Texas Disposal Systems wins verdict against WM

Texas Disposal Systems Landfill, Inc. (TDS) received a $25.45 million verdict from a Travis County State District jury in its lawsuit against Waste Management of Texas, Inc (WM). The jury awarded $5.45 million in actual damages and $20 million in exemplary damages, finding that Waste Management had circulated false and defamatory statements about TDS and its Austin, Texas landfill in 1997 after TDS received approval from the San Antonio City Council for a 30-year landfill disposal, transfer station and recycling contract. At the time, the companies were competing for a 30-year contract with the City of Austin.

“TDS is very pleased to have had the opportunity to fairly present its case and to see justice prevail,” said Bob Gregory, chief executive officer of TDS.

The jury found that Waste Management’s employees and other representatives made the statements knowing of their falsity or with reckless disregard as to whether the statements were true or not.

The jury’s verdict found that Waste Management made statements that:

• Falsely implied that TDS’s southeast Travis County facility was environmentally less protective than other area landfills.
• Falsely stated that TDS had obtained an exception to the important and rigorous environmental rules affecting landfills.
• Falsely stated that TDS accepted types of waste that are not permitted under state rules and under its permit.

The statements were made in a grassroots campaign to leaders in Austin’s environmental community, as well as to members of the media and Austin City Council, without identifying that the source of the statements was Waste Management.

Waste Management of Texas Inc. has expressed disagreement with the decision.

According to Waste Management, the case is a 13 year old matter in which a previous trial jury awarded no damages. The case was originally filed in 1997 and tried in 2003, in which a jury found that the company suffered no damages. An appeal was made and, in 2006, the Texas Third Court of Appeals remanded the case for retrial, which was completed in December.

In a second trial, a jury found that an “action alert” involved in the case did not cause TDS to lose any profits or business. The issue of a public figure plaintiff being awarded millions for “presumed” reputational damage, when the same jury found zero in true lost profits or business, presents exactly the type of constitutional danger that the United States Supreme Court predicted in Gertz, and the Texas Supreme Court found of concern in Bently v. Bunton.

Significant errors by the Court led to the verdict and Waste Management is confident that the Court of Appeals and/or the Texas Supreme Court will overturn it.

“WM Texas is very disappointed by this decision,” said Don Smith, area vice president for WM of South Texas. “We will be seeking prompt relief from the trial court and are prepared to appeal this award to the highest level.”