A group of Myrtle Beach property owners can proceed with a lawsuit against AVX Corp. after the state Supreme Court reversed a lower court’s decision to dismiss their case, according to documents filed Wednesday.
Lawyers for the landowners had argued that Circuit Court Judge Benjamin Culbertson improperly dismissed the claims because he refused to hear evidence that the owners’ property values have decreased and that bank loans have been denied because of pollution on property that is near their land.
The high court agreed, and the majority of justices said the case “raises the novel question whether South Carolina will recognize ‘stigma damages.’”
Wednesday’s decision left no doubts about the property owners’ next move.
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“We get a trial,” said Gene Connell, the Surfside Beach lawyer representing the residents. “I was pleased that the court reversed the lower court’s decision.”
A spokesman for AVX, which moved its world headquarters from Myrtle Beach to Greenville in 2009, could not be reached Wednesday for comment. The company demolished the remnants of the plant earlier this year.
The pollution stems from AVX’s use and handling of trichloroethylene, an industrial degreaser that can cause cancer and other health problems. The electronics manufacturer used TCE during the 1970s and 1980s, and its migration through the groundwater in a narrow swath of Myrtle Beach has taken decades.
Court documents and testimony show AVX officials knew in the 1980s that the pollution was moving from its 17th Avenue South 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.
Last year, AVX agreed to pay $1.2 million to the owners of 42 properties in Myrtle Beach where groundwater contaminated by TCE was discovered. The agreement provided most landowners with $10,000-$15,000 apiece, depending on the size and condition of each property.
In 2011, AVX settled a separate lawsuit with adjacent property owner Horry Land Co., which also claimed its property values had been ruined by the contamination. The terms of that settlement are confidential, but property records show AVX bought the 21.5-acre Horry Land site for $4.6 million.
A third contamination lawsuit — filed by a family that wanted to develop a condominium project near the manufacturer — ended in August 2013 when a jury awarded $750,000 to JDS Development. Both sides later agreed to vacate the judgment in favor of a confidential settlement.
The last remaining issue was whether owners of property outside the contamination area could sue AVX because the stigma from the nearby pollution damaged their property values. Culbertson dismissed the case, leading to the residents’ appeal.
During arguments before the state Supreme Court last year, AVX’s lawyer insisted that the property owners didn’t have a case and should not be allowed to sue the company.
Justices Costa Pleicones, Kaye Hearn and Donald Beatty supported reversing the lower court’s decision. John Kittredge and Chief Justice Jean Toal dissented.
In Wednesday’s court filing, the majority of justices stated the case poses a novel question.
“Further development of the facts may demonstrate that appellants’ property has in fact lost value due to its proximity to the property contaminated by TCE, or that the contamination has been remediated and the alleged stigma ameliorated,” the ruling states. “The creation of a factual record will allow us to decide whether to adopt a ‘no stigma damages rule;’ an ‘all stigma damages rule;’ or a modified rule.”
- AVX 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.
- The pollution is not considered a health hazard because the groundwater is not a drinking water source.