Farmers Win in State’s Highest Court

Thursday, December 13, 2007 12:42 PM CST

Joan Sanstadt, News Editor

On Dec. 6 the Wisconsin Supreme Court handed down its rulings on two separate cases involving stray voltage on central Wisconsin dairy farms.

Arguments in the Schmidt-Heeg case and the Gumz case took place last September before the high court.

Attorneys Dale Peterson and John Laubmeier, both of the Madison law firm of Stroud, Willink & Howard, worked on the amicus (friend of the court) briefs filed in each case on behalf of the Wisconsin Farm Bureau Federation (WFBF).

Peterson expressed “delight” with the Supreme Court’s decisions. “The Gumz case is now over. They will have to go back to circuit court to have the jury verdict affirmed. It’s just a matter of the Gumz family collecting the judgment awarded them by the jury - $533,000, plus 12 percent annual interest,” he added. (Of that amount $332,236 is for economic damages and $200,000 for annoyance, inconvenience and loss of use and enjoyment of their real property.)

The 12 percent interest will be calculated from April 20, 2005, when the case was entered at the county level (docketed).

“It’s been a long road for them,” Peterson noted.

The utility, Northern States Power (NSP) now known as XCEL Energy, had asked the Supreme Court to overturn a jury decision and Appeals Court ruling that upheld an award of damages and application of the statute of limitations for damages to the Marathon County dairy farmers because of problems associated with stray voltage.

In its amicus brief, WFBF asked the Supreme Court to preserve the judgment in the farmers’ favor against the utility because the six-year statute of limitations should not begin to run until a farmer knows or is reasonably certain as to the cause of harm to the dairy herd n especially when the utility advises the farmer that there was no stray voltage problem.

The Gumzes claimed their production and herd health problem had begun in 1991. They first worked with their herd nutritionist and veterinarian on animal health issues until 1996. That’s when they suspected the root of their problems was stray voltage. After unsuccessfully consulting with their utility in the late 1990s, the Gumzes (Grace, James, Michael and Susan) filed suit in December of 2001.

In the Gumz case, the Supreme Court ruling was four to three in favor of the Gumzes, with Justices David Prosser, Pat Roggensack and Annette Ziegler dissenting. Justice Ann Bradley wrote the majority opinion which said the Gumzes’ legal action was not barred under the state’s six-year-state of limitations because the family had exercised reasonable diligence in investigating the cause of damage to their herd before filing the lawsuit.

Schmidt-Heeg case

In the Schmidt-Heeg case the Supreme Court ruling was unanimous in favor of Clark County farmers Ralph and Karline Schmidt and Marathon County farmers August and Joanne Heeg, in their suit brought against Northern States Power (NSP), now known as XCEL Energy.

What the high court did was send the Schmidt-Heeg case back to the lower (circuit) court for trial. “For the Schmidts and Heegs the legal road is just beginning,” Peterson said. “The Supreme Court said the trial judge was wrong in throwing out the case.”

The circuit court had granted NSP’s motion for summary judgment, concluding that the statute of limitations had expired because the Schmidts allegedly knew NSP’s system was the cause of their injuries as early as 1993, which triggered the start of the six-year statute of limitations.

But when the Schmidt-Heeg case was appealed to the Court of Appeals, that court overturned the lower court decision. It said the moment of discovery could be interpreted differently. NSP maintained that the Schmidts should not be allowed to in effect “undiscover” their claims against NSP based on the 1993 tests performed by their own electrician because NSP’s subsequent tests did not show an excessive amount of stray voltage.

The Court of Appeals also rejected the circuit court’s conclusion that the Schmidt’s claims were barred by the filed rate doctrine, which guides utility rates. NSP contended it had complied with stray voltage standards laid out in the PSC’s rate-filing rules and should not be liable.

In its brief, the WFBF had urged the Supreme Court to rule that the utility’s tariff rate filed with the Public Service Commission cannot be interpreted to limit utilities’ liability with respect to stray voltage when that filed tariff does not expressly address the issue of legal immunity from stray voltage claims.

With respect to the statute of limitations issue, Supreme Court Justice Annette Ziegler wrote in the unanimous opinion that it was not clear when the Schmidts knew or should have known that stray voltage was harming their cattle and that the lower court should not have ruled in favor of the power company (by granting summary judgment) before considering evidence at a trial as to when the farmers knew or should have known that stray voltage was the cause of their problems.

Peterson said the Supreme Court’s decision said that summary judgment “should never be granted for a party if there are conflicts of material facts n as well as reasonable inferences from uncontested facts.”

It’s not a resolved issue, and after the trial in the lower court there could “be avenues for appeal again,” Peterson acknowledged.

“The Supreme Court typically doesn’t take cases to see if mistakes were made (in a lower court),” Peterson said. “The Supreme Court is to develop law or clarify law. If the party that loses before the jury then argues the jury made a mistake, it is very unlikely either side would get relief from the Court of Appeals.

“What the Supreme Court wanted to clearly address was the filed tariff and statute of limitations,” Peterson said.

The filed rate doctrine or tariff is what guides utility rates and is basically an agreement between the state and the utility. It is similar to the Administrative Rule process at the Department of Agriculture, Trade and Consumer Protection and at the Department of Natural Resources. The filed rate doctrine is the Public Service commission’s Administrative Rule.

Asked if this ruling could mean farmers would bring more stray voltage lawsuits against their utilities, Peterson said he didn’t think so. “These are tough cases for farmers to win because of all the science a utility has,” he suggested.

A lot would depend on how far back a farmer could show herd problems were caused by the utility’s system. “But the further back you go, you will run into the statutes of limitations. I don’t think by clarifying this, it will mean an increase in the number of lawsuits,” Peterson asserted.

“There is no reason to think the Schmidts and Heegs wouldn’t want to go before a trial jury in Clark County,” Peterson said. Responding to a question about whether it would be before the same judge that that had granted the summary judgment to NSP, Peterson responded this way: “Under the statutes, after a reversal there are windows opening as to when you have a right to a substitute judge. It’s a strategic decision as to whether they would want to ask n but they do have the legal option to ask for a different judge.”

In filing its amicus brief, “The Farm Bureau wanted to be sure farmers had equal rights to those of any other class of citizens n that’s why rights under the statutes of limitations have to be protected. Otherwise, farmers would be facing a short statute of limitations n it is now clear from the Supreme Court that farmers get the full benefit for their conduct in trying to eliminate stray voltage and not running first to the Court House (to file a lawsuit),” Peterson said.

“It is very important that utilities not be able to file tariffs from the PSC that eliminates the farmer’s legal claims if stray voltage is found,” he added.

Paul Zimmerman, WFBF’s executive director of public affairs, said “we don’t want farmers to have to go to court against utilities over stray voltage. It’s clear the process is working better n and its clear utilities are not to use delaying tactics. The positive note that should come out of this is that farmers and their utilities should work together to solve (stray voltage) cases, rather than go to court. We’re not seeing the stray voltage conflicts that that were out there 10 or 15 years ago,” he added.

Peterson said the Supreme Court affirmed earlier decisions in the Kolpien, Allen and Hoffman cases.

Tax bills

Rep. Lee Nerison (R-Westby) is urging his constituents to “take a good look” at the tax bills they’ve received in the mail “because it’s a lesson in how government spends your money. It is also worth talking about who sets property tax amounts and what role state legislators have in this.”

The lawmaker explained how the Wisconsin Department of Revenue (DOR) trains and certifies assessors to assess property according to its true value, whether market value or farmland value. “By law, assessed value is supposed to be within 10 percent of the actual value of the property. The exception is farmland, which is assessed for agricultural value. The assessor arrives at these values based on what similar property has sold for,” Nerison said.

“As a former county board chair, I know that setting property tax levies and adopting an annual budget is one of the most challenging things that local elected officials have to do. They must balance the need for paying for such things as snow plowing and local schools n while keeping the taxpayers’ bills in check,” he continued.

Nerison asks that property owners “keep in mind that property taxes are assessed locally, collected locally and spent locally. If you disagree with your property’s assessment, go to the open book meeting and talk with your municipality’s assessor.

“If you want to know how the school board or local government spends your money, go to their meetings and ask questions. Very few people actually take the time to find out how their hard-earned money is spent,” he recommended.

Nerison said he agrees with the concerns homeowners have expressed that they pay too much in property taxes. “As your State Representative, I took significant steps to keep your property taxes in line. The state budget that I voted for provides more than $12.3 billion in state aid to local school districts, including more than $524 million in new money for our local schools. More money from the state will allow school districts to ask for less from local property taxpayers.

“The budget also maintains the state’s commitment to local governments by not cutting the state’s shared revenue program. Again, more money from the state means less money is required from local taxpayers. Arriving at assessments and setting property taxes is a complicated process,” Nerison admitted, adding he hoped the information he’s provided “gives some insight into what role state and local governments have in it.”

Capitol Notes:

- It looks as though the State Assembly may vote on AB 334 (feral swine classified as harmful animals) this week. It passed out of the Rural Affairs Committee last week by unanimous vote. It still needs approval from the State Senate.

- The Wisconsin Taxpayers Alliance reports that total Wisconsin school property taxes are up 7.4 percent on this December’s tax bills n an increase that is two to three times the rate of inflation and is the largest since 1992-93 when the increase was 10.7 percent.

- Looks like health care and campaign finance reform measures will have to wait until 2008 for any legislative action.

- The “Frankenstein veto” that has drawn a lot of criticism this year will probably go before voters in an April 2008 referendum. Indications are that both houses of the legislature are set to pass the measure this week that would put new limits on the veto powers of Wisconsin governors.

- The cable bill has to go back to the Assembly to okay changes made to the measure in the State Senate. Under the provisions, the state would issue or deny franchises. Currently, that role is filled by local governments. If the Assembly votes in favor, the bill will go to Gov. Jim Doyle.

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