Crosstex North Texas Pipeline v. Gardiner – a Treatise on the Law of Nuisance

Written by John McFarland of the Oil and Gas Lawyer Blog.

The Gardiners claimed that a compressor station across the road from their property created a nuisance that damaged the value of their property. A trial resulted in a $2 million judgment for the Gardiners. After an eight-year battle, the Texas Supreme Court decided the Gardiners would have to try their case again. The case is another in a recent spate of cases alleging nuisance damages for operations in the oil field.

 

The Gardiners own 95 acres in Denton County that they use for recreational purposes. Crosstex built a 130-mile pipeline from Tarrant County to Lamar County that passes close to the Gardiner tract, and Crosstex bought 20 acres just across the road from the Gardiners and installed compressors there to compress gas in its pipeline. Crosstex installed four diesel engines to run the compressors, each “bigger than mobile homes.” Neighbors, including the Gardiners, complained of the noise caused by the compressor station’s operations, describing it as being as loud as a jet airplane or a locomotive engine. Although Crosstex installed mufflers and sound blankets to dampen the noise and surrounded the compressor engines with sound walls on three sides (but not on the side facing the Gardiners’ property), the Gardiners were not satisfied and filed suit in 2008, alleging that Crosstex had both intentionally and negligently created a nuisance.

In 2011, Crosstex installed “air intake silencers” at the compressor station and a fifteen-foot sound wall on the side of the station facing the Gardiners. The Gardiners claim these efforts did not sufficiently abate the noise, and their case went to trial in January 2012. The jury found that Crosstex had negligently created a nuisance by installing the station and found that the nuisance had decreased the Gardiners’ property value by more than $2 million. Judgment was entered for the Gardiners, and Crosstex appealed.

The Court of Appeals in Fort Worth reversed and remanded the case for a new trial. It held, among other things, that the evidence was not “factually sufficient” to support the jury’s finding of a negligently created nuisance.

The Texas Supreme Court affirmed the Court of Appeals’ judgment remanding the case for a new trial. The unanimous opinion, written by Justice Boyd, is in large part a 40-page treatise on the law of nuisance in Texas. The court decided that there was a lot of confusion on when someone could recover damages for conduct causing a nuisance, and what a “nuisance” is in the eyes of the law, and it took the opportunity to clarify the law and lay out what a plaintiff has to prove to recover for nuisance.

The Court said:

A ‘nuisance’ is a condition that substantially interferes with the use and enjoyment of land by causing unreasonable discomfort or annoyance to persons of ordinary sensibilities attempting to us and enjoy it.

Notice that there are a lot of subjective words here: “substantial” interference, “unreasonable” discomfort, “ordinary” sensibilities. These subjective judgments are for the jury to make.

In order for a defendant to have legal responsibility for damages caused by a nuisance, the plaintiff must prove either that the defendant intentionally caused the nuisance or negligently caused the nuisance.

… a defendant may be held liable for intentionally causing a nuisance based on proof that he intentionally created or maintained a condition that substantially interferes with the claimant’s use and enjoyment of land by causing unreasonable discomfort or annoyance to persons of ordinary sensibilities attempting to use and enjoy it. “Intent” … means that ‘the actor desires to cause [the] consequences of his act, or that he believes that the consequences are substantially certain to result from it.’

But the plaintiff need not establish that the defendant’s conduct was “unreasonable,’ only that the effects of the defendant’s conduct are unreasonable.

To establish liability for negligent nuisance, the plaintiff must prove “the existence of a legal duty, a breach of that duty, and damages proximately caused by the breach.” To establish negligence, the plaintiff must convince the jury that the defendant’s conduct was “simply doing or failing to do what a person of ordinary prudence in the same or similar circumstances would have not done or done.”

Finally, the court discussed the remedies available if a defendant is found liable for a nuisance: money damages, injunctive relief, and “self-help abatement.” Whether to enjoin the activity causing the nuisance is “a discretionary decision for the judge after the case has been tried.” What kind of damages may be recovered depends on whether the injury is “temporary” or “permanent.” If temporary, the owner may recover only for lost use and enjoyment that has occurred up to the time of trial. If permanent, the owner may recover the lost market value of the land affected by the nuisance.

Crosstex made several arguments rejected by the Court, one of particular interest: Crosstex argued that the Gardiners should have been required to submit expert testimony on the duty of a pipeline company to abate noise under the same or similar circumstances in order to prove negligence. The Court disagreed. The Court said that it was in the province of the jury to decide whether Crosstex breached its duty, and “the breach of that duty was building and continuing to operate the compressor station in such a way that its noise was beyond reasonable levels.”

Noise from compressor stations can travel for miles in rural areas. Juries may be more and more willing to award damages for the “unreasonable” annoyance caused by that noise to “persons of ordinary sensibilities.” But holding on to the verdict may be difficult, as the Gardiners have experienced.