Daily Development for
Thursday, January 23, 1997

by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law

EMINENT DOMAIN; INVERSE CONDEMNATION; ELECTROMAGNETIC WAVES: California Supreme Court affirms Covalt: depreciation in value due to threat of electromagnetic waves does not impose "direct and substantial" burden on property sufficient to render City Power Department liable for inverse condemnation damages under California "taking or damaging" Constitutional provision.

San Diego Gas & Electric Co. v. Covalt, 55 Cal. Rptr. 2d 724 (Cal. 1996)

This case affirms a case reported as the Daily Development for August 25, 1996 (on the DIRT Website). It "slams the door" on the varied creative claims raised by landowners for public liability for electromagnetic waves emitted by electric transmission lines. The case affirms the lower court determination that the California Public Utilities Commission has exclusive jurisdiction to establish sites for electric transmission lines and can evaluate the public risk considerations in its determination. Permitting other actions against public agencies for damages due to such facilities would be inconsistent with the Constitutional authority of the PUC, and such actions consequently are barred.

The case begins with an elaborate discussion of the nature of electromagnetic waves and the uncertainty that such waves generated by transmission facilities in fact cause a danger significantly greater than that which exists in ordinary human environments not located adjacent to such facilities. But this discussion is largely moot in light of the determination that none of these considerations would be relevant to a state court damages action, in light of the preemptive authority of the State PUC. In the lower court, the plaintiffs had also alleged personal injuries and emotional distress damages - the Court of Appeals found those claims unsubstantiated by reasonable scientific evidence, and the plaintiffs did not challenge that holding on appeal. The court's ruling would appear also to conclude that such claims are barred due to the supremacy of the PUC jurisdiction, but the holding is vague as to this issue in light of the fact that the plaintiffs had abandoned their appeal.

Of course, the fact that the PUC has authority to establish these facilities does not resolve the question of whether such location is such a "taking or damaging" of property sufficient to amount to an inverse condemnation. Plaintiffs relied upon the 1988 case of San Diego Gas & Electric v. Daley, 253 Cal.Rtpr. 144 (Cal. App. 1988), where the court ruled that in a condemnation action relating to a power line project the court could take into account depreciation of the remaining property due to public concerns about the danger of electromagnetic discharges. But the court here distinguished Daley by limiting it to its facts. Whatever the validity of the Daley case on the "just compensation" issue raised in regular eminent domain cases, the court views it as irrelevant to inverse condemnation cases.

But, the California Supreme Court changed tack on the balance of the inverse condemnation ruling. Instead of holding, as did the Court of Appeals. The lower court had reasoned that there was no taking because the alleged fear of electromagnetic waves was unreasonable, and therefore could not form the basis for a claim for diminished value. Here, the Supreme Court indicated that, reasonable or not, actual or not, the diminished value of plaintiff's land resulting from public concerns about nearby electromagnetic generation is not the kind of "direct and substantial" injury cognizable in inverse condemnation cases.

The court pointed out that there was no physical invasion of or interference with the plaintiffs' land. Instead, the only claim was for indirect injury due to diminution in value resulting from the installation of the electromagnetic lines. Here, the court concluded, the injury did not rise the level of a compensable injury. Aside from using the words "direct and substantial," the court really gives very little substantive information as to the nature of the test, instead citing to various precedent cases that are examples of each side of the line. At one point, analogizing to the airplane overflight cases, the court concludes that the plaintiff must show that the defendant's actions on its own land constituted a "direct and immediate cause of a substantial imparment of the [plaintiff's] use and enjoyment of the property." It states that the concern that future purchasers of the property will not pay a good price for it because of concerns of health hazards does not rise to the level of a "direct and immediate . . . impairment."

"Plaintiffs cite no case holding that an allegation of fear that an intangible intrusion may cause future harm to occupants of property is sufficient to charge a "direct and substantial burden" on the property."

Comment: As indicated in the notes to the 8/25/96 DD, the editor agrees basically with the conclusions and approach of the California Supreme Court here. On the question of whether fear of future injury may lead to a compensable claim, the editor would disagree with the court. The question should be one of degree, not kind. Clearly an actual public fear of a major and cataclysmic injury resulting from activities on adjacent state owned land constitutes an imposition of private property that an individual should not have to bear to serve the public interest.

Nor does the editor concur that there is no authority for this proposition, even in California. See: Carter v. City of Porterville, 22 Cal. Rptr. 2d 76 (Cal. App. 1993), where the court, in an opinion muddied by procedural complexity, appears to hold that a landowner has an actionable takings claim if it can show that its property has been reduced in value substantially because of concerns that a dam built on adjacent state land may burst and cause injury to persons or property on plaintiff's land. Carter is discussed in the 1993 SURVEY OF RECENT DEVELOPMENTS IN REAL ESTATE LAW.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 1-6, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Stacy Walter at the ABA. (312) 988 5260 or stacywalter@staff.abanet.org

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