Siewert v. Northern States Power Co.

• Decision Date: 26 January 2011
• Docket Number: Nos. A07-1975, A07-2070.,s. A07-1975, A07-2070.
• Citation: 793 N.W.2d 272
• Parties: Greg SIEWERT, et al., Respondents, v. NORTHERN STATES POWER COMPANY, d/b/a Xcel Energy, Appellant.
• Court: Minnesota Supreme Court

793 N.W.2d 272

Greg SIEWERT, et al., Respondents,

v.NORTHERN STATES POWER COMPANY, d/b/a Xcel Energy, Appellant.

Nos. A07-1975, A07-2070.

Supreme Court of Minnesota.

Jan. 26, 2011.

Syllabus by the Court

1. The filed rate doctrine does not preclude consideration of plaintiffs' claims for injunctive relief or monetary damages.

2. The primary jurisdiction doctrine does not bar plaintiffs' claims for injunctive relief to abate the nuisance resulting from stray voltage, or plaintiffs' claims for damages.

3. The statute of repose does not preclude consideration of plaintiffs' claims for monetary damages or for injunctive relief related to the maintenance, operation, or inspection of the electrical distribution system.

Charles A. Bird, Bird, Jacobsen & Stevens, P.C., Rochester, MN; and William D. Mahler, Will Mahler Law Firm, Rochester, MN, for respondents.

Timothy R. Thornton, Kevin M. Decker, Christianne A. Riopel, Briggs and Morgan, P.A., Minneapolis, MN, for appellant.

OPINION

PAGE, Justice.

Respondents Greg and Harlan Siewert, doing business as Siewert Holsteins, sued appellant Northern States Power Company(NSP) for damages and injunctive relief based on negligence, strict liability, trespass, and nuisance for stray voltage, which they claim was caused by an electric distribution system owned and operated by NSP. NSP moved for summary judgment on grounds that the filed rate doctrine, primary jurisdiction doctrine, and statute of repose precluded consideration of the Siewerts' claims. The district court largely denied NSP's motion for summary judgment, but certified these questions to the court of appeals as important and doubtful.¹ The court of appeals held that neither the filed rate doctrine nor the primary jurisdiction doctrine barred the Siewerts' claims for monetary damages, but the filed rate doctrine precluded consideration of the Siewerts' claims for injunctive relief. Additionally, the court of appeals held that the statute of repose did not bar any of the Siewerts' claims. We affirm the court of appeals with respect to the Siewerts' claims for monetary damages but reverse with respect to the Siewerts' claim for injunctive relief to prevent further nuisance by NSP.

Harlan Siewert and Greg Siewert, father and son, are dairy farmers. At the time they moved to their new farm in rural Wabasha County in 1989, they owned between 150 and 200 cows. Following their 1989 move, the cows' milk production decreased. Milk production seriously decreased by the late 1990s and early 2000s. The Siewerts' dairy herd also experienced health problems and unusually high mortality rates.

The Siewerts hired several experts to determine the cause of the decreased milk production and high mortality rates in the dairy herd. In 2004, at the recommendation of Dr. Andrew Johnson, a forensic veterinarian, the Siewerts began to explore stray voltage as the possible cause of the herd's losses. Stray voltage is a phenomenon in which an electrical current—voltage that returns to the ground after powering an appliance—passes through an object not intended as a conductor, in this case, allegedly the Siewerts' dairy cows.

The system that supplies electricity to the Siewerts and their neighbors is a multi-grounded wye system, a "system of conductors in which a neutral conductor is intentionally grounded solidly at specified intervals." National Electrical Safety Code (NESC) § 2 (IEEE 2006). A multi-grounded system may or may not be effectively grounded. Id. That is, a multi-grounded system may, or may not, have ground connections "of sufficiently low impedance and [ ] sufficient current-carrying capacity to limit the buildup of voltage to levels below that which may result in undue hazard to persons or to connected equipment." Id. The NESC recognizes several different electric distribution systems, including the multi-grounded wye system. NESC § 9-096.

In March 2004, the Siewerts hired an electrician to test for stray voltage in their farm's dairy operation area. The electrician found 6.6 amps of current and took measurements showing "[c]ow contact voltages" exceeding 1.5 volts. The electrician concluded that this voltage was excessive. In the meantime, NSP responded to the Siewerts' concerns by designing a new three-phase configuration for electrical service to the farm, which included a primary neutral isolator with a greater capacity. During his deposition, Greg Siewert testified that following NSP's adjustments,the stray voltage began to drop but was not entirely eliminated.

The Siewerts filed a complaint against NSP in district court alleging negligence, strict liability, nuisance, and trespass, claiming that stray voltage was the source of losses in their dairy production. The Siewerts introduced expert testimony of Donald Zipse in support of their claims that: (1) an alternative to the multi-grounded system that provided the Siewerts with electricity, such as a uni-grounded system, would not have resulted in the harm the Siewerts experienced; and (2) better service procedures would also have alleviated the harm.

NSP moved for summary judgment, arguing in part that the filed rate doctrine, primary jurisdiction doctrine, and Minn.Stat. § 541.051 (2010), Minnesota's statute of repose, each barred the court's consideration of the Siewerts' claims. The district court rejected NSP's arguments and, except for the Siewerts' claim for trespass, denied summary judgment. NSP filed a direct appeal under a claim of right and also filed a petition for discretionary review under Minn. R. Civ.App. P. 105.01. Meanwhile, the district court certified the questions of the filed rate doctrine, primary jurisdiction doctrine, and statute of repose for review under Minn. R. Civ.App. P. 103.03(i). NSP's petition for discretionary review was denied, and the appeal based on claim of right and the district court's certification were consolidated for review by the court of appeals.

The court of appeals held that: (1) the filed rate doctrine barred consideration of the Siewerts' claims for injunctive relief but not their damages claims; (2) the primary jurisdiction doctrine did not bar the district court's consideration of the Siewerts' claims for damages because the claims are "inherently judicial"; and (3) the statute of repose did not preclude consideration of the Siewerts' claims of negligence, strict liability, and nuisance because their claims either do not involve "improvement[s] to real property" or fall within the exception to the statute of repose for negligent maintenance, operation, or inspection of real property improvements. Siewert v. N. States Power Co., 757 N.W.2d 909, 919, 920, 924 (Minn.App.2008). We granted NSP's petition for review.

I.

We first address whether the filed rate doctrine precludes consideration of the Siewerts' claim for injunctive relief from nuisance and damages. This question and the questions on the primary jurisdiction doctrine and statute of repose came to the court of appeals as certified questions and therefore are questions of law that we review de novo. Hoffman v. N. States Power Co., 764 N.W.2d 34, 42 (Minn.2009); Watson ex rel. Hanson v. Metro. Transit Comm'n, 553 N.W.2d 406, 411 (Minn.1996).

NSP is a regulated monopoly authorized to sell energy services in Minnesota. Hoffman, 764 N.W.2d at 39. As such, it is subject to regulation by the Minnesota Public Utilities Commission (MPUC). Minn.Stat. § 216B.08 (2010). The Legislature vested the MPUC with exclusive authority to "adopt standards for safety, reliability, and service quality for distribution utilities" like NSP. Minn.Stat. § 216B.029, subd. 1(a) (2010). NSP is required to file a tariff with the MPUC that specifies the rates at which it will provide electric distribution services. Minn.Stat. § 216B.05, subd. 1 (2010). NSP must also comply with regulatory and industry standards for "safety, design, construction, and operation of electric distribution facilities." Minn.Stat. § 216B.029, subd. 1(d) (2010). The MPUC enjoys broad power to ascertain and fix just and reasonable policies forall public utilities. Minn.Stat. § 216B.029, subds. 1, 2 (2010). Moreover, "the MPUC must consider the right of the utility and its investors to a reasonable return, while at the same time establishing a rate for consumers which reflects the cost of service rendered plus a 'reasonable' profit for the utility." N. States Power Co. v. Minn. Pub. Utils. Comm'n, 344 N.W.2d 374, 378 (Minn.1984) (citing Narragansett Electric Co. v. Burke, 119 R.I. 559, 381 A.2d 1358 (1977), cert. denied, 435 U.S. 972, 98 S.Ct. 1614, 56 L.Ed.2d 63 (1978)). However, the power to award monetary damages to a complaining party is not one that the MPUC enjoys. See Peoples Natural Gas Co. v. Minn. Pub. Utils. Comm'n, 369 N.W.2d 530, 534 (Minn.1985) (holding that the MPUC does not have statutory authority to order refunds of past revenue collections).

NSP argues that the Siewerts' claims are barred by the filed rate doctrine because: (1) a request for additional or alternative services provided by NSP goes to the reasonableness of NSP's tariff-specified services; and (2) the claims for injunctive relief and damages both improperly enlarge or vary tariff-specified services.

The filed rate doctrine is a judicially created doctrine that prevents courts from adjudicating private claims that would effectively vary or enlarge rates charged under a published tariff. Keogh v. Chi. & Nw. Ry. Co., 260 U.S. 156, 163, 43 S.Ct. 47, 67 L.Ed. 183 (1922). Courts apply the filed rate doctrine for three primary reasons. First, ratemaking is a legislative function delegated to government agencies; under separation-of-powers principles, courts should not second-guess the reasonableness or lawfulness of agency-approved rates. Schermer v. State Farm Fire & Cas. Co., 721 N.W.2d 307, 314 (Minn.2006) (adopting the filed rate doctrine in Minnesota). Second, the regulation of rates is a comprehensive system and courts "ha[ve] neither the...