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 [email protected] [email protected] 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 ii 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 iii 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 iv 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 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.

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.

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.

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.

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.

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.

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.”).

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.

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.

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).

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.

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.

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.

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.

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.

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.

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).

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).

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 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.

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.

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).

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.

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.

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, non- discretionary 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).

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).

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 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 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.

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).

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.

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).

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.”).

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.

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.

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).

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).

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).

improper exclusion of the evidence regarding dioxin’s dangers to public health and of nuisance.

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 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.

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 product- liability 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).

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.

[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).

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.

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).

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 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 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).

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).

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.

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.

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 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.

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.

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.

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.

● 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.

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 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 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.

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 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 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 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).

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.

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.”).

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 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.

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.

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.

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 [email protected] [email protected] terence.o’[email protected] [email protected] [email protected] [email protected]

Counsel for Appellant Harris County, Texas

November 13, 2015

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 35173 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 35174

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 35175

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 35176

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 35177 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 35178

(3)Dates from September 1, 1997 until December 30, 2000 35179 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 35180

(Penally Amounts must be within the range of S30 - 310,000 per day of wolation)

Date or Date Range Penalty Amount Per Day 35181 35182

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 35183 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 35184

(3) Dates from September 1, 1985 until August 31, 1997 35186 (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 35187 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 35188 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 35189

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 35190 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) 35191 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) 35192 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 35194 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 35195 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 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 35196

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 35197 x i it 35682 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: [email protected] Email: nic<[email protected] Email: [email protected] ATTORNEYSFOR PLAINTIFF, HARRISCOUNTY,TEXAS 35683

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: [email protected] Email: [email protected] Email: [email protected] 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 35684

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: 35097 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: 35098 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) 35127 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: 35113 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: 35114 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 35115 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: 35116