The S.C. Supreme Court will hear arguments this week in a Myrtle Beach pollution case that could determine whether property owners near, but not directly impacted by, contamination can sue for damages.
Property owners living just outside the boundary of a large plume of groundwater pollution stretching north from 17th Avenue South have sued electronics manufacturer AVX Corp., claiming their property values have been diminished because of the public stigma the contamination has created. They say fear of the nearby pollution, not the pollution itself, has hurt them financially.
AVX counters by saying the property owners have no claim because their homes, while near the pollution, aren’t sitting atop the groundwater plume. AVX says state law precludes anyone whose property hasn’t been directly affected by contamination from filing claims.
Circuit Court Judge Benjamin Culbertson agreed with AVX and dismissed the property owners’ claims in 2012. The state Supreme Court agreed to take up the property owners’ appeal to decide an issue that has little precedent in South Carolina.
“Even though the contamination seems to be contained, the fact that you reside amidst a publicly known contaminated area is a serious factor that concerns the average home buyer,” Gene Connell, a Surfside Beach lawyer representing the property owners, said in court documents. Connell points to one property who was denied a home improvement loan by a local credit union that cited the nearby pollution as the reason the loan was not approved.
“The public’s perception and fear of the contaminated area created by the leaking toxic chemicals greatly diminishes the market value of your property.” Connell stated. “Suffice it to say, [my clients] fear living next to a contaminated cleanup site.”
AVX lawyer Richard Morton, of Charlotte, said the property owners’ fear is based on conjecture instead of fact and doesn’t amount to a legal claim against the electronics manufacturer. Morton said state law calls for property to have been physically affected by the contamination for a claim to be successful.
The lawsuit is “based only upon the speculative allegation and belief that they will be unable to sell their properties should they ever decide to do so at some hypothetical future point in time,” Morton stated in court documents. Morton wants the state Supreme Court to uphold Culbertson’s ruling, adding that none of the property owners “have actually tried and been unable to sell any of their properties.”
AVX has admitted that it caused groundwater in a roughly 10-block neighborhood north of its Myrtle Beach plant to be contaminated with trichloroethylene, or TCE, an industrial degreaser that has been linked to cancer and other health problems. Over decades, that pollution migrated from the AVX facility through groundwater to the adjacent neighborhood. Environmental experts have identified the boundaries where the pollution exists, and AVX is paying to clean up the contamination, which is not considered a health hazard.
The state Supreme Court last year heard a similar case in which six individuals claimed odors coming from the nearby Lee County Landfill in Bishopville had diminished their properties’ values. The court ruled that those individuals could not sue for trespass because “South Carolina adheres to the traditional rule requiring an invasion by a physical, tangible thing for a trespass to exist.”
The court left open the possibility that a negligence or nuisance claim might be possible, but added that such claims would be difficult to prove. The property owners in the AVX case are suing for trespass, negligence and nuisance.
Connell, in court documents, cited a pair of cases from the 1800s as evidence that a nuisance can exist even without physical impact to property.
In an 1858 case, the state Court of Appeals ruled that a property owner living near a working steam cotton press could sue for diminished property values based on the increased risk of fire from boilers on nearby land. And in an 1885 case, the state Supreme Court ruled that the apparent danger of living near an active gun powder magazine could be considered a nuisance.
However, another case cited by AVX states that property owners in South Carolina must show there has been “unreasonable interference with the use and enjoyment of their properties” to make a nuisance claim.
The property owners near AVX “must plead and prove actual contamination in order to establish an actionable nuisance,” Morton stated in court documents.
The state Supreme Court will hear arguments in the AVX case on Thursday, but the court isn’t expected to issue an opinion for at least several weeks. Regardless of the outcome of Thursday’s hearing, the class-action lawsuit involving those people whose property is contaminated will continue in circuit court.
The class-action lawsuit is one of three lawsuits AVX has faced over the TCE pollution since its extent was discovered in 2006. In the first lawsuit, heard in federal court, AVX agreed half-way through a trial to a confidential settlement with adjacent property owner Horry Land Co. A jury in a second lawsuit last year awarded $750,000 in actual and punitive damages to the developers of a planned condominium project that was scrapped because of the pollution. AVX later agreed to a confidential settlement in that case and the jury’s verdict was never entered.
The pollution stems from AVX’s use and handling of TCE during the 1970s and 1980s, and its migration through the groundwater in a narrow swath of Myrtle Beach has taken decades to occur. Court documents and testimony show AVX officials knew in the 1980s that the pollution was moving from its property to the adjacent neighborhood, but kept that information hidden from regulators and politicians. The company finally admitted to the pollution in 1995, but told regulators it was limited to the AVX site. Groundwater testing in 2006 showed high levels of TCE had moved through groundwater to the neighborhood.
AVX – which moved its world headquarters from Myrtle Beach to Greenville in 2009 – is paying to clean up the pollution using a process called enhanced reductive dechlorination, in which molasses is injected into the groundwater. The molasses creates bacteria that eat the TCE, breaking it down into harmless matter.
Experts disagree about the amount of time such a cleanup will take. AVX consultants say the TCE can be removed within five years, while others say it can take decades to reduce the pollution to federal standards. The pollution is not considered a health hazard because the groundwater is not a drinking water source.