Case Study- Xyz Cement

Planas, Jhazel Maureen M.

Salac, Kershey

Guerrero, Ma. Thalia An Joy R.

Lopez, Benedict

Sadangsal, Jana Stefi E.

Bonagua,

Patrick John C. Basa, Angelie P. Group No. 5 Case No. 6 - XYZ Cement Company Background of the Study In a982, XYZ Company began its plant operation in Pampanga. Local residents were very happy because of the economic benefits they got from the plant especially the 400 local residents employed. After a few years of operation, the plant started to emit large volumes of pollution. Local residents noticed the constant vibration and loud noise coming from the plant. Local residents filed a suit against the company asking the court to issue an injunction to close the plant. The residents claimed that the loud noise and vibrations posed dangers to their health and damaged their property. The company was using the best available technology in their operation. The court refused to issue the injunction arguing that closing the plant would mean more harm than good to both parties. The court instead ruled that XYZ should pay the residents a onetime fee to compensate them for the damage done. The amount was computed based on the Fair market price the residents would receive if they were inclined and able to rent their property. Identification of the Problem

CURRENT STATE

DESIRED

STATE

Lower court found that there was a nuisance and awarded temporary damages, but the injunction was denied.

A court should refuse injunctive relief when there is a large disparity in economic consequences of the nuisance and the injunction. Neighboring land owners brought suit alleging injury to property from

dirt, smoke, and vibration emanating from the plant. Lower court found that there was a nuisance and awarded temporary damages, but the injunction was denied. The injunction will be vacated upon the payment of permanent damages to Plaintiffs, which would compensate them for present and future economic loss to their property. Where a nuisance is of such a permanent and unabatable character that a single recovery can be had, including the past and future damages resulting there from, there can be but one recovery.

Smoke

Dirt

Nuisance

BROUGH T A SUIT

Vibration emanating from the Plant

Objectives of the Study 

To determine the root cause of the land owners for bringing a suit.



To identify the alternative courses of actions to be taken in order to address the situation.

Alternative Courses of Action to Address the Problem Effectivi

Achieva

Timely

ble 2

Manner 3

its

ty 3

equipment 2. Conduct a research and develop

1

3

1

a solution the problem 3. Closing down of the plant

2

1

2

1. Relocate

the

plant

and

Recommendation This type of decision would essentially result in regulating pollution, a government function and not a court function. The court noted that the law had been that a nuisance would be enjoined although marked disparity is shown in economic consequences to the parties concerned. The researchers recommend that they should relocate the plant and its equipment elsewhere and the costs of such relocation should have been considered. That would have set the upper bound of any bargain if an injunction, a property rule had been used. Guided Questions 1. Was the decision of the court fair? Why or why not? No, the decision seemed willing treat health as deserving no greater legal protection than economic interests. It also ignored the environmental interests of the general public by considering only the claims of people living near the plant. The decision also effectively coerced the property owners by giving them the choice either to rent their property to the company at a price established by the court, or to suffer the consequences without any compensation. Finally, this decision amount to granting the company a license to pollute with little or no incentive to improve its pollution control

technology. As long as the company is willing to pay a fee established by the government, and as long as it uses the best technology available at the time the plant was built, it is free to pollute the air and harm its neighbors. 2. If you were the owner of the cement plant, what will you do to solve the problem? Explain your answer. If I were the owner I will try to eliminate the nuisance. I will conduct a research and develop a solution to the problem and if no technical improvents will occur, I’ll shut down the plant. 3. Discuss the cost and benefits of the case from the perspective of the principle of utilitarianism The court chose the benefit of paying of damages which is smaller in amount than the cost of closing the plant. Although the plant produces air pollution and causes both property damages and health issues and it has been indentified as harmful, still, they chooses this option because they think that there is no universal remedy for the air pollution.

References Cost

and

Benefit

Approach

in

Ethics:

A

Utilitarian

View

http://www.thinking-economist.com/2014/10/cost-and-benefit-approach-inethics.html