Starrh & Starrh Cotton Growers v. Aera Energy LLC

In Starrh & Starrh Cotton Growers v. Aera Energy LLC (2007) 153 Cal.App.4th 583, a jury awarded damages of $ 3.8 million for a continuing subsurface trespass "resulting from the migration of wastewater produce from oil production activities" in aquifers underlying farmland. (Id. at p. 588.) Granting a partial directed verdict, "the trial court found Aera's trespass to be continuing because Aera persists in disposing of produced water into its unlined ponding basins. As a result, produced water continues to migrate onto Starrh's property and degrade the quality of its underlying aquifers." (Id. at p. 598.) On appeal, the defendant argued that its trespass was permanent and the cause of action was time-barred. (Starrh, supra, 153 Cal.App.4th at p. 589.) In Starrh, the Fifth District Court of Appeal quoted a secondary source as saying that California law has three different tests for determining whether a nuisance is abatable, namely: " 'Whether (1) the offense activity is currently continuing, which indicates that the nuisance is continuing, (2) the impact of the condition will vary over time, indicating a continuing nuisance, or (3) the nuisance can be abated at any time, in a reasonable manner and for a reasonable cost, and is feasible by comparison of the benefits and detriments to be gained by abatement.' " (Id. at p. 594.) The harm in Starrh "can be abated by some means." (Ibid.) "Aera officials testified they would continue the ponding practices for economic reasons as long as they were allowed to do so, but admitted other methods of disposal were available at a higher cost." (Id. at p. 597.) "The evidence indisputably establishes that alternative, although more expensive, methods of disposal were available to Aera." (Id. at p. 605.) Starrh went on to discuss the measure of damages and emphasized that "abatement is simply another word for restoration. In order to abate or restore the subsurface trespass, the contamination must be cleaned up. Starrh may recover the costs of restoration as a statutory measure of damages under Civil Code section 3334, subdivision (a) only if cleaning up the contamination is possible or economically practical." (Starrh, supra, 153 Cal.App.4th at p. 599.) The court agreed with the appellant "that there is no record evidence to support the jury's $ 3.8 million award for restoration costs." (Id. at p. 600.) "The evidence of unreasonableness in this case is sufficiently strong that we are tempted to conclude that the project is unreasonable as a matter of law." (Id. at p. 601.) One expert had estimated the cost at over $ 2 billion. (Ibid.) Ultimately, considering the issue of reasonableness to be a factual issue, the court reversed the judgment for a new trial on the issue of damages so that the jury could be properly instructed about how to determine this issue. (Id. at pp. 600-602.) "A jury must be told that once it resolves the factual issue of how much it might cost to restore the groundwater under Starrh's property to its original state (resolving the evidence presented by the experts), it must then determine whether the restoration costs are reasonable in light of all the competing interests." (Id. at p. 601.) "The jury needs to be advised that it can deny damages if it concludes the restoration costs are unreasonable." (Id. at p. 602.)