Observer, Volume 16, Number 18, Thursday May 25 1995


Professors in 'battle of economic experts'

Attorneys for homeowners seeking compensation from Bridgestone/Firestone Inc., B.F. Goodrich Company, and Goodyear Tire & Rubber Company recently asked professor of economics James Zinser and associate professor of economics Stephen Sheppard to evaluate damages. The homeowners lived near a superfund site in Uniontown, Ohio, called the Industrial Excess Landfill. ("When I first heard the name, I thought they were joking," says Sheppard.) The Ohio Court of Common Pleas of Stark County last December reached a verdict in favor of the homeowners. The case was perhaps the latest in which Oberlin professors have served as expert witnesses in court (Observer 3 March 1994).

Between 1966 and 1980 the Industrial Excess Landfill had received about 300,000 tons of toxic waste, much of it contained in metal drums that eventually rusted and leaked. Toxins in these drums included acetone, benzene, hexane, naphtha, phenol, xylene, and trichloroethane, Sheppard says. "To make matters worse, the 30-acre landfill was located in the center of a community in which virtually all homes obtained drinking water from individual wells. The wells became contaminated and toxic fumes broke through the earth covering of the landfill."

A first trial seeking compensation for homeowners took place in 1993, when the jury found the companies guilty but awarded total damages of only $500,000--less than $300 per homeowner. The court granted the homeowners a new trial on the grounds that the amount was far too low. The new trial was to focus only on determination of the amount of damages, and at this point Zinser and Sheppard were asked to become involved.

One attorney for the homeowners, Anthony Roisman, said that "the second trial was a battle of economic experts. The jury heard testimony from five economists on three different econometric models." Sheppard and Zinser developed one of the econometric models at Oberlin. Using data about all houses sold between 1979 and 1994 within three and a half miles of the landfill, their model showed how publicity about the landfill affected the value of houses according to their proximity to the landfill. After a seven-day trial the jury awarded the homeowners $6.7 million in damages. The case, according to another homeowners' attorney, Richard D. Panza, "clearly creates a precedent that the way in which hazardous waste is disposed can be the proximate cause of real estate devaluation on a massive scale. It also creates a duty for the disposers to the general public at large." (Bureau of National Affairs Daily Report for Executives, 20 December 1994.)

While preparing for the trial and testifying in it, Sheppard was teaching his Environmental Economics course. "It was great," he said, "to be able to discuss with the class the progress of the case and to indicate the importance of the concepts we were discussing."


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