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Jan 31 2017

Limitations and Preemption are Key Issues in Nuisance/Trespass Case Before Texas Supreme Court

January 31, 2017 (Houston)

James SmithBy James Smith – “Environmental Alert” (Schirrmeister, Diaz-Arrastia, Brem LLP)

For permanent injuries to property caused by nuisance or trespass, the plaintiffs must file suit within two years of the first injury, or the claim is barred by limitations.  But if the plaintiffs claim that the injury only started when the last of several independently owned facilities began operating, are the facilities that have been operating more than two years before suit still at risk?  Also, if a facility emits only in compliance with an extensive regulatory program, is it still at risk for nuisance or trespass claims for those emissions, or will regulatory compliance protect it, under the doctrine of preemption?

The Texas Supreme Court has the opportunity to address limitations and preemption in deciding Atmos Energy Corporation v. Town of Dish.

Multiple Facilities; All But One Operated for More than Two Years Before Suit

Based on the common law doctrines of nuisance and trespass, the plaintiffs complain that four compressor stations and one metering station, all independently owned and operated, have substantially interfered with residences and with the Town of Dish.  The compressor stations had all been operating more than two years before the plaintiffs filed suit.  Some of the plaintiffs complained about noise and odor from the compressor stations more than two years before filing suit.  At the request of the defendants, the trial court dismissed the case, based on limitations.  The defendants argued that any possible injury was permanent and began more than two years before suit was filed.

The plaintiffs appealed, asserting that the injury did not begin until the “synergistic effect” of the metering station combined with the four compressor stations, less than two years before filing.  An intermediate appellate court determined that dismissal was improper.  The defendant companies appealed to the Texas Supreme Court, requesting a reinstatement of the trial court’s dismissal based on limitations.

Does Compliance with the Regulations Preempt Common Law?

As an additional argument, the companies claim dismissal was proper because they operated in compliance with the extensive set of regulations of the Texas Commission on Environmental Quality (“TCEQ”), promulgated under the Texas Clean Air Act.  The defendants argue that TCEQ’s extensive regulations preempt any traditional common law in this area.

The defendants point to another recent Texas Supreme Court decision that determined that companies are liable for nuisances if they intentionally and substantially interfere with enjoyment of another’s property, or if their negligence causes substantial interference.  (My June 28, 2016 Alert discusses that recent decision.)  The Atmos defendants argue that the plaintiffs cannot show violations of any regulations, and therefore they cannot prove intentional or negligent interference.  Moreover, they argue that emissions allowed by TCEQ regulations cannot be a trespass.

Oral arguments are set for March 1, 2017.

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