Opinion
No. CIV. 2002-4140.
Filed December 30, 2004
John C. Quaintance, Quaintance Law Office, Sioux Falls, SD, John C. McMurry, Oklahoma City, OK, Ken M. Peterson, Morris Laing Evans Brock Kennedy, Wichita, KS, Attorneys for Victory Farms.
Amy Heinrich Arndt, R. Alan Peterson, Lynn, Jackson, Shultz Lebrun, P.C., Sioux Falls, SD, Rhea A. Myers, Wheeler Van Sickle Anderson, S.C., Madison, WI, Attorneys for Whetstone Valley Electric Cooperative, Inc.
MEMORANDUM OPINION AND ORDER
INTRODUCTION
[¶ 1] Plaintiff, Victory Farms, contends that defendant, Whetstone Valley Electric Cooperative, Inc., discharged electricity through a neutral attached to an underground cable near its dairy farm, which permanently damaged its dairy herd, and that such actions constituted a nuisance and were done negligently. Defendant denies the allegations. After considering the evidence admitted during a fourteen-day court trial, the court determines by a preponderance of the evidence the following facts and reaches the following conclusions of law.
I. Parties
[¶ 2] Plaintiff, Victory Farms, is a general partnership that owns and operates a dairy operation in Milbank, South Dakota. T. 1861:19-1863:1. At the time of the filing of the Complaint, it consisted of Peter Orradre and David Nuss, who are citizens of the state of California. Stipulation of the Parties May 22, 2004 (Docket 134); T. 4:1-6. Orradre and Nuss hired 29-year old Kevin Souza to manage Victory Farms. He has held that position since its inception in December 1998. T. 601:12-14; 603:2-15. Souza later became a partner of Victory Farms through work equity. As of December 18, 2003, Souza has a 7.42 percent interest in the partnership. T. 596:22-597:8; 714:17-715:2; 1862:24-1863:1.
[¶ 3] Defendant, Whetstone Valley Electric Cooperative, Inc., is a corporation organized and existing under the laws of the state of South Dakota with its principal place of business in South Dakota. Docket 134 at ¶ 2. Whetstone traces its beginnings to the Rural Electrification Act (REA). Investors have owned the cooperative since its inception in 1940. It is a small cooperative; its general manager opined that it may the smallest cooperative in South Dakota, if not the country. Whetstone has approximately 16 employees and, while it trains its employees on the job and by state licensing, it relies upon contracts with an engineer to provide engineering advice. Whetstone now owns approximately 1500 miles of power lines in Grant and Roberts counties in South Dakota. Because the Public Utilities Commission (PUC) gave Whetstone exclusive control over this area, Whetstone customers cannot choose their electricity provider. T. 2402:20-2403:9; 2356:2-2357:4; 2365:5-2366:18.
II. Background
A. Alan Schneck and Installation of Underground Cable
[¶ 4] Alan Schneck owned and operated a dairy operation near Milbank, South Dakota, prior to December 1998. In 1994-95, Schneck built a new, larger facility at a location across the road from his old facility. This is now the current location of Victory Farms' main dairy. The new facility was built with an equi-potential plane, and unlike Schneck's old facility, is a six-row confinement facility. Schneck moved his cattle into the new barn in November 1995. Angerhofer Depo. at 13:8-12, 14:1-6, 16:5-9, 44:14-16. The dairy operation averaged approximately 70 pounds of milk per cow per day when it moved into the new facility. Angerhofer Depo. at 20. Schneck intended to increase his herd to 2000 head of dairy cattle in his new facility. Angerhofer Depo. at 13:14. Schneck bought herds from others to add to his existing herd. Angerhofer Depo. at 17. The cattle looked good when they were purchased, but within a month the cattle looked like they were ready to die. He lost 50 percent of the cattle from one herd in particular. Id. The cattle would not eat or drink properly. Id. at 17-18.
An equi-potential plane consists of a large grid of copper wires, steel pipe, orwire mesh in the concrete of the parlor. The wires are in a crosshatch pattern thatare bonded at every cross point and periodically grounded. The plane provides apath with low resistance for electrical current in the barn and equalizes thepotential across the plane. T. 2906:11-2908:3.
[¶ 5] Schneck's milk production decreased in the summer of 1996. It increased some that fall but the cows never produced over 70 pounds of milk per cow as they did previously. Angerhofer Depo. at 45:17-46:17. In June 1996, Schneck's somatic cell count was 260,000, but rose to 775,000 within eight months. Schneck decided to sell the dairy. Schneck heavily culled cattle prior to selling the dairy, which decreased the somatic cell count. T. 1680:13-1682:11; 1682:23-1683:8; Ex. 591.
Somatic cells are the white blood cells that fight mammary gland infectionsand are released into milk. T. 113:11-31. Laboratory tests run on milk samplesprovide somatic cell counts which act as an indicator of udder inflammation ormastitis. Typically, a premium is paid for low somatic cell count milk and adeduction is made for high somatic cell count milk. T. 1422:14-25; T. 1694:23-24; T. 1752:11-13; T. 1882:5-13.
B. Whetstone Electricity
[¶ 6] Whetstone uses a "multi-grounded wye" distribution system containing a phase line and a neutral line. The primary phase line conducts current from the substation to various locations, and the neutral line carries electricity back to the substation. A series of grounds ground the neutral line to the earth. The system discharges neutral return electricity into the earth at the grounds. Snaza Depo. at 21:6-22:24; T. 1355:5-10; 1602:4-17; 1463:16-1464:16.
[¶ 7] Around June 26, 1996, Whetstone replaced an overhead electrical line adjacent to Schneck's property with a 2,592 foot long underground electrical line (URD). The electrical line, which served the Angerhofer farm, went underground near a pole in the southwest corner of the Schneck property and connected to a pole southeast of the dairy, approximately 250 feet from Angerhofer's farm. T. 2377:14-22; 2572:9-2573:17, 2576:4-2579:17, 2608:1-16, 2618:25-2619:25; Ex. 1-2; Ex. 42. Whetstone replaced the overhead cable with an underground cable for safety reasons. Whetstone believed an underground cable would provide greater clearance for the large machines utilized during and after the construction of Schneck's new dairy facility. Sass Depo. at 2573:1-17.
[¶ 8] Prior to physically installing the Whetstone underground cable, Whetstone employee Don Gerdes prepared a staking sheet, which described the lineman's job and who would do the work. He specified the location of the URD and that it would be grounded in the middle. Whetstone was aware that dairy cattle were in the area. T. 2572:9-18, 2595:18-20; 2617:19-2618:22; Ex. 1; Gerdes Depo. at 27:3-12, 59:11-16. Pursuant to Whetstone procedure, a lineman dug up the cable with a backhoe. He then cut off a 2-inch strip of the URD protective jacket with a knife, attached a ground rod with a clamp, and taped it with rubber tape to keep moisture out. T. 2596:13-2599:18; Snaza Depo. at 54:2-18.
[¶ 9] Whetstone installed the ground rod immediately south of the main dairy facility. The ground rod was connected to the bared cable and discharged electricity into the earth, creating neutral to earth voltage. There were four grounds to the east towards the Angerhofer farm and additional grounds to the west. A ground rod connection in the location south of the dairy was not imperative for safety. T. 2680:21-2682:6; Snaza Depo. at 52:24-53:2; 51:14-19; Ex. 42. Whetstone did not thereafter inspect the underground cable. T. 2621:4-2622:10; 2680:2-16; 2698:15-2700:16; Ex. 12.
C. Victory Farms
[¶ 10] Orradre grew up on a ranch in California. He graduated from the University of California with a degree in agronomy with an emphasis in agricultural business. He also has an master's in business administration. He currently owns a liquid feed company, Rothco Feed Service, that sells feed to cattle ranchers and dairy farmers. Orradre met Nuss when Nuss began selling feed for Rothco. They became partners in 1996. Nuss had prior experience with beef cattle in the midwest. They sold feed to dairies in California ranging from 300 to several thousand cows. Kevin Souza eventually began working with them, selling feed and doing nutritional consulting with dairies. Souza sometimes managed dairies on weekends when the usual managers were out of town. Nuss Depo at 20:25-21:7; T. 1938:15-19; 1847:16-1849:9; 1852:16-1853:16; 1855:9-19; 1856:1-10; 1857:9-22.
[¶ 11] Orradre, Nuss, and Souza decided to purchase a large dairy farm, so Souza began the search in Nebraska, where Nuss grew up. Realtors directed him to South Dakota where they had located the Schneck dairy for sale. Souza inspected the dairy by himself in November 1998. He was primarily concerned with the genetic strength of the cattle. Souza believed the Schneck dairy was functional and the cattle had good breeding, but that the dairy farm had poor management.
[¶ 12] Souza believed that Schneck's cows had the genetic potential to produce 70 pounds of milk. Orradre testified that Schneck had several noncompliance issues with the state regarding manure. He had to redo some lagoons to facilitate capacity for runoff or manure. Orradre, Nuss, and Souza believed that with capital, clean up, culling, and better management, the dairy was "a potential cash cow." T. 597:13-600:22; 1878:11-22; 1867:20-1868:5.
[¶ 13] Orradre sought financing in the amount of $5,316,300 for the purchase of Victory Farms. T. 871:3. Orradre conducted a records check for easements, which disclosed no underground lines on the Schneck land before he purchased the dairy. T. 1868:6-17. Whetstone's manager testified that Whetstone customarily attempts to obtain written easements for its power lines; however, it does not generally publicly record these easements. Whetstone's manager believed that most South Dakota cooperatives follow a similar practice. He did not know how successor purchasers of a dairy could know of a buried cable on their land. Snaza Depo. at 48:19-23; T. 2274:13-25; 2275:12-15.
[¶ 14] Orradre and Nuss purchased Victory Farms, the largest dairy in South Dakota, on December 18, 1998, from Schneck. As part of the purchase, Victory Farms was allowed to cull 10 percent of the herd plus any other cows that tested positive for disease. After culling approximately 18 percent of the total herd, Victory Farms purchased 1301 cows and a land and manure easement. T. 599:14-600:15; 1866:3-13; 1867:10-13; 1869:1-2; 1880:18-1881:2; Ex. 563.
[¶ 15] Orradre testified that when he bought the dairy, he knew that the prior lack of competent management had detrimentally affected the dairy. Orradre knew that although Souza had previously worked in management positions on dairies, he had never before had total responsibility and control of a dairy. Souza holds an associate's degree in dairy science at the College of the Sequoias where he was also the student herdsmen. Prior to working at Victory Farms, Souza had performed nutritional and breeding work for twelve dairies, ranging from 350 to 1500 cows, in California. He worked for two and a half years as the herdsman responsible for 80 percent of the breeding at a 2500 cow — 25 employee dairy in Tulare, California. Orradre and Nuss gave Souza total management control. T. 577:4-581:5; 588:2-591:12; 595:13-17; 1940:21-1941:11; 1965:24-1966:21.
[¶ 16] Despite attributing the low milk production figures to the prior poor management of the Schneck operation, Souza initially retained all the Schneck employees and did not modify their Standard Operating Procedures (SOP). Orradre did not know Souza's selection criteria for hiring employees at Victory Farms. He never gave Souza guidelines regarding production and did not receive goals reports from Souza. T. 605:4-13; 729:1-8; 1962:22-1963:7.
[¶ 17] Orradre and Nuss continue to live in California. Orradre visited Victory Farms approximately two to three times a year. T. 1990:3-5.
III. Problems Experienced at Victory Farms
A. Herd Health Problems
[¶ 18] Victory Farms lost a significant number of cows in 1999. The somatic cell count was higher than average, and herd health and milk production had not improved. On his first visit to Victory Farms, the treating veterinarian, Dr. James Beaty, observed and noted that a "jolt or something startled a cow and she runs or jumps and pushes, knocks over those at the tank around her." Dr. Beaty likened the bolting to a flight mechanism, or movement away from an adverse stimulus. He did not see any physical cause, such as mistreatment, electricity, use of a cattle prod, waking a sleeping cow, or a subordinate cow attempting to leave a dominant cow. T. 132:8-25; 335:25-339:7; Ex. 430. Dr. Beaty also noticed cows lapping at water during this first visit. This was unusual because cows normally stick their muzzles into the water and suck it. He noted eight or more cows that had not recently been milked congregated by the tank, which is unusual because cows typically return from the parlor, drink, eat, and lie down. Tr. 131:4-132:7; Ex. 430 p. 1. In his notes from this first visit, Dr. Beaty listed "Stray Electricity" as tentative diagnosis "A" at the top of his list. He listed possibilities B through D as dry feed, neck rails, and cows bunching to the middle. T. 130:16-136:10; Ex. 430 at p. 1-2.
[¶ 19] During his next visit, Dr. Beaty again cited "stray electricity" as a differential diagnosis. He believed stray electricity was largely responsible for the high somatic cell count and mastitis. He noted that "not just one or two or three, but more . . . signs that were almost pathognomonic for stray electricity." He detailed decreased water consumption, dry matter intake and production, and increased somatic cell count and mastitis. T. 143:12-144:2; 149:25-150:15; 159:23-160:8; Ex. 430 at p. 6, 8-11. Dr. Beaty checked for dehydration by running a hematocrit (HCT). Victory Farms cows measured in the low 40s, which demonstrates dehydration. Water consumption was between 14 and 15 gallons, which is below average. The cows did not drink and the normal process of their uteri involuting or shrinking following birth did not occur as quickly as it should have. T. 151:20-154:3; 173:21-25; Ex. 430 p. 9-10.
An HCT measures the number of red cells in a given volume of blood.
[¶ 20] Dr. Beaty's first goal was to increase water intake because it is the most important nutrient. When he attended veterinary school in the 1970s, he learned that when animals are confined and water is brought to them, a failure to drink should trigger thoughts of "(1) electricity, (2) electricity, (3) electricity, (4) electricity, (5) electricity." He was instructed to then consider water quality. T. 146:25-147:14; 174:1-10. To try to increase water consumption, Dr. Beaty placed a Rubbermaid tank in the holding pen to observe whether cows drank from it after milking. Although he could not measure the amount drunk at the tank, he described the tank as busy all the time. At the Rubbermaid tank, cows stuck their muzzle in to drink, unlike at the other tanks. T. 236:5-237:4; Ex. 430 p. 12-13.
[¶ 21] Orradre acknowledged that water quality was a concern even though Midwest Labs reported the water quality was sufficient. Victory Farm softened their water, which made it more difficult to control the cattle's sodium intake. Consultants were concerned about the mineral content because of high iron, sulfates, and manganese. Orradre knew these minerals could be detrimental to a cow's immune system. T. 862:6-9; 1970:13-1971:11; 1973:7-1974:7; 3077:9-3078:5; 3135:1-8.
[¶ 22] Victory Farms hired water quality expert Dan Pitzen, who formulated a mineral pack for the cows based on the minerals found in the water. Victory Farms also checked for plugged or dirty water lines. In July 2000, Victory Farms paid Eco Water Systems approximately $40,000 to install a green sand filter water system. Dr. Schulte, a veterinarian, had recommended such a system in May 1999. Water consumption rose to 23 gallons by December 2000. T. 1886:23-1887:18; 147:15-148:1; 865:6-17; 248:22-249:4; 252:4-15; 3076:5-8077:5; Ex. 430.
[¶ 23] In July 2002, the farm switched to Rural Water at a cost of $1,400-$2,200 per month. Souza described this additional cost as a good investment, despite claiming that it made no difference in the cattle's water consumption. T. 919:23-920:17.
[¶ 24] Dr. Beaty's second goal was to increase dry matter intake. Dr. Beaty noted a "ketone smell" at the dairy. Inadequate feed intake causes the break down of body fats for energy, which results in sweet smelling urine and breath called a "ketone smell." T. 148:2-17; Ex. 430 at p. 7. According to Dr. Beaty, overcrowding of cattle in the pens can lead to reduced feed intake. Both he and Dr. Schulte periodically observed overcrowding at Victory Farms, particularly in the fresh cow pen. Dr. Schulte was particularly concerned about overcrowding the recently fresh animals because "their appetite is poor, and when the feed bunk is full they will not aggressively fight their way in to eat." This leads to reduced dry matter intake and early lactation metabolic disease. T. 532:10-21; 3074:19-3075:8.
Fresh cows are cows that recently calved. T. 414:24-415:5.
[¶ 25] Dr. Beaty criticized the farm's six-row barn, especially for fresh cows, referring to it as a "banker's barn." A six-row barn provides less bunk space for each cow. He also noted that it is critical to not crowd the fragile cows in the fresh pen. A very timid cow can drop a quarter of a body condition score in a week. T. 414:9-416:1.
[¶ 26] Dr. Schulte was concerned about nutrition and the ration fed to the cows. Specifically, he felt that the macro and micro minerals did not meet NRC (Nutrient Requirements of Dairy Cattle) requirements and that the ration did not contain over the minimum amount of effective fiber. Dr. Schulte believed these deficiencies affected the dry matter intake levels and caused the fresh cows to lose condition. T. 3081:5-20.
[¶ 27] Failure to feed mineral packs coupled with poor water quality can result in trace mineral deficiencies and copper deficiency in cows, which can cause death. Prior to consultation with Dr. Schulte, Souza did not include a mineral pack in the feed because it was not the practice in California. Excluding the vitamin trace mineral mix was highly unusual for the Midwest. T. 865:13-17; 867:4-868:9; 3078:18-3081:4.
[¶ 28] Victory Farms' treating nutritionist, Dr. Paul Windschitl, stated that "too many cows were dying . . . for no apparent reason." Dr. Windschitl discussed and adjusted the rations, but could not determine the source of the problems. Moisture content in the total mixed ration was cooked weekly to determine whether additional feed was necessary to ensure that the cow received the same amount of nutrients and received more water. T. 138:23-139:7; 147:15-148:1, 248:22-249:4; 260:2-13; 1886:24-1887:18; Ex. 430; Windschitl Depo. at 83:3-19.
[¶ 29] Dr. Beaty stated that on "regular" farms, he would expect weighbacks of 5 to 10 percent of the total feed that day. Due to the quality of Victory Farms' feed, he allowed the practice to drop to the 2 to three percent range. T. 507:6-12. Dr. Beaty noted that pens were out of feed in August 2000. He reminded Victory Farms in July 2001 to not run out of feed "for any length of time," and commented as recent as March 2004 to "go for two percent weigh back." Ex. 430, p. 7, 47, 152.
A weighback is the leftover feed expected to remain in the bunk after thecows have completed feeding. T. 792:8-9.
[¶ 30] Souza testified, however, that it was his goal to "slick up" the bunks so there is hardly any feed left over. He recorded this with a zero on the weighback spreadsheet. He strived to leave less than 1 percent feed in the bunk, if possible, although he agreed that no one ever advised him to feed to this low level and that this practice differs from the industry standard of 4 to 5 percent weighbacks. Souza testified that the cows were not "starving," and he managed the feed bunks in this manner because "feed is an expensive part of your ration and, you know, what are you going to do with 4 or 5 percent of weighbacks[?]." He hypothesized that as long as the cows were not desperate to get at the feed, he was doing his job. Souza stated that the workers determined whether the cows were getting enough feed by observing them approach the bunks. If they run quickly when the feed is put out, they may need greater rations; if they approach it slowly, their ration is adequate. He acknowledged the subjective nature of this analysis. T. 792:10-24; 801:24-803:21.
[¶ 31] The evidence indicates that weighbacks greater than zero occurred from October 11, 2000, to November 7, 2000, three days in March 2002, one day in March 2003, one in April 2003, and twice in June 2003. From September 1 through September 3, 2001, no weighbacks were recorded. Souza testified that the feeders report daily weighbacks; however, he only prepares spreadsheets "sometimes." Plaintiff only made 102 records available to the court. Of these 102 spreadsheets, 31 days had weighback data for pens. Ex. 473; T. 801:14-25.
[¶ 32] Victory Farms also had issues with clostridial fermentation and moldy feed. In February 1999, Victory Farms experienced severe ketosis in the dry cow lot, which was likely due to feed refusal. The feed refusal appeared to be related to haylage that underwent a clostridial fermentation, which made it unpalatable and the cows refused to eat it. Ketosis is also associated with fatty liver, which can cause long-term health effects. T. 3116:20-3119:10; Ex. 481.
[¶ 33] Victory Farms asked Dr. Sousa, a former Milbank Vet Clinic veterinarian and the former treating veterinarian at Victory Farms, to draft letters to its insurance company making claims for death loss of animals. The first letter to Hartford Insurance on February 21, 1999, made claims for health effects to cattle due to clostridial problems with the feed purchased from Schneck. In his letter, Dr. Joe Sousa a former Milbank Vet Clinic veterinarian and the former treating veterinarian at Victory Farms, directly correlated the liver problems caused by the feed to cattle deaths. Ex. 481; TT 3118:12-18.
[¶ 34] Moldy feed was also a problem during the spring of 2000. Dr. Schulte testified that Victory Farms had purchased feed and very wide bunkers from Schneck. The bunkers were difficult to appropriately cover and keep covered; consequently, some feed was uncovered and exposed to the elements. Additionally, the top portion of some of the feed was out of condition. Dr. Schulte stated that they tried to do their best at removing the damaged feed prior to feeding the cattle. T. 3081:23-3082:6.
[¶ 35] Dr. Beaty also observed teat eversion. Normally, the sphincter muscle closes the teat end to prevent milk leakage and to keep mastitis-causing pathogens from entering the mammary gland. During the normal milking process of pulsation and relaxation, the teat dilates and enlarges to increase milk flow. A failure to let down milk can cause over-milking because the milker tries to suck milk from the mammary gland through the teats even though no milk has been let down. Over-milking can cause an eversion of the lining of the teat or the actual teat. T. 122:10-124:16.
[¶ 36] Souza estimated that four or five cows out of 30 kicked off milking units during milking. Dr. Beaty recorded 3 to 10 percent kickoffs on his first visit to Victory Farms. He generally sees less than one-half percent. He believes the kick offs contributed to mastitis, high somatic cell counts, and chapped and everted teat ends. Kick offs can also cause teat eversion. T. 631:10-25; 632:1-14; 133:17-134:10, 143:4-11; Ex. 430.
[¶ 37] Dr. Beaty observed the cows acting nervous and defecating excessively. Souza testified that nervous cows picked up their feet, twitched their tails, and acted antsy. Souza described the milkers coming out of the parlor as "covered with manure," as if they had rolled in it. Dr. Beaty stated that "it looked like the milkers had been dipped in manure." Tr. 629:4-25; 630:16-24; 134:11-19; Ex. 430.
[¶ 38] The cows were reluctant to enter the milking parlor. Workers needed to get into the holding area, whistle at the cows, tap them on the back, and coax them into the parlor. The milkers sometimes had to push the cows into the parlor. Such reluctance may relate to stray electricity, uncomfortable cows, discomfort in the parlor, or setting the milker pulsation at 90 pulses per minute. T. 632:15-633:14; 170:25-171:15; 427:15-429:3.
[¶ 39] Dr. Sousa testified that he did not understand why Victory Farms used a 90 pulse rate when the industry standard was 60. He agreed that 90 pulses per minute could cause everted teat ends, increased mastitis, and irritated cows. He did not know of any other dairies in the area who used this pulsation rate. T. 3129:25-3131:8. Dr. Sousa also testified that Souza used an "iron fisted ruler" management style and did not always explain why practices were important to the workers.
[¶ 40] Dr. Schulte observed additional communication difficulties because Victory Farms hired numerous Hispanic workers who did not speak English. Dr. Beaty noted that the Hispanic workers often nodded yes, even though it was not clear they actually understood "what, when, and why they are feeding." T. 3122:25-3124:13; 3066:6-21; Ex. 430 p. 85.
[¶ 41] Dr. Sousa prepared a video to instruct milkers on proper techniques for teat preparation. The record suggests, however, that Souza never showed the video to Victory Farms' employees. Dr. Sousa was not always happy with the techniques being used in the parlor, parlor equipment, maintenance, and "procedural drift" from the night crew. T. 3124:14-3126:6; 3142:10-3143:12; 3151:17-22; Ex. 1087.
[¶ 42] Dr. Beaty testified that a week of training is necessary for a new milking parlor employee. Souza testified that Vasquez, the parlor manager, provided each new employee a half day of discussion about "good procedure" and "works with them for a full day." T. 431:19-432:5; 726:18-727:5.
[¶ 43] During a visit on August 3, 2000, Dr. Beaty described the scene as "apocalyptic." Downed cows in a large pen at the dry cow facility had received pain killers, but they could not or would not stand. Over 150 cows lay immobile or on their sides. Workers hauled the cows to the dry cow facility from the main barn in the front end loader's bucket. Workers watered and fed them by hand twice a day. T. 140:17-141:21; 642:1-643:7; Ex. 430 p. 6-7. Dr. Beaty performed postmortems on some of these cows in July and August 2000, but found nothing definitive. He frequently noted cellulitis, an inflammation of the fascia between the muscle planes of the limbs, but he could not determine a cause. T. 296:19-298:25.
[¶ 44] Dr. Beaty described Victory Farms' culling losses as the worst he had ever seen. These losses from death and culling made the per cow milk production appear higher than it actually was. T. 612:14-613:14; 539:1-540:4. In Beaty's opinion, treatments for numerous problems with the Victory Farms cows were ineffective. Standard protocols that worked on other dairies where Dr. Beaty was the treating veterinarian did not work at Victory Farms. He noted that the cows may be immunosuppressed and researched information about stray electricity. T. 144:3-21; 164:6-16, 261:11-17; Ex. 430 at p. 6-7, 053.
[¶ 45] Before reaching his final diagnosis that stray electricity caused the herd health problems at Victory Farms, Dr. Beaty used blood chemistry and blood serology, rectal paplations, cultures, and sensitivities to identify mastitis sample organisms. He also ruled out management problems and nutritional problems. T. 185:6-186:7; 290:5-16.
[¶ 46] Victory Farms contacted 15 different consultants to critique its operation and determine the cause of cow death and low milk production. Souza testified that they tried everything to find the causes of their persistent problems. T. 636:2-642:12; 630:22-631:1. Victory Farms brought Land O' Lakes consultant Peter Grazier to review parlor procedures, including prepping the cow, attaching the units, post dipping, moving in the parlor, and wiping the cows with clean towels. Victory Farms swept the parlor floor with muriatic acid to provide the cows with better footing, looked at health and treatment protocols which were working elsewhere, added a biannual vaccine for respiratory problems to the SOP, and modified rail height on some of the pens. T. 164:6-16; 170:25-171:15; 188:12-189:1; 237:8-21; 256:1-7; 261:11-17; 428:6-429:3; Ex. 430 at p. 37-53.
[¶ 47] On March 3, 2001, Victory Farms called Dr. Sousa to assist with the emergency treatment and euthanasia of cows injured during a collapse of a barn at the dry cow facility. Eighteen cows initially died and a review of plaintiff's DairyComp records indicates that a total of 30 died that day due to "barn." Ex. 295 p. 9, 482
B. Suspensions
[¶ 48] During direct examination, Souza testified that the South Dakota Department of Agriculture (SDDA) had warned the farm once regarding paint in the basement but never issued a suspension. Souza testified that when the inspector returned two weeks later, "everything was fine." In actuality, the farm was inspected on August 3, 2000, and in addition to being notified that Victory Farms needed to paint and clean the basement, problems with cleaning and sanitation in the milk parlor area and the milk bulk tank were identified. Souza received a warning letter dated August 7, 2000, to correct these violations. The farm was re-inspected on September 5, 2000, but problems with cleaning and sanitation remained. Souza was notified by letter that Victory Farms' Grade A permit was suspended. T. 658:20-659:14 and 715-721. Ex. 460, p. 14-17. Souza testified that although the SDDA suspended Victory Farms' Grade A permit, Victory Farms continued selling its milk as Grade A because Valley Queen continued to pay it Grade A prices. He noted that Valley Queen never suspended its Grade A milk purchase. Souza never informed Orradre about the suspension. T. 718:16-24; 722:13-21; 725:13-18; 1963:12-16.
[¶ 49] Souza testified that sanitary violations noted by the inspector are only a problem if they affect bacteria counts. He testified that Victory Farms' somatic cell counts were not high. Prior to reinstatement of its Grade A permit on September 25, 2000, however, a milk sample was taken on September 18, 2000, which revealed a bacteria count in the milk of 245,000, which exceeded the state permit limits. 720:20-721:23; Ex. 460, p. 19-20.
[¶ 50] Victory Farms received additional warnings on February 8, 2001, and August 7, 2001, that its Grade A permit was in danger of suspension. On July 17, 2002, cleaning and sanitation were noted items that required re-inspection. Ex. 460 p. 24-25, 28-29, 34-35.
C. Whetstone, REA, and USDA Policies
[¶ 51] An REA memo dated September 24, 1981, regarding "Stray Voltage in Dairy Farms" informed REA members such as Whetstone:
There is general agreement among most people who have done research in this area that very low voltages (as low as .25 to 0.5 volts) may, under certain conditions, cause problems for livestock. It seems therefore that dairy operations, swine farrowing operations, etc., should be considered as critical loads with stringent requirements which are not met by the normal electric service.
Snaza Depo. at 37:1-38:4; Ex. 43 at 1. A letter to electric borrowers indicated that these voltages referenced measurements at cow contact points and recommended that dairies install equi-potential planes. An April 27, 1983, REA memo concerning "Stray Voltage in Dairy Farms" counseled: "We strongly urge you to make appropriate information available to your customers by use of bill stuffers, direct mailing or other suitable means." Snaza Depo. at 46:9-21, 47:24-48:3; Ex. 43, 44 at 1.
[¶ 52] In the early 1990s, Whetstone published articles dealing with stray voltage and sent them to its customers. Operations manager Dave Snaza wrote an article entitled, "Stray Voltage! A Dairyman's Worst Nightmare." He described stray voltage as a "nightmare" because farmers without electrical knowledge have difficulty locating it. T. 2403:18-2404:6, 2404:12-2405:2; 2556:23-2558:11; Ex. 1150.
[¶ 53] Since 1989, Whetstone has completed a form entitled "Neutral to Earth Complaints" when investigating stray voltage complaints. When determining whether there is a current that is high enough to affect cows, employees are instructed to consider the following factors: increased incidence of mastitis, decreased milk production, reluctance to enter the stall or the parlor, nervousness, uneven milk-out, longer milking time, reduced feed intake, reluctance to drink water, weather, if operator received a shock, and somatic cell count. Snaza Depo. at 39:22-43:4; 44:25-45:4; Ex. 20.
Cows naturally desire to let down milk. The hormone oxytocin causes themammary gland to let down milk into the teat. When the cow is stimulated, thepituitary gland releases oxytocin which flows to the heart, circulates through thebloodstream, reaches the myoepithelial muscles around the alveoli in the udder, and causes them to contract.
Anything that excites the cow during or just prior to the milking processadversely influences oxytocin's release and function by releasing adrenaline orepinephrine, which blocks oxytocin. This also decreases immune function anddelays the cow's response to injury because melatonin, which affects leukocytes(white blood cells), decreases and cortisol, adrenaline, or epinephrine increases. T.119:12-122:9; 1607:23-1610:7.
[¶ 54] In 1992, Whetstone adopted Policy Bulletin 40-16B, which addressed Whetstone's electrical distribution system, the multi-grounded wye system. Its system is "based on the multi-grounded neutral return where the return current divides between the earth and a metallic conductor." This system conforms to electric code requirements and is universally accepted as the safest system available for electrical distribution systems. Ex. 13; Snaza Depo. at 51:4-22. Whetstone's policy specifically "recognize[d]" that milking parlors and livestock confinement operations may have special service requirements because of problems resulting from the sensitivity of livestock to very low levels of neutral-to-earth voltage. The bulletin was reviewed on February 21, 1994, and remains in effect today. Snaza Depo. at 51:23-52:7; DeFea Depo. at 85:4-86:6; Ex. 13.
[¶ 55] The "Redbook," published by the United States Department of Agriculture (USDA) cautions that many factors can cause behavior, health, or production problems on dairy farms, including "management and cow handling methods, environmental conditions, nutritional disorders, mastitis control methods, sanitation, and disease." Thus, the cause/effect determination is extremely important: "It should be reemphasized that factors such as mistreatment of cows, milking machine problems, disease, poor sanitation, and nutritional disorders may cause cows to manifest any of the symptoms that are associated with stray voltage/current problems." Ex. 1013 at 3-23; Ex. 1011 at 10.
IV. Testing the Dairy
A. Fitzgerald Lane
[¶ 56] Because the cattle exhibited symptoms of stray voltage, an independent electrician from Wisconsin, Tim Fitzgerald, was hired to check for stray electricity. T. 1887:25-888:22. In October or November 2000, Otter Tail Power (OTP) knew that Victory Farms had contacted Tim Fitzgerald regarding stray electricity. OTP tested the premises, and employee Wes Lane reported finding nothing of significance. T. 662:12-664:3.
[¶ 57] Fitzgerald visited Victory Farms in late 2000 and completed his work in the spring of 2001. He replaced the bare concentric wire serving Victory Farms from OTP with an overhead 480 and a grounded Delta system. T. 663:1-12; 666:6-667:16. Fitzgerald testified that installing the delta removed "measurable primary current" from the farm environment. It lowered the current flow through the ground. Dr. Beaty testified that he attributed the increased water consumption in December 2000 to Fitzgerald's work. Although Victory Farms videotaped Fitzgerald's work, those tapes are not part of the record. Fitzgerald Depo at p. 38:18-41:9; T. 252:4-15; Ex. 430.
[¶ 58] Souza called South Dakota One Call on July 10, 2001, and subsequently Whetstone employee Mark DeFea marked the location of the line in front of Victory Farms with red flags. The red flags read, "BURIED POWER CABLE, Whetstone Valley Elect. 1-800-566-6631." T. 2637:5-2639:11; Ex. 1010 p. 5; Ex. 1154.
B. Bodman
[¶ 59] Victory Farms' lawyers requested that agricultural engineer Gerald Bodman come to South Dakota in the fall of 2001 to determine whether an off-farm, extraneous voltage problem existed. Victory Farms believed OTP was the likely source of any problems because it supplied Victory Farms' power. T. 1582:16-1585:4. Bodman's field notes summarize the current he measured on the main grounding conductor, where Lane had recorded .5374 volts the previous month. The main grounding conductor went between the main panel and a ground rod outside of the dairy milking center. Bodman bases threshold level of injury on current, not voltage.
Electricity travels down a pathway, or circuit, and the flow of electricity isreferred to as current. Current is the actual power; voltage is the force behind thecurrent. According to Ohm's Law, voltage equals current multiplied by resistance.There is an inverse relationship between resistance and conductivity: highresistence results in low conductivity. T. 159:8-1461:19; 1006:11-18; 1475:7-16; Ex. 1013.
[¶ 60] Bodman's initial reading at the main grounding conductor at the service entrance panel exceeded the scale on his equipment, over 10 amperes (amps), but it lasted only an instant. He initially thought this extremely high reading was because a piece of equipment faulted on the dairy. Such readings are generally encountered under fault conditions only, but no on-farm fault could be found. Bodman then believed it was either an intermittent fault or a transient from an external source. T. 1626:19-1627:18; 1719:15-17; 1575:22-1580:9; 2341:12-2344:3; Ex. 256. He could not duplicate this reading.
[¶ 61] Bodman next measured 7.2 amps on the grounding conductor and then measured 3.1 to 3.3 amps, which is 3100 to 3300 milliamps (mA). Later, he measured 3.2 and 4.6 and 2.8 to 3.1 amps on the grounding conductor. Bodman changed to a Hewlett Packard digital recording volt meter and measured 2.6 to 3.1 amps, 2.9 amps, and then 4 to 5.3 amps. His lowest reading was .9 amps. T. 1586:7-1588:9; 1582:16-1585:4.
[¶ 62] Bodman testified that the sampling rate of his instruments results understates the electricity, particularly short impulses. Anything over one-half ampere on an electrode grounding conductor indicates a fault. Bodman did not find any on-farm faults to account for the current. He attempted to rule out any possible fault by running on-farm equipment with a generator and then with power from OTP. Turning on and off the recycling air compressor, the vacuum pump, and the bulk tank did not affect his readings. T. 1605:12-1607:22.
[¶ 63] Bodman arranged to separate the primary and secondary neutrals with OTP to allow differentiation between on-farm and off-farm sources. When this separation had no effect on the levels he measured, Bodman concluded that OTP was not the source of the currents on the grounding conductor. T. 1581:7-1582:15.
[¶ 64] The Victory Farms' barn had an equi-potential plane of steel within eight feet of the floor. Bodman stated that external voltage differences of electricity may flow through or on the equi-potential plane when traveling back to the substation. According to Bodman, this plane should have been tied to the grounding bus in the main distribution panel. He measured over 10 amps of current on this bus, to which the grounding electro-conductor was attached. Bodman opined that a properly installed equi-potential plane would have carried current through every metallic component within the dairy and every conductive surface, including wet concrete. T. 1589:11-1590:11.
[¶ 65] Bodman stated that the resistance and the flow of current through the barn was less than through the surrounding soil because the barn was broad and wet. In his opinion, in a multi-grounded system, electrical energy returns from the point of use to the source transformer along multiple pathways. The Milbank substation was the source transformer for the Whetstone distribution line in front of Victory Farms.
[¶ 66] He opined that Victory Farms' equi-potential plane could not prevent this electricity from getting into the cows, because the plane was designed to disperse current throughout the facility and the cows were confined to the barn. The grounding conductors and the reinforcing steel in the floor further distributed stray current throughout the dairy. Bodman's voltage measurements were low because they measured voltage drop rather than driving voltage, which is the difference between the Whetstone line and the substation. Tr. 1598:5-1604:9.
[¶ 67] Bodman noted that Victory Farms' cows and waterers were very clean, the ventilation system was good, and there was good hygiene regarding towel use. He ranked Victory Farms' management as a six or eight on a scale of ten, describing them as good but not excellent. He explained that the practices he criticized artificially capped production but did not cause the extensive herd health problems the cattle were experiencing. T. 1649:22-1650:22, 1653:6-1654:20, 1656:11-1660:1; 1662:4-1663:15; 1803:3-20; 1824:15-17.
C. Neubauer
[¶ 68] Master electrician Lawrence C. Neubauer was hired by Victory Farms after the owners still noted some problems even after the dairy was isolated by Fitzgerald. Neubauer was told that someone had measured 8 amps on a grounding conductor to the lighting panel. Neubauer visited Victory Farms numerous times between July and September 21, 2001. T. 1083:11-22; 1084:1-6; 1089:14-1090:25; 1118:9-24; 1285:4-21.1606:12-1607:22.
[¶ 69] Neubauer believed that either OTP or on-farm equipment was creating the problem. During his first visit in July 2001, Neubauer measured between 1 and 3 amps on the grounding conductor to lighting panel in the electrical equipment room. He determined that this current did not reach the cows. He measured 300 to 400 mA on the water line that rose from the floor. This was 60 cycle wave form that utilities use and could have come from either an on-farm or off-farm source. He tested grounding conductors at the main service where he detected several hundred milliamps on all grounds. He concluded that something "was seriously wrong" because there should not have been current on the ground wires. T. 1087:14-1087:17; 1093:20-1095:1; 1083:23-1085:25; 1098:16-1099:11.
[¶ 70] Following his first visit, Neubauer suggested supervising the lighting at Victory Farms. If there were an electrical fault on the supervised system, a horn or alarm would sound as a result of ground fault circuit interrupters (GFCIs) used on conductors run through a Davis monitor. The GFCI detected on-farm ground faults. If 5 amps went out, 5 amps should return, and if not, the breaker would trip instantly. Off-farm stray electricity would not trip the interrupter because the point of origin for off-farm electricity is the substation rather than the on-farm transformer referenced by the GFCI.
[¶ 71] Before Neubauer arrived, Victory Farms used GFCIs on nearly all circuits except the lighting. By August 2001, Neubauer had his wife's company change all the lights and plugs, which resulted in a completely supervised system throughout the dairy. His wife's company charged Victory Farms $7,000; however, he eventually accepted $2,300 as full payment because he had not solved the problem. He testified that he told Victory Farms, he would not bill until he found a problem. T. 1078:10-1080:25; 1088:1-1090:8; 1240:6-1242:4; Ex. 453.
[¶ 72] Neubauer returned to Victory Farms around July 27, 2001. The cows in the parlor were agitated so he connected a test lead wire to the parlor steel and ran it to a remote rod about fifty feet outside the barn. He recorded parlor steel to remote rod measurements for a 24-hour period. He measured over one volt of electricity at random times on the remote rod. One impulse lasted just under 4 seconds; another impulse lasted approximately 9½ seconds and reached 3/10ths of a volt. He detected between 1/10 of a volt to over 1½ volts. He testified that his meter exceeded its 2-volt scale because it could not adjust to the magnitude of the impulses. T. 1101:6-1104:24; Ex. 448D, 448E.
[¶ 73] He described the transients he measured as random and unique, and he could not match them to any piece of operating equipment on the dairy. He then recommended installing a copper ring with ground rods, "a ground ring," to provide a direction of current flow and to determine if something off-farm could be measured. T. 1089:14-1091:7; 1109:21-1110:8. Souza installed the ground ring in early August by digging a trench approximately two feet deep around the entire dairy with a Ditch Witch trencher. Souza stated that he saw the red flags when he was trenching in the ground ring wires but did not read them. He continued to dig the ground ring within 12 feet of the Whetstone flags. Neubauer supervised Mr. Souza's installation of the ring and determined its location. He testified that he never saw the red flags marking the Whetstone underground buried line.
[¶ 74] Souza inserted a copper wire into the trench, pounded 8-foot ground rods every 16 feet, and attached the rods to the wire. Neubauer provided data loggers that were attached to the ground ring to measure any ground current. Neubauer also told Souza to install "jumpers," which are wires that divert some of the ground current around Victory Farms. The first "jumpers" connected the OTP neutral electric wire at the front of the dairy to the neutral by the Whetstone southwest pole. T. 670:9-671:3; 672:24-674:23; 950:20-953:13; 1110:19-1111:2; 1257:18-1260:16.
[¶ 75] The ground ring surrounded the total area where the cows were housed and monitored current in the earth at a particular point in time. According to Neubauer, the ground ring reduced resistivity and attracted nearby current. The current circulated on the ring and left the ring where it returned back to its source at the Milbank substation. It did not cause any detectable amount of current to enter the cows because the current would have had to travel through a medium with higher resistence. T. 1470:22-1472:7.
[¶ 76] Neubauer attached a data logger monitoring device to the ground ring to monitor possible ground current. His highest readings were in front of the dairy. On August 2, 2001, at 6:47 p.m., he measured 411 and 433 mA on the ground ring before the current subsided. Neubauer perceived a pattern of current increasing and then decreasing, but he did not know its origin. T. 1111:14-1113:18; 1115:5-1116:2; Ex. 583.
[¶ 77] Neubauer testified that current accessed the cows in the parlor through grounding conductors that were electrically connected to the steel. Parlor entrance gates and butt plates were steel, and the cow's butt was against the plate during milking. Metal rapid exit gates held the cow near her brisket, metal exit lane fences and chutes confined the cow for palpations, and every stall had a metal stall gate up against the cow's flank. Tr. 624:1-626:21; 628:1-629:3; 1130:19-1131:3; 1133:25-1134:3.
[¶ 78] On September 17, 2001, Neubauer returned to Victory Farms and printed the ground ring data. Neubauer stated that he had never seen an underground cable distribute electricity that was not from a service provider. He detected current on the grounding wires traveling to or from the parlor. He retested the electrical system multiple times and measured each green ground wire individually. He found current on virtually all of them, which ranged from fifty to several hundred milliamps. The readings on the grounding conductors did not correspond to power use at Victory Farms. T. 1118:9-1120:2; 1131:2-1133:24; 1181:13-16.
[¶ 79] Neubauer ruled out OTP. He checked for current on the far east end free stall panel across from where the OTP substation was located, and the grounding conductor had no current flow from the parlor to the panel. He believed that if OTP were the problem, he would have measured large amount of currents there. Ground ring measurements showed the current flowing to the northwest. T. 1136:10-1137:6; 1171:1-1172:2. On September 19, 2001, Neubauer concluded from the ground ring data that someone ran "major loads twice a day every day." He told Souza that the current was not from Victory Farms and that they needed to determine its source. Neubauer believed somebody was milking twice a day; Souza responded that it was Angerhofer. Neubauer inquired as to where the cable at the riser pole in the southwest corner went. They hooked up another set of jumpers to bypass the cable and confirmed milking times at the Angerhofer farm, which coincided with the ground ring data. T. 1118:9-24; 1137:1-6; 1138:17-1140:10; 1141:12-20.
[¶ 80] Neubauer installed a second set of jumpers that connected the riser pole by Angerhofer, where the cable came up, to the OTP substation down ground. Neubauer believed this would help determine whether the cable had a problem and whether the jumpers significantly impacted ground ring readings. The jumpers reduced current flow by 40 percent. T. 1138:17-1140:25.
[¶ 81] Believing strongly that the Whetstone underground cable was the source of the problem, Neubauer contacted Whetstone and requested that someone test its underground cable. T. 1141:21-1142:19. Whetstone's operations manager and former foreman, Mark DeFae, and another Whetstone representative arrived at Victory Farms on Thursday, September 20, 2001. Neubauer testified that he showed them his data and DeFea responded that they would test the line because something was "not right." While at Victory Farms, DeFea removed the jumpers that Neubauer had installed. TR 2684:12-14. He then ran two tests, a Rykom cable locator test and a wire continuity test. His notes indicate an OL on the line. Neubauer confirmed that DeFea had checked his meter, had placed the test leads together on continuity, and had physically metered out the cable. DeFea stated that he would have a backhoe and a bucket at Victory Farms first thing in the morning to remove the cable. DeFea does not deny telling Neubauer and Souza that the line was open. T. 1142:23-1144:3; 1146:14-1147:4; 2684:7-2684:11; 2697:17-2698:14.
"OL" signifies an open line with infinite resistance. The current cannot getthrough the wire and therefore leaves the line at the bared neutral and flows overthe ground rod into the earth. If the neutral return current cannot return to thesubstation through the wire, it goes through the earth. T. 1148:25-1149:11; 1154:22-1155:11; 2684:15-2685:8.
Whetstone employee Mark Weber testified that he and DeFea conductedfurther testing on the line in September 28 and concluded that the undergroundcable did not have an open and that the line was continuous. Neubauer disagreesand opines that the open was most likely in the neutral at the west riser pole wherethe cable connected to the distribution line and where splices were visible. T. 1285:4-21; 2720:12-24.
[¶ 82] Neubauer testified that during the afternoon of September 20, a Victory Farms employee came into the office where Neubauer and Souza were working and reported that the cows were kicking. The employee asked what they were doing. Neubauer observed several cows acting agitated on the parlor monitor. He testified that when the jumpers were attached, the cows had calmed down. During testing, however, DeFea had removed the jumpers in order to meter the cable. After DeFea replaced the jumpers at 3:45 that afternoon, the cows became calmer. T. 1147:5-23; 1144:4-1146:7.
[¶ 83] Although a VCR was attached to the television monitor in the office, Neubauer did not videotape the cows' reactions. Neubauer did not take cow contact tests at that point, did not go to the parlor to observe the cows, and did not demand immediate connection of the jumpers. Although Souza was also present in the office, he did not look at the monitor when the employee reported the agitation. T. 886:6-887:22; 1415:19-1417:10. Because of the lack of corroborating evidence, the court finds that Neubauer's testimony is not credible regarding the alleged reaction of the milk cows on September 20.
Because the court finds Neubauer's testimony incredible, Victory Farmscannot prove causation under its challenge: dechallenge: rechallenge theory.
[¶ 84] On September 21, 2001, from 11:25 to 11:33 a.m., the ground ring current was measured at 200 mA with the jumpers attached. This was about half the amount measured without the jumpers. At 1 p.m., Neubauer measured 44 mA on the ground ring. At 1:47 p.m., the underground cable was de-energized and the ground ring measurements went to zero. The cable was re-energized around 2:40 p.m. Victory Farms was milking during the entire process, which ruled out the Otter Tail system or an on-farm problem. T. 1156:21-1159:15; Ex. 449F-2.
[¶ 85] DeFea returned to Victory Farms on September 21, 2001, and dug up the underground cable. Neubauer asked Whetstone to remove the connection to the ground rod, telling them that he did not want it discharging current in front of the dairy. T. 2661: 9-11; 1290:1-9. DeFea recognized that disconnecting the ground rod would not create an unsafe condition because there were four grounds east towards Angerhofer's farm and additional grounds to the west. Whetstone left the ground rod disconnected to the underground cable and reburied the cable. T. 2680:21-2682:6.
[¶ 86] Neubauer opined that Whetstone's electricity traveled through the dairy as it returned to its source at the Milbank substation. It came both from the underground cable and the grounding at Angerhofer. He stated that because the current could not escape at the southwest riser pole, it flowed through the earth taking any available path, including through the Victory Farms dairy parlor, electrical room, and free stall facility. T. 1165:14-1166:1. Neubauer opined that there is a large differential between the phase and neutral return on the same line that carried the electricity on the Whetstone underground cable. He measured over 14 amps phase current with approximately 2.5 amps return current. He testified that the neutral return generally had 80 percent return going into the earth, rather than on the neutral. T. 1196:18-1197:10; 1199:12-14; 1401:1.
[¶ 87] Whetstone de-energized the underground cable on the afternoon of October 11, 2001. Angerhofer was then re-fed from the Labolt substation to the south. Whetstone charged Victory Farms $8,000 to de-energize the line. T. 1160:17-1161:6; 1896:21-25; 2263:21-2264:12; Ex. 449H-2.
E. Victory Farms After October 2001
[¶ 88] Nutritionist, Dr. Windschitl, noted a dramatic improvement in herd health after October of 2001. Windschitl Depo. at 86:7-88:16. Dr. Beaty stated in his field notes from January 24, 2003, that the fresh cows and heifers looked good, somatic cell count had dropped, teat ends had improved, milkers stayed clean, and the board and rails were not full of manure. T. 271:25-273:7; Ex. 430 at p. 114. In Dr. Beaty's opinion, the cattle respond better to treatment, and there is less mastitis. T. 206:8-207:6. Most defecation now occurring in the parlor followed milking when the cow is standing in the holding or return part of the parlor rather than while she was milking. Employees wash down the milking area once every three pens now as opposed to washing every pen due to the amount of manure. Kickoffs have dropped to less than 2 percent and are generally limited to first calf heifers. The cows are calmer in the parlor and less jittery. T. 172:2-9, T. 549:6-25; T. 634:18-636:1; 656:7-22. Previously Dr. Beaty observed cows exiting rapidly from the parlor. Now, Victory Farms' employees sometimes have to go in and urge the cow out in order to let other cows in to milk. T. 172:10-25.
[¶ 89] Somatic cell count and production both evidence herd health, although somatic cell count is more important. Valley Queen, the creamery that buys Victory Farms' milk, tests for somatic cells on every shipment of milk received. This count becomes the basis for pricing, and a low count indicates higher quality milk. Valley Queen compared Victory Farms' somatic cell count to a peer group of 10 large dairies, ranging from 650 to 3,500 cows, in South Dakota, Minnesota, and Iowa that also sell to Valley Queen. From July to October 2001, Victory Farms' somatic cell count was higher than the peer group's. By August and September 2002, Victory Farms' count dropped below the peer group line. Since January 1, 2003, Victory Farms' somatic cell average has been about 100,000 less than the peer group. T. 200:10-204:13; 389:8-391:23; 205:5-13; 278:11-15; 224:18-225:11; Ex. 574.
[¶ 90] In 1999, milk production ranged from 47.1 to 57.1 pounds per cow per day and averaged in the low 50s. The average remained the same in 2000 and 2001. Now, excluding the portion of the herd purchased after de-energization, the average milk production for the 1,672 milking cows is 55 pounds and 58 pounds fat corrected milk. Fifteen percent of the cows included in these production numbers are alleged by plaintiff to have permanent damage. T. 209:5-23; 226:22-227:11; 524:1-25; Ex. 556, 568. The rolling herd average of milk production shows an increase in 2001; however, from 2002 to 2003, this average declined significantly. Ex. 232.
A "rolling herd average" calculates the average milk produced over a 12-month period divided by the average number of cows. It rolls forward with eachsuccessive month; the first month is dropped from the average and the new monthincluded. T. 504:23-505:2; 2093:12-2094:15.
[¶ 91] Water consumption, which is closely linked to a cow's milk production, is up to 25 gallons as opposed to 14 to 15 gallons several years ago. The magnitude of cows lapping water has decreased considerably, although it still happens occasionally. T. 173:13-174:16; 373:18-374:14.
[¶ 92] There is greater stability in the parlor work force and greater consistency for the cows and for procedures in the parlor. After years of frequent employee turnover, there have been only a few new milkers in the past two years. Vasquez, the parlor manager, improved his job performance and now takes responsibility for equipment repairs in the parlor. T. 546:15-20; Vaspquez Depo at p. 59:2-11; 61:25-63:22; Ex. 1030.
[¶ 93] Prior to October 2001, Victory Farms had two 11-hour shifts, with an hour clean up between. Milk let down problems had previously slowed milking. Now Victory Farms milks more cows and finishes sooner. There are almost two hours between shifts. The parlor flow rate has improved from 130 to 180 cows per hour before October 11, 2001, to 230 to 260 cows per hour currently. T. 170:8-24; T. 633:24-634:17.
V. Credibility of Witnesses and Evidence
[¶ 94] Because many of the court's conclusions of law depend on which experts' opinions are given more weight, the court will discuss the credibility it gives to the testimony of each expert.
A. Dr. James Beaty, D.V.M.
[¶ 95] Dr. Beaty's education makes him a qualified and credible witness. He attended undergraduate and veterinary school at Kansas State University (KSU). He graduated with his doctorate in veterinary medicine in 1979. He studied stray electricity in pre-veterinary medicine dairy science, animal science, and dairy production courses. During pre-vet and veterinary school, he learned that the presence of stray electricity means decreased water consumption. He testified that in both undergraduate and veterinary school he learned that "If we see more than one sign [such as those listed by Whetstone in Exhibit 20] we better have electricity as a rule-out. . . . as a differential diagnosis." T. 111:23-113:14; 133:13-16; Ex. 20.
[¶ 96] His work experience adds to the credibility and reliability of his testimony. His veterinary practice consists predominantly of large animals, particularly dairy cows. He works with dairies in Minnesota, Iowa, Kansas, and South Dakota. Since 1979, he has treated over 100,000 dairy cows. T. 115:16-116:4.
[¶ 97] His methods are reliable and bolster the credibility of his testimony. He practices problem-oriented veterinary medicine (POVM), which resembles differential diagnosis. POVM is an ongoing process where the vet lists the problems encountered and suggests tentative diagnoses. Each diagnosis is evaluated subjectively and objectively. In this diagnostic process, Dr. Beaty takes a history, which is a chronological synopsis of events. He took histories at Victory Farms. T. 113:15-114:8; 125:13-126:1.
[¶ 98] Dr. Beaty's examinations are hands-on, physical examinations, where an animal is evaluated both subjectively and objectively. This includes taking temperature, ausculating the heart and lungs, palpating rectally, pinging the sides of abomasal displacement, observing general demeanor of an animal, looking at ears, nose, and throat, and evaluating consistency of the stool. During his Subjective-Objective Assessment Plan (SOAP), Dr. Beaty recorded his subjective and objective observations at Victory Farms in extensive daily notes. T. 126:2-13; 127:25-128:9.
[¶ 99] Dr. Beaty's evaluations are independent. He walks through all the dairy pens looking for changes, signs of disease, and signs of things going wrong or right. He prefers to walk alone because two people become one set of eyes seeing the same things and missing the same things. Although as a veterinarian, Dr. Beaty has the right to prescribe and sell drugs, he chooses not to because he does not want accusations of "profiting on a problem." He writes prescriptions, but the dairy bids out its own pharmaceuticals. T. 126:14-127:6; 128:10-22.
[¶ 100] Dr. Beaty relies on others when evaluating the total health of a dairy herd. He considers himself as a member of a team consisting of the manager, who is the leader, the nutritionist, and himself. He and the nutritionist constructively criticize the manager. He does not believe he is there to "pat them on the back" because it renders his own role ineffective. T. 128:23-129:7; Ex. 430 at p. 24.
[¶ 101] As the treating veterinarian, he visited the dairy every two weeks. He made observations and drew conclusions about the cause of the herd health problems at Victory Farms during the course of actually diagnosing and treating this herd. The first time he spoke with counsel for plaintiff was in January 2002. T. 116:15-21; 223:3-25.
[¶ 102] His extensive field notes evidence his professionalism and thoroughness. His notes contain approximately 156 pages of contemporaneous handwritten comments, suggestions, and observations from his first visit in July 2000 to the present. Dr. Beaty testified that his attention to detail is what gets most people "over the hump," thus, he is not hesitant to criticize where needed. He took many notes prior to his retention as an expert witness. Ex. 430; T. 129:8-16.
[¶ 103] His August 3, 2000, notes reflect his concern about the cows' failure to respond to any treatment. He sought information on electricity in order to determine the source of Victory Farms' problem. Dr. Beaty called KSU, Michigan State University (MSU), University of Wisconsin, University of Minnesota, and the University of Pennsylvania and broadly requested all available information about stray voltage. These universities sent him information and directed him to websites. Dr. Beaty testified that he read numerous articles on his own. He billed Victory Farms for 124 hours of literature review. Ex. 430 at p. 7-8; T. 144:3-145:11; 167:10-168:2; 358:10-359:4.
[¶ 104] Dr. Beaty downloaded an article by Dr. Hillman on MSU's agricultural science department's web site. KSU's veterinary medicine, agricultural science, and engineering departments sent him articles by Drs. Hultgren, Dahlberg and Hillman. T. 534:24-535:18; 550:11-552:16; 553:13-554:9; Ex. 195, 267, 308 382. Dr. Hillman and Martin Graham authored Exhibit 312, entitled "Milk Production of Dairy Herd Decreased by Transient Voltage Events." Dr. Hillman is a Ph.D. dairy consultant, professor emeritus at MSU's Department of Animal Science. Graham is professor emeritus in the Electrical Engineering and Computer Service department at the University of California. The article discusses transient voltage or current rather than steady state. T. 165:22-167:9; Ex. 312.
[¶ 105] Dr. Hillman also wrote Exhibit 267 entitled "Effects of Electrical Shock on Cattle." He noted that the response of cattle to voltage varies widely. The article cited numerous responses to electrical shock, including inexplicable intermittent periods of reduced production, increased incidence of mastitis, elevated somatic cell count, lengthened milking times, incomplete milk let down, extreme nervousness in the parlor, reluctance to enter the milking parlor, rapid exit from the parlor, reluctance to use water bowls or metallic feeders, and altered consummatory behavior such as lapping water or splashing rather than normal drinking behavior. He stated that "persistent, intermittent electrical shock produces typical stress syndrome characterized by increase of blood adrenal hormones, cortisol, epinephrine." T. 168:20-169:4; Ex. 267. Other articles that Dr. Beaty read concluded that dairy cows can perceive small amounts of current. Ex. 195; T. 190:10-191:6.
[¶ 106] The court finds that, based upon his education, knowledge, competency and experience as Victory Farms' treating veterinarian, Dr. Beaty was qualified to provide opinions as to the causes of the Victory Farms' herd health and production problems. The court further finds that his opinion testimony was based on sufficient facts and data and that his opinions based on POVM and differential diagnosis methodology were the product of reliable principles and methods. The court concludes that Dr. Beaty reliably applied these principles and methods to support his conclusion that stray electricity caused the herd health and production problems at Victory Farms. Finally, the court finds that Dr. Beaty's demeanor on the witness stand was direct and responsive. Accordingly, the court assigns great weight to his testimony.
[¶ 107] Defendant argues that because Dr. Beaty had little information about the authors of the articles he read and their methods, any conclusions derived from these articles are unreliable. It contends that the literature is unreliable because it is not peer-reviewed and that he only reviewed information that supported his theories. Defendant further criticizes Dr. Beaty for concluding that electricity caused the herd's problems because he cannot quantify the level of electricity necessary to harm cattle. See Defendant's Findings, Docket 160, ¶¶ 31-42.
[¶ 108] The court does not find these arguments persuasive and accepts Dr. Beaty's testimony. First, Dr. Beaty did not solely formulate his diagnosis on the literature he reviewed. He relied on his education, experience, and knowledge to reach the diagnosis. Second, the reliability of observations and notes extending over months of close contact with Victory Farms' herds does not hinge upon whether articles he read were peer reviewed. Defendant's own expert, Dr. Gustafson, testified that he has also relied on articles that are not peer reviewed. T. 3007:7-16.
[¶ 109] Third, Dr. Beaty repeatedly stated that he was not an electrician and therefore, not qualified to quantify a specific amount of current necessary to flow through the cattle. Finally, the court disagrees with defendant's characterization that Dr. Beaty's methods are "wholly without precedent." The court analyzed and rejected this argument in its order dated February 13, 2004, Docket 73. Accordingly, the court accepts the opinion of Dr. Beaty that electricity caused Victory Farms' herd health problems.
[¶ 110] The court does not accept Dr. Beaty's opinion, however, that electricity caused permanent symptoms and long-term low milk production for the dairy cows. In reaching this conclusion, Dr. Beaty applied the same methodology used to determine causation. Because a strong temporal connection does not exist, the court finds Dr. Beaty's opinion is not sufficiently reliable. See Bonner v. ISP Tech., Inc., 259 F3d 924 at 930 (8th Cir. 2001) (differential diagnoses sufficiently reliable regarding cause of acute symptoms, but not sufficiently reliable to establish cause of permanent symptoms).
[¶ 111] To reach this conclusion, the court compared the VIC 1 herd to the VIC 2 herd. The VIC 1 herd consists of the Holsteins, Jerseys and cross breeds purchased by Victory Farms prior to de-energization of the Whetstone cable. These are the cows that Victory Farms contends were adversely affected by the stray voltage. The VIC 2 herd consists of Holsteins, Jerseys and cross breeds that were purchased by Victory Farms after the cable was de-energized. Victory Farms maintained separate records for the two groups. The evidence indicates that the April 2004 production records reflect that the VIC 1 Holsteins had a test day average of milking cows of 56.5 and test day average of all cows of 44.8. TE 564. The same records reflect that the test day average for the VIC 2 Holsteins was 56.7 and for all cows of 49. TE 564. These figures are not significantly different. Furthermore, the evidence further reflects that between April 14 and April 27, 2004, 50 VIC 2 cows were dried off (13.9 percent of the entire group), while during this same time period only 24 VIC 1 (1.2 percent) of the group were dried off. (TE 1173). The scatter graph reflects that the cows culled from VIC 2 were cows which were producing below 35 pounds of milk. The same culling practice was not utilized with the VIC 1 cows. By removing the bottom 14 percent of the VIC 2 cows, the overall production average for the remaining cows was artificially increased.
[¶ 112] The milk production records also disclose that the rolling herd average for the VIC 2 herd has declined dramatically since October of 2003. The average in October was 19,993 pounds of milk per cow for the Holsteins. By April 2004, it dropped to 18,010. TE 564. During this time period the percentage of milking cows has remained fairly constant from 86 percent in October of 2003 to 87 percent in April of 2004. TE 564.
[¶ 113] Another sign of herd health is somatic cell count. The April 2004 records indicate that the somatic cell count for the VIC 2 Holsteins increased from 158,000 in December 2003 to 342,000 for the March and April 2004 test. The VIC 1 Holsteins, on the other hand, had a somatic cell count that remained consistently below 300,000 for the last year. TE 564.
[¶ 114] Death loss is another sign of herd health. The April 2004 records indicate that VIC 1 Holsteins had 183 cow deaths from May 2003 to April 2004 out of an average herd size of 1727 animals. This reflects a 10.6 percent death loss. The VIC 2 Holsteins, on the other hand, had 63 deaths out of an average of 369 cows during the same twelve-month time period. This reflects a 17.1 percent death rate. TE 564.
[¶ 115] After comparing the VIC 1 cows to the VIC 2 cows, the court finds no significant differences between the two herds in milk production. With regard to herd health, the VIC 1 herd appears healthier than the VIC 2 herd. Because the differences do not support the conclusion that the VIC 1 cows have permanent health problems, the court finds that Dr. Beaty's analyses and conclusions that stray electricity is the cause of permanent herd health problems and low milk production are not sufficiently reliable to consider as evidence.
B. Gerald Bodman
[¶ 116] Bodman earned bachelor's and master's degrees from Pennsylvania State University in agricultural engineering and is a Professor Emeritus of Biological Systems Engineering at the University of Nebraska, Lincoln. He is licensed as a professional engineer in 37 states, including South Dakota. Bodman has worked with over 10,000 farms to develop reliable and manageable livestock production systems and is currently developing his own 750-cow dairy. T. 1570:22-1571:25; 1573:18-1575:15; 1674:19-1675:6; Ex. 254.
[¶ 117] Bodman has worked as a consultant in the area of stray voltage and has investigated stray voltage on over one thousand farms, involving more than 100,000 dairy animals in 20 states. As a stray voltage consultant, Bodman does 80 to 90 percent plaintiff's work. In the 1990s, he arbitrated stray electricity cases between opposing factions. He was retained in 13 to 15 extraneous voltage investigations involving Consumers' Energy in Michigan to opine regarding the cause of the problems. His recommendations resulted in several settlements. Bodman has trained electricians, producers, and utility personnel on stray voltage and agricultural wiring. He has authored over 500 publications. Bodman's education, work experience, skill, and knowledge evidence his expertise. T. 1625:25-1626:18; 1697:4-16; 1573:18-1574:17; 1674:19-1675:6; Ex. 254.
[¶ 118] The court finds that while Bodman was qualified to provide expert testimony, it does not give significant weight to all of Bodman's opinions. During a typical investigation, Bodman testified that he conducts cow contact measurements. Cow contact measurements determine the current flowing between any two points that a cow may contact simultaneously. Bodman did not take any cow contact measurements in the Victory Farms' parlor because he considered the current reading from his instruments to be insignificant. Bodman's deviation from his standard practice and the standard practice in this field makes his conclusions less persuasive. T. 1754:9-1757:20.
[¶ 119] The court does not give great weight to his conclusion that between .08 and 1.9 mA of current reached the cows through the milk hose. Bodman did not determine the amount of voltage necessary to force this current through the hose. He neither measured the voltage simultaneously with his milk hose current readings, nor calculated the voltage necessary to drive 1.1 mA current through the milk hose configuration. Because adequate voltage is necessary to push the current through the hose and thereby affect the cattle, the failure to measure voltage makes his conclusion largely meaningless. Bodman did not witness any unusual cow behavior contemporaneous to these milk hose measurements, and reported that the cows were generally calm. This further detracts from his opinion that current reached the cattle through the milk hoses. T. 1766:12-1774:20; 1381:1-5.
[¶ 120] Defendant's expert Dr. Gustafson testified that a milk hose is not a feasible electrical path to the cow because the resistance of the rubber hose is too high for any current that an animal could perceive to flow through it. Milk is also a relatively poor conductor. Although the cow has multiple parallel paths for current to flow, the milk hose has only one path. Based upon the singular path of the milk hose, Dr. Gustafson calculated that approximately 46 volts were necessary to force the .08 to 1.9 mA of current claimed by Bodman through that hose. Such voltage can be measured. The court finds Dr. Gustafson's explanation and criticism credible. T. 3027:4-3031:20.
[¶ 121] Bodman testified that he saw no levels of concern as recognized by the stray voltage scientific community that he can attribute to Whetstone other than his milk hose readings. He agreed that if such current is accessing the cows, he should be able to measure it; however, while at Victory Farms, he could not. T. 1790:7-1791:18. The court finds this testimony credible.
C. William O. English
[¶ 122] English received a degree in electrical engineering from MSU in 1973, and is a licensed professional engineer in Michigan. English began working with telephone, gas, and electric regulating at the Michigan Public Service Commission (MPSC) in 1974. He traveled to farms with Consumers Energy to observe analysis of whether the farm had a stray voltage problem. Additionally, he acquired literature from utilities and other state regulatory agencies about stray voltage and interviewed Truman Surbrook at MSU, the person who primarily dealt with stray voltage complaints. T. 1430:25-1435:5.
[¶ 123] In 1984, English began investigating stray voltage on dairy farms for the MPSC. He interviewed farmers, veterinarians, and nutritionists about classic stray voltage symptoms. He wrote stray voltage reports and tested approximately 50 farms, some of them multiple times. He became the MPSC staff expert on the National Electric Safety Code (NESC), applied the code to complaints, and evaluated possible code violations by utilities. He was a member of the Stray Voltage Task Force in Michigan which recommended that the MPSC conduct hearings to develop standards for addressing the stray voltage problem in Michigan. English has co-authored articles about stray voltage's effect on farm animals, including cows, as recently as 1995. T. 1435:22-1440:22; 1455:14-1456:11; 1442:6-21; Ex. 172.
[¶ 124] While at the MPSC, English collected a list of stray voltage symptoms on dairy cows which he included in the 1995 article. These symptoms include intermittent periods of poor production, unexplained poor production, increased incidence of mastitis, elevated somatic cell counts, increased milk times, incomplete milk let down, extreme nervousness while in the milking parlor, reluctance to enter the milking parlor, rapid exit from the parlor, reluctance to use water bowls or metallic feeders, altered consummatory behavior such as lapping water from the watering device, breeding problems, inflamed feet at the hoof line, unexplained tumors, ineffectual medical treatment, and apparent reduction of the immune response. Another symptom he testified about is extreme defecation. T. 1444:15-20.
[¶ 125] English testified that in his opinion electricity on the buried ground rod in front of Victory Farms and on the Angerhofer down grounds traveled to the Milbank substation through numerous pathways, including the Victory Farms barn. It accessed conductive materials, including footings of the Victory Farms complex, rebar in the footings, metallic structures connected to the floor, wells in front of the dairy, bulk tanks, sump pumps, equipment ground wires, and building ground rods. The cows could not avoid contact with these surfaces in the barn. He opined that soil studies, reports, and resistivity calculations demonstrated the high conductivity of Victory Farms' soil. Thus, electricity traveled from the cable or Angerhofer grounds through the soil. T. 1509:21-1513:23; 1475:10-16; 1479:12-1480:2; 1484:7-1485:2.
[¶ 126] English's education, work experience, knowledge, and skill evidence his expertise in the area of stray voltage and its effect on dairy cattle. He is competent and qualified to testify about these matters. The court finds that he based his expert opinions on sufficient and reliable facts, data, principles, and methods. The court further finds that English reliably applied the principles and methods to the instant facts. For these reasons and those cited in the court's previous order, the court finds some of English's testimony credible. See Docket 73.
[¶ 127] The court does not, however, give substantial weight to all of English's opinions. Although English acknowledged that cow contact measurements are typical protocol in the field, he never conducted such measurements because he wasn't invited to evaluate Victory Farms until after the resolution of its problems. Additionally, he testified that he did not see any other witness's voltage measurements at cow contact points that gave him any concern at Victory Farms. He quantified his personal level of concern for stray voltage at .02 volts for steady state but noted that steady state voltage is not a problem on Victory Farms. T. 1532:12-1533:15; 1541:9-1542:6; 1546:8-12.
[¶ 128] English opined that an equi-potential plane is ineffective against electrical surges because spikes and surges rapidly travel through the plane rather than being spread throughout the plane. T. 1472:11-1474:12; 1477:19-1478:7. He further argues that various levels of moisture and other conductive elements found in a typical dairy environment, including urine and fecal matter, impair the plane's effectiveness. Moisture seeping into the concrete, type and grade of concrete, varying density, spacing between stones, and spacing of rebar across the plane affects its conductivity. As support, English notes that PSCW Docket 106 recognizes equi-potential plane limitations. T. 1474:13-1475:6; 1477:2-18; Ex. 604.
[¶ 129] English opined that an equi-potential plane can actually lower source resistance so that very little voltage can be measured even though a relatively high current is traveling through the cows. T. 1475:17-1476:1. Wisconsin, a leading state in making equi-potential planes mandatory in livestock facilities, no longer requires equi-potential planes. T. 1836:7-1837:20.
[¶ 130] Defendant's expert Dr. Gustafson testified that equi-potential planes are still an effective method of controlling and decreasing electrical flow through a dairy. With an equi-potential plane, the whole plane is at the same voltage with both transients and steady state electricity. T. 3031:20-3035:8. He further opined that "equi-potential planes are widely accepted methods of prevention of cow contact voltages independent of source, i.e., on-farm or off-farm." TE 1171, para. C. Victory Farms' own expert, Bodman, testified that in about a half dozen articles that he has written and published, he recommended equi-potential planes as a response to stray voltage. One of those articles is even posted on the University of Nebraska web site. TT 1793.
[¶ 131] The court finds defendant's experts' arguments more persuasive. Science supports these conclusions and the effectiveness of equi-potential planes. Accordingly, the court gives no weight to English's criticisms of the equi-potential plane.
[¶ 132] English testified that current must flow through a cow to actually harm the cow, and that multi-grounded wye systems are nearly the universal system used across the United States. He acknowledged that the NESC requires a minimum of four grounds per mile, which Whetstone satisfied. T. 1525:7-18; 1527:17-25; 1530:19-24. These opinions undermine several of his conclusions, and therefore, the court gives his conclusions less weight.
D. Lawrence C. Neubauer
[¶ 133] Neubauer is a licensed Master Electrician in Wisconsin, North Dakota, and South Dakota. After receiving his license as a journeyman electrician in 1986, he worked for an electrical contractor specializing in industrial matters. After six months he became foreman and supervised journeymen and apprentices. He focused on "power quality," which ensures clean power so that spikes or power swells did not affect the computer systems. T. 993:4-994:8; 1002:9-19.
[¶ 134] Neubauer started his own business in 1993, Concept Electric, Inc., which provided residential, commercial, and industrial electrical contracting. At its peak in the 1999-2000, Concept had 27 employees. He estimates investigating between 500 and 600 farms for stray electricity since 1993. He describes his job as discovering whether an electrical leakage exists and if so, identifying its source. T. 996:12-997:9; 1003:21-25; 1071:3-5
[¶ 135] In approximately 60 of the more than 500 farms that Neubauer has investigated, he has attributed the electrical problem to the dairy farmer as the sole source rather than the utility. This is the fourth time he has testified in court. T. 1019:14-1020:19.
[¶ 136] The court finds that Neubauer's knowledge, training, skill, and experience qualify him to opine about stray voltage on dairy farms. The court further finds he based his opinions on sufficient facts and data and documented measurements taken at and around Victory Farms. He employed reliable principles and methods and reliably applied those principles and methods to the instant facts and data. Accordingly, the court gives significant weight to certain opinions of Neubauer as described in this opinion. See also Docket 73. Although the court gives credence to Neubauer's systematic method of ruling out possible sources of electricity, the court does not give great weight to all of his opinions.
[¶ 137] Neubauer testified that although he made some cow contact measurements, he "gave up on them." T. 1224:10-16; 1306:1-23. Neubauer's datalogger voltage measurement readings were essentially zero during all relevant times of the testing. He positioned the datalogger closer to the cattle than the ground ring. Prior to and subsequent to de-energization, Neubauer recorded datalogger measurements of essentially zero. Ex. 1074, p. 2-15; T. 1382:13-1387:14. This detracts from his conclusion that stray voltage from Whetstone's cable harmed Victory Farms' herd.
[¶ 138] Whetstone's expert, Forster, testified where two grounded points are very close together, the proximity of the conductors can cause current to flow through the ground between these points. Neubauer did not state a specific standard for the distance required to provide full isolation between ground rods, although he agreed that 50 to 100 feet will provide isolation. Nevertheless, he installed a ground ring "something less than 12 feet away" from the Whetstone line. Some interconnection through the earth to the ground ring will likely occur because of the close proximity of the ground ring to the cable. Forster testified that Neubauer could only measure currents on the ground ring because the ground ring was placed too close to the cable. T. 2919:5-2923:10; 2899:24-2900:12; 1359:16-1362:22. The court finds that any measurements of current on the ring were a result of the ring being placed too close to the ground and thus not an accurate reflection of stray voltage that would affect the cattle in the dairy barn.
[¶ 139] Neubauer agreed that Whetstone properly installed the ground rod by Victory Farms. T. 1288:18-24. Neubauer testified that he had been told that previous testers had measured 8 amps on Victory Farms' grounding system. Neubauer measured 1 to 3 amps in the electrical equipment room, which is 25 to 30 feet from the milking parlor. These measurements were taken closer to the cows than the ground ring and were higher than measurements on the ground ring, yet Neubauer determined that they did not affect the cows. He stated that the current measured was confined to a circle and did not travel through the ground and that there was insufficient voltage to force the current through the ground and through the cows. Neubauer, nevertheless, did not measure voltage on the ground ring. T. 1270:16-2174:16.
[¶ 140] These inconsistencies undermine some of Neubauer's conclusions. Neubauer used very advanced equipment, yet he never explained how the current reached the cows, why he disregarded cow contact measurements, and why measurements from the ground ring reliably evidenced stray voltage affecting the cattle. Furthermore, the fact that he involved his wife's company to repair alleged electrical problems suggests bias. The court, therefore, gives weight only to the conclusions relied on in this opinion.
E. Wes Lane
[¶ 141] Wes Lane grew up on a dairy farm and worked as an electrician in the Navy for two years. He worked in a power plant on missile sites as a power and distribution specialist and as a federal certified mine electrician at a coal mine. He is a licensed electrician in three states. He has worked at OTP since 1979. He first became aware of the problems with stray voltage in 1982 and began testing stray voltage full time for OTP in 1989. He now supervises substation maintenance and stray voltage at OTP. He ensures that all station devices are properly tested and that employees are properly testing farms for stray voltage. T. 2288:7-2290:7. When conducting stray voltage investigations, Lane considers the farmer his customer. He also treats information obtained during these investigations as confidential. T. 2344:5-9.
[¶ 142] Lane has attended seminars regarding testifying in stray voltage cases. He recalled one presenter who instructed attendees not to produce documents that the rural electrical association did not want other people to eventually see. T. 2351:7-10; 2333:18-23.
[¶ 143] Lane tested Victory Farms on three different occasions (1996, 1999, and 2001) and never measured any levels of concern at cow contact points. Victory Farms notes that the 1996 results preceded the installation of the Whetstone underground cable and ground rod, and the 1999 tests preceded the date that Angerhofer began using his milking machines. Lane tested the east and west sides of Victory Farms, but did not precisely identify the exact placements of the test leads in his report.
[¶ 144] Lane identified the "Channel A" test as barn neutral to remote rod. It ran from the barn service panel to a remote rod. In 1996, he measured .221 maximum voltage barn neutral to remote rod. In 1999, he measured .273 volts and in 2000, he measured .5374 volts. He believed these "spikes" were of no consequence because they were not cow contact measurements and reflected equipment being turned on or off. After each of the three tests, Lane concluded that there was no stray voltage.
[¶ 145] Lane testified that he does not test for amperage because, according to Ohm's law, current cannot exist in the absence of voltage. He will not test for stray voltage when other investigators are present. Although Lane was more concerned about what OTP was supplying, he inspected Victory Farms' wiring "and the wiring looked good as far as the inspection went." Angerhofer Depo. at 42:8-44:3; Exs. 195 at 290, 540, 584 at p. 393-94, 400, 406, 1156-58; T. 2302:15-18; 2304:2-22; 2310:14-17; 2336:5-11; 2333:24-2334:3; 2352:6-2353:24; 2341:12-2344:3; 2347:12-19; 2619:8-19; 2294:17-2295:2.
[¶ 146] Although plaintiff attempts to undermine the credibility and reliability of Lane's testimony, tests, and equipment, its own expert, Bodman, testified that he has worked with Lane multiple times during the past 20 years and believes he is a competent stray voltage investigator. Bodman also testified that Lane used the necessary equipment to thoroughly conduct these tests. T. 1728:2-9. Accordingly, the court finds his testimony credible, his techniques reliable, and gives substantial weight to his testimony.
F. Matthew Schwarz
[¶ 147] Matthew Schwarz graduated from North Dakota State University (NDSU) with a degree in electrical engineering. He received his professional registration after working under another engineer for four years. He is currently registered in four states and was formerly registered in several other states. Since 1971, he has worked at HDR/SSR Engineers, Inc. and currently manages the Bismarck office. He works as a consulting engineer, and much of the company's work relates to REA and co-ops. He designs systems for them, reviews work plans, and their actual work. His company received approximately $6 million-$7 million per year from utilities from 1998 to 2002. T. 2756:1-2759:4.
[¶ 148] Schwarz has belonged to several professional organizations and founded the Institute for Electrical and Electronics Engineers. He has served on the NESC committee since the 1980s. Utilities have a strong presence on this committee. Although he testifies regularly at trials, he does not receive any extra compensation from the utility for his opinion. He has never testified on behalf of a dairy farmer. Schwarz visited Victory Farms once in May 2003 following de-energization. T. 2759:5-2761:3; 2805:3-2806:7; 2808:5-20.
[¶ 149] Schwarz opined that cow contact measurements are the only way to determine whether objectionable current is flowing through a cow. Even if a dairy exhibits common symptoms of exposure to stray electricity, the utility is under no duty to act unless certain cow contact measurements can be made at a satisfactory level. He testified that negligence by a utility cannot arise until after it receives notice from the dairy farmer. T. 2791:7-12; 2823:5-2824:22.
[¶ 150] He found it reasonable for Whetstone to install a wye distribution system in front of Victory Farms and to replace the overhead line with a buried jacketed cable. It is a normal installation for that type of location. Whetstone properly maintained the neutral line, as evidenced by routine line patrol, testing by OTP, and additional practical tests. Whetstone reasonably relied on a recognized expert to conduct follow-up stray voltage testing. It is also reasonable and common among small cooperatives to consult with an electrical engineer rather than employing one. He testified that Whetstone complied with all the provisions of the NESC, particularly Part 92, and that nothing requires more than one ground rod at termination points. The fact that current is present on the underground cable does not demonstrate that it is objectionable unless the levels are unreasonable and harmful. T. 2772:21-2773:22; 2768:22-2770:25; 2775:1-2781:18; 2800:1-5; 2782:4-2783:2; 2789:3-2790:25; 2843:13-2844:18; Ex. 284 p. 18-19.
[¶ 151] He noted that no evidence demonstrated that Victory Farms' overhead line did not comply with section 214A of the NESC regarding line installation, inspection, and testing. Nor was there any evidence that Whetstone improperly installed the underground line or failed to inspect it as required by section 313. T. 2792:17-2799:14; Ex. 284 at p. 64.
[¶ 152] Schwarz has the education, experience, knowledge, and skill necessary to provide credible opinions on the issue of stray voltage's effect on cattle and the requirements of the NESC. Accordingly, the court gives substantial weight to the portions of his testimony herein cited. The court disagrees, however, with that portion of Schwarz's testimony that opines that cow contact measurements are the only way to determine whether objectionable current is flowing through a cow. English testified that Michigan PUC's staff engineer investigated stray voltage in dairy farms in the 1990s utilizing cow contact protocol approximately 50 percent of the time. He frequently tested from steel structure to remote rod to determine the levels of energy in that environment. English opined that measuring Whetstone electricity on the parlor steel proved it passed through the cows because they were in the parlor. T. 1437:19-1439:9; 1564:10-1655:2, Ex. 507.
[¶ 153] The court finds that cow contact measurements are highly persuasive evidence of whether electricity is harming cattle. The court finds, however, that cow contact measurements are not the only method of demonstrating the presence of stray electricity at a dairy. Thus, the court does not accept in full this portion of Schwarz's testimony.
G. Charles Gerald Forster
[¶ 154] Forster graduated with a degree in electrical engineering from the University of Wisconsin. Following graduation, he worked as a consultant for Waters and Associates for 12 and a half years and eventually became the vice president. In 1981, he formed a consulting business, Forster Electrical Engineering, which he sold in January 2000. He has acted as a consultant for municipal electric utilities, rural electric cooperatives, industrial clients, and approximately 60-70 other consulting firms since 1968. He now runs a company called Phasor Labs. Forster became a registered professional engineer in 1971, and is registered in ten states. T. 2849:23-2851:9.
[¶ 155] He has worked in the utility power field doing system studies, designing transmission lines, substations, and low voltage design distribution lines on industrial plants. Beginning in 1989, he acted as the chief engineer for various electric cooperatives in Wisconsin. He has represented cooperatives on state and code committees, including the NESC committee and a subcommittee that reviewed the NESC. Forster served for ten years on the Department of Agriculture's stray voltage advisory council that monitored utilities. Forster remains on the committee's stray voltage and electric phenomena subcommittees. He has also served on the Public Service Commission's stray voltage steering committee. T. 2851:10-2854:15.
[¶ 156] Since 1981, he has investigated stray voltage and similar phenomena on approximately 150 farms. Generally, cooperatives pay him to investigate farms for farmers. During investigations, he trains co-operative employees, farmers, and electricians. He works closely with farmers, and his web site instructs farmers how to test for stray electricity. He has testified in numerous cases, but has never testified that a utility was negligent. He testified that such cases usually do not make it to court, but that he has helped sue utilities. T. 2856:20-2858:2; 2954:15-20; 2965:5-12.
[¶ 157] Forster testified that cow contact measurements are the only way to determine whether electricity affects a cow. He stated that there was no relationship between the electricity measured on the ground ring and what happened at cow contact points in the barn. Any measurements on the ring, moreover, resulted from its close proximity to Whetstone's cable. It does not evidence anything improper about the cable nor does it measure the activity on the neutral. Forster stated that if Neubauer wanted to measure the current on the neutral, he should have measured the primary neutral rather than install a ground ring. Placing the ring in the ground explains why they could detect a current because the ground is a poor conductor while the ring is not. Furthermore, current on the ring is neither current through a cow or through the ground. T. 2919:21-2921:6; 2951:12-19; 2923:1-10. Forster stated that Neubauer's measurements in September 2001, from the parlor steel to the remote rod were more accurate than the ground ring readings because they were closer to the cows. He measured very low voltage, the highest being .1 volts, which still does not evidence current at cow contact. T. 2923:23-2927:20.
[¶ 158] Victory Farms would not allow Forster to temporarily recreate the alleged conditions on September 20, 2001. He was at the farm for a day but was only allowed one and a half hours to test the parlor. T. 2929:1-11.
[¶ 159] He disagrees with Bodman's concern about .08 mA in drinking water and knows of nothing in the literature that supports this conclusion. He also disagrees with Bodman's measurement that 1.9 mA of current flowed through the milk hoses at Victory Farms. Forster believed that Bodman then needed to take a volt meter and measure from the floor to the milk line. In his opinion, the high voltage necessary for this current, moreover, would not come from a utility but is more likely from on-farm. T. 2931:11-23; 2937:21-2938:15.
[¶ 160] Forster concluded that Whetstone did not act negligently. It properly installed and maintained the underground lines. He further stated that placing the ground rod several hundred feet from the milking parlor adequately isolated it. Additional grounds were necessary because people cut certain grounding wires. It was reasonable for Whetstone to rely on and request testing from OTP. He does not believe Victory Farms evidences a stray voltage problem because the levels measured are too low to create such problems. T. 2950:9-2952:25.
[¶ 161] The court finds Forster's opinions to be reliable and credible. His education, skills, and experience qualify him as an expert in the area of stray voltage. The court, therefore, gives weight to the portions of his testimony cited to support the court's findings of fact and conclusions of law. For the reasons previously stated, the court does not give weight to Forster's opinion that cow contact measurements are the only way to determine whether electricity affects a cow.
H. Dr. Alan Langill
[¶ 162] Dr. Langill attended the pre-veterinary program at Nova Scotia Agricultural College for two years. He graduated from the Atlantic Veterinary College in 1997. He is currently enrolled in an MBA program at the University of Guelph in Ontario, Canada. Upon graduating from veterinary college, Dr. Langill's practice centered on beef cattle in Canada. For three years, he provided traditional veterinary services including working with farmers to provide basic herd health, preventive medicine programs, diagnosis, and continuing education for the dairyman. Subsequently, he became the staff veterinarian and part of the management team for Bos Family Farms, an Indiana 6,000-cow dairy. He returned to veterinary practice for six months, but left to assist an associate managing a dairy in Minnesota for six months. He is currently self-employed with an interest in milking equipment and milk quality work. T. 3187:1-3189:1.
[¶ 163] Dr. Langill does not currently serve as the primary treating veterinarian for any dairy herds in excess of a thousand cows. He has worked as the primary treating veterinarian for a dairy with over one thousand cattle for three and one half years. He is 31 years old. He visited Victory Farms once for approximately eight hours in May 2003. Dr. Langill testified that neither Dr. Beaty nor Kevin Souza were very competent at completing their jobs. He believed he was the superior veterinarian, although he could not think of anything that would distinguish him from Dr. Beaty. He believed he was more competent than Dr. Beaty to assess Victory Farms' herd health and to understand production of the VIC 2 herd. T. 3300:3-3301:5; 3306:21-3307:7; 3186:11-16; 3310:14-21; 3314:6-9.
[¶ 164] Dr. Langill described the status of Victory Farms' dry cow facility as deplorable and that the cows were treated "inhumanely." This statement contradicts nearly all other evidence in the record, including testimony by Dr. Schulte, a veterinarian who testified on behalf of Whetstone. T. 3302:6-3303:6; 3096:22-3097:3; Ex. 154.
[¶ 165] Dr. Langill opined that cow comfort in the milk barn created production limitations. In his report, he stated that "the cleanliness of the dairy animals, especially the legs and udder, is a risk factor for poor milk quality and new mastitis infections." Dr. Schulte, however, noted on page four of his field notes on the Farm Visit Investigation Report that the cows all appeared to be very comfortable. He stated, "Congratulations, you have very clean cows. This will help to avoid udder health concerns which lead to many milk quality challenges." T. 3313:13-17; Ex. 154, 1040. Dr. Langill concluded that Dr. Beaty ineffectively treated the cattle, even though Dr. Langill was not aware of which medications and antibiotics Dr. Beaty prescribed. T. 3321:9-3322:2.
[¶ 166] The court does not accept any portion of Dr. Langill's testimony. The court finds that he lacks the expertise, experience, and skill to provide credible and reliable opinions regarding large dairies in general and Victory Farms in particular. He based his conclusions on incomplete information, and his assessments appeared biased. Accordingly, the court gives no weight to his testimony.
I. Dr. Robert J. Gustafson
[¶ 167] Dr. Gustafson grew up on a dairy farm and received undergraduate and master's degrees from Ohio State University. He received his doctorate degree in agricultural engineering at MSU. While working toward his Ph.D., he taught in a two-year program for people trying to qualify to become electricians in MSU's agricultural department. He taught at the University of Minnesota from 1972 through 1984. He then chaired the Department of Agricultural Engineering at Ohio State University, and five years ago became the associate dean for academic affairs.
[¶ 168] Since the early 1970s, he has actively belonged to the American Society of Agricultural Engineers (ASAE) and other professional societies. He has served on several ASAE committees particularly relating to electrical issues, and currently serves as the society's president. Dr. Gustafson became acquainted with stray voltage in 1978, when he began working with colleagues at the University of Minnesota's Extension Service on electrical problems on farms. He continues to visit farms and trains electricians and power suppliers. He has written a textbook regarding stray voltage and numerous other publications. T. 2985:21-2989:13.
[¶ 169] He opined that .08 mA of current on a waterer will not deter water consumption, contrary to Bodman's testimony. He testified that additional moisture on an equi-potential plane does not detract from its ability to protect against electricity but rather, it enhances its protective value by increasing the conductivity and decreasing variability. Gustafson believes an equi-potential plane is a "widely accepted method of prevention of cow contact voltages independent of source, i.e. on-farm or off-farm." T. 3026:19-3031:20; Ex. 1171.
[¶ 170] The court found Dr. Gustafson to be a credible witness. His education, knowledge, training and skill qualify him to provide opinions regarding stray voltage. The court accepts his testimony as reliable and relevant to the issues on trial.
J. The Redbook
[¶ 171] The parties disagree on the authority the court should give the "Redbook." Whetstone points to Chapter Three as evidencing that there are certain thresholds or safe limits of exposure of dairy cows to electricity. These thresholds are based on several studies detailed in the chapter. T. 1631:20-1633:5. Alan Leftcourt, the editor of the Redbook, conducted the first study in Chapter Three, which began with eight cows. Two were removed because of a violent reaction to the current. The study reports the results of what happened to the remaining six cows. The court agrees with plaintiff that this small sample size does not represent good scientific research. T. 1633:16-1635:16.
[¶ 172] The second study, conducted at Cornell University by Gorewit, began with eight cows. Again, two cows reacted violently at the beginning and were excluded from the data base. The publication was based on animal response to current and voltage of the remaining six cows. Cornell originally videotaped the violent reaction of the cows to the voltage and current, but destroyed the video because of concern about animal rights advocates' reactions. Bodman testified that Cornell has received substantial funding from the utility industry. T. 1635:21-1639:16.
[¶ 173] The third study, also conducted at Cornell, purported to be a full lactation study that involved ten cows in four sample groups. The raw data shows that the cows in the study groups frequently varied, and the average cow remained in the study for only 90 days. This is approximately one fourth of their lactation. The sample size was very small, and raw data was obtained from lawsuits. Even though a peer reviewed journal published the second Cornell study, important data was omitted. T. 1639:20-1641:20.
[¶ 174] The fourth Redbook study originated in New Liskeard College in Canada by Paul Gumprich. For contact purposes, expanded metal flooring, which is a sharp steel surface, was used. In order to avoid damage to the animals, they covered the expanded metal with a thick layer of straw, which increased the resistance of the path through the cow from the metal contact plates. They measured voltage, but did not measure current. The study was not scientifically sound. T. 1641:24-1644:8.
[¶ 175] The court finds plaintiff's criticisms of these studies in Redbook valid. Accordingly, the court does not give significant weight to the studies and conclusions contained in Chapter Three of the Redbook. Furthermore, the scientific community is not limited to the Redbook authors. Ten to fifteen people authored the Redbook, and its graphs represent the consensus of the animal scientists in the group, which is less than half of the total authors. T. 1647:4-1747:18; 1446:2-15; 3036:12-3038:1.
[¶ 176] Peer review neither automatically validates an article nor makes it representative of the scientific community. Peer review for some ASAE publications is generally not blind. ASAE division editors make the ultimate decisions as to who reviewers will be and the reviewer can either elect to sign or not sign. In practice, the defining factor in credibility of academic publications is familiarity with and trust in particular authors, rather than peer review. T. 1715:20-1718:9; 3007:7-16.
[¶ 177] The court finds these criticisms valid and persuasive. To the extent defendant relies on the above conclusions and methods, the court does not give its arguments great weight. The court does not, however, discredit all information in the Redbook.
DISCUSSION IV. Negligence
[¶ 178] In a diversity case, a federal court should apply the law of the state where it sits. Jurrens v. Hartford Life Ins. Co., 190 F3d 919, 922 (8th Cir. 1999). Accordingly, the court will apply the substantive law of the state of South Dakota.
[¶ 179] Negligence is the breach of a legal duty imposed by statute or common law and requires proof of three necessary elements: (1) a duty on the part of the defendant; (2) a failure to perform that duty; and (3) an injury to the plaintiff resulting from such a failure. Blaha v. Stuard, 2002 SD 19, ¶ 19, 640 NW2d 85, 90.
[¶ 180] A duty may be imposed either by common law requiring the exercise of ordinary care or skill not to injure another, or by a statute designed for the benefit of a class of persons. Lovell v. Oahe Elec. Co-op., 382 NW2d 396, 398 (SD 1986) (quoting Albers v. Ottenbacher, 79 SD 637, 116 NW2d 529 (1962)). Ordinary care
is that which an ordinarily prudent or reasonable person would exercise under the same or similar circumstances. It is commensurate with existing and surrounding hazards. The greater the danger, the greater is the care required, so that a very high degree of danger calls for a very high degree of care, which, however, amounts to ordinary care in view of the situation and circumstances.Lovell, 382 NW2d at 398.
[¶ 181] The distribution of electrical energy is a highly dangerous activity, so a distributor of electrical energy has a duty to exercise ordinary and reasonable care under all the circumstances to prevent injury to persons or property. Peterson v. Spink Elec. Co-op. Inc., 1998 SD 60, ¶ 13, 578 NW2d 589, 591-92. Such reasonable care applies to the construction and maintenance of the lines. Ward v. LaCreek Elec. Ass'n, 83 SD 584, 590, 163 NW2d 344, 350. "The degree of care which will satisfy this requirement varies with the danger which will be incurred by negligence[.]" Id.
[¶ 182] The law does not require a person to "guard against or take measures to avert that which a reasonable person under the circumstances would not anticipate as likely to happen." Peterson, 1998 SD 60, ¶ 14, 578 NW2d at 592. "Reasonable foresight, rather than prophetic vision, is the law's standard. . . . [I]f the injury could not have been foreseen, it is to be attributed not to the actor, but to the accident. . . . One may not be said to be negligent because he fails to make provision against an accident which he could not be reasonably expected to foresee." Id. at ¶ 15.
[¶ 183] Victory Farms has not carried its burden of proving that Whetstone breached its common law duty to exercise ordinary and reasonable care under all the circumstances. Whetstone could not reasonably anticipate that low levels of ground current could harm Victory Farms' cattle. Victory Farms points to the REA bulletin stating that under certain conditions, .25 to .5 volts may cause harm to dairies. These measurements, however, reference .25 to .5 volts at cow contact points. There is no evidence in this record of cow contact measurements within or above this range of concern. In fact, Neubauer testified that his cow contact measurements were essentially zero. Neubauer did record measurements ranging from 1/10 of a volt to 1.5 volts; however, these were remote rod readings. Thus, they do not reflect the voltage traveling through a cow in Victory Farms' dairy barn.
[¶ 184] Neubauer's measurements on the ground ring present the same problem. The readings from the ring document the current flowing on the ring but demonstrate nothing about the current flowing through the cows on Victory Farms. The ground ring was located only 12 feet from Whestone's underground cable. Because it was not sufficiently isolated, the court finds that communication between the two electrical systems was likely. The ground ring measurements, therefore, do not reliably indicate the amount of stray electricity in the dairy barn at Victory Farms. Plaintiff's expert, English, agreed that the measurements on the ground ring were not indicative of current through the cows.
[¶ 185] Bodman's measurements also do not provide evidence that would alert Whetstone to a stray voltage problem on the farm that required remedial measures. Bodman only measured current, which reveals nothing about the force of the current (voltage) traveling through a cow. There is no evidence in the record that establishes that current without voltage is harmful; rather, the laws of electricity undermine this claim. Without voltage to push the current, it is unlikely to cause any damage. Bodman testified that he should be able to measure any current that accessed the cows, but he could not.
[¶ 186] The record and the prevailing law indicates that the industry standard for stray voltage that causes problems for cows is one volt. See, e.g., Kuper v. Lincoln-Union Elec. Co., 1996 SD, 1996 SD 145, 557 NW2d 748, 753. Lane tested Victory Farms on three occasions, and recorded .221 volts, .273 volts and .5374 volts. These levels were low, below the industry standard of concern, and not at cow contact points. English admitted that there were no voltages reported at Victory Farms that signaled a level of concern. Although he stated his level of concern began at .02 volts for steady state voltage, he acknowledged that Victory Farms did not have an issue with steady state voltage. Accordingly, Whetstone did not breach its common-law duty by not taking steps to eliminate the electricity measured by these readings.
[¶ 187] Nor could Whetstone perceive danger from the circumstances surrounding the installation and maintenance of the cable. Whetstone installed the underground cable in response to safety and clearance concerns due to large equipment used at Schneck's new dairy facility. It was grounded according to regulation, which increases the safety of the distribution system. "[I]t does not follow that levels of voltage and current harmful to cows' productivity and health will necessarily result from the use of a multi-grounded system." Vogel v. Grant-Lafayette Elec. Co-op., 548 NW2d 829, 831 (Wis. 1996).
[¶ 188] Furthermore, it was reasonable for Whetstone to believe that any measurable levels of stray electricity would not harm Victory Farms' cattle because it had an equi-potential plane under the barn, the Whetstone distribution line did not serve Victory Farms and was isolated from the farm's secondary system, and the underground cable was over 20 feet away from the milking parlor. No one at Victory Farms ever complained of receiving shocks in the barn. Compare Kuper, 557 NW2d at 754 (both plaintiff and one of his children received shocks while in the dairy barn). In fact, the first time anyone from Victory Farms complained to Whetstone about a problem was September 20, 2001. The next day, Whetstone disconnected the neutral round rod from in front of the dairy barn. Victory Farms could not have reasonably foreseen any injury to Victory Farms' cattle as a result of the underground cable. See Vogel, 548 NW2d at 432 (no liability where electric company had no reason to know that its system was imposing unreasonable levels of stray voltage into the farm).
[¶ 189] Victory Farms can point to only one case involving nontraditional stray voltage where an electric company was liable for negligence. The findings in Hoffman v. Wisconsin Electric Power Co., 664 NW2d 55 (Wis. 2003), are not, however, dispositive of the current case. First, in Hoffman, the electric company refused to replace, retest, or remove the underground cable, despite rapid deterioration. Id. at 60-61. Second, the court applied a highly deferential review to the jury's verdict against the electric company:
[T]he Hoffmanns presented an alternative theory at trial: that non-traditional stray voltage was harming their dairy herd and that traditional stray voltage is not the only kind of electrical current that can harm animals. The jury believed the case presented by the Hoffmanns that non-traditional stray voltage was a cause of the damage to their dairy herd. . . . Accordingly, our inquiry focuses on the sufficiency of the evidence for the jury's verdict that non-traditional stray voltage was a cause of the damages sustained by the Hoffmanns. Specifically, we examine whether there is any credible evidence to support the verdict.Id. at 63. The court's analysis assumed that an electrical provider can be liable for nontraditional voltage without actually analyzing the issue and it focused solely on whether there was evidence to support the jury's conclusion. The deference given the jury in Hoffmann separates it from the current case.
[¶ 190] Victory Farms' expert, English, testified in Hoffmann that the utility industry generally no longer uses the underground bare-concentric cable because of its inadequate performance. Id. at 65. He testified that the defendant was liable for negligence after it realized that the underground cable was deteriorating more quickly than expected yet refused to remove and replace it. Id.
[¶ 191] No such testimony exists in the current case. Rather, English testified that multi-grounded wye systems, like Whetstone's, are the most universally used systems in the United States. The record also indicates that Whetstone promptly tested and de-energized the cable when requested. The facts in Hoffmann, moreover, indicate that plaintiff blamed the stray electricity on the deterioration of the cable rather than its placement. It wanted the deteriorated cable replaced, not de-energized. This suggests that simply having a underground cable and ground near a dairy does not create problematic or actionable levels of stray voltage.
[¶ 192] Neither the court nor Victory Farms has identified any other cases that impose liability on an electric company for stray voltage at levels as low as those measured at Victory Farms. Most cases report significantly higher measurements. See, e.g., Kuper, 557 NW2d at 754 (stray voltage measurements in the barn ranged from 7.25 volts to 10.85 volts); Kolpin, 469 NW2d at 598-99 (initially measured between 12 and 15 volts in the milking parlor and after adding additional grounding rods the voltage levels in the barn dropped to 2 volts); Tipmont Rural Elec. Membership Corp. v. Fischer, 697 NE2d 83, 87-88 (Ind.App. 1998) (prior to isolation, cows experienced 2-volt spikes and steady voltage of 1 volt; voltage near water heater was 2.5 volts); James v. Beauregard Electric Co-op, Inc., 736 So2d 353, (La.Ct.App. 1999) (2 to 3 volts measured on milk pipeline and 6 to 8 volts measured from the milk pipeline to the grating).
[¶ 193] Having considered all the evidence, the court finds that Whetstone exercised care that an ordinarily prudent or reasonable person would have exercised under the same or similar circumstances commensurate with the highly dangerous activity of electrical energy. Whetstone cannot be expected to exercise "prophetic vision," but rather only reasonable foresight. Peterson, 578 NW2d at 592. Thus, the court finds that Whetstone did not breach a common law duty.
[¶ 194] A legal duty may also be imposed by statute. Blaha, 640 NW2d at 90. "Pursuant to SDCL 47-21-75, the NESC [National Electrical Safety Code] provides the minimum requirements an electric cooperative must meet in construction of transmission lines." Lovell, 382 NW2d at 398. Victory Farms argues that Whetstone failed to comply with NESC Rule 92D by allowing objectionable flow to occur over the grounding conductor, Rule 214A for failing to properly inspect and test the underground cable, Rule 92B for failing to provide additional bonding and connections between the cable insulation shielding or sheaths and the system ground, and Rules 12A and 12C for failing to construct, operate, and maintain its line in accordance with accepted good practice for the known local conditions.
[¶ 195] NESC Rule 92D requires arranging ground connection points so that under normal circumstances, no objectionable current will flow over the grounding conductor. "If an objectionable flow of current occurs over a grounding conductor due to the use of multi-grounds, one or more of the following should be used:
1. Abandon one or more grounds.
2. Change location of grounds.
3. Interrupt the continuity of the conductor between ground connections.
4. Subject to the approval of the administrative authority, take other effective means to limit the current.Id. The code states that temporary currents established during abnormal conditions while grounding conductors "are performing their intended protective functions are not considered objectionable. The conductor shall have the capability of conducting anticipated fault current without thermal overloading or excessive buildup." Ex. 284 at 19; T. 1699:21-1700:17. NESC Section 1, Rule 15, defines "shall" as "mandatory." T. 1506:25-1507:7; Ex. 284 at 2.
[¶ 196] The third edition of the NESC Handbook interprets the 1993 NESC. The section of the Handbook interpreting Rule 92D explains that
installations near areas that are known to present specific problems (such as milking barns without adequate voltage gradient control . . .) may need special attention to limit damage to equipment or uncomfortable conditions for personnel or animals.
Ex. 286 at 23; T. 1494:20-24. The handbook notes that "A fraction of an ampere, or even several amperes, in circuits of large capacity may not be a serious matter. In other cases, however, such flow may be disturbing to the service as is sometimes the case around dairy barns in which cows are connected to milking systems." T. 1495:21-1496:23; Ex. 286 at 23.
[¶ 197] The NESC does not define the word "objectionable." The "designer" is expected to utilize good design and operating practice to appropriately identify and remedy the objectionable current situation. The designer can be the utility or someone acting on the utility's behalf. T. 1495:11-17; 2845:4-18; Ex. 286 at 22-23.
[¶ 198] NESC Section 31, Rule 313A, provides that the responsible party should inspect accessible lines and equipment, when in service, "at such intervals as experience has shown to be necessary [and] . . . when considered necessary, lines and equipment shall be subjected to practical tests to determine required maintenance." Ex. 284 at 176. NESC Section 9, Rule 92B(2)(b)(3) recommends "additional bonding and connections between the cable insulation shielding or sheathes and the system ground." Ex. 284 at 18.
[¶ 199] NESC Section 1, Rules 12A and 12C, mandates that the design, construction, operation, and maintenance of all electric supply and communication lines and equipment meet the requirements of these rules. It notes that for "all particulars not specified in these rules, construction and maintenance should be done in accordance with accepted good practice for the given local conditions known at the time by those responsible for the construction and maintenance of the communication or supply lines and equipment." Ex. 284 at 1.
[¶ 200] The court finds that Victory Farms has not sustained its burden of proving that Whetstone breached a statutory duty. Defendant's experts, Dr. Forster and Schwarz, have extensive experience with formulating and complying with NESC regulations. They testified that Whetstone's underground cable near Victory Farms complied with NESC regulations. The court finds their testimony credible and persuasive. Additionally, the court accepts the evidence in the record from Whetstone employees that they installed, maintained, and operated the cable pursuant to industry standards. Whetstone sufficiently complied with the NESC by grounding its distribution line the required four grounds per mile. Although the NESC handbook interpreting Rule 92D identifies "milking barns without adequate voltage gradient control" as an area that may present a specific problem when installing grounding conductors, this milking barn had an equi-potential plane, which is a form of gradient. Furthermore, while Rule 313A requires inspection of "accessible lines and equipment," this cable was not accessible after it was buried. Finally, Whetstone's use of one grounding connection at the termination points of its underground cable was consistent with the requirements of Section 92B(2)(b)(3) of the NESC. Thus, Victory Farms failed to show that Whetstone breached a statutorily imposed duty.
[¶ 201] Negligence can also arise where an electric distributor fails to follow its own manuals and procedures. Peterson, 578 NW2d at 592. Plaintiff also has not satisfied this burden, however. Although plaintiff has suggested that Whetstone deviated from its own procedures by not adequately considering the presence of a dairy near the underground cable, the court disagrees. There was testimony that Whetstone tests its lines when any sign of malfunction appears and that Whetstone promptly responded to both Schneck's and Victory Farms' requests to test the line. See Vogel, 548 NW2d at 837 (no liability where co-op immediately responded to plaintiff's concerns and repeatedly tested the farm); cf. Kaech v. Lewis County Public Utility Dist. No. 1, 23 P.3d 529, 536 (Wash.Ct.App. 2001) (defendant negligent where it was aware of stray voltage problems but did not respond to plaintiff's calls for two weeks and did not replace the faulty insulator for two years).
[¶ 202] Whetstone recognized the special sensitivity of dairies; thus they installed a multi-grounded wye system, which is universally accepted as the safest distribution line. By burying the cable and grounding it, Whetstone took measures to ensure the safety of the area surrounding the cable. See Kolpin v. Pioneer Power Light Co., 469 NW2d 595, 599 (Wis. 1991) (electric company added additional grounding rods in the distribution line serving the dairy, which significantly decreased the amount of stray voltage measured on the dairy). Plaintiff's expert Neubauer agreed that Whetstone properly installed the ground rod. The cable was properly maintained and the line was continuous.
[¶ 203] Imposing liability as a result of Whetstone's bulletins and policies that instruct about the sensitivity of dairies to electricity would improperly penalize it for attempting to better serve its customers and better inform its members. There is a significant difference between levels of electricity that cows can perceive and levels that harm cows. Instruction on the levels of perception does not impose additional duties regarding the levels of harm.
[¶ 204] There is no evidence that the cable was improperly maintained or had dangerously deteriorated. Accord Hoffman, 664 N.W.2d at 60-61 (cable had quickly deteriorated due to corrosion and a bad splice yet power company refused to remove, replace, or re-test it). Furthermore, the portions of Whetstone's policies pointed to by plaintiff merely suggest added considerations when installing a distribution system. They do not impose specific rules or requirements for the installation of distribution lines. Thus, the court finds that Victory Farms failed to show that Whetstone failed to perform a legal duty based on noncompliance with its own manuals and procedures.
[¶ 205] Because Whetstone did not breach either a statutory or common law duty, it is not liable for negligence. The court finds that Whetstone exercised ordinary and reasonable care and thus finds in favor of Whetstone on the issue of negligence. Because Victory Farms did not meet its burden to prove that Whetstone failed to perform a duty it owed to Victory Farms, the court does not need to reach the issue of whether Victory Farms proved causation.
V. Nuisance
[¶ 206] "A nuisance consists in unlawfully doing an act, or omitting to perform a duty, which act or omission . . . [a]nnoys, injures, or endangers the comfort, repose, health, or safety of others." SDCL 21-10-1. South Dakota law exempts statutorily authorized actions or maintenance from being considered a nuisance. Hedel-Ostrowski v. City of Spearfish, 2004 SD 55, ¶ 13, 679 NW2d 491, 497. The statute states: "[n]othing which is done or maintained under the express authority of a statute can be deemed a nuisance." SDCL 21-10-2. In adopting this statute, the legislature has "adopted a public policy that private interests must endure some inconvenience for the general populace to receive the benefits of utilities." Kuper, 557 NW2d at 761.
[¶ 207] South Dakota law authorizes cooperatives to construct electric lines as long as they comply with the NESC. See SDCL 47-21-75. Whetstone's use of a multi-grounded wye system is permitted and contemplated by the NESC. The utility used an underground cable which is permitted under the NESC. The NESC mandates grounding electrical distribution systems for public safety. rsuant to that statutory mandate, Whetstone grounded the electrical distribution line the required four grounds per mile. Additionally, the court accepts the evidence in the record from Whetstone employees that they installed, maintained, and operated the cable pursuant to industry standards.
[¶ 208] Victory Farms argues that objectionable flow of current over the grounding conductor occurred in violation of NESC Rule 92D. That Rule requires the utility to use one or more of the following if objectionable flow of current occurs over a grounding conductor due to the use of multi-grounds: abandon one or more grounds; change the location of grounds; interrupt the continuity of the conductor between ground connections; or subject to the approval of the administrative authority, take other effective means to limit the current. In the court's opinion, this Rule places the burden on the utility to eliminate the objectionable current only after it is known that objectionable current exists on the grounding conductor. "As a matter of basic physical science, stray voltage is . . . nothing more than the by-product of the transmission of electrical power . . . a normal and natural condition which is common to every power distribution system in this country." Kuper, 557 NW2d at 761. There are no tests that Whetstone can conduct on its primary system to determine voltage at cow-contact, thus objectionable current can only be determined after a complaint. This is consistent with the expert opinion of Schwarz that the mere presence of current on grounding conductors is not objectionable, rather the current may be considered "objectionable only if it is at such a level that can be demonstrated to be the cause of a problem." Schwarz TT 2789:3-2790:25. In the present case, the day after Whetstone was informed that Victory Farms believed there was objectionable current, Whetstone disconnected the ground rod from in front of the dairy barn. Thus, the court finds that NESC Rule 92D was not violated.
[¶ 209] Victory Farms also argues that NESC Rule 313A, which requires testing of lines and equipment when necessary, was violated. There is no evidence here, however, that the underground buried cable in question had deteriorated or was improperly maintained. And when Victory Farms notified Whetstone of a potential problem, Whetstone immediately inspected the line and disconnected the ground rod. Rule 313A also requires inspection of "accessible lines and equipment." Schwarz testified that Whetstone's routine visual inspections of its lines was sufficient. Furthermore, because this line was not accessible after it was buried, Whetstone did not violate this provision of Rule 313A.
Originally Victory Farms alleged a violation of Rule 214A of the NESC.This Rule applies only to overhead lines, however, while Rule 313A applies tounderground lines. Thus, the court will only discuss Rule 313A.
[¶ 210] NESC Section 9, Rule 92B(2)(b)(3) recommends "additional bonding and connections between the cable insulation shielding or sheathes and the system ground." Schwarz testified that Whetstone provided the bonding that is required by this provision and that only one ground rod is required at the termination points. He further stated that Whetstone acted consistent with REA specifications. Schwarz TT 2781. The court accepts the testimony of Schwarz that Whetstone complied with this provision.
[¶ 211] Finally, Victory Farms contends that Whetstone violated NESC Section 1, Rules 12A and 12C, which required all electrical supply lines to be designed, operated, and maintained to meet the NESC requirements. As discussed herein, Victory Farms has not shown that Whetstone failed to comply with the NESC rules.
[¶ 212] No evidence exists in the record to indicate that levels of stray voltage at Victory Farms' dairy violated any statute or the NESC. "Many public utilities emit by-products which may be troublesome to private property ownership, but the public's concern in maintaining utilities outweighs private interests. In granting an exemption from nuisance actions to statutorily authorized activities our legislature obviously adopted a public policy that private interests must endure some inconvenience for the general populace to receive the benefits of utilities." Kuper, 557 N.W.2d at 761. Thus, Victory Farms cannot prevail on its nuisance cause of action based on a statutory violation.
[¶ 213] Nuisance can also be shown under common law. Id. A private nuisance, which is alleged here, exists if a "person's conduct is: the legal cause of an invasion of another's interest in the private use and enjoyment of land, and the invasion is either, (a) intentional and unreasonable, or (b) unintentional and otherwise actionable under the rules controlling liability for negligent or reckless conduct, or for abnormally dangerous conditions or activities." Kuper, 557 NW2d at 761 (quoting Restatement (Second) of Torts § 822). The South Dakota Supreme Court has found that proof of intent is necessary; otherwise, liability without fault may result. Kuper, 557 NW2d at 761. An act is considered intentional if the person acts for the purpose of causing it or knows that it is substantially certain to result from his conduct. Collins v. Barker, 2003 SD 100, ¶ 17, 668 NW2d 548, 554.
[¶ 214] In Kuper, the South Dakota Supreme Court addressed the issue of whether stray voltage near a dairy constituted a common law nuisance. Kuper, a dairy farmer, sued Lincoln-Union Electric Company (L-U) for negligence and nuisance. Kuper, 557 NW2d at 753. After several weeks of milking, Kuper noticed his cattle acting strangely, so he notified L-U. Id. L-U measured 1.3 volts of stray voltage between the dairy barn's floor and the steel milk pipeline. Id. Several people received shocks in the dairy barn, and over the next few years, L-U repeatedly tested the dairy. Id. at 754. After rewiring the barn in 1992, L-U found no problematic levels of stray voltage in the barn. Id.
[¶ 215] Kuper still experienced problems with his cattle. Wes Lane tested Kuper's dairy in 1993 and found acceptable levels of voltage. Id. Kuper then hired Gerald Bodman, who ruled out any on-farm sources of electricity. He concluded that stray voltage came directly from L-U's neutral conductor to Kuper's neutral conductor and after isolation, indirectly from L-U's neutral conductor through ground current. Id.
[¶ 216] The jury returned a verdict in favor of plaintiffs in the amount of $575,283.59. Id. at 752. The South Dakota Supreme Court overturned the jury's verdict, finding that no action for nuisance could lie. Id. at 762. The court concluded that no evidence in the record indicated that levels of stray voltage at Kuper's dairy farm violated any statute or the NESC. Furthermore, the court found that Kuper failed to prove a common law nuisance because he failed to prove intent. The court described an intentional intrusion in the nuisance context as an invasion:
that the actor knowingly causes [i.e. natural stray voltage] in the pursuit of a laudable enterprise [i.e. provision of electrical power] without any desire to cause harm. . . . It is not enough to make an invasion intentional that the actor realizes or should realize that his conduct involves a serious risk or likelihood of causing the invasion. [The actor] must either act for the purpose of causing it or know that it is resulting or is substantially certain to result. . . .Id. at 762 (brackets in original). The Supreme Court further specified that the knowledge element exists "not when the electric power company knows it is providing electricity with a natural by-product being stray voltage and ground current, but when the company knows these phenomena are occurring at unreasonable levels, causing harm to dairy cows, and continues to act to cause the harm." Id.
[¶ 217] The court noted that L-U visited the farm over 70 times in response to Kuper's concerns about the herd's reactions to stray voltage. Id. The court concluded that the electric company was not liable for nuisance, despite evidence of continual herd health problems and evidence of ground current near the dairy. Id. In reaching this conclusion, the court noted that the offending elements, stray voltage and ground current, are naturally occurring phenomena that only certain animals and humans with special instruments can detect. Id. The electrical provider, therefore, will not know of it until the consumer
points out that the levels of these elements are causing harm. Unique local conditions, including a farmer's own electrical appliances; the type of grounding, if any of farm buildings; soil composition or the existence of current carrying objects in the ground; particular sensitivities of the animals; and other factors, may combine to produce problems with excessive stray voltage, circumstances of which a utility company may not be aware and over which it may have no control.Id.
[¶ 218] Kuper bears a striking resemblance to the current case. Both dairies experienced similar difficulties with their herds. Wes Lane and Gerald Bodman both tested Victory Farms and the Kuper farm. Their conclusions were similar in both cases. Both dairies pointed to stray voltage indirectly emitted from the power company's neutral conductor through ground current as the source of their herd problems.
[¶ 219] Under the rationale of Kuper, Whetstone is not liable to Victory Farms for common law nuisance. The record does not contain evidence of intentional conduct that would result in liability. The next day after Victory Farms notified Whetstone of its concern about stray voltage, Whetstone tested its line and disconnected the ground. Prior to notification by Victory Farm, Whetstone had no reason to know that any ground current was harming Victory Farms' herd. There is no evidence that Whetstone knew the naturally occurring stray voltage phenomena were occurring at unreasonable or objectionable levels and causing harm to dairy cows but continued to act to cause the harm. See Kuper, 557 NW2d at 762. Without such knowledge, Whetstone is not liable for nuisance. Accordingly, the court finds in favor of Whetstone on the issue of nuisance.
VI. Motions to Strike
A. Defendant's Motion to Strike
[¶ 220] Defendant moves to strike plaintiff's findings of fact numbered 39-40, 46, 48-49 because plaintiff supported these findings with Alan Schneck's deposition. Defendant notes that Schneck's deposition was not received into evidence. Plaintiff agrees and does not oppose the motion to strike. Accordingly, the court grants defendant's motion to strike these findings. The court did not consider these findings or Schneck's deposition when reaching its opinion in the current case.
B. Plaintiff's Motion to Strike
[¶ 221] Plaintiff moves to strike Section VI, Statute of Limitations, in defendant's Post Trial Reply Brief. Plaintiff urges the court to strike this section because defendant did not raise the argument in its initial brief. Defendant opposes the motion, noting that it pleaded the statute of limitations as an affirmative defense in its answer. Defendant further argues that the section properly responds to plaintiff's findings of fact that reference Victory Farm's lack of knowledge regarding the underground line installed and maintained by Whetstone.
[¶ 222] Generally, issues not raised in an opening brief cannot be raised for the first time in a reply brief. South Dakota Mining Ass'n v. Lawrence County, 155 F3d 1005, 1011 (8th Cir. 1998). The court does not, however, need to decide whether raising the defense in the answer is sufficient to then argue statute of limitations in a reply brief. The court also does not need to determine whether Section VI in defendant's reply properly responds to plaintiff's claim regarding knowledge. Because the court found in favor of defendant on negligence and nuisance, these issues are moot. Accordingly, the court denies plaintiff's motion to strike.
CONCLUSION
[¶ 223] The court finds that Whetstone is neither liable for negligence nor nuisance. The presence of stray voltage symptoms alone does not establish a violation of the NESC, does not create a duty upon Whetstone, does not evidence either negligence or nuisance, and does not entitle Victory Farms to any damages. Accordingly, it is hereby
[¶ 224] ORDERED that judgment be entered for defendant on the issue of liability.
[¶ 225] IT IS FURTHER ORDERED that defendant's motion to strike (Docket 163) is granted.
[¶ 226] IT IS FURTHER ORDERED that plaintiff's motion to strike (Docket 165) is denied.