Prohosky v. Prudential Ins. Co. of America

• Decision Date: 22 July 1985
• Docket Number: No. 84-1699,84-1699
• Citation: 767 F.2d 387
• Parties: Robert PROHOSKY, et al., Plaintiffs-Appellees, v. The PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 387

767 F.2d 387

Robert PROHOSKY, et al., Plaintiffs-Appellees, v. The PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant-Appellant.

No. 84-1699.

United States Court of Appeals, Seventh Circuit.

Argued Jan. 22, 1985.

Decided July 22, 1985.

Wayne C. Ponader, Bose, McKinney & Evans, Indianapolis, Ind., for plaintiffs-appellees.

John R. Nesbitt, Rensselaer, Ind., for defendant-appellant.

Before ESCHBACH and COFFEY, Circuit Judges, and JAMESON, Senior District Judge. ^*

COFFEY, Circuit Judge.

The defendant-appellant, Prudential Insurance Company of America, appeals the entry of an injunction preventing it from discharging water through the endguns of a central pivot irrigation system. We reverse and remand this case to the district court with instructions to vacate the injunction and proceed with the damage portion of this litigation.

I

The defendant, Prudential Insurance Company of America ("Prudential"), is a New Jersey corporation that owns approximately 23,000 acres of farmland, commonly known as the Fair Oaks Farm, located in the rural, northwest counties of Jasper and Newton, Indiana. Following purchase of the farmland in December 1979. Prudential installed a central pivot irrigation system, consisting of several mobile, water-spraying rigs designed to rotate in a circular pattern and irrigate approximately 8,000 acres of the farmland. ¹ Prudential obtained water for this irrigation system by drilling wells into the bedrock aquifer underlying the Fair Oaks Farm. In October 1982, area landowners who obtained water for domestic and agricultural consumption from the same bedrock aquifer, filed a class action lawsuit in the United States District Court for the Northern District of Indiana, premising jurisdiction upon diversity of citizenship, see 28 U.S.C. Sec. 1332 (1982). The plaintiffs claimed that:

"in 1981 and 1982 the Defendant's unreasonable operation of irrigation systems and appropriation of water in excess of its reasonable and beneficial use on the Fair Oaks Farms caused a large number of water wells on lands situated in the neighborhood of the Fair Oaks Farms to become depleted depriving the Plaintiffs and others of water for domestic and agricultural consumption."

The plaintiffs alleged that Prudential's irrigation system depleted the water supply, and reduced the artesian pressure, of the bedrock aquifer underlying the Fair Oaks Farm and the surrounding land owned by the plaintiffs. The plaintiffs further alleged that "the water extracted from the depleted water table contains sulfur and other elements and chemical compounds which make the water odoriferous, untasteful and unfit for consumption." The plaintiffs also claimed that "[s]treamflows and lake levels that are dependent upon ground water discharge have been and will continue to be reduced as a direct and proximate result of operation of defendant's irrigation systems." In addition, the plaintiffs claimed that "depletion of the ground water resources underlying Jasper County, Indiana and Newton County, Indiana has decreased the productivity of the Plaintiff's real estate, diminished the desirability of residing upon said land, and has caused a depreciation in the value of the Plaintiff's land." The plaintiffs sought $50 million in compensatory damages, $50 million in exemplary and punitive damages, and requested that the "Defendant and those under the direction and control of Defendant, and those contracting with the Defendant, be enjoined from further irrigation upon said real estate."

In October 1983, the parties proceeded to trial on the issue of whether or not the plaintiffs were entitled to injunctive relief and, following a seven-day bench trial, the district court judge entered detailed findings of fact and conclusions of law. See Prohosky v. Prudential Ins. Co. of America, 584 F.Supp. 1337 (N.D.Ind.1984) ("Prohosky" ). At trial, Prudential "admitted that its pumping lowers the static water level in the wells but ... maintained that these wells still contain water at artesian conditions." Id. at 1350. ² The Indiana Department of Natural Resources agreed with Prudential as it "consistently found that no wells have gone dry [and] ... that no person who took steps to meet the departmental guidelines was without water." Id. Indeed, the district court found that in 1981, twenty-one of the sixty-two named plaintiffs "experienced problems in obtaining water" from their wells which were drilled in the bedrock aquifer underlying their land as well as the Fair Oaks Farm. Id. at 1346. ³ According to the court, nine of these plaintiffs modified their water systems, either by drilling new wells or extending the depth of their existing wells, "and from that time forward experienced no further problems with respect to the availability of water." Id. In 1982, nineteen plaintiffs, including the twelve who did not modify their wells the previous year, experienced difficulty in obtaining water. The court found that fourteen of these plaintiffs "elected to take steps to modify their water systems, and they in turn obtained adequate supplies of water again and have had no further problems...." Id. In 1983, six plaintiffs, including the five who did not modify their wells the previous year, "experienced problems in obtaining water." Id. According to the court, "[o]f those persons, almost all who made the appropriate modifications to their water systems have experienced no further problems in obtaining water or have alternative sources of water, usually through wells in the surficial aquifer." Id. Thus, the district court found that "[a]lmost all of [the] persons [who] have modified their wells, or drilled new wells where modification was not possible now have water." Id. In addition, "[m]ost of these people received some reimbursement from Prudential for their water problems...." Id. In view of this evidence, the court concluded that the plaintiffs' claim "of wells 'going dry' does not present any basis for a finding for an injunction at this time." Id. at 1350.

The district court further found that for purposes of obtaining injunctive relief, the plaintiffs failed to introduce sufficient evidence to establish that Prudential's irrigation system increased the levels of hydrogen sulfide within the plaintiffs' water. According to the court, "[s]ome of the plaintiffs, but certainly not all of them, claimed that the amount of hydrogen sulfide in the water in the new wells that they drilled, or in the existing wells that they modified, has increased since Prudential began pumping." Id. at 1347. The court noted that:

"[t]he burden of proving increased hydrogen sulfide claims ... falls upon the plaintiffs. The lack of chemical analysis to support the claim complicates the fulfillment of that burden since the evidence is limited solely to the subjective perceptions of the plaintiffs and those perceptions, as shown by the evidence, differ from person to person."

Id. at 1348. In view of the lack of substantial evidence to support the plaintiffs' allegations of increased hydrogen sulfide levels, the district court denied injunctive relief, simply stating that the plaintiffs' testimony "should be carefully presented and considered on the damage phase of this case." Id.

The court also found that for purposes of injunctive relief, the plaintiffs failed to introduce sufficient evidence to establish that Prudential's irrigation system damaged the surficial aquifer, consisting of area lakes and streams. The court found that:

"[i]n the aquifer system in Jasper and Newton Counties, there is typically a lower or bedrock aquifer and a surface or sand aquifer, separated by an aquitard. The aquitard is an essentially impermeable layer of clay which acts to prohibit an interconnection between the bedrock and surficial aquifer, at least within any period of time relative to the growing season. In the Iroquois Moraine area, the aquitard extends to the surface and there is no surficial aquifer."

Id. at 1349. The evidence revealed that "most of the plaintiffs ... live on the Iroquois Moraine, an area where the acquitard reaches to the surface and accordingly, there is no surficial aquifer." Id. Thus, the court ruled that the evidence introduced on the issue of a reduced water level in the surficial aquifer "is insufficient for the issuance of an injunction now." Id.

Finally, the district court found that "[t]hose plaintiffs who actually have crop yield [data] ... are unable to show any pattern which might indicate Prudential's pumpage has affected their crop yields." Id. The testimony of the plaintiffs' experts revealed that there are "only two plaintiffs who could have experienced lower crop yields. But these two plaintiffs do not claim any loss of crop yields." Id. at 1350. Based upon the plaintiffs' lack of evidence in support of their assertions of reduced crop yields, the court concluded that "[t]he evidence on this subject does not authorize the issuance of an injunction." Id. In sum, the district court ruled that "for purposes of either permanent or temporary injunction this court determines that the evidence on crop loss and water quality with the alleged resulting impact on real estate values is not sufficiently persuasive to cause this court to grant a general or massive injunction." Id. at 1351. Upon review of the record, we agree with the district court that for purposes of obtaining injunctive relief, the plaintiffs failed to establish that the water level within the bedrock aquifer had fallen below artesian conditions, that the hydrogen sulfide level had actually increased, that they were in any way affected by a decreased water level in the surficial aquifer, or that they had experienced crop losses, as a result of Prudential's irrigation system. Despite the plaintiffs' failure to introduce sufficient evidence to establish that Prudential's irrigation system was causing continual harm, the district court granted "very limited and specific...