper as the only defendant. 133

129 75 RR 12, 21. The formal charge conference was held before MIMC and Waste Management settled with Harris County. 75 RR 1-92. After the settlement, the trial court revised the jury charge to take out questions regarding MIMC and Waste Management. 76 RR 30. That shortened the jury charge from twenty questions to twelve. Id. The parties agreed that there was no need for a new formal charge conference and stipulated that the objections and requests at the formal charge conference would be considered having been made to the new-numbered questions in the revised jury charge. 76 RR 29-33. 130 63 CR 35113-35116 (App. G). 131 75 RR 12, 21; 63 CR 35113-35116 (App. G); 63 CR 35177, 35183 (App. A). 132 74 RR 46; 77 RR 5, 10. 133 77 RR 7; 62 CR 34704.

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The jury found for International Paper.

In the jury charge, the trial court asked the jury two liability

questions.134 In Question One, it asked the jury if International Paper:

[C]aused, suffered, allowed or permitted the discharge of industrial waste containing dioxin into or adjacent to any water in the state at any time from February 15, 1973, until March 30, 2008.135

That question was based on Harris County’s claim that International

Paper violated the Texas Water Code.136 In Question Four, it asked the

jury if International Paper:

[C]aused 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 from December 31, 1975, until March 30, 2008.137

That question was based on Harris County’s claim that International

Paper violated the Texas Administrative Code.138

The jury answered “No” to both questions. 139 The trial court

entered final judgment consistent with the jury’s verdict. 140 The final

134 63 CR 35172-35199 (App. A). 135 63 CR 65177 (App. A). 136 1 SCR 67-69; TEX. WATER CODE § 26.121(a). 137 63 CR 65183 (App. A). 138 1 SCR 69-70; 30 TEX. ADMIN. CODE § 335.4.

26

judgment states that Harris County shall “recover nothing on all claims

against Defendant International Paper Company.” 141 Harris County

filed a motion for new trial, which the trial court denied.142

STANDARD OF REVIEW

The trial court is required “to submit requested questions to the

jury if the pleadings and any evidence support them.”143 The Supreme

Court has emphasized that the trial court has absolutely no discretion

to disobey this requirement.144 The issue of whether the charge

submitted the controlling issues is a question of law, which this Court

reviews de novo.145

This Court reviews the trial court’s submission of a particular

instruction for abuse of discretion.146 An instruction is proper if it

assists the jury, is supported by the pleadings or evidence, and

139 63 CR 65177, 65183 (App. A). 140 Cf. 63 CR 35172-35199 (App. A) with 64 CR 35217-35222 (App. B). 141 64 CR 35220 (App. B). 142 64 CR 65226; 64 CR 35637 (App. C). 143 Elbaor v. Smith, 845 S.W.2d 240, 243 (Tex. 1992); TEX. R. CIV. P. 278. 144Elbaor, 845 S.W.2d at 243 (referring to the requirement as “a substantive, nondiscretionary directive to trial courts”). 145Hamid v. Lexus, 369 S.W.3d 291, 295 (Tex. App.—Houston [1st Dist.] 2011, no pet.). 146 Shupe v. Lingafelter, 192 S.W.3d 577, 579 (Tex. 2006).

27

accurately states the law.147 The Supreme Court has held that “[c]harge

error is generally considered harmful if it relates to a contested, critical

issue.”148

A trial court has “no discretion” in determining what the law is or

in properly applying the law.149 This Court, therefore, reviews legal

issues de novo, and the trial court automatically abused its discretion if

it incorrectly interpreted, or improperly applied, the law. 150 The trial

court also abused its discretion if it acted in an arbitrary or

unreasonable manner without reference to any guiding rules or

principles.151

This Court reviews the trial court’s decision to exclude evidence

for abuse of discretion.152 A trial court’s improper exclusion of evidence

is reversible error if “the judgment turns on the particular evidence

excluded.”153

147 Union Pac. R.R. Co. v. Williams, 85 S.W.3d 162, 166 (Tex. 2002). 148 Thota v. Young, 366 S.W.3d 678, 687 (Tex. 2012). 149 In re Dep’t of Family & Protective Servs., 273 S.W.3d 637, 642 (Tex. 2009). 150 Id. at 642-43. 151 Walker v. Gutierrez, 111 S.W.3d 56, 62 (Tex. 2003). 152 In re J.P.B., 180 S.W.3d 570, 575 (Tex. 2005). 153City of Brownsville v. Alvarado, 897 S.W.2d 750, 754 (Tex. 1995); see also Gulley v. Davis, 321 S.W.3d 213, 217 (Tex. App.—Houston [1st Dist.] 2010, pet. denied).

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SUMMARY OF ARGUMENT

The trial court erred when it refused to submit to the jury Harris

County’s issues on whether International Paper caused, suffered,

allowed, or permitted an endangerment of the public health and welfare

or a nuisance. Harris County pled those claims, so it was entitled to

jury issues on them—and it was reversible error to not submit the

issues—if the claims were supported by some evidence.

There is no dispute that International Paper, through its contract

with MIMC, dumped dioxin-containing sludge in the Pits, and

International Paper stipulated that the EPA has determined that dioxin

is a hazardous substance. This evidence was sufficient to support jury

issues on Harris County’s endangerment-of-public-health and nuisance

claims.

Because the trial court improperly excluded all of Harris County’s

evidence showing the dangers of dioxin, this Court should still reverse

even if it determines that the admitted evidence was insufficient. The

trial court erred in determining that the jury could not be permitted to

consider the findings of the Texas State Department of Health, the

EPA, the World Health Organization, and the International Agency for

29

Research on Cancer, and in excluding testimony from Harris County’s

three experts on dioxin’s health effects. The trial court erred in

determining that juries cannot consider evidence of adverse health

effects unless those health effects double the risk to the public, as

Havner requires for establishing causation in toxic tort cases.

The public-health and nuisance issues are independent of one

another. So if this Court determines that the trial court erred in

refusing to submit the public-endangerment issue, then it should

reverse regardless of its determination of the nuisance issue. And,

similarly, this Court should reverse if it determines that the trial court

erred in refusing to submit the nuisance issue, regardless of its

determination on the public-endangerment issue.

The trial court also erred when it changed its mind and instructed

the jury that, as of 1966, International Paper no longer owned the

sludge that it dumped in the Pits. There is no dispute that it was

International Paper’s sludge—and only International Paper’s sludge—

that was dumped in the Pits. And International Paper did not identify

any document showing that it ever transferred the ownership of its

sludge. International Paper, therefore, had to conclusively establish

30

that the ownership of its sludge passed to another person or entity by

operation of law. International Paper did not meet its burden. Because

the ownership of the sludge was a contested, critical issue, the trial

court’s improper instruction was reversible, harmful error.

Each of these grounds is sufficient—by itself—to reverse the trial

court’s judgment and remand for retrial. On behalf of the people of

Harris County, the County should be permitted to try its entire case to

the jury, not the erroneously abridged version of that case that the trial

court permitted.

ARGUMENT

This Court should reverse the judgment and remand this case for

retrial because the trial court (1) improperly refused to submit to the

jury Harris County’s claims of endangerment of the public health and

welfare and for nuisance, and (2) improperly instructed the jury that

International Paper ceased owning the sludge as of 1966.

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I. The trial court erred when it refused to submit to the jury Harris County’s claims for endangerment of the public health and for nuisance.

Harris County’s pleadings included claims that International

Paper caused, suffered, allowed, or permitted (1) the endangerment of

the public health and welfare,154 and (2) the creation and maintenance

of a nuisance. 155 Harris County provided evidence supporting those

claims and requested jury issues on them. 156 The trial court, therefore,

was required to submit those issues to the jury. 157

The trial court erred when it refused to submit these issues. 158

This Court, therefore, should reverse the judgment and remand for a

retrial that includes the issues of endangerment of the public health

and welfare, as well as nuisance.

A. The trial court erred when it refused to submit Harris County’s claim for endangerment of the public health.

The Texas Administrative Code expressly prohibits causing,

suffering, allowing, or permitting the handling or disposal of industrial

154 1 SCR 69-70; 30 TEX. ADMIN. CODE § 335.4(3). 155 1 SCR 69-70; 30 TEX. ADMIN. CODE § 335.4(2). 156 See §§ I(A)-(B) below; 63 CR 35097-35098 (App. E); 63 CR 35127 (App. F). 157 Elbaor, 845 S.W.2d 243. 158 63 CR 35172-35199 (App. A); 63 CR 35097-35098 (App. E); 63 CR 35127 (App. F).

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solid waste in a manner that causes “the endangerment of the public

health and welfare.” 159 There is no question that International Paper

caused the disposal of industrial solid waste in the Pits.

The Texas Administrative Code defines “industrial solid waste” as

“solid waste resulting from or incidental to any process of industry or

manufacturing.” 160 The Texas Administrative Code states that “solid

waste” includes “discarded material, including solid, liquid, [or]

semisolid … materials resulting from industrial … operations.”161

International Paper admitted that:

● The sludge was waste created as a result of International Paper’s papermaking process;162

● Its sludge was dumped in the Pits; and163

● The only waste ever dumped in the Pits was the sludge from its paper-mill operations.164

159 30 TEX. ADMIN. CODE § 335.4(3). 160 30 TEX. ADMIN. CODE § 335.1(80). 161 30 TEX. ADMIN. CODE § 335.1(140). 16265 RR 36-37; 68 RR 14; see also 63 RR 71 (International Paper’s paper-mill sludge is “industrial waste”). 163 65 RR 36-37; 68 RR 14. 164 68 RR 14; 68 RR 51; 70 RR 120.

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Because the sludge was discarded material that resulted from

International Paper’s industrial process, it is—by definition—industrial

solid waste.165

The operative question, then, is whether there is evidence that the

sludge at the Pits endangered the public health and welfare. This

Court can easily answer that question because International Paper

stipulated at the beginning of trial that it did.166

International Paper admitted that the sludge it dumped in the

Pits contained dioxin.167 International Paper stipulated that “[i]n July

1985, the EPA listed dioxin as a hazardous substance” and determined

that “dioxin may be harmful to the public health or the environment.” 168

The trial court stated that the stipulation was evidence of dioxin’s

“dangerousness.”169

165 30 TEX. ADMIN. CODE § 335.1(80). 166 62 RR 9-11 (App. H). 167 70 RR 178. 16862 RR 10-11 (App. H). The trial court based its decision to exclude extensive evidence on the dangers of dioxin in part on the fact that International Paper and the other defendants had stipulated that the EPA had determined that dioxin was dangerous. 62 CR 34775; 62 CR 34777; 62 CR 34793; 74 RR 58. 16962 CR 34775 (the trial court stated that it was excluding “evidence related to dioxin’s … dangerousness except as set forth in the parties’ stipulation”) (emphasis added); 62 CR 34777 (same); 62 CR 34793 (same).

34

A stipulation “is an agreement, admission, or concession made in a

judicial proceeding by the parties relating to matters incident to the

proceedings.”170 A stipulation “obviates the need for proof on a litigable

issue.”171 This Court has held that a “stipulation constitutes a binding

contract between the parties and the court.”172

International Paper’s stipulation that the EPA designated dioxin

as a “hazardous substance” is some evidence that dioxin is a danger to

public health.173 Harris County, therefore, was entitled to the

submission on this issue, and the trial court erred when it refused to

submit the issue to the jury. The trial court’s refusal to submit an issue

supported by the pleadings and evidence is reversible error, requiring

reversal of the judgment and remand for retrial. 174

170Hansen v. Academy Corp., 961 S.W.2d 329, 335 (Tex. App.—Houston [1st Dist.] 1997, writ denied). 171 Id.

Rosenboom Mach. & Tool, Inc. v. Machala, 995 S.W.2d 817, 820 (Tex. App.— 172

Houston [1st Dist.] 1999, pet. denied). 173 62 RR 10-11 (App. H). 174Hiles v. Arnie & Co., 402 S.W.3d 820, 830 (Tex. App.—Houston [14th Dist.] 2013, pet. denied) (“If there is some evidence to support the submission, the trial court commits reversible error if it fails to submit the instruction.”).

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B. The trial court erred when it refused to submit Harris County’s claim for nuisance.

Equally important as Harris County’s claim that International

Paper endangered public health and welfare, is Harris County’s claim

that International Paper created a nuisance. The Texas Administrative

Code also prohibits causing, suffering, allowing, or permitting the

handling or disposal of industrial solid waste in a way that causes “the

creation and maintenance of a nuisance.” 175 A nuisance is “a condition

that amounts to an unreasonable interference with a right common to

the general public.”176

Harris County pled and introduced evidence that International

Paper violated this provision of the Texas Administrative Code by

creating and maintaining a nuisance, entitling it to a jury issue.177 The

trial court erred when it refused to submit the nuisance issue to the

jury. This Court, therefore, should reverse the judgment on this basis

and remand for retrial.

175 30 TEX. ADMIN. CODE § 335.4(2). 176In re Premcor Ref. Group, Inc., 233 S.W.3d 904, 907 (Tex. App—Beaumont 2007) (orig. proceeding); Jamail v. Stoneledge Condominium Owners Ass’n, 970 S.W.2d 673, 676 (Tex. App.—Austin 1998, no pet.); RESTATEMENT (SECOND) OF TORTS § 821B(1). 177 1 SCR 69-70; see §§ I(B)(1)-(2) below; Elbaor, 845 S.W.2d at 243.

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1. International Paper’s stipulation is evidence that the dioxin in the Pits created a nuisance.

International Paper’s stipulation that dioxin is a hazardous

substance is also sufficient evidence that it created a nuisance. With

that stipulation, International Paper agreed that the sludge that it

dumped in the Pits contains a “hazardous substance” that is “harmful to

the public health or the environment.” 178

The contamination with a hazardous substance creates “a

condition that amounts to an unreasonable interference with a right

common to the general public,” which is the definition of a nuisance. 179

Dumping sludge that contains dioxin, a hazardous substance, into pits

that slide beneath the surface of the San Jacinto River is the creation of

a nuisance. The trial court, therefore, erred when it refused to submit

the nuisance issue to the jury.

2. There is sufficient evidence in the record regarding nuisance in addition to International Paper’s stipulation.

Even if this Court were to hold that the stipulation was not

sufficient evidence, there is additional evidence that International

178 62 RR 10-11 (App. H). 179In re Premcor Ref., 233 S.W.3d at 907; Jamail, 970 S.W.2d at 676; RESTATEMENT (SECOND) OF TORTS § 821B(1).

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Paper created a nuisance. The trial court, therefore, erred when it

refused to submit the nuisance issue to the jury.

There has been extensive dredging of the San Jacinto River in the

area of the Site, including dredging for sand-mining purposes. 180 The

fact that the Pits—which International Paper admits are contaminated

with its dioxin—are now under the San Jacinto River greatly limits the

ability of the public to dredge in that area of the River.181 International

Paper itself contends that dredging near the Site accidentally cut into

the Pits, releasing dioxin into the River.182 The dioxin contamination

caused the Army Corps of Engineers to suspend dredging operations

near the Site.183 The dioxin in the sludge that International Paper

dumped in the Pits, therefore, has curtailed the ability to dredge and

mine sand in the area. That alone is evidence that International Paper

created a nuisance. 184

180 70 RR 175-176. 181 PX 1005; 70 RR 178; 71 RR 26. 182 70 RR 173, 177-178; 71 RR 27-28. 183 70 RR 73, 177-178. 184In re Premcor Ref., 233 S.W.3d at 907; Jamail, 970 S.W.2d at 676; RESTATEMENT (SECOND) OF TORTS § 821B(1).

38

It has long been held that pollution interfering with fishing is a

nuisance.185 Harris County provided evidence that people fished at the

Site.186 The contamination of the Site with dioxin, which the EPA has

found to be a hazardous substance, interferes with the public’s ability to

fish at the Site.187 That alone created a nuisance.

Because most of the Site has been inundated by the San Jacinto

River since mid-1989, those portions of the Site are now part of the San

Jacinto River, which means that the riverbed of the San Jacinto River is

now contaminated with dioxin.188 Because portions of the Pits are now

part of the San Jacinto River’s riverbed, the ownership of those portions

of the Pits passed from private hands to the public. 189 The public’s

ability to make use of that portion of the riverbed has been extremely

185RESTATEMENT (SECOND) OF TORTS § 821B(1) cmt. g; Texas Gulf Sulphur Co. v. State, 16 S.W.2d 408, 410-11 (Tex. Civ. App.—Galveston 1929, no writ); State ex rel. Wear v. Springfield Gas & Elec. Co., 204 S.W. 942, 945-46 (Mo. 1918). 186 64 RR 189-194. 187 62 RR 10-11 (App. H). 188 PX 1005; 63 RR 107-108; 65 RR 163.

TH Inv., Inc. v. Kirby Inland Marine, LP, 218 S.W.3d 173, 182-84 (Tex. App.— 189

Houston [14th Dist.] 2007, pet. denied).

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curtailed because of the dioxin contamination.190 That alone is evidence

that International Paper created a nuisance. 191

Because Harris County provided evidence that International

Paper caused, suffered, allowed, or permitted the creation or

maintenance of a nuisance, the trial court erred when it refused to

submit the nuisance issue to the jury.

C. The trial court erred when it excluded evidence on endangerment and nuisance.

International Paper may argue that the stipulation and other

evidence were insufficient to support a jury submission on

endangerment of the public health and welfare or nuisance. While

Harris County disagrees with that argument as explained above, this

Court should order a retrial even if it were to determine that the

evidence on these issues was insufficient.

A court cannot improperly exclude evidence on an issue and then

penalize a party for failing to provide evidence on that issue. This

Court, therefore, should grant a retrial based on the trial court’s

190 62 RR 10-11 (App. H). 191In re Premcor Ref., 233 S.W.3d at 907; Jamail, 970 S.W.2d at 676; RESTATEMENT (SECOND) OF TORTS § 821B(1).

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improper exclusion of the evidence regarding dioxin’s dangers to public

health and of nuisance.

1. The trial court erred when it excluded the government reports on dioxin’s health risks.

Much of the excluded evidence came from reports prepared by the

United States and Texas governments regarding the Site.192 Under

Texas Rule of Evidence 803(8), government reports setting out “factual

findings from a legally authorized investigation” are admissible unless

“the source of information or other circumstances indicate a lack of

trustworthiness.” 193 Pursuant to Rule 803(8), these government reports

were admissible regardless whether Havner applies in government

civil-penalty cases because they are not expert testimony. 194

International Paper did not establish that the EPA and Texas

State Department of State Health Services reports were not

trustworthy. And these government reports were relevant because they

related directly to the issue of dioxin’s dangerousness.195 The trial

court, therefore, erred when it excluded the evidence from the

192 OPX 3; OPX 7; OPX 11; 74 RR 47-58. 193 TEX. R. EVID. 803(8). 194 Havner, 953 S.W.2d at 713-14. 195 TEX. R. EVID. 401.

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government reports because they were admissible under Texas Rule of

Evidence 803(8) as government reports setting out “factual findings”

from “legally authorized investigation[s].” 196

2. The trial court erred in using Havner to determine the admissibility of evidence regarding dioxin’s health risks.

Harris County attempted to introduce evidence from its experts

Dr. Schecter, Dr. Snodgrass, and Dr. Olson to show the dangers of

dioxin.197 International Paper objected that the evidence of dioxin’s

dangers was not admissible under the Texas Supreme Court’s ruling in

Merrell Dow Pharmaceuticals, Inc. v. Havner because the studies did

not show a doubling of the risk of cancers and other conditions. 198 The

trial court excluded the evidence of dioxin’s dangers based on

International Paper’s objection.199

The trial court erred in excluding the evidence of dioxin’s dangers

because Havner does not limit the admissibility of evidence regarding

the general dangerousness of a substance in an environmental civil-

196 TEX. R. EVID. 803(8). 197 See OPX 3; OPX 7; OPX 15; OPX 18; OPX 19; 74 RR 47-60. 198Havner, 953 S.W.2d 706; 23 CR 14409, 14416-14425; 24 CR 15373, 15381-15388; 26 CR 16172, 16183-16196. 199 62 CR 34775; 62 CR 34777; 62 CR 34793.

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penalty case brought by the government. Instead, Havner’s doubling-of-

the-risk requirement applies in toxic-tort cases where a plaintiff is

seeking to hold a defendant liable for causing a specific injury to the

plaintiff. Harris County did not attempt to link dioxin to any specific

person’s injury in an attempt to recover damages for that injury, so

Havner does not apply.

In a tort case, the question is whether the defendant’s conduct

caused the plaintiff’s injury.200 The plaintiff cannot prevail unless he

can show that it is more likely than not that the defendant’s conduct

caused his injury.201 In Havner, the Supreme Court addressed how this

well-recognized more-likely-than-not rule plays out in the toxic-tort

context.202 The Supreme Court held that a plaintiff could not show that

it was more likely than not that the defendant’s product caused his

injury unless the scientific studies showed that exposure to the

defendant’s product more than doubled the risk of the injury. 203

200 Bostic v. Georgia-Pac. Corp., 439 S.W.3d 332, 342-43 (Tex. 2014). 201 Id.; Parker v. Employers Mut. Liab. Ins. Co., 440 S.W.2d 43, 47 (Tex. 1969). 202Havner, 953 S.W.2d at 714 (noting that the case was addressing “proof of causation in a toxic tort case”) (emphasis added). 203 Id. at 714-20.

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The Supreme Court has repeatedly held that Havner applies in

toxic-tort cases. 204 But there are no cases that have held that Havner

applies when the government is seeking to impose civil penalties for

violating environmental laws. And there are certainly no cases holding

that Havner applies when the government is seeking to impose civil

penalties for endangering the public health or creating a nuisance.

The fact that Havner‘s doubling-of-the-risk requirement does not

apply is apparent from the Supreme Court’s explanation of its holding.

In explaining the importance of the doubling-of-the-risk requirement in

Havner, the Supreme Court said:

Assume that a condition naturally occurs in six out of 1,000 people even when they are not exposed to a certain drug. If studies of people who did take the drug show that nine out of 1,000 contracted the disease, it is still more likely than not that causes other than the drug were responsible for any given occurrence of the disease since it occurs in six out of 1,000 individuals anyway. Six of the nine incidences would be statistically attributable to causes other than the drug, and therefore, it is not more probable that the drug

204See, e.g., Borg-Warner Corp. v. Flores, 232 S.W.3d 765, 772 (Tex. 2007); BIC Pen Corp. v. Carter, 346 S.W.3d 533, 545 (Tex. 2011) (holding that Havner applies in toxic-tort cases and refusing to apply Havner to manufacturing-defect productliability cases). The Supreme Court has also applied Havner in pharmaceutical cases when the issue is whether epidemiological evidence shows that the defendant’s drug caused the plaintiff’s injury, which is in many ways similar to the inquiry in toxic-tort cases. See Merck & Co. v. Garza, 347 S.W.3d 256, 265-66 (Tex. 2011).

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caused any one incidence of disease. This would only amount to evidence that the drug could have caused the disease. However, if more than twelve out of 1,000 who take the drug contract the disease, then it may be statistically more likely than not that a given individual’s disease was caused by the drug. 205

The doubling-of-the-risk requirement, therefore, is based on the need in

toxic-tort cases to show that it is more likely than not that the

defendant’s product caused the specific plaintiff’s particular injury.

By contrast, in an environmental civil-penalty case brought by the

government, the question of whether the defendant’s waste caused a

particular person to contract a particular disease is not an issue.

Instead, the question is whether the defendant violated Texas

environmental laws by endangering the public health and creating a

nuisance and, if so, the amount of civil penalties that should be

assessed.206 Instead of attempting to recover damages based on

injuries to a specific plaintiff, in a civil-penalty case the government is

seeking to deter dangerous conduct.

In addition, the Supreme Court has held that Texas

environmental laws should be interpreted “liberally to give effect to

205 Havner, 953 S.W.2d at 717; see also Bostic, 439 S.W.3d at 349. 206 TEX. WATER CODE § 7.101; TEX. WATER CODE § 7.102.

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[their] remedial purpose[s].”207 Applying Havner‘s doubling-of-the-risk

requirement in environmental civil-penalty cases brought by the

government is contrary to the Supreme Court’s command, as well as the

statutory and regulatory language upon which Harris County litigated

its case.

This Court, therefore, should make clear that Havner‘s doubling-

of-the-risk requirement does not apply when the government is seeking

to show the dangers of pollution in environmental civil-penalty cases.

This Court should use this case to make clear to trial courts that while

Havner is extremely important when determining causation in toxic-

tort cases, it does not apply to environmental civil-penalty cases

brought by the government.

207 R.R. St. & Co. v. Pilgrim Enter., 166 S.W.3d 232, 238 (Tex. 2005).

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3. Harris County provided evidence that International Paper’s dumping of the dioxin-laced sludge in the Pits endangered the public health and created a nuisance.

The trial court erroneously excluded Harris County’s offered

testimony and documentary evidence showing the dangers of dioxin. 208

This evidence includes:

● The International Agency for Research on Cancer—one of the primary scientific bodies for determining which substances cause cancer in humans—has determined that there is sufficient evidence that 2,3,7,8-TCDD can cause cancer in humans.209

● The United States Department of Health and Human Services’ National Toxicology Program has determined that 2,3,7,8-TCDD can cause cancer in humans.210

● The World Health Organization has determined that 2,3,7,8-TCDD can cause cancer in humans. 211

● Texas Department of State Health Services issued a Public Health Assessment that specifically addressed the Site.212 The Public Health Assessment concluded that prolonged exposure to

74 RR 51-60; 62 CR 34775; 62 CR 34777; 62 CR 34793; OPX 3; OPX 7; OPX 11; 208

OPX 15; see pp. 13-20 above. 209 2 SCR ___ (Harris County’s Reply at Ex. C); OPX 7 at 40. 210 2 SCR ___ (Harris County’s Reply at Ex. C). 211 2 SCR ___ (Harris County’s Reply at Ex. D). 212 OPX 7 at 10.

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contaminated sediments from the Site could increase the risk of cancer.213 The Public Health Assessment stated that “[d]ioxins have been detected in sediments at the [Site] at levels that would possibly cause unacceptably high risks for cancer (greater than one out of 10,000 people exposed).”214

● The EPA found that “[b]oth human and ecological health is threatened by releases of hazardous substances from the [Site].” 215

● The Texas Department of Health issued Fish and Shellfish Consumption Advisories for the San Jacinto River.216 The first advisory, which was issued in 1990, warned of the dangers of eating catfish and blue crabs because of the dioxin contamination.217 The second advisory, which was issued in 2001, warned of the dangers of eating any fish caught from “the San Jacinto River downstream of the U.S. Highway 90 bridge,” which includes the area of the Pits.218

The trial court erred when it excluded the evidence based on

Havner‘s doubling-of-the-risk requirement because that requirement

does not apply in this government civil-penalty case.219

213 Id. 214 Id. 215 OPX 11 at 6. 216 74 RR 57; OPX 15. 217 OPX 15 at 3. 218 Id. at 2. 219 See § I(C)(2) above.

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4. The trial court’s improper exclusion of the evidence regarding the dangers of dioxin was reversible error.

A trial court’s rulings on the admissibility of evidence ordinarily

do not rise to the level of reversible error. But the Supreme Court has

made clear that a trial court’s improper exclusion of evidence is

reversible error if “the judgment turns on the particular evidence

excluded.”220 That is the situation here.

Harris County was entitled to the submission to the jury of the

issues on endangerment of public health and nuisance if there was

evidence supporting those claims.221 If this evidence had been

admitted, then there would clearly be evidence that the sludge

endangered the public and created a nuisance.222 So if this Court

determines that the evidence introduced—including the stipulation—

was insufficient to support submissions on those issues, then “the

judgment turns” on the exclusion of the evidence regarding dioxin’s

dangers.223

Alvarado, 897 S.W.2d at 754; see also Gulley v. Davis, 321 S.W.3d 213, 217 (Tex. 220

App.—Houston [1st Dist.] 2010, pet. denied). 221 Elbaor, 845 S.W.2d at 243. 222 See § I(C)(3) above. 223If this Court determines that the evidence was sufficient to support the submission of those issues, then it will reverse on that basis and will not need to

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Therefore, the trial court’s erroneous exclusion of the evidence

regarding dioxin’s dangers was reversible error.

D. The endangerment and nuisance issues are not “functionally identical” to the submitted discharge question.

International Paper has argued that the trial court did not have

to submit the public-endangerment and nuisance issues because those

issues allegedly involved the same factual determination as the issues

that the trial court did submit.224 International Paper is wrong. Harris

County’s requested issues on public endangerment and nuisance were

different than the issues that the trial court submitted, so the trial

court erred when it refused to submit Harris County’s requested public-

endangerment and nuisance issues.

A trial court does not have to submit an issue when the requested

issue is “functionally identical” to a submitted issue. 225 Texas Rule of

Civil Procedure 278 describes the exception as not requiring “other and

reach the issue of whether the trial court’s exclusion of the evidence was reversible error. Even though this Court will not need to address whether the exclusion was reversible error in that circumstance, it should still address the trial court’s exclusion of that evidence because the evidence’s admissibility will be a major issue on retrial and may affect not just the liability determinations, but also the amount of penalties. 224 64 CR 35614-35617. 225 Hyundai Motor Co. v. Rodriguez, 995 S.W.2d 661, 665-66 (Tex. 1999).

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various phases or different shades of the same question.” 226 This Court

has interpreted Rule 278’s exception as not requiring “additional issues

or instructions that are mere shades or variations of the issues already

submitted.”227

Rule 278’s exception does not apply here because Harris County’s

requested issue on public endangerment was not functionally identical

to issues that were submitted in the charge.

The jury was asked in Question One if International Paper:

[C]aused, suffered, allowed or permitted the discharge of industrial waste containing dioxin into or adjacent to any water in the state at any time from February 15, 1973, until March 30, 2008.228

The jury was asked in Question Four if International Paper:

[C]aused, suffered, allowed, or permitted the handling or disposal of industrial solid waste containing dioxin in such a manner 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 at any time from December 31, 1975, until March 30, 2008?229

226 TEX. R. CIV. P. 278. 227Avanti Sales Int’l, Inc. v. Pycosa Chem., Inc., No. 01-04-00983-CV, 2005 WL 2670740, at *3 (Tex. App.—Houston [1st Dist.] Oct. 20, 2005, no pet.). 228 63 CR 65177 (App. A) (emphasis added). 229 63 CR 35183 (App. A) (emphasis added).

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Harris County requested that the jury also be asked if International

Paper:

[C]aused, suffered, allowed, or permitted the handling or disposal of Industrial Solid Waste in such a manner so as to cause … [t]he creation and maintenance of a nuisance, or … [t]he endangerment of the public health and welfare at any time from December 31, 1975, until March 30, 2008? 230

The following table shows the differences between the liability

questions that the trial court submitted and the requested issues on

endangerment and nuisance that the trial court refused:

Submitted Question Requested Issue Endangerment

Sub-Issue #1 #4 of Public Nuisance Health

Must sludge be No—sludge need not be

dangerous or a Dangerous Nuisance dangerous or a nuisance

nuisance? Is discharge, or Discharge or No discharge or imminent threat Discharge imminent imminent threat of of discharge, threat discharge required required?

This shows that the requested endangerment and nuisance issues are

not functionally equivalent to the issues the jury answered.

Under the Texas Administrative Code, these issues are separate

and distinct violations. The Texas Administrative Code prohibits

230 63 CR 35097 (App. E) (emphasis added).

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causing, suffering, allowing, or permitting the handling or disposal of

industrial solid waste in such a manner so as to cause:

● The discharge or imminent threat of discharge of industrial solid waste into or adjacent to the waters in the state without a permit;

● The creation and maintenance of a nuisance; or

● The endangerment of the public health and welfare.231

Therefore, under TCEQ rules the discharge of industrial solid waste

without a permit is separate from disposing of industrial solid waste in

a manner that endangers the public health and welfare or creates a

nuisance.

In submitted Questions One and Four, the issues were whether

the sludge left the Pits and entered the San Jacinto River, or whether

there was an imminent threat that would happen.232 The focus was on

the movement of the sludge—the “discharge”—into the River. There

was no requirement that the sludge had to be dangerous. It only had to

move, or be in danger of moving, into or adjacent to the River.

The endangerment-of-public-health issue that the trial court

refused to submit to the jury focused on the danger posed by the 231 30 TEX. ADMIN. CODE § 335.4. 232 63 CR 35177, 35183 (App. A); 30 TEX. ADMIN. CODE § 335.4(1).

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sludge—not whether it was moving into the River. 233 The jury had to

consider whether International Paper’s disposal of the sludge

endangered the public health, which could be met regardless whether

the sludge was ever discharged into, or near, the River or if it stayed in

the Pits where it was dumped.234 The jury could have found

International Paper liable under the requested issue if the sludge as

dumped was dangerous, even if the jury did not find that the sludge

moved, or was in danger of moving, into the water.

For example, Harris County provided evidence that there is a

danger that hurricanes and floods could dislodge the sludge from the

Pits and cause it to enter the River, thus endangering the public

health.235 The submitted Question Four asked whether International

Paper’s disposal had caused an actual discharge or the “imminent

threat of discharge.”236 The jury could have believed Harris County’s

evidence that hurricanes and floods could move the sludge into the

River, but because hurricanes and floods are not common occurrences, it 233 63 CR 35097 (App. E). 234 Id. 235 66 RR 32-33.

63 CR 35183 (App. A). Submitted Question One required a discharge, so an 236

imminent threat of discharge would not result in liability under Question One. 63 CR 35177 (App. A).

54

could have found that the threat was not “imminent,” thereby resulting

in a “No” answer to submitted Question Four. 237 The requested public-

endangerment issue does not require that the danger be imminent, so a

real—but not imminent—threat like a hurricane or flood would result

in a “Yes” answer to the requested issue, but a “No” answer to the

submitted questions.

A nuisance is “a condition that amounts to an unreasonable

interference with a right common to the general public.” 238 The

nuisance issue could be met by, for example, the fact that the dioxin

contamination of the Pits curtails the ability to mine sand from the

riverbed in the area around the Site.239 The evidence is undisputed that

the Pits are contaminated with dioxin from International Paper’s

sludge.240 The evidence is also undisputed that portions of the dioxin-

contaminated Pits are now under the San Jacinto River. 241 And

International Paper’s own witnesses testified that dredging will release

237 66 RR 32-33. 238In re Premcor Ref., 233 S.W.3d at 907; Jamail, 970 S.W.2d at 676; RESTATEMENT (SECOND) OF TORTS § 821B(1). 239 70 RR 73, 175-176. 240 68 RR 14; 70 RR 178; 71 RR 26. 241 PX 1005; 63 RR 107-108; 65 RR 163.

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the dioxin into the River and that the dioxin contamination caused the

cancellation of dredging permits.242 The jury, therefore, could have

found that International Paper created a nuisance even if the jury did

not find that the sludge had moved, or was in danger or moving, into

the water as it sits.

The jury, therefore, could have found that International Paper’s

disposal of the sludge in the Pits endangered the public health or

created a nuisance even though it found that International Paper’s

disposal of the sludge did not cause the discharge, or imminent threat of

discharge, of the sludge into or adjacent to the water. That means

Harris County’s requested issues on public endangerment and nuisance

were not the “functional equivalent” of the submitted issues. So the

exception does not apply, which means that the refusal to submit the

requested issues was harmful error.

242 70 RR 173, 177-178.

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II. The trial court erred in the jury instructions that it gave regarding International Paper causing, suffering, allowing, or permitting a discharge or imminent threat of discharge of waste.

The trial court did not err just by refusing to submit the public-

endangerment and nuisance issues. The trial court also erred in the

instructions that it gave. Specifically, the trial court erred when it

instructed the jury that International Paper no longer owned the sludge

as of 1966.243 This instruction was harmful error, so this Court should

reverse the judgment and remand for retrial.

A. The trial court erred when it instructed the jury that International Paper no longer owned the sludge as of 1966.

International Paper does not dispute that it owned the sludge that

was generated at its paper mill.244 And International Paper does not

dispute that it arranged for the sludge that it generated at its paper

mill to be dumped in the Pits at the Site.245 International Paper does

not even dispute that the only waste ever dumped in the Pits was the

sludge from its paper mill.246

243 63 CR 35177 (App. A); 63 CR 35183 (App. A). 244 65 RR 34-37; 68 RR 14. 245 65 RR 34-37; 68 RR 14. 246 68 RR 14, 51; 68 RR 51; 70 RR 120.

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Instead, International Paper claims that the title to its sludge

transferred from International Paper to some other entity, so it no

longer owned the sludge that was dumped at the Site. 247

International Paper 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.248 Because there is no

contractual agreement transferring the ownership of the sludge from

International Paper to another entity, the only way the ownership could

be transferred is by operation of law.

International Paper claims that the ownership transferred by

operation of law in two separate ways:

● First, International Paper claims that, under the law regarding the disposal of garbage, ownership of the sludge passed to MIMC when MIMC picked it up for disposal at the Pits. MIMC did not agree with International Paper on this issue.249

● Second, International Paper claims that the sludge became a fixture of the land after it was dumped in the Pits, thereby converting from International Paper’s personal property into real property owned by Virgil McGinnes, the Site’s owner, even though McGinnes was not a party to the International

247 See, e.g., 64 CR 35607-35614. 248 See, e.g., id. 249 56 CR 31696; 64 CR 35607-35609; see § II(A)(1) below.

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Paper/MIMC agreement and there is no evidence McGinnes intended to become the owner of International Paper’s sludge.250

Because neither of International Paper’s theories are supported by the

law or the facts, it did not conclusively establish that its ownership of

the sludge transferred to another entity or person by operation of law.

The trial court, therefore, erred when it instructed the jury “that as of

1966, [International Paper] no longer owned the waste.” 251

Whether International Paper continued to own the sludge after it

was dumped in the Pits was a contested, critical issue on which the trial

court changed its mind.252 The trial court’s instruction that

International Paper no longer owned the waste as of 1966 was,

therefore, reversible error. 253

1. International Paper did not conclusively establish that the ownership of its sludge passed to MIMC when MIMC took the sludge to the Pits.

International Paper claims that a waste generator ceases to own

its waste once it is disposed.254 So—according to International Paper—

250 62 CR 34702; 64 CR 35609-35613; see § II(A)(2) below. 251 63 CR 35177 (App. A); 63 CR 35183 (App. A); see § II(A)(1)-(2) below. 252 See § II(A)(3) below. 253 Thota, 366 S.W.3d at 687; see § II(A)(3) below. 254 64 CR 35607-35609.

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ownership of the sludge transferred from International Paper when

MIMC removed the sludge from the paper mill. 255

International Paper’s argument is based on a misunderstanding of

Texas law regarding disposal of waste. Under Texas law—absent an

agreement transferring ownership—the ownership of waste is not

transferred unless the waste owner has abandoned the waste. 256

Because there was no agreement transferring ownership of the sludge,

International Paper had to conclusively establish that it abandoned the

sludge.257

International Paper did not meet its burden to conclusively

establish that it abandoned the sludge, so it did not conclusively

establish that its ownership of the sludge was transferred to another

entity or person.

255 Id. 256Sharpe v. Turley, 191 S.W.3d 362, 367-68 (Tex. App.—Dallas 2006, pet. denied); R.R. Comm’n of Tex. v. Waste Mgmt. of Tex., 880 S.W.2d 835, 843 (Tex. App.— Austin 1994, no writ); see also Meyer Waste Sys., Inc. v. Indiana Dept. of State Revenue, 741 N.E.2d 1, 5 (Ind. T.C. 2000) (“With respect to ownership, this Court has held that ‘[a]t the point the garbage is abandoned, the generators of the garbage lose their ownership rights.’”) (quoting Indiana Waste Sys. of Indiana, Inc. v. Indiana Dept. of State Revenue, 633 N.E.2d 359, 367 (Ind. T.C. 1994)). 257See City of Keller v. Wilson, 168 S.W.3d 802, 815-17 (Tex. 2005) (standards for conclusive evidence).

60

Under Texas law, International Paper did not abandon the sludge

by contracting for MIMC to pick it up and dispose of it at the Site.

Texas courts have held that property—including waste or garbage—is

abandoned when the owner leaves “the property free to be appropriated

by any other person.” 258 Under Texas law, “abandon” means to “give up

absolutely; to forsake entirely; to renounce utterly; to relinquish all

connection with or concern it; to desert.”259 Whether property has been

abandoned is “generally a fact question,” and “the facts must

affirmatively show an intent to abandon.”260

International Paper’s contract with MIMC shows that

International Paper retained control over the sludge and did not

abandon it:

● The contract specified that the sludge would be disposed at “a tract of land acceptable to [International Paper]”261

● The contract specified that the sludge would be transported by barge. 262

258 Waste Mgmt., 880 S.W.2d at 843; see also Sharpe, 191 S.W.3d at 368. 259Waste Mgmt., 880 S.W.2d at 843 (quoting BLACK’S LAW DICTIONARY 2 (6th ed. 1990)); Russell v. Am. Real Estate Corp., 89 S.W.3d 204, 209 n.5 (Tex. App.—Corpus Christi 2002, no pet.). 260 Russell, 89 S.W.3d at 209 n.5. 261 DX 1436 at 1.

61

● The contract required MIMC to have all required permits and licenses and to comply with all laws, rules, and regulations.263

● International Paper required MIMC to perform the work “in a good and workmanlike manner.”264

● International Paper had the right to audit MIMC’s records.265

● International Paper even withheld 15% of the contract payment to make sure that MIMC paid for all of its labor, material, and equipment costs.266

International Paper did not just have MIMC pick up the sludge in

its barges and dump the sludge in the Pits. Instead, International

Paper had MIMC return part of the water from the sludge slurry to its

paper mill.267 That is further evidence that International Paper

continued to exercise control over the sludge even after it was dumped

in the Pits.

International Paper’s involvement with the sludge continued after

an incident in December 1965 where rain washed away parts of the

levees surrounding the Pits, reducing the height of the levee in half at

262 Id. 263 Id. at 6; 68 RR 18. 264 DX 1436 at 6; 68 RR 18. 265 DX 1436 at 6. 266 Id. at 2. 267 70 RR 111, 119-120.

62

places.268 International Paper investigated that incident and discussed

it with MIMC.269 International Paper expressly stated that this

material—which had already been disposed—was “[International

Paper’s] waste sludge material” and cautioned about “the sensitive

nature of this entire operation and the need for special precaution in

connection with the disposal of this waste material.” 270

International Paper is not like the homeowner who leaves garbage

at the curb to be picked up, never to think about it again. Instead,

International Paper specified how the sludge would be transported and

disposed and was integrally involved in the entire operation regarding

its sludge, including overseeing the sludge after it was dumped in the

Pits.271

The control International Paper continued to exercise over its

sludge dumped in the Pits shows that there is at least a fact issue on

whether International Paper abandoned the sludge. International

Paper did not conclusively establish that title to the sludge transferred

268 PX. 16. 269 Id. 270 Id. at 1-2 (emphasis added). 271 Id. at 2.

63

from International Paper to MIMC, or any other entity. 272 The trial

court, therefore, erred when it instructed the jury that International

Paper ceased owning the sludge as of 1966.

2. International Paper did not conclusively establish that the sludge became a fixture to the real property after it was dumped in the Pits.

International Paper also claimed that it lost ownership of the

sludge after it was dumped in the Pits because the sludge supposedly

became a fixture, thus transforming from International Paper’s

personal property to the landowner’s real property.273

Under certain circumstances, personal property that has been

attached to real property can become what is called a “fixture.”274 If the

personal property becomes a fixture, it loses its character as personal

property and becomes part of the real property. 275 So the ownership of

272This Court should also consider MIMC’s position on this issue. International Paper contends that MIMC became the owner of the sludge when it picked the sludge up for disposal. MIMC, however, contended that it does not own—and never has owned—the sludge. 56 CR 31696. MIMC’s argument is evidence that International Paper did not transfer ownership of the sludge when it was disposed of in the Pits, so International Paper did not conclusively establish that it transferred ownership of the sludge when the sludge was picked up for disposal. 273 55 CR 31268-31270; 64 CR 35609-35613. 274 Lee v. Lee, 411 S.W.3d 95, 109 (Tex. App.—Houston [1st Dist.] 2013, no pet.). 275 Id.

64

the formerly personal property would then transfer to the owner of the

real property.

That is what International Paper claims happened here.276 It

asserts that the sludge became a fixture when dumped in the Pits,

thereby ceasing to be its personal property and, instead, becoming part

of the real property owned by the owner of the Pits. 277 International

Paper is wrong: Only personal property that is an “improvement” can

become a fixture.278 And International Paper’s dioxin-containing sludge

is not an improvement.

Because International Paper did not conclusively establish that

the sludge was an improvement, it did not conclusively establish that

the sludge became a fixture. International Paper, therefore, did not

conclusively establish that the sludge was converted from its personalty

to the Pit owner’s realty. The ownership of the sludge was a fact issue

for the jury, so the trial court erred when it instructed the jury that

International Paper ceased to own the sludge as of 1966.

276 55 CR 31268-31270; 64 CR 35609-35613. 277 55 CR 31268-31270; 64 CR 35609-35613. 278 See § II(A)(2)(a) below.

65

a. The sludge cannot be a fixture because it was not an improvement.

Under Texas law, a fixture is a type of improvement. 279 Therefore,

if the sludge was not an improvement, it cannot be a fixture under

Texas law.

This Court has held that an improvement must increase the value

of the property.280 International Paper did not provide any evidence

that the sludge increased the market value of the Site. Instead, Harris

County provided evidence showing that the sludge actually decreased

the Site’s market value.281

56 CR 31749 (“Therefore, although all improvements are not necessarily fixtures, 279

any fixture … is considered an improvement.”) (quoting Reames v. Hawthorne- Seving, Inc., 949 S.W.2d 758, 761 (Tex. App.—Dallas 1997, pet. denied)). 280 Dubin v. Carrier Corp., 731 S.W.2d 651, 653 (Tex. App.—Houston [1st Dist.] 1987, writ dism’d), disapproved on other grounds, Sonnier v. Chisholm-Ryder Co., 909 S.W.2d 475, 480-82 (Tex. 1995) (an improvement “includes everything that permanently enhances the value of the premises”); Dow Chem. Co. v. Abutahoun, 395 S.W.3d 335, 345-46 (Tex. App.—Dallas 2013, no pet.) (“The customary meaning of ‘improvement’ is a permanent addition that increases the value of the property and makes it more useful”) (internal quotation omitted); Brown & Root, Inc. v. Shelton, No. 12-01-00259-CV, 2003 WL 21771917, at *4 (Tex. App.—Tyler July 31, 2003, no pet.) (quoting Trust Co. Bank v. U.S. Gypsum Co., 950 F.2d 1144, 1152 (5th Cir. 1992)) (an “improvement” is “a permanent addition that increases the value of the property and makes it more useful”). 281 PX 143 at 4.

66

In its 1968 board of directors minutes, MIMC addressed the

market value of the Site after the dumping was complete. 282 MIMC’s

board minutes recognized that the dumping of the sludge at the Site

had made the land “worthless.”283 MIMC’s board minutes state that

“the property was completely filled with waste materials,” and that

“[d]ue to its physical condition it was also regarded that the land was

worthless in that it had no present sales value” 284 MIMC, therefore,

wrote down the value of the land on its books “from $50,000 cost to the

nominal sum of $1.”285

Harris County, therefore, provided evidence showing that

dumping the sludge at the Site actually decreased the Site’s market

value, which means that the sludge was not an improvement. 286

Because the sludge was not an improvement, by definition it could not

be a fixture.287 The sludge, therefore, is still International Paper’s

282 Id. 283 Id. 284 Id. 285 Id. 286 Dubin, 731 S.W.2d at 653. 287 56 CR 31749; Reames, 949 S.W.2d at 761.

67

personal property and has not become real property belonging to the

owner of the real property where the Site is located.

b. There was no intent to incorporate the sludge into the soil, so it is not a fixture.

The sludge was not a fixture even if this Court were to hold that it

was an improvement capable of becoming a fixture. The Supreme Court

has established a three-part test to determine “whether personalty has

become permanently attached to the realty” such that it is a fixture:

1. The mode and sufficiency of annexation, either real or constructive;

2. The adaptation of the personalty to the use or the purpose of the realty; and

3. The intent of the owner.288

The evidence shows that International Paper did not conclusively

establish that the sludge—assuming it could even qualify as an

improvement capable of becoming a fixture—met the test to become a

fixture.

The Supreme Court has held that the third factor—the intent of

the owner—is “critical” and that intent is “preeminent and the other

288 Sonnier v. Chisholm-Ryder Co., 909 S.W.2d 475, 479 (Tex. 1995).

68

two are evidence of intent.”289 International Paper failed to provide any

evidence of intent to make the sludge a fixture.

International Paper did not provide any evidence showing its

intention that the sludge become part of the land. And International

Paper certainly did not provide any evidence from the owner of the land

showing the owner’s intention that the sludge become part of the land.

The trial court ruled that Virgil McGinnes, one of MIMC’s owners—not

MIMC—actually owned the land where the Site was located.290 There

was absolutely no evidence showing that McGinnes intended the sludge

to become part of his land. The record contains no evidence regarding

the terms any agreement between MIMC and McGinnes that would

have allowed MIMC to incorporate the sludge into the land in a way

that would transfer ownership of the sludge to McGinnes.

Texas courts have described personalty being annexed to realty as

becoming “part of the soil.”291 International Paper’s intent was never

for the sludge to become “part of the soil.” Instead, International

289 Id. 290 62 CR 34702. 291 See, e.g., Cox v. Rhodes, 233 S.W.2d 924, 928 (Tex. Civ. App.—El Paso 1950, writ ref’d n.r.e.); Moore v. Carey Bros. Oil Co., 269 S.W. 75, 76 (Tex. Comm’n App. 1925); Westchester Fire Inc. Co. v. Roan, 215 S.W.985, 987 (Tex. Civ. App.—Fort Worth 1919, writ ref’d).

69

Paper’s and MIMC’s intent was for the sludge to remain separate from

the soil in what they thought was an impermeable layer of clay. 292 Even

though it turned out that the Pits were not impermeable, the intention

of International Paper and MIMC was to keep the sludge separate from

the soil. 293

In addition, the sludge was not adapted to a specific use of the

land. The sludge dumped in the Pits along the San Jacinto River does

not contribute to the use of the land. There was evidence showing that

the area around the Site has been used as a fishing spot and for mining

sand.294 The dioxin-contaminated sludge is not adapted to using the

Site for fishing, mining sand, or dredging.

International Paper, therefore, did not conclusively establish that

the sludge—assuming it could even be considered an improvement—

became a fixture, thus becoming part of the Site’s realty.

292 64 RR 53; DX 30. 293 63 RR 121-122, 127-130, 134. 294 64 RR 192-193; 70 RR 169-174, 195-196; PX 1036-A.

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c. International Paper failed to conclusively establish that removing the sludge would materially damage the Site.

This Court has also held that personal property does not become a

fixture—thereby converting to real property—unless the “personal

property cannot be removed without materially damaging the

property.” 295

International Paper claimed that removing the sludge from the

Site would materially damage the property.296 But removing the sludge

from the Site would not materially damage the property; rather, it

would improve the property and cause its value to increase.

This Court has held that the test for whether removing an item

would materially damage the property is whether the removal would

devalue the property.297 International Paper did not conclusively

establish that removing the sludge would devalue the Site’s market

value. In fact, it provided no evidence on that point. Harris County

Melendez v. State, 902 S.W. 2d, 132, 137 (Tex. App.—Houston [1st Dist.] 1995, no 295

writ). 296 64 CR 35610-35611. 297Houston Bldg Serv., Inc. v. Am. Gen. Fire and Cas. Co., 799 S.W.2d 308, 311 (Tex. App.—Houston [1st Dist.] 1990, writ denied) (“The removal of the frames would cause material damage to the building. We acknowledge that doors could be removed without material structural damage to the rest of the structure. The removal of doors, however, would certainly devalue the building, causing material damage to the rest of the building.”).

71

provided evidence showing that International Paper’s dumping of the

sludge at the Site lowered the Site’s market value.298 So removing the

sludge would increase—not decrease—the Site’s market value.299

3. The trial court’s erroneous instruction was reversible error because it related to a contested, critical issue.

An erroneous jury instruction is harmful error—and, therefore,

reversible error—if it probably caused the rendition of an improper

verdict.300 The Supreme Court has held that “[c]harge error is generally

considered harmful if it relates to a contested, critical issue.”301

The issue of whether International Paper continued to own the

sludge after it was dumped in the Pits was a contested and critical issue

in the case. International Paper’s position was that it could not have

caused, suffered, allowed, or permitted dioxin from the sludge to seep

into the water because it had no ownership interest in the sludge after

it was dumped in the Pits.302 So the issue of whether International

298 PX 143 at 4; see § II(A)(2)(a) above. 299 PX 143 at 4; see § II(A)(2)(a) above. 300TEX. R. APP. P. 44.1(a)(1); Columbia Rio Grande Healthcare, LP v. Hawley, 284 S.W.3d 851, 856 (Tex. 2009). 301 Thota, 366 S.W.3d at 687. 302 36 CR 24674-21680.

72

Paper continued to own the sludge after dumping was a critical and

contested issue.

The importance of the ownership issue is shown by the fact that

International Paper’s counsel focused on the issue in both opening

statement and closing argument.303 In opening statement,

International Paper’s counsel told the jury that the evidence would

show International Paper ceased owning the sludge after dumping. 304

In closing argument, International Paper’s counsel told the jury that

International Paper could not be liable because it ceased owning the

sludge after it was dumped in the Pits.305 International Paper’s counsel

specifically read the jury the trial court instruction that “as of 1966,

[International Paper] no longer owned the waste.” 306

The trial court’s non-ownership instruction was even more

harmful given the inconsistent way that it addressed the ownership

issue. The trial court denied International Paper’s summary-judgment

motion based on its claim that it no longer owned the sludge, ruling

303 62 RR 70-71; 77 RR 52, 60. 304 62 RR 70-71. 305 77 RR 52, 60. 306 77 RR 60.

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that the issue of International Paper’s continued ownership was a fact

issue.307 Harris County, therefore, tried the case based on that

understanding. Harris County’s counsel told the jury in opening

statement that International Paper “continued to own the sludge after

delivering it to MIMC,” and International Paper maintained its position

that it no longer owned the sludge.308 The trial court undercut Harris

County’s credibility with the jury when it—erroneously—instructed the

jury that International Paper ceased owning the sludge in 1966.309

That makes the instruction even more harmful than it would have been

had the trial court consistently held that International Paper ceased

owning the sludge after it was dumped in the Pits.

The trial court erred when it instructed the jury that

International Paper ceased owning the sludge in 1966.310 The

erroneous instruction is harmful error—and, therefore, reversible

error—because it “relate[d] to a contested, critical issue.” 311 This Court,

therefore, should reverse the judgment and remand for retrial because

307 62 CR 34781; 62 CR 34784; 57 RR 123; 59 RR 8-10. 308 62 RR 41; 62 RR 70-71. 309 63 CR 35177, 35183 (App. A). 310 See § II(A)(1)-(2) above. 311 Thota, 366 S.W.3d at 687.

74

of the trial court’s erroneous instruction regarding ownership of the

sludge.

B. The trial court erred when it instructed the jury that generating waste and contracting for disposal is not sufficient to establish liability.

The trial court also erred when it instructed the jury that a “the

mere fact that [International Paper] generated the waste and

contracted with an independent waste disposal company for its disposal

is not, by itself, sufficient to establish that [International Paper] is

liable for any discharge.” 312 In the interest of judicial economy, Harris

County adopts by reference the State’s brief, which addresses this

issue.313

PRAYER

Harris County prays that this Court reverse the trial court’s

judgment and remand this case for retrial. Harris County respectfully

requests that this Court make clear that evidence regarding the

dangers of dioxin is admissible in the retrial and that Havner‘s rule

regarding the doubling of the risk does not apply because this is an

312 63 CR 35177, 35183 (App. A). 313 TEX. R. APP. P. 9.7.

75

environmental civil-penalty case brought by the government, not a

toxic-tort case.

Respectfully submitted,

/s/ Rock W.A. Owens Rock W.A. Owens Debra Tsuchiyama Baker Texas Bar No. 15382100 Texas Bar No. 15089600 Vince Ryan Earnest W. Wotring Harris County Attorney Texas Bar No. 22012400 Texas Bar No. 99999939 John Muir Terence L. O’Rourke Texas Bar No. 14630477 Special Asst. Harris County Attorney David George Texas Bar No. 15311000 Texas Bar No. 00793212 OFFICE OF HARRIS COUNTY ATTORNEY BAKER•WOTRING LLP VINCE RYAN 700 JPMorgan Chase Tower 1019 Congress, Room 1547 600 Travis Street Houston, Texas 77002 Houston, Texas 77002 Telephone: (713) 755-5908 Telephone: (713) 980-1700 Fax: (713) 437-4211 Fax: (713) 980-1701 rock.owens@cao.hctx.net dbaker@bakerwotring.com terence.o’rourke@cao.hctx.net ewotring@bakerwotring.com jmuir@bakerwotring.com dgeorge@bakerwotring.com

Counsel for Appellant Harris County, Texas

November 13, 2015

76

CERTIFICATE OF SERVICE

I certify that on November 13, 2015, I served a copy of the foregoing document upon the following counsel of record via electronic filing or certified mail:

Allyson N. Ho Mary E. Smith MORGAN, LEWIS & BOCKIUS LLP Assistant Attorney General 1000 Louisiana Street, Suite 4000 OFFICE OF THE ATTORNEY Houston, Texas 77002 GENERAL OF TEXAS ENVIRONMENTAL PROTECTION

Counsel for Defendant DIVISION International Paper Co. P.O. Box 12548, Capitol Station Austin, Texas 78711

Counsel for Necessary and Indispensable Party The State of Texas, acting by and through Texas Commission on Environmental Quality

/s/ David George David George

CERTIFICATE OF COMPLIANCE

This brief contains 14,726 words, excluding the caption, signature blocks, and certificates. This motion was prepared using Microsoft Word 2016 in 14 point (12 point in footnotes) Century Schoolbook (Arial headings and table of contents) font.

/s/ David George David George

APPENDIX

No. 201 1-76724

Harris County, Texas, et al, Plamtig § IN THE DISTRICT COURT OF

v § HARRIS COUNTY, TEXAS

International Paper Company, ei al, § Defendants § 295th JUDICIAL DISTR]CT

CHARGE OF THE COURT

Members of the Jury

After the closmg arguments, you will go to the jury room to decide the case, answer the questions that are attached, and reach a verdict You may discuss the case with other jurors only when you are all together m the 3ury room

Remember my previous instruchons Do not discuss the case with anyone else, either m person or by any other means Do not do any independent mvestigation about the case or conduct any research Do not look up any words in dictionaries or on the Internet Do not post mformation about the case on the Imernet Do not share any special knowledge or expenences with the other Jurors Do not use your phone or any other electrome device durmg your debberations for any reason I will give you a number where others may contact you in case of an emergency

Any notes you have taken are for your own personal use You may take your notes back mto the jury room and consult them dunng deliberations, but do not show or read your notes to your fellow jurors durmg your dehberations Your notes are not evidence Each of you should rely on your mdependent recollection of the evidence and not be mfluenced by the fact that anothei juror has or has not taken notes

You must leave your notes with the bailiff when you are not debberating The balhff will give your notes to me promptly after collecting them from you I will make sure your notes are kept m a safe, secure location and not disclosed to anyone. After you complete your deliberations, the balb ff will collect your notes When you are released f rori jury duty, the bailiff will promptly destroy your notes so that nobody can read what

you wrote

I lere are the mstructions for answermg the questions

i Do not let bias, prejudice, or syrnpathy play any part m your decision

FILED

Chris Daniel District Clerk

Time:

NOV 1 3

ѯL108

Warrie Ôounty,

By

es1¯d

Base your answers only on the evidence admitted in court and on the law that is

2

m these instructions and questions Do not consider or discuss any evidence that was not admitted m the courtroom

3 You are to make up your own mmds about the facts You are the sole judges of the credibility of the witnesses and the weight to give their testimony But on matters of law. you must follow all of my mstructions

4 lf my mstructions use a word m a way that is different from its ordinary meamng, use the meamng l give you. which will be a proper legal definition

5. All the questions and answers are important No one should say that any question or answer is not important

'·yes°'

6 Answer or 'no lo all questions unless you are told otherwise A "yes"

answer must be based on a preponderance of the evidence unless you are told otherwise Whenever a question requires an answer other than "yes" or 'no," your answer must be based en a preponderance of the evidence unless you sæ told otherwise The term "preponderance of the evidence" means the greater weight of credible evidence presented m this case If you do not find that a preponderance of the evidence supports a "yes''

"

answer. then answer "no A preponderance of the evidence is not measured by the number of witnesses or by the number of documents admitted m evidence For a fact to be proved by a preponderance of the evidence, you must find that the fact is more likely true than not true

7 Do not decide who you ihmk should wm before you answer the questions and then just answer the questions to match your decision Answer each question carefully without considermg who will wm Do not discuss or consider the effect your answers will have

8 Do not answer questions by drawmg straws or by any method of chance

9 Some questions might ask you for dollar amount Do not agree m advance to

a

decide on a dollar amount by addmg up each juror s amount and then figurmg the average

10Do not trade your answers For example, do not say, "I will answer this '°

question your way if you answer another question my way

Unless otherwise instructed. the answers to the questions must be based on the I 1

decision of at Icast 10 of the 12 Jurors The same 10 jurors must agree on every answer. Do not agree to be bound by a vote of anythmg less than 10 Jurors, even if it would be a majority

Ashave said before. If you do not follow these mstructions, you will be guilty of

I

juror misconduct, and I might have to order a new trial and start this process over agam This would waste your time and the parties' money, and would require the taxpayers of

3

this county to pay for another trial lf a Juror breaks any of these rules, tell that person to stop and report tt to me immediately

A fact may estabbshed by direct evidence or by circumstantial evidence or both be

A fact as established by direct evidence when proved by documentary evidence or by witnesses who saw the act done or heard the words spoken A fact is established by cucumstantial evidence when it may be fairly and reasonably mferred from other facts proved

General Definitions and Instructions

1 The "Site" means the waste sue at the northwest mtersection of Interstate 10 and the San Jaemto River m Harris County. Texas A photograph of the Site m 1966 is shown on the attached Exhibit "A" hereto

2 "Harris County" means Plamtiff Hams County, Texas

3 "InternationalPaper" means Defendant International Paper Co

4 "Champion Paper" means Champion Intemational Corp ; US Plywood-

Champion Papers, Inc Champion Papers, Inc , The Champion Paper and Fibre ,

Company, and The Champion Coated Paper Company, the predecessors by merger to Defendant International Paper Co

5 The "Defendants" means Defendants International Paper and its predecessor by merger Champion Paper

6 "MIMC" means McGmnes Industrial Mamtenance Corporation.

7 "Industnal Waste" means waterborne liquid, gaseous, or solid substances that result from any process of mdustry. manufacturing. trade, or busmess

8 "Water m the State" means groundwater, percolatmg or otherwise, lakes, bays. ponds, impoundmg reservoirs, sprmgs, rivers, streams. creeks, estuaries, wetlands. marshes, mlets. canals. the Gulf of Mexico, inside the territorial hmits of the state, and all other bodies of surface water. natural or artificial, mland or coastal. fresh or salt, navigable or nonnavigable, and meludmg the beds and banks of all watercourses and bodies of surface water. that are wholly or partially mside or bordermg the state or mside the.jurisdiction of the state

9 -Industrial Sohd Waste" means Solid Waste resultmg from or mcidental to any process of mdustry or manufacturmg, or mimng or agricultural operation

10 "Solid waste" meludes discarded material meludmg sohd, liquid. or semisolid material tesultmg from mdustrial operations

11 "Dioxm" means 2, 3, 7. 8-Tetrachlorodibenzo-p-dioxm

12 "Hazardous Substance" means any substance designated as such by the admmistratoi of the Umted States Environmental ProtectlOn Agency Effective July 3, 1985, the United States Environmental Protection Agency designated Dioxin as a Hazardous Substance

13 Champion Paper merged into International Paper on December 31, 2000

14 Any recovery will be determined by the court when it applies the law to your answers time of judgment at the

15 The parties have always agreed that neither Champion Paper nor International Paper has ever owned the property on which the Site is located

Question One

Do you find that any of the followmg Defendants caused, suffered, allowed, or permitted the discharge of mdustrial waste contammg dioxm into or adjacent to any water m the state at any time from February 15. 1973, until March 30, 20089

In this question, "discharge" meludes to deposit, conduct, drain, emit, throw, run, allow to seep, or otherwise release or dispose of, or to allow, permit, or suffer any of these acts or omissions

"Cause, suffer. allow. or permit" shall be defined using the common, normal, and everyday meanmgs for each word m the phrase A person "causes, suffers, allows, permits¯¯ or an event when that person had the power to prevent an event at the time of the event, but failed to do so

You are instructed that the mere fact that Champion Paper generated the waste and contiacted with an mdependent waste disposal company for its disposal is not, by itself, suffleient to estabbsh that Champion Paper is liable for any discharge You are further mstructed that as of 1966, Champion Paper no longer owned the waste and no longer had a contract for disposal at the Site Champion Paper contmued to have a busmess relationship with MIMC up to 1973

Answer -Yes" or "No" for each Defendant

a Champion Paper (before December 31, 2000)

b International Paper (on or after December 31. 2000)

If you answered "Yes" to Question One for one or more of the Defendants, then answer the following question as to those Defendant(s) Otherwise, do not answer the followmg question

Question Two

For each Defendant for whom you answered "Yes" m Question One, identify each violation date or range ofdates on which consecutive daily violations, if any, by such Defendant occurred

Answer with the dates, or date ranges, usmg the month, day, and year

a Champion Paper

You are mstructed that you should write down each date of a violation (or date range of consecutive daily violations) by Champion Paper, for any violation(s) durmg the followmg time periods

(1) Dates from February 15, 1973 until August 31, 1985

(2) Dates from September 1, 1985 until August 31, 1997

(3)Dates from September 1, 1997 until December 30, 2000

b International Paper

You are mstructed that you should write down each date of a violation (or date range of consecutive daily violations) by International Paper, for any violation(s) durmg the followmg time period

(1) Dates from December 31, 2000 until March 30, 2008

If you answered "Yes" to Question One for one or more of the Defendants, then answer the followmg question as to those Defendant(s) Olherwise, do not answer the following question

Question Three

What amount of money should be assessed agamst each Defendant as a penalty for each day you found a violation m response to Question Two?

Your answer should fall in the followmg ranges, dependmg on the date of the violation(s)

Date Range Penalty Range February 15, 1973 - August 31, 1985 Mmimum per day $50 Maximum per day $1,000

September 1, 1985 - August 31, 1997 Mimmum per day $50 Maximum per day $10,000

September 1. 1997 - March 30, 2008 Mimmum per day $50 Maximum per day $25,000

For each of the dates, if any, you found that a Defendant committed a violation m response to Question Two. do the following two thmgs (i) re-enter those date(s) or date range(s) m the applicable table below, and (n) enter the proper penalty per day for each of those violations You may impose different penalties for mdividual day(s) or for day(s) within a date range

a Champion Paper

(1) Dates from February 15, 1973 until August 31, 1985 (Penally Amounts must be withm the range of SJ0 -

SI,000 per day of

wo/anon)

Date or Date Range Penalty Amount Per Day

(2) Dates from September 1, 1985 until August 31, 1997

(Penally Amounts must be within the range of S30 - 310,000 per day of wolation)

Date or Date Range Penalty Amount Per Day

(3) Dates from September 1, 1997 until December 30, 2000 (Penalty Amounts must be within the range of $50 -

$23,000 per day of

violation)

Date or Date Range Penalty Amount Per Day

b International Paper

(1) Dates from December 31, 2000 until March 30, 2003 (Penally Amounts must be within the range of $50 - 325,000 per day of wolation)

Date or Date Range Penalty Amount Per Day

Question Four

Do you fmd that any of the followmg Defendants caused, suffered, allowed. or permitted the handhng or disposal of mdustnal sohd waste contaimng dioxm m such a manner so as to cause the discharge or immment threat of discharge of mdustrial sobd waste containmg dioxm mto or adjacent to the water m the State at any time from December 31, 1975, until March 30, 20087

"Disposal" means the discharge, deposit, mjeCflon, dumpmg, spuhng, leakmg, or placmg of sohd waste or hazardous waste (whether contamerized or any

uncontamenzed) mto or on any land or water so that such solid waste or hazardous waste or any constituent thereof may enter the environment or be discharged mto any waters

question, "discharge" means accidental or mtentional spillmg, leakmg, In this pumpmg. pout mg, emittmg, emptymg. or dumpmg of waste mto or on any land or water

"Cause, suffer, allow, or permit" shall be defined usmg the common, normal, and everyday meanmgs for each word m the phrase 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

You ale mstructed that the mere fact that Champion Paper generated the waste and contracted with an mdependent waste disposal company for its disposal is not, by itself, sufficient to estabbsh that Champion Paper is hable for any discharge You are further mstructed that as of 1966, Champion Paper no longer owned the waste and no longer had a contract for disposal at the Site Champion Paper contmued to have a busmess relationship with MIMC up to 1973

Answer "Yes" or "No" for each Defendant

a Champion Paper (before December 31, 2000).

b International Paper (on or after December 31, 2000)

ff you answered "Yes" to Question Four for one or more of the Defendants, then answer the followmg question as to those Defendant(s) Otherwise, do not answer the following question

Question Five

For each Defendant for whom you answered "Yes" in Question Four, identify each violation date or range of dates on which consecutive daily violations, if any, by such Defendant occurred

Answer with the dates, or date ranges, usmg the month, day, and year

a Champion Paper

You are mstructed that you should write down each date of a violation (or date range of consecutive daily violations) by Champion Paper, for any violation(s) during the followmg time periods

(1) Dates from December 31. 1975 until August 31, 1981

(2)Dates from September 1, 1981 until August 31, 1985

(3) Dates from September 1, 1985 until August 31, 1997

(4) Dates from September 1, 1997 until December 30, 2000

b [nternational Paper

You are mstructed that you should write down each date of a violation (or date range of consecutive daily violations) by International Paper, for any violation(s) during the following time period

(1) Dates from December 31, 2000 until March 30, 2008

l4

lf you answered "Yes" to Question Four for one or more of the Defendants, then answer the folowmg question as to those Defendant(s) Otherwise, do not answer the followmg question

Question Six

What amount of money should be assessed agamst each Defendant as a penalty for each day you found a violation m response to Question Five?

Your answer should fall in the followmg ranges. dependmg on the date of the violation(s)

Date Range Penalty Range December 31, 1975 August 31. -

1981 Mimmum per day $50 Maximum per day $1.000

September 1, 1981 - August 31, 1985 Mimmum per day $50 Maximum per day $2,000

September 1. 1985 - August 31, 1997 Mimmum per day $100 Maximum per day $25,000

September 1, 1997 - March 30, 2008 Mmimum per day $50 Maximum per day $25,000

For each of the dates, if any, you found that a Defendant committed a violation m lesponse to Question Five, do the followmg two thmgs (i) re-enter those date(s) or date range(s) m the apphcable table below, and (11) enter the proper penalty per day for each of those violations You may impose different penalties for mdividual day(s) or for day(s) withm a date range

a Champion Paper

(1) Dates from December 3], 1975 until August 31, 1981 (Penally Amounts must be withm the lange of £50 -

£1,000 per day of violation)

Date or Date Range Penalty Amount Per Day

(2) Dates from September 1, 1981 until August 31, 1985 (Penalty Amounts must be withm the range of $50 -

$2,000 per day of

violanon)

Date or Date Range Penalty Amount Per Day

(3) Dates from September 1, 1985 until August 31, 1997 (Penally Amounts must be within the range of £100 -

323,000 per day of

violation)

Date or Date Range Penalty Amount Per Day

(4) Dates from September 1, 1997 until December 30, 2000 (Penalty Amounts must be withm the range of S30 -

S25,000 per day of

violanon)

Date or Date Range Penalty Amount Per Day

17

b lnternational Paper

(1) Dates from December 31, 2000 until March 30, 2003 (Penalty Amounts must be withm the ; ange of 350 -

S25,000 per day of

wolation)

Date or Date Range Penalty Amount Per Day

If you answered "Yes" to Questions One and/or Four for one or more of the Defendants. then answer the followmgquestion Otherwise, do not answer the followmg question

Question Seven

What is the reasonable fee for the services of the Connelly Baker Wotrmg LLP Law Firm representmg Hams County in brmgmg this civil-penalty case, stated m dollars and cents?

Factors to consider in determming a reasonable fee melude-

1 The time and labor required, the novelty and difficulty of the questions mvolved. and the skill required to perform the legal services properly

2 The likehhood that the acceptance of the particular employment will preclude other employment by the lawyer

3 The fee customarily charged m the locality for similar legal services

4 The amount mvolved and the results obtamed

5 The time bmitations imposed by the client or by the circumstances

6 The nature and length of the professiorial relationship with the cliem

7 The experience, reputation. and abilay of the lawyer or lawyers performmg the services

8 Whether the fee is fixed or contmgent on results obtamed or uncertamty of collection before the legal services have been rendered

Answer with an amount m dollars and cents for each of the followmg

a For representation m the trial court

Answer

b For representation through appeal to the court of appeals

Answer

c For representation at the petition for review stage m the Supreme Court of Texas

Answer

d For representation at the merits briefing stage m the Supreme Court of Texas

Answer

e For,representation through oral argument and the completion of proceedmgs in the Supreme Court of Texas

Answer

If you answered "Yes" to Questions One and/oi Four for one or more of the Defendants, then answer the followmgquestion as to those Defendant(s) Otherwise, do not answer the following question

Question Eight

Were any of the violations you found m Questions One and/or Four caused solely by an act of God?

An occurrence is caused by an act of God if it is caused directly and exclusively by the violence of nature, without human intervention or cause, and could not have been prevented by reasonable foresight or care An occurrence is not caused solely by an act of God if it could be avoided by the exercise of due care, foresight, or proper plannmg, mamtenance, or operation

Answer "Yes" or No' for each Defendant

a Champion Paper (before December 31, 2000)

b International Paper (on or after December 31, 2000)

If you answered "Yes" to Question Eight for one or more of the Defendants, then answer the following question as to those Defendant(s) Otherwise, do not answer the following question

Question Nine

Identify by date, or range of dates, when the violations that you found in Questions One and/or Four were caused solely by an act of God7

Answer with a dates, or range of dates, using the month, day, and year for each Defendant you answered "Yes, to m response to Question Eight

a Champion Paper (before December 31, 2000)

b International Paper (on or after December 31, 2000)

If you answered "Yes, to Question Four for one or more of the Defendants, then answer the followmg question as to those Defendant(s) Otherwise, do not answer the following question Question Ten

On any day 1, 1997, were any of the Defendants hsted below also after September

a person responsible for sohd waste? Answer only for the Defendants that you determmed committed violations m Question Four

How you decide this question should not influence your consideration about how you answer Questions One through Six.

A person is responsible for solid waste if the person

(1) is any owner or operator of a sohd waste facihty,

(2) owned or operated a solid waste facility at the time of processmg, storage, or disposal of any solid waste,

(3) by contract, agreement. or otherwise, arranged to process, store, or dispose of, or arranged with a transporter for transport to process, store, or dispose of, solid waste owned or possessed by the person, by any other person or entity at

(A) the sohd waste facility owned or operated by another person or entity that contams the solid waste, or (B) the site to which the sohd waste was transported that contams the solid waste, or

(4) accepts or accepted any solid waste for transport to a sohd waste facihty or site selected by the person

Answer "Yes" or "No= for each Defendant listed below, if you answered "Yes" to Question Four for that Defendant

a Champion Paper (before December 31, 2000)

b International Paper (on or after December 31, 2000)

If you answered "Yes" to Question Ten for one or more of the Defendants, then answer the followmg question as to those Defendant(s) Otherwise, do not answer the followmg question

Question Eleven

Were any of the violations you found m Question Four caused solely by acts or omissions of a thud person?

A violation is caused solely by an act or omission of a third person if the Defendant

(1) exercised due care concermng the sohd waste, considering the characteristics of the sohd waste, in light of all relevant facts and circumstances, and

(2) took precautions agamst foreseeable acts or omissions of the third person and the consequences that could foreseeably result from those acts or omissions

A "third person" does not include

(1) employees or agents of the Defendant for which you are answermg this question, or,

(2) those who have a direct or indirect contractual relationship with the Defendant for which you are answermg this question

Answer "Yes" or "No" for each Defendant hsted below

a Champion Paper (before December 31, 2000)

b International Paper (on or after December 31, 2000)

If you answered "Yes" to Question Eleven for of the Defendants, then answer one or more

the followmg question as to those Defendant(s) Otherwise, do not answer the followmg question

Question Twelve

On which were the violations that formed the basis dates for your answer to Question Four caused solely by acts or omissions of a third person?

For each of the followmg Defendants, write the date(s) or range(s) of consecutive dates on which the alleged violation(s) were caused solely by acts or omissions of a third person

a Champion Paper I

(1) Dates from September 1, 1997 until December 30, 2000

b International Paper

(1) Dates from December 31, 2000 until March 30, 2008

Presiding Juror:

1 When you go mto the ury room to answer the questions, the first thing you will need to do is choose a presiding juror

2 The presidmg juror has these duties a have the complete charge read aloud if it will be helpful to your dehberations, b preside over your debbetations, meamng manage the discussions, and see that you follow these mstructions, c give written questions or comments to the baihff who will give them to the Judge. d write down the answers you agree on, e get the signatures for the verdict certificate, and f notify the balbff that you have reached a verdict

Do you understand the duties of the presidmg juror? If you do not, please tell me DOW

Instructions for Signing the Verdict Certificate:

I Unless otherwise mstructed, you may answer the questions on a vote of 10 jurors The same 10 jurors must agree on every answer in the charge This means you may not have one group of 10 Jurors agree on one answer and a different group of 10 jurors agree on another answer

2 If 10)urors agree on every answer, those 10 Jurors sign the verdict

lf 11 jurors agree on every answer, those 11 jurors sign the verdict

Ïf all of you agree on every answer, you are unammous and only the presidmg

12

juror signs the verdict

3 All jurors should debberate on every queston You may end up with all 12 of you agreemg on some answers, while only 10 or 11 of you agree on other answers But when you sign the verdict, only those 10 who agree on every answer will sign the verdict

Do you understand these mstrucnons7 lf you do not, please tell me now

Judge Presidmg

Verdict Certificate

Check one

Our verdict is unanimous All 12 of us have agreed to each and every answer The presidmg luror has signed the certificate for all 12 ofus

Signature of Presidmg Juror Prmted Name of Presidmg Juror

Our verdict is not unammous Eleven of us have agreed to each and every answer and have signed the certificate below

Our verdict is not unammous Ten of us have agreed to each and every answer and have signed the certificate below

NAAΠPRINTED

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Figure 6a

FILED Chris Daniel '

CAUSE NO 201 I-76724

HARRIS COUNTY, TEXAS, Plaintiff § IN THE DISTRICT COURT OF

and § §

THE STATE OF TEX AS, acting by and through § the TEXAS COMMISSION ON § ENVIRONMENTAL QUALITY,A Necessary and § HARRIS COUlfY, TEXAS Indispensable Party, § §

v. § §

INTERNATIONAL PAPER COMPANY, § MCGINNES INDUSTRIAL MAINTENANCE § 295TH JUDICIAL DISTRICT CORPORATION, WASTE MANAGEMENT, INC., AND WASTE MANAGEMENT OF TEXAS, INC., Defendants.

FINAL JUDGMENT

On October 16, 2014, the above cause of action was called for trial before a jury of

twelve persons who were duly accepted, impaneled, and swom. Plaintiff Harris County, Texas

appeared by and through its attomeys and announced ready for trial. The State of Texas, acting

by and through the Texas Commission on Environmental Quality, a necessary and indispensable

party, appeared by and through its attomeys and announced ready for trial. Defendant

Intemational Paper Company appeared by and through its attomeys and announced ready for

trial. Former Defendants McGinnes Industrial Maintenancc Corporation and Waste

Management of Texas, Inc. appeared by and through their respective attorneys and announced

ready for trial. Before trial began, however, the Court dismissed PlaintiffHarris County, Texas's

claims against former Defendant Waste Management, Inc. on the latter party's motion.

After all parties rested, on November 13, 2014, Plaintiff Harris County, Texas, the State

of Texas, acting by and through the Texas Commission on Environmental Quality, and former

Defendants McGinnes Industrial Maintenance Corporation, Waste Management of Texas, Inc.,

and Waste Management. Inc. announced a settlement of the claims by and against these parties,

but not Defendant Intemational Paper Company. On the joint motion of said parties, but not

RECORDER'S MEMORANDUM

quality

TNs instrument is of poor at the time of imaging

Defendant International Paper Company, the Court severed the claims by and against those

settimg parties and assigned a new cause number ("2011-76724A") for those claims.

Accordingly, no issues on any claims by or against former Defendants McGinnes Industrial

MaintenanceCorporation, Waste Management of Texas, Inc., and Waste Management, Inc. were

submitted to the jury.

On November 13, 2014, after presentation of the testimony, evidence, arguments of

counsel, and instmctions of the court, the special issues were submitted to the jury as set forth in

the Charge of the Coun. In response, the jury returned its verdict on that same date of November

13, 2014, which the Coun received, filed, and entered of record. The questions submitted to the

jury and the jury's findings are attached as Exhibit "1" and incorporated by reference in their

entirety and are summarized as follows:

QUESTION ONE: Do you find that any of the followingDefendants caused, suffered, allowed, or pernitted the discharge of industrial waste containing dioxin into or adjacent to any water in the state at any time from February 15, 1973, until March 30, 2008?

ANSWER FOR CHAMPION PAPER: No.

ANSWER FOR INTERNATIONALPAPER: No.

QUESTION TWO: For each Defendant for whom you answered "Yes" in Question One, identify each violation date or range of dates on which consecutive daily violations, if any, by such Defendant occurred.

IN ACCORDANCE WITH THE COURT'S INSTRUCTION, NO ANSWER WAS PROVIDED BASED ON ANSWERS TO QUESTIONONE.

QUESTION THREE: What amount of money should be assessed against each Defendant as a penalty for each day you found a violation in response to Question Two?

IN ACCORDANCE WITH THE COURT'S INSTRUCTION, NO ANSWER WAS PROVIDED BASED ON ANSWERS TOQUESTIONONE.

QUESTION FOUR: Do you find that any of the following Defendants 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 at any time from December 31, 1975, until March 30, 2008?

ANSWER FOR CHAMPION PAPER: No.

ANSWER FOR INTERNATIONALPAPER: No.

QUESTION FIVE: For Defendant for whom you answered "Yes" in Question each

Four, identify each violation of dates on which consecutive daily violations, date or range

if any, by such Defendant occurred.

IN ACCORDANCE WITH THE COURT'S INSTRUCTION, NO ANSWER WAS PROVIDED BASED ON ANSWERS TO QUESTION FOUR.

QUESTION SIX: What amount of money should be assessed against each Defendant as a penalty for each day you found a violation to Question Five?

IN ACCORDANCE WITH THE COURT'S INSTRUCTION, NO ANSWER WAS PROVIDED BASED ON ANSWERS TO QUESTION FOUR.

QUESTION SEVEN: What is for the services of the Connelly Baker the reasonable fee

Wotring LLP Law Firm representing Harris County in bringing this civil-penalty case, staled in dollars and cents?

IN ACCORDANCE WITH THE COURT'S INSTRUCTION, NO ANSWER WAS PROVIDED BASED ON ANSWERS TO QUESTIONS ONE AND FOUR.

QUESTION EIGHT: Were any of the violations you found in Questions One and/or Four caused solely by an act of God?

IN ACCORDANCE WITH THE COURT'S INSTRUCTION, NO ANSWER WAS PROVIDED BASED ON ANSWERS TO QUESTIONS ONE AND FOUR.

QUESTION NINE: Identify by date, or range of dates, when the violations that you found in Questions One and/or Four were caused solely by an act of God.

IN ACCORDANCE WITH THE COURT'S INSTRUCTION, NO ANSWER WAS PROVIDED BASED ON ANSWERS TO QUESTIONS ONE AND FOUR AND LACK OF ANSWER TO QUESTIONEIGHT.

QUESTION TEN: On any day after September 1, 1997, were any of the Defendants Ested below also a person responsible for solid waste?

IN ACCORDANCE WITH THE COURT'S INSTRUCTION, NO ANSWER WAS PROVlDED BASED ON ANSWERS TO QUESTION FOUR.

QUESTION ELEVEN: Were any of the violations you found in Question Four caused solely by acts or omissions of a third person?

IN ACCORDANCE WITH THE COURT'S INSTRUCTION, NO ANSWER WAS PROVIDED BASED ON ANSWERS TO QUESTION FOUR AND LACK OF ANSWER TO QUESTIONTEN.

QUESTIONTWELVE: which dates were the violations that formed the basis of your On

answer to Question Four caused solely by acts or omissions of a third person?

IN ACCORDANCE WITH THE COURT'S INSTRUCTION,NO ANSWER WAS PROVIDED BASED ON ANSWERS TOQUESTION FOUR AND LACK OF ANSWER TO QUESTION ELEVEN.

After the jury was released, Defendant International Paper Company moved for judgment

based on the verdict. Having considered that motion, the arguments of counsel, and all matters

of record, the Court finds that with respect to the claims against Defendant International Paper

Company, including its predecessors in interest, the jury's verdict is in favor of Defendant

Intemational Paper Company, including its predecessors in interest, and against Plaintiff Harris

County, Texas, the State of Texas, and the Texas Commission on Environmental Quality. The

Court is therefore of the opinion that, on the merits, judgment should be rendered in favor of

Defendant Intemational Paper Company and against Plaintiff Harris County, Texas, the State of

Texas, and the Texas Commission on Environmental Quality in conformance with the pleadings,

the nature of the case proved, and the jury's verdict. The Court hereby renders the Final

Judgment as follows:

It is ORDERED, ADJUDGED, AND DECREED that PlaintiffHarris County, Texas, the

State of Texas, and the Texas Commission on Environmental Quality recover nothing on all

claims against Defendant Intemational Paper Company.

It is further ORDERED, ADJUDGED, AND DECREED that Defendant Intemational

Paper Company's counterciaims for declaratory judgment are DISMISSED AS MOOT AND

WITHOUTPREJUDICE, subject to Defendant Intemational Paper Company's right to try those

counterclaims in the event this cause of action is reversed or remanded by appeal.

The Court finds that Defendant Intemational Paper Company is the successful party as

that term is used in Texas Rule of Civil Procedure 131 and further ORDERS that Plaintiff Hams

County, Texas shall pay to Defendant Intemational Paper Company all taxable costs, consisting

of all fees of the clerk, all service fees, and all fees of the court reporters for the original of

stenographie deposition, hearing, and trial transcripts and exhibits obtained for use in the suit.

The Court ORDERS execution to issue for this Final Judgment as allowed by law in

favor of Defendant International Paper Company, and further ORDERS that all writs and process

for the enforcement and collection of this Final Judgment may issue as necessary.

It is further ORDERED, ADJUDGED, AND DECREED that all requested relief by

Plaintiff Harris County, Texas, the State of Texas, acting by and through the Texas Commission

on Environmental Quality, or Defendant Intemational Paper Company that is not expressly

granted or denied herein is hereby DENIED.

This is the Final Judgment of the Court, which disposes of all claims and all parties, and

is appealable.

Signed this th day of January, 2015.

JAN 2 0 2015

Judge Caroline E. Baker

FILED ociŠ$Ïcgacg No. 2011-76724

APR 0 6 2015 HARRIS COUNTY,TEXAS, § IN THE DISTRICT COURTOF Plaintiff § § HARRIS COUNTY,TEXAS and § 295th JUDICIAL DISTRICT §

THE STATE TEXAS, acting by and OF § through the TEXAS COMMISSIONON § ENVIRONMENTALQUALITY, a § necessary and indispensable party § §

VS. § §

INTERNATIONAL PAPER COMPANY, § MCGINNESINDUSTRIAL § MAINTENANCECORPORATION, § WASTE MANAGEMENT, INC., AND § WASTE MANAGEMENT OF TEXAS, § Defendants §

No. 2012-58016

Dao Van Pho, et al., Plaintiffs § IN THE DISTRICT COURTOF §

VS. § HARRISCOUNTY,TEXAS §

InternationalPaper Company, et «L, § 125"' JUDICIAL DISTRICT Defendants §

No. 2012-66308

Jim Harpster and Jennifer Harpster, § et al., Plaintiffs § IN THE DISTRICTCOURTOF §

VS. § HARRISCOUNTY,TEXAS §

InternationalPaper Company, et al., § 110' JUDICIAL DISTRICT

Defendants § §

ORDER

Carne on to be heard Plaintiff Harris County'sMotion for New Trial Upon

consideration, the Court DENIES Plaintiff Harris County's Motion for New TriaL

MEMORANDUM

RECORDER'S quality instrument is of poor

This imagmg of

at the time

Signed tlus 6 day of April, 2015 APR 0 6 2015

JUDGE PRESIDING

4/17/2015 10:40 08 AM

Chris Daniel - District Clerk Harris County Envelope No. 4929587 By: Phyllis Washington

Filed 4/17/2015 10:40:08 AM

No. 2011-76724

Harris County, Texas, er al.. Plaintig § IN THE DISTRICT COURT OF §

v. § HARRIS COUNTY. TEXAS

Intemational Paper Company, et al., § Defend<mts. § 295th JUDICIAL DISTRICT

PLAINTIFF HARRISCOUNTY'SNOTlCE OF APPEAL

Plaintiff Harris County appeals from this Court's:

1 January 20.2015 Final Judgment (attached as Exhibit A)

2. April 6, 2015 Order Denying Harris County's Motion for New Trial (attached as Exhibit B):

3. January 20.2015 Order on International Paper Company s

Motion for Directed Verdict (attached as Exhibit C)

4. January 9, 2015 Order on Defendants' Motions to Exclude the Reports. Opinions, and Testimony of Dr. Philip Bedient and Motion to Exclude the Report. Opinions. and Testimony of Dr. John Pardue and Amended Motion to Exclude the New Opinions. HEC-RAS Modeling, River Gauge Data and Related Testimony of Dr. Philip Bedient and testimony oE Dr. John Pardue Regarding Dr. Rifal's 2013 Chemosphere Paper and the Amount of Dioxin that Entered the San Jacinto River (attached as Exhibit D);

5. December 3, 2014 Order on Defendants' Motion to Exclude the Report, Opinions, and Testimony of Dr. Wayne Snodgrass (attached as Exhibit E);

6. December 3, 2014 Order on International Paper Company's Traditional and No-Evidence Motion for Summary Judgment on Causation Against Harris County (attached as Exhibit F);

7. December 2014 Order on International Paper Company's 3.

Traditional and No-Evidence Motion for Summary Judgment on Specific Elements of Harris County's Statutory Claims (attached as Exhibit G);

8. December 3. 2014 Order on Defendants' Motion to Exclude the Report. Opinions, and Testimony of Dr. Joan Meyer (attached as Exhibit H)

9. December 3, 2014 Order on Defendants' Motion to Exclude the Report, Opinions, and Testimony of Dr. Arnold Schecter (attached as Exhibit I);

10. December 3, 2014 Order on Defendants' Motion to Exclude the Report, Opinions, and Testimony of Dr. James Olson (attached as Exhibit 1); and

11. Every adverse ruling prior to this Court's Final Judgment that is subsumed therein, as well as any adverse ruling subsequent to this Court's Final Judgment that upholds this Court's Final Judgment.

Harris County appeals to the First Court of Appeals in Houston, Texas, because a

prior appeal in this case was filed in that court.

"Int? Paper Co. v. Harris County, 445 S.W.3d 379 (Tex. App.-Houston [lst Dist.], no pet.) Tex. Govt. Code 22.202(h): TEX. APP.-HOUSEN [lST DisT.] IDCAL R. l.4(b).

Respectfully submitted,

OFFICE OF HARRIS COUNTY ATTORNEY, VINCE RYAN

/s/Rock W. A. Owens Rock W.A. Owens Texas Bar No. 15382100 Vince Ryan Harris County Attorney Texas Bar No. 99999939 Terence L. O'Rourke Special Assistant Harris County Attorney Texas Bar No. 15311000 1019 Congress, 15 Floor Houston, Texas 77002 Telephone: (713) 274-5121 Facsimile: (713) 437-4211

and

CONNELLY •BAKER • WOTRING LLP

/s/ Debra Tsuchiyama Baker Debra Tsuchiyama Baker State Bar No. 15089600 Earnest W. Wotring State Bar No. 22012400 Michael Connelly State Bar No. 04685000 John Muir State Bar No. 14630477 David George State Bar No. 00793212 700 JPMorgan Chase Tower 600 Travis Street Houston, Texas 77002 Telephone: (713) 980-1700 Facsimile: (713) 980-1701 Email: dbaker@ connellybaker.com Email: ewotrine@connellvbaker.com Email: nic<ginelly@aconnellybaker.com Email: imuir@connellybaker.com

ATTORNEYSFOR PLAINTIFF, HARRISCOUNTY,TEXAS

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing instrument is being seived upon all counsel of æcord via email, facsimile, certified mail, and/or hand delivery on April 17, 2015.

Winstol D. Carter, Jr. Counsel for International Paper Co. Allyson N. Ho Craig A. Stanfield Morgan, Lewis & Bockius LLP 1000 Louisiana St., Suite 4000 Houston, Texas 77002 Telephone: (713) 890-5000 Facsimile: (713) 890-5001 Email: wcarter@moreanlewis.com Email: aho@morganlewis.com Email: cstanfield@morganlcwis.com

Mary E. Smith Counsel for the State of Texas. Anthony Benedict Texas Commission on Environmental Assistant Attorney General Quality Office of the Attorney General of Texas Environmental Protection Division P.O. Box 12548, Capitol Station Austin. Texas 78711-2548 Telephone (512) 463-2012 Facsimile (512) 320-0911 Email: marv.smith@texasattorneveeneraLeov Email: anthonv.benedict@texasanomeySED E

/s/ Earnest Wotring Earnest Wotring

No 2011-76724

Harris County, Texas, el al, Plamtiff § IN THE DISTRICT COURT OF § §

v. § HARRIS COUNTY, TEXAS §

International Paper Company, et al, § Defendants § 295th JUDICIAL DISTRICT

Plaintiff Harris County's Requested Question Number One (To Replace Question Eight)

Do you find that any of the following Defendants caused, suffered, allowed, or permitted the handling or disposal of Industrial Solid Waste in such a manner so as to cause:

1. The Discharge or imminent threat of discharge of industrial solid waste into or adjacent to the water in the state;

2. The creation and maintenance of a nuisance, or

3 The endangerment of the public health and welfare

at any time from December 31, 1975, until March 30, 2008?

Granted

Refused

Modified as Follows:

No 2011-76724

Harris County, Texas, et al, Plamitff § IN THE DISTRICT COURT OF § §

v § HARRIS COUNTY, TEXAS §

International Paper Company, et al, § Defendants § 295th JUDICIAL DISTRICT

Plaintiff Harris County's Requested Question Number Two (Additional Instruction for Question Eight)

A "Nuisance" is a condition that substantially mterferes with the use and enjoyment of property by causing unreasonable discomfort or annoyance to persons of ordinary sensibilities.

Granted

Refused

Modified as Follows:

Question Admin. Code Violation

30 Tex. Admin. Code § 335.4

Do you find that any of the following Defendants caused, suffered, allowed, or permitted the collection, handling, Storage, Processing, or Disposal of Industrial Solid Waste in such a manner so as to cause:

1 The Discharge or imminent threat of Discharge of Industrial Solid Waste mto or adjacent to the Water in the State;

2. The creation and maintenance of a nuisance; or

3. The endangerment of the public health and welfare

at any time from December 31, 1975, until March 30, 2008?

"Disposal" means the Discharge, deposit, mjection, dumping, spilling, leaking, or placing of any solid waste or hazardous waste (whether containerized or uncontainerized) into or on any land or water so sohd waste or hazardous waste or any constituent that such

waters.2

thereof may enter the environment or be discharged mto any

In this question, "Discharge" means accidental or mtentional spilling, leakmg pumping, pouring, emitting, emptymg, or dumping of waste into or on any land or water

Answer "Yes" or "No" for each Defendant

a Champion Paper (before December 31, 2000)

b. Intemational Paper (on or after December 31, 2000):

c MIMC.

d GC Environmental (before December 31, 2003).

e Waste Manggement o xas (on or after December 31, 2003)

ACCEPTED:

REFUSED

I TEX WATER CODE TEX ADMIN CODE § 7 101, 30 § 335 4

30 TEX ADMIN CODE § 335 2

1(44)

3

30 TEN ADMIN CODE § 335 l(43)

No. 2011-76724

Hams County, Texas, et al, Plaintiff § IN THE DISTRICT COURT OF § §

v. § HARRIS COUNTY, TEXAS §

International Paper Company, et al, § Defendants § 295th JUDICIAL DISTRICT

Plaintiff Harris County's Requested Question NumberNine (Additional Question)

Did the sludge become a fixture on the property where the Site is located?

Answer "Yes" or "No":

Granted

Refused

Modified as Follows:

No. 2011-76724

Harris County, Texas, et al, Plaintiff § IN THE DISTRICT COURT OF § §

v. § HARRIS COUNTY, TEXAS §

International Paper Company, et al, § Defendants § 295th JUDICIAL DISTRICT

Plaintiff Harris County's Requested Instruction Number Seventeen (Instruction for Requested Question NumberNine)

For the sludge to become a fixture, it must become a permanent part of the land.

Granted

Refused

Modified as Follows:

No. 2011-76724

Harris County, Texas, «I al, Plamtiff § IN THE DISTRICT COURT OF § §

v. § HARRIS COUNTY, TEXAS §

International Paper Company, et al, § Defendants § 295th JUDICIAL DISTRICT

Plaintiff Harris County's Requested Instruction Number Eighteen (Instruction for Requested Question Number Nine)

In deciding whether the sludge became a permanent party of the land, you should consider:

1. The mode and sufficiency of annexation of the sludge, either real or constructive, 2. The adaptation of the sludge to the use or purpose of the land, and 3. The mtention of the party who annexed the sludge to the land

Granted

Refused

Modified as Follows

No. 2011-76724

Hams County, Texas, et al, Plamtiff § IN THE DISTRICT COURT OF § §

v. § HARRIS COUNTY. TEXAS §

International Paper Company, et al, § Defendants § 295th JUDlCIAL DISTRICT

Plaintiff Harris County's Requested Question Number Ten (Additional Question)

Did the sludge improve the market value of the property where the Site is located?

Answer "Yes" or "No"

Granted

Refused

Modified as Follows: