Iowa Supreme Court Upholds $4.75 Million Nuisance Award in Dairy Stray Voltage Case

July 16, 2024 | Jennifer Harrington

The case is Vagts et. al v Northern Natural Gas Company, No. 23-0537 (Iowa June 21, 2024).

On June 21, 2024, the Iowa Supreme Court upheld a $4.75 award to a dairy for nuisance due to stray electrical voltage from a natural gas pipeline. On appeal, the natural gas company argued the plaintiffs were required to show the company’s actions were negligent. The company also challenged the $1.25 million portion of the award assessed for noneconomic damages. The Court rejected both arguments.

Facts

The plaintiffs are dairy farmers located in northwest Iowa. In 1960, the dairy granted an easement to the defendant, Northern Natural Gas Company (NNG) to lay a natural gas pipeline through their property. Federal regulations require that a natural gas pipeline has a cathodic protection system (CPS). A CPS uses low-level electrical current to protect the pipeline from corrosion. An easement allowing the installation of the CPS was entered into in 1960. Both the CPS and pipeline were installed in 1964. In 2013, the CPS had parts replaced. In 2017, the dairy operation grew by 500 cows. The owners expanded their barn, with the new section being located closer to the CPS.

The cows began to display “bizarre, abnormal behavior” after 2013. Milk production and quality declined, and “an abnormally high rate” of cows died. The plaintiffs turned to many experts to help them discover why their cows were afflicted with this mysterious decline. Eventually, they tested for and found stray voltage. They contacted the Allamakee-Clayton Electrical Cooperative, Inc. (ACEC), which also found stray voltage and reached out to NNG.  Although NNG found stray voltage, its representatives believed the voltage amount was too low to cause concern or require mitigation efforts.

In March 2021, the plaintiffs filed suit against NNG and ACEC. They brought nuisance, negligence, and abatement claims against NNG and negligence and abatement claims against ACEC. Prior to trial, the plaintiffs dismissed the negligence claims against NNG and ACEC, and ACEC entered into a settlement agreement with the dairy.  The matter went to trial in January 2023.

NNG objected to the plaintiffs’ proposed jury instruction on nuisance. NNG argued plaintiffs were required to prove that NNG was negligent as an element of the nuisance claim. The district court found that negligence is not an element of nuisance and did not change the jury instruction. The jury found that the stray voltage from the CPS was a nuisance and awarded the plaintiffs $3 million in economic damages, $1.25 million “for personal inconvenience, annoyance and discomfort,” and $500,000 for the loss and use of enjoyment of land.     

NNG filed a posttrial motion claiming the court erred by submitting the nuisance claim to the jury without including negligence as an element of the claim. NNG also moved for a new trial or, in the alternative, for remittitur on the non-economic damages. The district court denied both motions, NNG appealed, and the Iowa Supreme Court retained the case.

Opinion

The Court first addressed the role of negligence in a nuisance case. The court found that negligence is not an element of nuisance in Iowa. Neither the common-law of nuisance nor Iowa Code § 657.1(1), which codifies nuisance law, requires the nuisance to be the result of negligent conduct. Instead, the Court reaffirmed that nuisance only requires the plaintiff prove there is an intolerable condition on their land that is a result of defendant’s conduct. In support of its ruling, the court examined and explained cases where prior Iowa courts found a defendant’s conduct was a lawful activity, yet still created a nuisance. One of the last cases examined, Martins v. Interstate Power Co., 652 N.W.2d 657 (Iowa 2002), was also a negligence claim based on stray voltage with a dairy farmer plaintiff.

NNG urged the court to find that Martins held nuisance requires “proof of negligence unless the conduct involves inherently dangerous activity.”  NNG quoted a specific sentence of Martins to support its argument:“[t]he true distinction between negligence and nuisance is that ‘to constitute a nuisance “there must be a degree of danger (likely to result in damage) inherent in the thing itself, beyond that arising from mere failure to exercise ordinary care in its use.” The Court found this sentence was a “stray sentence” and an incorrect statement of the law. The Court noted, however, that the holding of the Martins case was, “correct and consistent with the common law, the controlling statute, and our precedents.”

As an alternative argument, NNG urged the court to overrule Martins and adopt the Restatement (Second) of Torts § 822. The Restatement’s definition of nuisance requires proof of negligent conduct to establish a nuisance claim under most circumstances. In support of their argument, NNG directed the Court to the post-Martins 2004 amendment of Iowa Code § 657.1(2). The new subsection granted a comparative fault defense to electric utilities in defending nuisance actions.  The Court declined to adopt Restatement § 822. They found the addition of § 657.12(2) showed only that the Legislature desired a comparative fault analysis to apply to a specific defendant, and it did not support adding negligence theories to all claims of nuisance. The Court went further and noted Restatement § 822 would soon be superseded by Restatement (Fourth) of Property § 2.1 (tentative).

The court next examined the damages awarded by the jury. NNG appealed the jury’s award of $1.25 million for “personal inconvenience, annoyance, and discomfort.” The company argued the award was not supported by evidence since the nuisance did not bother any of the plaintiffs’ physical senses. The Court found the jury had ample reasons to award this amount. The nuisance caused plaintiffs increased labor and stress over the dairy operation. The Court specifically referenced the emotional toll of euthanizing additional cows. The Court upheld the full award to the plaintiffs.  

Concurrence

Justice Mansfield wrote a concurrence, joined by the Chief Justice and Justice Waterman. It examined Part II of the majority’s opinion, the role of negligence within nuisance. While they ultimately agreed with the holding, they agreed only because “(NNG) didn’t raise the necessary arguments[.]”The concurrence felt the plaintiffs were not entitled to bring a strict-liability nuisance claim due to the specialized nature of the harm suffered.

The concurrence reviewed the concept of nuisance, noting the harm had to bother an “ordinary person” for a defendant to be responsible for the nuisance, regardless of whether they acted negligently. This is the normalcy standard. In the view of the concurrence, “a strict-liability nuisance has to involve activity that is unacceptable to the ordinary person. Otherwise, the common law insists on proof of negligence.”

Although the concurrence did not agree with the majority’s analysis of nuisance, they did agree with the holding because NNG failed to argue strict-liability nuisance was not an available claim to the plaintiffs due to their specialized use. They noted the definition of “nuisance” presented to the jury was open to two interpretations. The first interpretation was a correct statement of the law, but the second interpretation allowed the jury to decide if they, as the conscience of the community, felt NNG’s activities were a nuisance. The concurrence argued that the record does not show there was an intolerable condition for an ordinary person. However, the jury could have decided they felt NNG’s activities were intolerable, and that was allowed under the jury instruction given.