Supreme Court upholds $4.75 million verdict for dairy affected by ‘stray voltage’

The cattle at Vagts Dairy near West Union behaved bizarrely after a natural gas pipeline company altered an electrical system meant to prevent corrosion. (Photo courtesy of Iowa Courts Online)

The Iowa Supreme Court on Friday backed a jury’s $4.75 million award to a northeast Iowa dairy that for years suffered from stray electrical current in the ground from a nearby natural gas pipeline.

The justices unanimously rejected an appeal by the Northern Natural Gas Company, but they disagreed about how similar lawsuits should be litigated in the future.

Vagts Dairy, of West Union, and its operators Mark, Joan and Andrew Vagts filed suit in 2021 against the gas company, seeking damages for the alleged electrical nuisance caused by its pipeline.

The pipeline was built 60 years ago and runs for about 14,000 miles from Texas to Michigan, court records show. It includes an electrical system that passes small amounts of current through the pipeline to protect against corrosion, which is required by federal regulation.

The Vagts’ predecessors had signed easements with the company to allow it to lay the pipeline and install the corrosion-protection system on their property.

In 2013 — after the company replaced part of that electrical system — the Vagts’ cows began to have “bizarre, abnormal behavior,” court records show. They shucked milking equipment, stood in waterers to get their hooves off the ground, became ill, produced less milk and offspring, and had triple the normally expected mortality rate.

Research has shown that cows are more susceptible than humans to electric current in the ground, and its effects are well documented and mostly arise from faulty electrical systems. It can be “catastrophic to a dairy farm,” court records show.

In 2017 the Vagts expanded their dairy operation to 500 cattle and extended a dairy barn closer to the electrical system. The expansion included metal-reinforced concrete that became charged by that system, court records show.

In 2022, more than 17% of the Vagts’ dairy herd died. The typical mortality rate for a dairy is 5%.

“Sometimes you get to the point you don’t even want to get up in the morning because you don’t know what you’re going to find out there,” Mark Vagts testified at the lawsuit trial in January 2023.

His son, Andrew, testified: “What really sucks is telling my kids why their fair calf had to be shot or put down or sold.”

A jury decided that Northern Natural Gas Company created a nuisance that caused damages and significant harm, court records show. It awarded the Vagts $3 million for economic damages, $1.25 million for personal inconvenience and discomfort and $500,000 for loss of use and enjoyment of the property.

At trial, the company disputed whether it caused the problem with the cows and the value of the damages. On appeal, it argued the Vagts needed to prove it was negligent in creating the nuisance and that the amount of the monetary award lacked evidence to support it.

Justice Christopher McDonald, who wrote the majority opinion, disagreed: “Neither the district court, nor this court, should disturb the jury’s verdict unless it is flagrantly excessive or inadequate or so out of reason so as to shock the conscience. … The jury’s verdict is supported by the record when viewed in the light most favorable to the plaintiffs, and the district court did not abuse its discretion in declining to disturb it.”

McDonald said the law does not require a finding of negligence for creating a nuisance in this case.

Justice Edward Mansfield disagreed. He and two other justices ultimately sided with the majority opinion but said it was because the company’s attorneys “didn’t raise the necessary arguments, and the district court ruled correctly given what was before it.”

Mansfield wrote that because dairy cattle are especially susceptible to the electrical currents, the nuisance situation was abnormal and negligence should have been considered. He said the majority relied on an errant Supreme Court decision from two decades ago that conflicts with the court’s other rulings.

The company “is not entitled to a new trial,” Mansfield wrote, “but we should be careful not to expand the law of strict-liability nuisance contrary to our 170 years of precedent.”

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