EARL e-News: The Uncertain Status of “Stigma Damages” for Property Claims in Sc – Updates on Ecological, Administrative and Regulatory Law
In Chestnut, et al v. AVX Corporation, Appellate Situation 2012-212143 (S.C. Top Court August 5, 2014), the Condition Top Court was confronted with the problem of whether “stigma damages” could make an application for ecological contamination which didn’t directly impact a plaintiff’s property – but is purported to have impacted the home value when you are near the pollution.
AVX Corporation had released trichloroethylene (TCE) in to the atmosphere over years of manufacturing in North Myrtle Beach. The plaintiffs within this situation, however, didn’t allege any direct TCE contamination on their own qualities rather they claimed that AVX was negligent which negligence caused the need for their home to decrease because of closeness towards the TCE pollution.
The situation showed up in the Top Court within the earliest possible situation – dismissal from the plaintiffs’ complaint within Rule 12(b)(6) motion. This appeal is before discovery and just the bare allegations from the complaint were prior to the Court.
Three from the five Justices reversed the Circuit Court decision around the claim of negligence, departing the problem of “stigma damages” to in the future after sufficient details are designed to address this problem. Importantly, however, two five Justices intensely dissented in the decision making extensive arguments why “stigma damages” aren’t recognized within the condition of Sc within theory of negligence.
In the moment, the problem of whether “stigma damages” could be permitted under Sc law is undecided. Under this decision, an offender might be unlikely to prevent trial around the issue because this situation reversed a pretrial motion to dismiss. Sooner or later, the appellate courts will need to affirmatively address the problem.
The stakes are huge.
Suppose a house worth millions of dollars suffers (by testimony) a 10 % diminution in value by closeness to some pollution event. That’s $100,000 in damages for starters complaintant inside a area of the pollution event.
The potential damages might be huge whether or not the current rentals are not for purchase and never directly influenced by the TCE pollution. The dissent, within this situation, forcefully argues that these kinds of damages are inherently speculative making persuasive arguments why “stigma damages” shouldn’t be permitted. Companies and insurance providers might want to seek legislative clearness about this issue to prevent potentially huge damage awards later on.