Negligent Noise Nuisance Case Presents Procedural

Negligent Noise Nuisance Case Presents Procedural and Substantive Issues to the Texas Supreme Court
February 2, 2016
The Supreme Court of Texas has scheduled oral arguments in a negligent nuisance case, Crosstex North Texas Pipeline v Gardiner.  What may appear to be a simple case alleging that a neighbor’s noise created a common law nuisance has raised several substantive and procedural issues.

The Gardiners own 95 acres in Denton County, which they use for grazing and riding horses, and which they are holding for investment. No residences are on the Gardiners’ property.  They complain of a natural gas compressor station owned by Crosstex that is across the highway from their property.

At trial, the jury found that noise from the compressors constituted a negligent nuisance. The jury awarded the Gardiners over $2 million in damages.

The three judge panel of the intermediate appellate court in Fort Worth made a somewhat unusual ruling, holding that the evidence of the nuisance was legally sufficient, but not factually sufficient. That court remanded the case for a new trial.  One judge dissented, stating that the evidence was factually as well as legally sufficient, so that the jury verdict should have been upheld.

To determine if evidence is legally sufficient, appellate courts look only at the evidence supporting the jury’s finding, and will uphold the finding if the supporting evidence amounts to more than a scintilla. Both intermediate appellate courts and the Texas Supreme Court have authority to analyze legal sufficiency, and the Texas Supreme Court may conduct a legal sufficiency analysis that is independent of the analysis of the intermediate court.  In general, if a court determines that the evidence was not legally sufficient, the result is a dismissal of the case and the party that won before the jury gets nothing.

Factual sufficiency is different. An intermediate appellate court may determine that the evidence is factually insufficient by analyzing all of the evidence, both which supports and does not support the verdict.  The evidence is factually insufficient if in that context the jury’s finding was so against the great weight and preponderance of the evidence as to be manifestly unjust, shocking to the conscience, or clearly demonstrating bias.  In general, when an intermediate appellate court reverses based on factual sufficiency, the remedy is a new trial.

Due to a provision in the Texas Constitution, only intermediate appellate courts may perform factual sufficiency analysis; Texas Supreme Court review is limited to determining if the intermediate court properly applied the factual sufficiency standard. The Supreme Court may not conduct its own factual review.  If it determines that the intermediate court’s decision does not establish proper application of the standard, or shows use of the wrong standard, the remedy is a remand for a new factual sufficiency analysis by the intermediate court.

In this case, both sides were displeased with the intermediate court’s ruling, and both appealed. Crosstex argues that the evidence was not legally sufficient to support the verdict, and that the measure of damages was improper. Crosstex will request that the Supreme Court render a decision dismissing the case in its entirety.

In contrast, the Gardiners argue that the intermediate appellate court in Fort Worth did not properly apply the factual sufficiency standard, and that the Texas Supreme Court should remand to the Fort Worth court for a proper factual review. The Gardiners no doubt hope that in a second factual review, the Fort Worth court will reinstate the jury’s verdict of over $2 million.

The case also provides an opportunity for the Supreme Court to address substantive issues related to nuisance cases, including the relationship between negligence and nuisance. Some argue that nuisance is a claim based on a property right, and that a party subject to a nuisance should never have to prove negligence. In contrast, others claim that only certain kinds of nuisances create liability absent negligence, and that in this situation the Gardiners needed to prove not only that the noise was unreasonable but that Crosstex was negligent.

Another issue concerns the measure of damages. The Gardiners do not use the property for residential purposes, but for grazing and riding horses. The jury’s award of over $2 million for grazing land was, in part, due to evidence that the Gardiners would, in the near future, use the property for residential purposes. Crosstex argues that when damages are based on a highest and best use different from the existing use, the jury must receive proof that the property is adaptable to the new use within the immediate future. Crosstex claims that the Gardiners had no evidence to support this.

Finally, Crosstex argues that its abatement efforts may not have been properly considered by the jury. Generally, nuisance damages are measured by the value of the property before and then just after the particular nuisance. However, when abatement efforts are involved, it may not be clear when the jury should consider the time to assess damages.

The case gives the Texas Supreme Court a number of issues to examine. As is often the case, the Court could focus only on the legal/factual sufficiency issues, and not analyze the more substantive issues, or it could give further guidance regarding the substantive law of nuisance and damages.  It seems that in recent cases the Court has decided property damage cases based on narrow issues; examples include FPL Farming v. Environmental Processing Systems, and the case that I argued, Houston Unlimited v. Mel Acres Ranch.  In both of these cases, the Court could have addressed issues regarding the effect of state regulatory actions on property damage claims, but the Court instead decided the cases based on issues of a more procedural nature.

Oral argument before the Texas Supreme Court will be March 29, 2016.

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