Texas Disposal Systems Landfill v. Waste Management Holding

Texas Disposal Systems Landfill v. Waste Management Holding, Inc. was a decision by the Third Court of Appeals - Austin holding that the trial court's take-nothing judgment on defamation claim was error, and affirming the remainder of the lower court's decision.
Background
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History and trial court
In 1995, Texas Disposal Systems Landfill, Inc. (TDSL) and Waste Management Inc. (WMI) were competing for a waste disposal contract with the city of San Antonio, Texas. In 1996, Austin, Texas began a similar contract process and by 1997 both companies were the only two that proceeded to Phase II of the contract process.
A public affairs consultant for WMI, at their request, authored an "Action Alert" memo that was sent to several environmentalists that disparaged TDSL. The memo addressed supposed deficiencies of the TDSL landfill liner and issues relating to trucking the majority of San Antonio waste steam up Interstate 35 to Travis County. Due in part to the memo, the Austin City Council delayed the contract process. TDSL then filed a lawsuit in 1997 alleging defamation on the part of WMI and the consultant, although the consultant was later dropped from the case The case went to trial in 1999.
During the trial in the 126th District Court of Texas, the consultant testified that he understood that TDSL's landfill was in compliance with the Environmental Protection Agency (EPA) rules on landfill lining. These rules, known as Subtitle D, provide for two methods of lining a landfill, either a synthetic liner system or a performance design method, which are environmentally equal in performance. TDSL used the performance design method. In the trial, the consultant testified that he understood that the TDSL system was approved by the EPA and that the landfill was licensed by the Texas Natural Resource Conservation Commission (TNRCC, now known as the Texas Commission on Environmental Quality). The consultant also stated that the comments in the memo was "to convey the message that not compliance with Subtitle D" and that the "statement was intended to be a negative comment for consumption by the public generally."
Second appellate decision
In the second appellate decision, the Third Court of Appeals granted a motion for rehearing by TDSL. The court reversed itself as to the defamation per se instructions and granted a new trial as to the defamation claims as regards to the "Action Alert" memo. Based on the facts of the case and the law, the trial court erred in not providing a defamation per se instruction, due in part to the finding that WMI had acted with actual malice.
Third appellate decision
Chief Justice W. Kenneth Law delivered the opinion of the court. Law held that the actions of WMI, in conjunction with the actions of its employee Erwin and its consultant, provide "clear and convincing evidence" of the actual malice in the issuance of the "Action Alert" memo, and that as such, it was intended to damage or defame TDSL.
In addition, TDSL argued that in refusing a defamation per se instruction, the trial court erred. In Texas, there are two types of defamation, per quod and per se. In the first per quod, the plaintiff must prove actual damages, or evidence of injury. In the second, per se, the defamatory statements are actionable in and of themself, without any proof of actual damages being necessary. In this case, Law held that it was appropriate for the jury to determine if the defamatory statements were per quod or per se. The court remanded the case for retrial.
Subsequent appeals
WMI appealed the decision of the Third Court of Appeals to the Texas Supreme Court. In an unpublished decision, the Texas Supreme Court denied their petition. WMI then asked the Texas Supreme Court for a rehearing on the denial. In another unpublished decision, this request was also denied.
Subsequent developments
The case was re-tried in November 2010. A Travis County jury awarded TDSL ~$25.5 million in actual and exemplary damages. The award is currently under appeal. In the 13 years since the decision, it has been cited by the Texas Supreme Court, and Federal District courts in the Second and Fifth Circuits. It has appeared in the Houston Law Review, the Southern Methodist Law Review and the Texas Business Litigation Journal.

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