X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
E.I. du Pont de Nemours and Company went to trial in Beaumont, Texas, in a poison well case with the deck stacked against it, and the stakes high. But DuPont won that bet, saving the company multimillions and frustrating trial lawyers’ hopes to establish property rights deep below the surface of the earth. The plaintiffs suing DuPont demanded $173 million for underground storage and environmental damage. Their claim: that the cancer-causing chemicals a DuPont plant was flushing through its wells into the earth had traveled beneath their land, had trashed their mineral rights, and would ultimately pollute their drinking water. Plaintiffs’ lawyers around the United States were watching to see whether such cases might pay off. DuPont and other companies have wells like these around the country; their potential liability is enormous. And it might go further still. A plaintiffs’ victory might firmly establish property rights under the earth — which could be used as the foundation for other environmental and mineral rights suits. The test case in Beaumont seemed ideal for the plaintiffs’ bar. The people claiming that DuPont’s wells had polluted their property were none other than the McFaddins — one of the most prominent families in Texas. A McFaddin had fought at the Battle of San Jacinto, which had helped win the state independence from Mexico. A McFaddin owned the land under Spindletop dome, the location of the 1901 oil strike that put Beaumont on the map and helped change Texas’ image from the home of slow-talking cowboys to the land of risk-taking wildcatters. The firm representing the McFaddins was Beaumont’s Provost & Umphrey Law Firm — one of the state’s richest, best-known firms. It’s one of five hired by the Texas attorney general to pursue litigation against the tobacco industry. Provost & Umphrey’s share of the $2.3 billion in tobacco case legal fees means it could well afford the estimated $1 million cost to go after DuPont. (The firm would not confirm that figure.) Provost & Umphrey fielded a crack trial team, led by partners J. Keith Hyde and Greg Thompson. (Thompson is known for having won a $129 million verdict in an asbestos case.) Worse yet for DuPont: The suit was tried in a jurisdiction renowned as a plaintiffs’ heaven. “If you get your feelings hurt easily, or you can’t take a whipping every once in a while, you can’t be a defense lawyer here,” says DuPont’s local counsel in the case, M.C. Carrington of Beaumont’s Mehaffy & Weber. The plaintiffs’ claims also were problematic. They contended that toxic waste had migrated from under DuPont’s Beaumont Works chemical plant to the plaintiffs’ land and destroyed the value of their mineral rights — a charge akin to murder in oil-and-gas country. And they claimed that the value of the surface acreage of the legendary McFaddin property was cut in half. That’s like saying DuPont had defiled a Texas monument. Or at least that’s how the plaintiffs hoped jurors would see it. Key evidence seemed to work against DuPont. Plaintiffs had a map prepared by the company to gain the federal government’s permission to build what’s technically called a “deep injection well.” Such wells are, essentially, multilayered high-tech pipes, thrust deep into the bowels of the earth, through which manufacturing plants flush their toxic wastes. Those chemicals then remain in the earth’s brine-water layer, where, supposedly, they more or less stay put, or, if they span out, it’s in a diluted form. On its map, DuPont predicted that injected chemicals could creep underground, below the land owned by the McFaddins. As Provost & Umphrey’s Hyde puts it: “These deep wells inject hazardous waste beneath someone else’s property. This [case] centered around a trespass.” U.S. District Judge Thad Heartfield in Beaumont, Texas thought that allegation was good enough for the case to go forward. And he set the bar relatively low for the plaintiffs to make their case. Refusing DuPont’s motion to dismiss, he noted that the Texas Supreme Court has “recognized the viability of subsurface trespass claims under Texas law.” And every unauthorized entry is considered a trespass in Texas, he noted — even if there is no damage and no interference with use. DuPont feared that if the plaintiffs won, they’d be establishing those rights, as Silvio DeCarli, the company lawyer in charge of the defense, puts it, “to the center of the earth.” Then a flood of poison well and other deep-earth suits might be unleashed. All told, companies have about 500 of these “Class I injection wells” around the United States. “We viewed this as the next wave of litigation” by the plaintiffs’ bar, says DuPont’s other outside counsel on the case, Damond Mace, a partner in Cleveland’s Squire, Sanders & Dempsey. “If they won here, it would march across the country.” Imagine the relief — the jubilation, even — when, at the end of the trial, a jury on March 13 rejected the plaintiffs’ case. It was, says Thomas Sager, DuPont’s top legal officer, “one of the top five wins I’ve seen in my time at DuPont.” And Sager has been with the company for 25 years. Sager attributes the win to DuPont’s ability to assemble a multifirm team, a virtual law firm for the case, rather than pay one firm for all the needed expertise. DuPont’s injection well team was put together in 1998, soon after the company received its first letter from the plaintiffs. DeCarli was DuPont’s natural choice as inside point man; he’d been an environmental engineer designing pollution-control systems for 10 years before going to law school. DeCarli selected Beaumont’s Mehaffy & Weber for its local savvy: knowledge of the players, potential impact on real estate values, that sort of thing. But “I got to Damond Mace by chance,” DeCarli says. His Lexis search of reported opinions on injection well cases found a few, one of which had gone to verdict and appeal. The Ohio Supreme Court upheld a win for Cleveland’s BP Chemicals, Inc., over a plant in Lima, Ohio. Mace had represented BP. The Delaware-based DeCarli met with the plaintiffs’ lawyers, clients, and scientists in Beaumont, his technical experts by his side. It was, he says, “a mediation without a mediator.” But as the DuPont lawyer listened, he came to believe that the plaintiffs had no proof of damages: “It just didn’t seem like there had been any harm.” And the only real evidence plaintiffs had of toxic chemicals migrating beneath McFaddin land, he concluded, was DuPont’s own maps. These are the maps the company was mandated to give the Environmental Protection Agency, depicting a worst-case scenario of where waste might travel. The federal government requires companies to provide proof that the material they propose to inject will do no harm to the environment, that it will be contained in a defined zone for 10,000 years, and that it will not affect oil or gas in the defined area. DuPont had passed that test. As a result, since the 1980s the company has injected some 3.6 billion gallons of wastewater containing acrylonitrile into the well, 4,200 feet under the Beaumont plant. Acrolonitrile, the chemical produced by the plant, is a basic building block for some plastics. It is also a known carcinogen. More than a year passed after that first meeting; letters were exchanged. Then, in December 1999, plaintiffs filed suit. They insisted that there were chemicals in the underground areas owned by McFaddin, and that DuPont had to pay an underground storage fee. The price tag: $43 million in compensatories, much of that in past and future storage fees — plus $130 million in punitives (based on the plaintiffs’ assessment of how much it would cost for DuPont to dispose of the hazardous waste somewhere else). The case barreled toward the courtroom. Settlement demands were always too high, says DeCarli: “We had these wells at other plants; so did other corporations. If we paid this claim, where would it stop?” Waste Management Inc. had settled an injection well case in 1991 for $15 million. But plaintiffs fared less well last year in two cases, both in Louisiana and both dismissed on summary judgment. With Boudreaux v. Equitable Storage, Mace says, plaintiffs had a problem with their experts. In Mongreu v. Monsanto, plaintiffs pursued the novel argument that the injected materials migrating under their land was an unconstitutional taking of their property. The 5th U.S. Circuit Court of Appeals affirmed Mongreu’s summary judgment in May. Both cases are on appeal. “These wells were an effort to utilize the best disposal techniques to get rid of hazardous waste,” says DeCarli. “This was the most environmentally sound way of getting this stuff out of the biosphere … . There is no way this can migrate up to potable water.” So DuPont drew a line in the sand. There would be no settlement, says Sager: “We were determined.” Everyone’s role was clear as the defense team prepared for trial: Mace would handle the science; his undergraduate degree is in chemistry. Carrington and his partner Sandra Clark would contribute their insights into local opposing counsel. Carrington and Clark have been with Mehaffy & Weber since each graduated from law school, about two decades ago. Both specialize in defending large corporations in toxic torts and environmental litigation in the Gulf Coast area. In fact, Carrington was not only familiar with the opposing party, he was good friends with one of the named plaintiffs, Bill Wilson. Their children attended the same private schools; they’d gone on weekend trips with a mutual friend; Wilson even owned the building that houses the offices of Mehaffy & Weber, the Bank of America building on Beaumont’s Calder Avenue at 10th Street. Suddenly adversaries in a high-stakes case, they put their friendship on hold. “It was one of those uncomfortable situations,” says Carrington. “We weren’t mad at each other, but we didn’t do much beyond nodding to each other when we saw each other in the hall or the elevator.” Carrington also knew two of the Provost & Umphrey lawyers on the case. He’d already tried cases against both Hyde and Darren Brown. “I knew they would come in with a blunt, sledgehammer approach, that we were the greedy corporate raiders,” says Carrington. So he made sure the defense stayed low-key. Clark goes further, saying: “There were no surprises at the trial.” That’s quite a claim. But the defense was ready when plaintiffs’ counsel began the trial by recalling Spindletop and the Battle of San Jacinto and the family’s vaunted place in Beaumont history. “Part of the plaintiffs’ strategy was to play the historical family story high in the trial. They tried to make this appear as if it was a family who cared about their land,” says Clark. Wilson and other name plaintiffs and family members took the witness stand to tell the tale. The testimony would resonate with Beaumont jurors already keenly aware of the McFaddin name. There’s a McFaddin Wildlife Refuge on the upper Texas coast. And on McFaddin Avenue in Old Town, Beaumont, a beautiful Southern mansion built in 1906 by the McFaddin family is now a museum. Nonsense, said the defense. Carrington went after his buddy Wilson and doesn’t mind saying, “I hammered him in cross.” “While the land had been in the family for generations,” explains Clark, “they had sold off most of the surface estate” over the years. The land is now owned by corporate-type entities: estates, trusts, and banks. And no one lives there. Since the McFaddin family first sold part of the land to DuPont in the late 1940s, it’s been converted to industrial use. Other plants in the area include an Exxon Mobil refinery and a Sun Oil terminal. “They’re saying this is our heritage,” says Carrington. “I’m saying this is crazy.” The McFaddins own only about 230 acres now, plus the mineral rights under the entire site; about 20 percent of that mineral acreage is under the DuPont plant. “It’s not some homeland,” says Carrington. “It’s all about money.” As for the science, the plaintiffs’ geologists and computer modelers claimed to show where a plume of toxic chemicals had spread; other experts testified about how this had damaged the property’s value. Mace says that the plaintiffs did a “great job of signing up all the local experts.” As a result, DuPont was forced to turn to an outsider, Don Warner, professor emeritus of geological engineering at the School of Mines and Metallurgy at the University of Missouri-Rolla. Warner had done research for the EPA on deep injection wells when the federal government was considering how to regulate them. For the DuPont case, Warner analyzed the site’s geology, looking at well logs, seismic data, and faults to render an opinion on where the wastewater could flow. He spent four hours on the witness stand rebutting the McFaddins’ claims. “The injectate,” insists Mace, “doesn’t spread as far as they say it does.” Still, some of the most effective testimony for DuPont may have come from its passive witnesses: huge visual aids lugged into court and kept before the jurors throughout the trial. One display was an 8-foot-tall, 3-foot-wide, multicolored chart showing what DuPont believes is the geology of the area beneath the plant — and why that land formation could not allow wastewater to migrate to the McFaddin property. At the top of this chart, putting everything into perspective, is a tiny dot depicting the tallest building in Beaumont. The rest is an enormous cross-section of the 8,000 feet of layers beneath the DuPont plant: aquifers, shale, and clay. It looks, says Mace, “like a layer cake.” The defense also hauled into court 200 pounds of pipe — a scaled model of the top two feet of an injection well. The pipe has an outer casing of steel, followed by inner layers of concrete, then steel, then the injection pipe. Hazardous materials are pushed with water through the innermost pipe. At the same time, water is injected at high pressure in a surrounding casing so that, DeCarli explains, “if there is a leak in the internal pipe — a hole, a rupture or puncture — the waste doesn’t flow out; the water flows in.” The defense also pushed hard on this key scientific issue: The chemicals were being injected into existing brine water — which naturally has high levels of arsenic and metals. “Brine water is itself toxic,” says Mace. “If you tried to use it to water crops, it would kill them. It’s already unusable. By definition, pollution makes water unfit for drinking, but the brine water was already unfit.” After an 11-day trial, the jury had deliberated just two hours, Carrington recalls, when the parties were called back to the courtroom. “We thought the jury had a question. But as we came in, the marshal said, ‘You’ve got a verdict,’ and the jurors started filing in. It caught us off guard, but we felt, with this quick a verdict, it had to be a favorable result for us. If a jury is going to give away money, they’re going to take a little time.” Judge Heartfield looked at the verdict and handed it to the clerk to read aloud. At first Mace thought something had gone terribly wrong. Jurors were rejecting DuPont’s assertion that plaintiffs were barred from making their claims by the statute of limitations. Surprised, he started to get very nervous. “It was only a matter of a few seconds between the verdict on the first question and the next one,” says Mace, “but it seemed like hours.” Then, in quick succession, the jury rejected the rest of the plaintiffs’ case, finding no trespass, no violation of the plaintiffs’ storage rights, and no intentional pollution. Talk to the jurors today, and they’ll tell you that the defense’s experts were simply more convincing. Juror Wallace Wilbanks, for example, says that the plaintiffs’ first paid professional witness, Philip Bedient of Rice University, “kept talking about the poison that DuPont was dumping on the McFaddins’ property. It was ‘the poison this,’ ‘the poison that,’ ” says Wilbanks. But then the professor “ admitted that the brine water that was 4,300-5,000 feet underground was very poisonous itself. You give it to cattle, your cattle will die. You drink it, you will die. That told me right quick that what DuPont was putting down there wasn’t as bad as what’s down there already.” The jurors were particularly unimpressed by the plaintiffs’ real estate expert, says Wilbanks, who lives about two miles from the McFaddin land. “The plaintiffs’ expert had devaluated the property by half and said the mineral rights were worth zero, but he admitted he never set foot on the property,” recalls Wilbank. In contrast, a defense real estate appraiser “had walked over the whole property. He knew it.” This expert talked about how a drag strip had been on the land years before. “I used to drag cars over there,” says Wilbanks. “He knew what he was talking about.” DuPont triumphed. But the case cost the company significantly more than $1 million. The McFaddins did not file an appeal, not even a motion for a retrial. Perhaps they decided $1 million was enough to spend on a lost case. Whatever their reasoning, injection well suits may not dry up as completely as DuPont would like. Hyde does say, “If we had another case with similar facts and similar circumstances, we still would pursue it. We still think our clients’ property rights were violated.” Surely, what happens to the two cases in Louisiana will help shape trial lawyers’ view of poison well cases’ potential. In Beaumont, though, things are more resolved. After a two-year hiatus, Carrington and Wilson are friends again. It may even be that there’s an added respect between them. Recently, Carrington reports, Wilson hired him to handle a lawsuit.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.