Wisconsin’s dairy industry and a group of rural banks are asking the state Supreme Court to uphold a jury’s decision to award more than $13 million to a Trempealeau County farmer in what would be the state’s largest stray voltage settlement.
In August 2017, a jury found that Northern States Power Co., or NSP, a subsidiary of Xcel Energy, was negligent and failed to follow state regulations, causing more than $4 million in losses for Paul Halderson and his wife, Lyn, who operate a nearly 1,000-cow dairy farm near Galesville.
The Haldersons claimed their herd suffered from illness and decreased milk production for more than a decade because of improperly grounded power lines.
The jury awarded the Haldersons about $4.5 million, finding deliberate violation of statute, which would entitle the Haldersons to triple damages. But Judge Scott Horne later overruled the “wanton and willful” finding on the grounds that Xcel conducted multiple tests on the Halderson farm but failed to find unacceptable levels of stray voltage.
A higher court denied the Haldersons’ appeal, upholding Horne’s decision, saying “the evidence at trial was insufficient for a reasonable jury to find, by clear and convincing evidence, that NSP’s conduct was willful, wanton, or reckless.” The appeals court also denied Xcel’s request for a new trial.
The Haldersons are now asking the Supreme Court to review the case, which they say hinges on an issue “of compelling statewide importance.”
They say Xcel’s expert “intentionally violated the applicable rules at every test so as not to find” stray voltage and that the judge introduced concepts of evidence not found in the jury instructions or case law when he dismissed the triple damages award.
Xcel has not responded to the Supreme Court petition but argued before the appeals court that the Haldersons’ cows never came into contact with excessive voltage and that their case relied on a “stunt” by their hired expert.
“We continue to be disappointed in the verdict,” said company spokeswoman Chris Ouellette. “We have to evaluate our next steps and let the process play out.”
In a motion filed Friday, the Dairy Business Association along with Pigeon Falls State Bank and two of its branches, none of which has a relationship to the Haldersons, seek to weigh in on the case, saying utilities have “paid lip service to eradicating this scourge but have routinely flouted collaborative rules” to protect dairy farmers.
Utilities will take the appeals court decision “as license to perform inadequate testing” while affected farmers go out of business without the money to afford litigation.
“I think it’s a hugely significant issue in the dairy industry for farmers and for lenders who are providing financing to farmers for a whole farm economy,” said Tim Jacobson, the attorney for the DBA and bank.
Stray voltage refers to current that leaks from neutral wires into the earth. Animals that come into contact with a grounded object — such as a watering trough — can receive small shocks. This can cause dairy cattle to avoid eating, become stressed and generally produce less milk, according to research from the U.S. Department of Agriculture.
According to the Haldersons’ suit, NSP found excessive voltage in one of their barns beginning in 1996 but failed to report it. In 2011, a consultant hired by the Haldersons found high levels of electricity and concluded it was coming from the utility’s distribution system.
The suit claimed this led to reduced milk production and the loss of $5.8 million in profits before Xcel installed new equipment.
If the Haldersons are granted triple damages, it would be the largest stray voltage damage award in state history, according to the Haldersons’ attorney.
In 2010 a Grant County farmer won a record $5 million settlement against Scenic Rivers Energy Cooperative, and last year the Minnesota Court of Appeals upheld a $9 million verdict against Crow Wing Cooperative Power & Light Co.