## Facts

- Indiana Auto Shredders Company (Shredders) operated an automobile-shredding and metal-recycling plant in the Irish Hill section of Indianapolis, Indiana.
- The plant site was specifically zoned for shredder use, and Shredders held a permit authorizing that use.
- Russell Harrison and others who lived or worked near the facility sued Shredders in federal court, asserting Indiana common-law and statutory nuisance claims based on alleged dust, vibration, and noise from the plant.
- Plaintiffs also alleged the plant violated local air-pollution regulations.
- The case proceeded through extensive hearings and trial proceedings (including more than thirty trial days on preliminary and final matters).
- The district court issued a lengthy memorandum decision and entered judgment that (1) permanently enjoined Shredders from operating the plant (allowing a short period to wind down operations) and (2) awarded $176,956 in compensatory damages and $353,912 in punitive damages to plaintiffs and intervenors.
- Although plaintiffs claimed health and safety threats, the trial record did not establish imminent health hazards caused by the plant.
- Shredders appealed. A temporary stay of the injunction issued during the appeal but was later vacated, and the plant shut down while appellate review continued.

## Issues

1. Under Indiana nuisance law, did the evidence and findings support a permanent injunction that completely shut down a lawful, zoned, and permitted auto-shredding operation based on alleged dust, vibration, and noise?
2. Were the district court’s findings and causation determinations adequate under Federal Rule of Civil Procedure 52(a) to support the liability determination and the scope of equitable relief?
3. Did the record support the compensatory damages award and the punitive damages award under Indiana standards governing proof of harm and aggravated misconduct?

## Decision

- The Seventh Circuit reversed the district court’s judgment.
- The court held that the record and the district court’s findings did not justify the extraordinary remedy of a permanent injunction requiring total cessation of operations.
- The court set aside the compensatory and punitive damages awards because the district court’s factual and legal support for those awards was inadequate on the record presented, including problems with proof tying alleged harms to Shredders’ operation and with the basis for punitive damages.
- The case was remanded for further proceedings consistent with the Seventh Circuit’s opinion.

## Legal Principles

- A private nuisance determination under Indiana law requires an evaluation of reasonableness in context, including the character of the locality, the gravity of the interference, and the utility of the defendant’s conduct; a lawful enterprise is not automatically a nuisance because it causes discomfort.
- Zoning approval and permits do not bar nuisance liability, but they are material when assessing reasonableness and when shaping equitable relief.
- A permanent injunction closing an operating business is an exceptional remedy; it requires well-supported findings showing substantial, unreasonable interference and a careful assessment of whether less drastic measures could address the harm.
- Trial courts must make findings with enough specificity to permit meaningful appellate review; where findings do not reliably connect alleged harms to the defendant’s conduct in a mixed-use or industrial area, broad relief may not stand.
- Punitive damages under Indiana law require proof of aggravated conduct beyond mere operation of a business that produces noise, dust, or vibration; a large punitive award is not supported absent a solid evidentiary basis for the required mental state.

## Conclusion

In *Harrison v. Indiana Auto Shredders Co.*, the Seventh Circuit reversed a district court judgment that permanently shut down a permitted auto-shredding plant and imposed substantial compensatory and punitive damages, concluding that the district court’s nuisance analysis and key findings—especially on causation, severity of interference, and the justification for an outright closure and punitive damages—were not adequately supported by the record and Indiana nuisance standards, and remanded for further proceedings.


Harrison v. Indiana Auto Shredders Co., 528 F.2d 1107 (1975)