The recent dismissal of a $600 million federal environmental lawsuit over emissions from a Michigan paper recycling mill comes as a relief to Waco-area leaders who recruited the same company to build a $1 billion mill here.
Chief Judge Hala Jarbou of the Western U.S. District of Michigan on March 15 dismissed all claims against Graphic Packaging International’s plant in Kalamazoo, Michigan.
Forty-five plaintiffs had filed the lawsuit in June, alleging violations of the Clean Air Act and Clean Water Act and claiming that hydrogen sulfide gas from the plant caused noxious odors and health problems in nearby neighborhoods.
The Kalamazoo plant is the model for the highly automated mill that Graphic Packaging is building at 2601 Gateway Blvd. in Waco. The mill will recycle industrial and commercial cardboard into consumer packaging such as cereal boxes. Crews have begun putting up exterior walls at the Waco plant.
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Crews are framing and enclosing the new Graphic Packaging paper mill on Gateway Boulevard.
Plaintiffs in the Kalamazoo suit listed the city and the state’s environmental agency as defendants along with Graphic Packaging.
In a 63-page opinion dismissing the case, Judge Jarbou called some of the claims “spurious.” In dismissing the Clean Air Act claims, she said that just because Michigan environmental officials did not penalize the facility every time they noted excessive air pollution, it does not mean they failed to enforce the standards.
In response to nearly every pollution notice, the paper mill conducted its own investigation and improved its processes, even when disputing the allegation, according to records with Michigan environmental regulators.
Jarbou dismissed some allegations saying plaintiffs failed to state a claim against defendants, and some because the plaintiffs failed to follow the rules of procedure for bringing civil lawsuits in federal court.
In a phone interview Wednesday, McLennan County Judge Scott Felton said the dismissal comes as a relief. The Waco facility is based on one of the newest lines at the Kalamazoo plant, so officials here would have been concerned if the claims had been upheld, he said.
When city and county officials including Felton visited the Kalamazoo paper mill about 19 months ago they were impressed with orderliness and cleanliness of the facility and how well it fit into the neighborhood that surrounds it, Felton said Wednesday.
“We were aware that these claims were out there, and we did our own research into the claims and the company as well,” Felton said. “We found that the claims didn’t have very much weight, and we thought case would be dismissed. We also found that the company is led by high integrity people, who care about the communities where they have facilities and the people who work there.
“That’s why we moved ahead with the plant in Waco.”
Felton feels confident the paper mill’s environmental technology will be state-of-the-art.
“This is a more modern facility than the other one (in Kalamazoo), and it will incorporate all the recent advances in manufacturing and air quality,” Felton said.
In a statement after the dismissal, a Graphic Packaging International spokesperson said the company appreciates the court’s careful consideration of this case and its recognition that the complaint lacked legal merit.
The company and the other defendants had asked the court to dismiss the case because it contained insufficient, improper and false allegations, and the court agreed, the statement says.
“While we are pleased with the Court’s ruling and remain proud of our work and our record in Kalamazoo, we will continue to seek solutions to help improve the environment,” the statement says.
Graphic Packaging has invested millions of dollars in ongoing facility improvements and air monitoring equipment, the statement says.
“Since 2021, these investments have driven an 81% reduction in our hydrogen sulfide emissions levels, which were already under state limits,” the statement says. “We will continue to work alongside city leaders and state and federal regulators to achieve further progress. However, we will also defend ourselves vigorously against false and frivolous claims.”
County Judge Felton said Graphic Packaging International choice to build a modern plant here sends a message to other manufacturing companies.
“We’re getting interesting calls on available industrial areas,” the county judge said. “Waco and the county are seeing benefits from West Coast and East Coast companies moving to Texas.”
The Waco factory and companion buildings for offices and finished goods are moving quickly toward completion, with Graphic Packaging International aiming for production start here in 2026.
Waco, McLennan County and McLennan Community College collaborated on an incentive package that includes $8 million in rail and natural gas assistance, $40 million in property tax breaks over 20 years, impact fee waivers worth $1.5 million, sales tax reimbursements worth $1.4 million, and water and wastewater discounts worth $5 million. In addition, the Tax Increment Financing Zone No. 4 board has recommended $60.8 million to extend utilities to industrial areas, including Graphic Packaging.
The paper mill is located in the TIF No. 4 Zone, which dedicates a portion of property tax revenue within the zone to be reinvested for economic development.
Economic development officials have estimated that even with the incentives local entities will reap some $25 million in net property tax revenues by 2046 from the plant.
WATCH NOW: Waco officials talk about Graphic Packaging’s plans to spend $1 billion on a high-tech paperboard recycling mill in Waco, marking a record investment for economic development here, they said. (Feb. 2023)
