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

a solution the problem

3. Closing down of the plant

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, Ill 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:

Utilitarian

View

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