Oklahoma’s robust wind resource, in conjunction with the state’s production tax credit (PTC), has inspired the construction of nearly 6 GW of wind projects over the past decade in the state.
Despite the fact that wind energy projects bring great economic benefits to the rural communities in which they are located, local opponents of these projects have occasionally sought to fight them, and sometimes, they have done so through the courts. Nationwide, there have been few reported decisions dealing with an opponent’s efforts to stop development of a wind project. But more recently, significant case law is beginning to develop, as nuisance and permitting cases related to wind energy are becoming more common.
A recent example of wind opponents trying to disrupt development of a wind project under a nuisance law theory is the Oklahoma case of Terra Walker v. Kingfisher Wind. The Walker litigation represents one of a rising number of wind nuisance cases, generally initiated by “not in my backyard” landowners who do not want to look at nearby turbines.
Ten years ago, there was only one case in West Virginia and a handful in Texas dealing with nuisance claims against utility-scale wind projects. Since then, the Rankin v. FPL Energy case in Texas has become the most commonly cited case. In Rankin, a Texas appellate court held that aesthetic impact is not admissible as evidence of a nuisance. Most states take the same approach to aesthetic impact and do not allow nuisance claims to move forward when they are based solely on an individual’s preference against looking at wind turbines. A valid nuisance claim requires a substantial interference with the plaintiffs’ use and enjoyment of their property. As a result, opponents of wind projects have had to become creative in submitting evidence as to why and how wind farms may create a nuisance. Nuisance claims in general are very fact-specific, but thus far, most plaintiffs have failed to provide concrete, objective evidence of impacts that would qualify a wind farm as a nuisance.
The Walker court’s opinion on nuisance law provides some additional guidance on nuisance cases. In this case, neighboring landowners opposed the Kingfisher Wind project in Kingfisher and Canadian Counties, Okla.[adleft zone=’190′]
In Walker, the Oklahoma Wind Action Association and seven individual landowner plaintiffs sought to enjoin Kingfisher Wind LLC from the construction and subsequent operation of a wind farm under theories of anticipatory nuisance and anticipatory trespass. The plaintiffs’ claim for anticipatory trespass did not survive a motion to dismiss, the court finding the claim to be “too speculative” to support a plausible claim. As support for their anticipatory nuisance claim, the plaintiffs alleged that the 149 turbines would cause adverse health effects, emit noise, cause “shadow flicker” and destroy the natural landscape.
The plaintiffs supported these allegations with two expert opinions – one from a radiologist opining on potential medical impacts resulting from the wind project and one from an acoustical engineer opining on the potential impacts from sound coming from the wind project – and sought a 1.72-mile setback of the project from their properties.
The plaintiffs’ evidence focused almost entirely on adverse health effects caused by “shadow flicker” and sound from the turbines, as well as the aesthetic annoyance caused by the project generally. Despite the fact that the plaintiffs had a full opportunity to take discovery and present expert opinion on the potential impacts of the wind project, the court determined that the plaintiffs failed to make the requisite showing of likely harm – a reasonable probability that an injury would occur beyond mere speculation – and substantial interference with the use and enjoyment of the plaintiffs’ property was not found.
Moreover, already hesitant to grant extraordinary relief in any case, the court declined to do so not only because the plaintiffs failed to demonstrate likely harm, but also because the balance of the hardships between the parties could not be viewed as favoring the plaintiffs, given the massive costs already expended in the then-operational project. The court suggested that this was due, in part, to the plaintiffs’ related failure to request a preliminary injunction before or during construction.
In support of their anticipatory nuisance claim, the Walker plaintiffs relied “almost entirely on asserted adverse health effects and annoyance.”
This is generally a common tactic among nuisance plaintiffs, who attempt to rely on generalized scientific studies or scientific work of questionable validity to assert potential health effects associated with various alleged nuisance conditions. Nuisance plaintiffs may rely on such health effects evidence both to support claims for injunctive relief and to support often unbounded demands for compensatory damages for the “annoyance” allegedly caused by such health effects. In opposing summary judgment on their anticipatory nuisance claim, the Walker plaintiffs presented the opinions of two experts concerning alleged health effects caused by wind farms.
Like in many other cases, these experts failed to tailor their opinions to the facts of the Walker case. Instead, the two experts provided generalized opinions concerning plaintiffs who lived within a particular geographic radius of the wind farm that did not include examinations of any plaintiffs, review of their medical records or any investigation specific to the actual wind farm at issue. As a result, the Walker court found the harm alleged by the plaintiffs to be “speculative at best” and granted summary judgment in favor of the defendant. The decision highlights the important role that experts play in supporting nuisance claims and keeps the door open for defendants to fight nuisance claims as speculative where plaintiffs’ experts fail to tailor their work to the facts of the case or rest on generic opinions applicable to wide classes of individuals.
The Walker opinion is in line with recent decisions in several other states where landowners have attempted to claim that neighboring wind farms are a nuisance. These cases are important for the wind industry, as well as the energy industry as a whole. Even though anticipatory nuisance claims are not ordinarily upheld, they can often delay projects, add additional costs and impact project financing, particularly where the plaintiff seeks a preliminary injunction before the project begins in earnest. And, of course, courts may entertain nuisance cases once the project is in operations where actual proof of injury can be shown.
Historically, the doctrines of anticipatory nuisance and trespass, although long recognized, have been seldom utilized. In recent years, however, the plaintiffs’ bar has discovered that such anticipatory suits are potentially a powerful weapon, not only because they might prevent development from going forward at all, but also because such cases can impact project financing and slow construction.
As a result, industry players have been served with more and more such suits over the past few years in an attempt by opponents and their counsels to normalize this tactic. These nuisance suits have posed a threat to several industries, including the wind generation industry and companies involved in oil and gas drilling, and many in these industries are rightly concerned about this strategy to block development. Litigation of this sort can make it very difficult for a project to obtain tax equity or debt financing unless the sponsor is willing to indemnify the investor and has the credit support to back up that indemnification. In many cases, it is difficult for a sponsor to take such a risk.
Even if the developer ultimately wins the litigation, delays in financing could lead to the project missing key construction deadlines, as well as deadlines related to PTC qualification or power purchase agreement-guaranteed completion dates. The costs of litigation can also significantly affect the economics of a project. Even if the plaintiffs know their case may ultimately be unsuccessful, many hope that a nuisance case might be enough to convince a developer to look elsewhere due to the cost and delays. The ruling in the Walker case should help encourage investors that frivolous suits of this nature represent less of a threat to successful wind farm completion than previously appreciated.
The Walker court joined a number of other courts that have rejected the anticipatory nuisance tactic. The Walker decision is important because successful prosecution and injunction of an anticipatory nuisance and trespass case could legitimize this tactic and potentially lead to a much bigger industry problem. Thus far, defendants have been able to largely defeat these claims, and the hope for developers is that plaintiffs will soon abandon this misguided tool. The Walker decision is another step in that direction.
If the plaintiffs had been successful in the Walker litigation, lenders and investors likely would have increased the level of scrutiny on wind projects, particularly when project facilities were to be located near residential uses of non-participating landowners; and developers would have incurred additional project costs related to either leasing more land than would normally be necessary for a project and/or obtaining easements from non-participating landowners in order to create buffers around projects so as to avoid nuisance claims.
Ultimately, what can a wind project do to avoid issues with nuisance? One hope is that, as case law such as Walker continues to develop, it will make it easier for developers to have the cases dismissed quickly. If a project is built and approved in an area with zoning ordinances, that would give some additional protection against nuisance claims. Developers should also strive to gain local support for the project, even from landowners who will not have turbines on their property. Community outreach and an understanding of the economic impact of wind farms on property taxes and job creation will help gain support and may dissuade opponents from filing claims. Gaining the support of county judges and other local officials may also have an impact.
In the end, however, where neighboring landowners are intent on trying to impede development of a project under a nuisance theory, project proponents can look to a growing body of case law rejecting plaintiffs’ claims for nuisance where the evidence fails to suggest a reasonable probability that an actual injury will occur.
Becky Diffen is an attorney with McGuireWoods’ energy industry team. She can be reached at firstname.lastname@example.org. Other McGuireWoods attorneys who contributed to this article include partners Trent Taylor, Marvin Rogers, Jay Hughes, Tennille Checkovich and Jonathan Blank.