CAE-Link Corp. v. Washington Suburban Sanitary Commission

CATHELL, Judge. The Washington Suburban Sanitary Commission (WSSC) commenced this declaratory judgment action eleven years ⁶⁰⁸ ago against various specified property owners in the Montgomery Industrial Park (MIP), 1 as well as other persons claiming injury as a result of WSSC’s taking of certain covenants running with the land. The MIP owners who are present parties to the case are CAE-Link Corporation, BancTec Systems, Inc., AT & T Resource Management Corporation, International Fabricare Institute, Erie Indemnity Company and the Washington Post Company. Additionally, John and Norma Robertson and Jerry and Barbara Robertson are also appellants.

All of the appellants are represented by the same attorneys on appeal and all issues and arguments here raised by counsel are made on behalf of all appellants. Except when otherwise necessary, we shall refer to all of the owners as appellants. On July 10, 1978, the United States District Court for the District of Columbia issued a comprehensive order, pursuant to the Federal Water Pollution Control Act, which required WSSC to build and have operational by July 1, 1979, a sewage sludge composting facility in Montgomery County, Maryland. 2 On April 25, 1980, the district court issued a second order compelling WSSC to move forward with the construction and operation of a sewage sludge composting facility to be ⁶⁰⁹ located at the specified site in the MIP, known as “Site IF’. On June 27, the district court issued a third order reiterating the directives set forth in its prior orders.

In this order, the district court overrode and enjoined WSSC from complying with an injunction issued by the Circuit Court for Prince George’s County which prohibited WSSC from expending any funds to build or operate Site II. The federal judge also ordered WSSC to proceed expeditiously to obtain the land, build, and operate the composting project. Finally, the judge enjoined all parties from taking any action which would frustrate or impede the execution of the order. Pursuant to the district court’s order, WSSC filed a condemnation action in the Circuit Court for Montgomery County to obtain the land for the Site II composting project.

WSSC condemned 115 acres in the MIP for the construction and operation of a sewage sludge composting facility. The land WSSC took by condemnation was burdened by certain restrictive covenants in favor of neighboring land owners in the MIP. Thus, WSSC initiated a declaratory judgment action to determine whether the beneficiaries of the covenants had to be compensated for the value of those property rights. The defendants answered WSSC’s complaint and filed counterclaims for monetary damages alleging inverse condemnation, breach of covenant, nuisance, bad faith pursuant to Maryland Rule 1-341 and violation of 42 U.S.C. section 1983 .

On motion of the defendants, the trial court issued a ruling that the restrictive covenants owned by the defendants and extinguished by WSSC’s condemnation were compensable property interests and denied WSSC’s claim for declaratory relief. WSSC appealed to this Court, which affirmed the lower court’s ruling. WSSC v. Frankel, 57 Md.App. 419 , 470 A.2d 813 (1984). The Court of Appeals subsequently vacated and remanded the case for further proceedings in the circuit court.

WSSC v. Frankel, 302 Md. 301 , 487 A.2d 651 (1985). WSSC moved for partial summary judgment. The trial court granted WSSC’s motion as to the counterclaims that ⁶¹⁰ alleged violation of § 1983, bad faith, and punitive damages. The court denied WSSC’s motion as to the counterclaims for inverse condemnation and breach of covenants.

As to the nuisance claim, the court granted partial summary judgment to the extent of requiring that the defendants prove that WSSC was negligent. The counterclaims for breach of covenant were nevertheless dismissed by stipulation of the parties that the covenants had been extinguished in July of 1980 as a result of the WSSC’s condemnation of Site II. Trial by jury on the nuisance and inverse condemnation counts began on March 4, 1991. At the close of the counterclaimants’ case-in-chief, WSSC moved for judgment on both counts.

The trial court denied WSSC’s motion as to inverse condemnation, but granted the motion on the nuisance count. At the conclusion of all the evidence, the jury found in favor of WSSC. 3 Counterclaimants’ motion for new trial was denied and this appeal ensued. On appeal, Appellants present the following assignments of error: I. The trial court committed reversible error in granting WSSC’s Motion For Judgment on Appellants’ claims for nuisance. A. The trial court committed reversible error in ruling that proof of negligence was a prerequisite to recovery on Appellants’ nuisance claim.

B. The trial court erred in equating the standard of proof necessary to establish a non-possessory taking with the standard of proof necessary to establish a nuisance.

II

The trial court committed reversible error in instructing the jury that, in determining the value of the restrictive covenants, they could consider whether ⁶¹¹ WSSC’s use of Site 2 substantially interfered with Appellants’ use and enjoyment of their lands.

III

The trial court committed reversible error in admitting evidence of unforeseeable “comparable” sales that occurred long after the date of taking.

IV

The trial court committed reversible error in admitting prejudicial evidence that certain Appellants had knowledge when they purchased their lands that WSSC proposed to build a sludge facility. V. The trial court’s erroneous and inconsistent evidentiary rulings created jury confusion and warrant reversal. A. WSSC’s internal memoranda on the issue of the value of the restrictive covenants should have been admitted. B. The trial court committed reversible error by allowing the jury to visit Site 2 at the close of all the evidence.

C. The trial court’s double standard for admissibility of evidence “inside” and “outside” MIP prevented the jury from having an accurate picture of the effect of Site 2 on Appellants’ properties. D. The trial court’s admission of hearsay appraisals was erroneous and prejudicial. E. The trial court erred by admitting WSSC’s “state-of-the-art” evidence. F. The trial court erred in refusing to allow Appellants to cross-examine WSSC’s expert fully with regard to his credibility.

Appellee cross appeals, raising three issues: I. The trial court erred by permitting the jury to consider the inverse condemnation claims of those Appellants who purchased their land after the restrictive covenants were extinguished on July 8, 1980.

II

The trial court erred by refusing to strike the speculative valuation testimony of Appellants’ expert witness, E.L. Dieudonne. ⁶¹² III. The trial court erred by refusing to grant WSSC’s motion for judgment against AT & T on the ground that its inverse condemnation claim was barred by limitations. DISCUSSION I. THE TRIAL COURT ERRED BY GRANTING WSSC’S MOTION FOR JUDGMENT AS TO APPELLANTS’ NUISANCE CLAIMS. In granting judgment in favor of WSSC on the nuisance claims, the trial court said: With respect to the nuisance claim, the motion to dismiss is granted for two reasons.

The first reason being that right or wrong I have held that in this case, based upon the facts in this case, that in order to recover on a nuisance theory, the Plaintiffs have to show simple negligence in the construction and operation of the facility. There is no evidence that I can recall to support that theory. Appellee argues that the principal issue on this appeal is whether, as a matter of law, it can be held strictly liable in nuisance for complying with the injunctive orders of a federal district court which specifically required it to build and operate a sewage sludge composting facility at a specified location near Appellants’ properties. Appellee contends that federal law (Federal Water Pollution Control Act) preempts the state law of nuisance and an award of damages would constitute an “attack” on the orders of the district court.

Appellants rebut Appellee’s preemption argument, asserting that an award of damages, unlike injunctive relief, would not interfere with the operation of Site II and that a nuisance cannot be created with impunity pursuant to legislative or judicial authority. A. PREEMPTION The Supremacy Clause of the United States Constitution, art. YI, cl. 2, requires that when compliance with ⁶¹³ both federal and state law is a physical impossibility, the “state law is ‘void to the extent it conflicts with a federal statute.’ ” Sanders v. State, 57 Md.App. 156, 167 , 469 A.2d 476 cert. denied, 299 Md. 656 , 474 A.2d 1345 (1984) (quoting Maryland v. Louisiana, 451 U.S. 725, 747 , 101 S.Ct. 2114, 2129 , 68 L.Ed.2d 576 (1981)). See also Hillsborough County, Fla. v. Automated Medical Laboratories, Inc., 471 U.S. 707, 713 , 105 S.Ct. 2371, 2375 , 85 L.Ed.2d 714 (1985); Harrison v. Schwartz, 319 Md. 360, 364 , 572 A.2d 528 , cert. denied, — U.S.-, 111 S.Ct. 143 , 112 L.Ed.2d 110 (1990); Hecht Co. v. C & P Telephone Co., 310 Md. 148, 152 , 528 A.2d 474 (1987).

If Congress has expressly stated preemptive intent or evidenced an intent to occupy a field, federal law shall govern. Harrison, 319 Md. at 364 , 572 A.2d 528 . When, however, Congress does not expressly state its intent, there is a presumption against preemption. Abbot by Abbot v. American Cyanamid Co., 844 F.2d 1108,1112 (4th Cir.1988) (citing Maryland v. Louisiana, 451 U.S. at 726 , 101 S.Ct. at 2118 ).

The presumption is even stronger against preemption of state remedies, like tort recoveries, when no federal remedy exists. Abbot, 844 F.2d at 1112 (citing Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 251 , 104 S.Ct. 615, 622 , 78 L.Ed.2d 443 (1984)). See also Taylor v. Gen. Motors Corp., 875 F.2d 816 (11th Cir.), cert. denied, 494 U.S. 1065 , 110 S.Ct. 1781 , 108 L.Ed.2d 783 (1991) (strong presumption against preemption when subject matter is tort remedy).

The federal district court passed its order pursuant to 33 U.S.C. § 1251 et seq., the Federal Water Pollution Control Act or the Clean Water Act (1987). Section 1251(a)(5) provides that “it is the national policy that area-wide waste treatment management planning processes be developed and implemented to assure adequate control of sources of pollutants in each State____” Section 1365(e), known as “the saving clause,” provides that “[njothing in this section shall restrict any right which any person (or class of persons) may have under any statute or common ⁶¹⁴ law to seek enforcement of any effluent standard or limitation or to seek any other relief...." (Emphasis added.) The paradigmatic decision in this area is International Paper Co. v. Ouellette, 479 U.S. 481 , 107 S.Ct. 805 , 93 L.Ed.2d 883 (1987). In Ouellette , Vermont landowners brought suit against an operator of a New York pulp and paper mill, under the Vermont common law of nuisance. The Supreme Court held that the Clean Water Act preempted Vermont nuisance law to the extent that that law sought to impose liability on an out-of-state point source 4 because that “would be a serious interference with the achievement of the ‘full purposes and objectives of Congress.’ ” Ouellette, 479 U.S. at 493-94 , 107 S.Ct. at 812 (citation omitted).

The Act did not, however, bar landowners from bringing a nuisance claim pursuant to the law of the source state, which in that case was New York. Id. at 497-99 , 107 S.Ct. at 814-15 . The Court stated that “[t]he saving clause specifically preserves other state actions, and therefore nothing in the Act bars aggrieved individuals from bringing a nuisance claim pursuant to the law of the source State.” 479 U.S. at 497 , 107 S.Ct. at 814 (emphasis in original). But see City of Milwaukee v. Illinois, 451 U.S. 304 , 101 S.Ct. 1784 , 68 L.Ed.2d 114 (1981) (the Water Pollution Control Act saving clause does not bespeak a congressional intent to preserve federal common law remedies inconsistent with the complex statutory scheme provided by that Act).

Accord Nat’l Audubon Soc’y v. Dep’t of Water, 869 F.2d 1196 (1988) {federal common law nuisance claims are preempted by Federal Water Pollution Control Act). Appellee relies on the case of Bieneman v. City of Chicago, 864 F.2d 463 (7th Cir.1988), cert. denied, 490 U.S. 1080 , 109 S.Ct. 2099 , 104 L.Ed.2d 661 (1989). This reliance is misplaced. The Bieneman Court held that all state common law remedies were not preempted.

Id. at 473 . ⁶¹⁵ Appellee finds significant the Court’s holding that “[a] state court could not award damages against O’Hare or its users for conduct required by these regulations----” Id. at 472 . In the case sub judice, the federal district court ordered WSSC to build and operate a composting site in the MIP. It did not, however, order Appellee to build and operate a composting site that emits obnoxious odors that invade the property of others. Therefore, WSSC’s conduct was not entirely directed by the district court order and state actions are not precluded.

Thus, because of the saving clause, the Water Pollution Control Act would not bar Appellants from maintaining their nuisance suit in this state nor is the nuisance action otherwise preempted by federal law. B. NUISANCE CLAIM Appellants argue that the trial court erred by requiring them to prove negligence as a prerequisite to recovery on their nuisance claim. They specifically argue that in Maryland nuisance is a matter of strict liability and that negligence is not a necessary element; thus, the trial court’s ruling directly contradicts established law in this state. Appellee refutes this argument, contending that it should not be held strictly liable for doing what it was ordered to do and cites numerous cases from other jurisdictions that require a showing of negligence in order to establish nuisance.

Appellee advises us to carve out an exception based on the unusual facts of this case. We decline. The Court of Appeals, in Meadowbrook Swimming Club, Inc. v. Albert, 173 Md. 641, 645 , 197 A. 146 (1938), said: The law is clear that where a trade or business as carried on interferes with the reasonable and comfortable enjoyment by another of his property, a wrong is done to a neighboring owner for which an action lies at law or equity. In such cases it makes no difference that the business was lawful and one useful to the public and conducted in the most approved method. [Citations omitted.] ⁶¹⁶ See also Bishop Processing Co. v. Davis, 213 Md. 465, 474 , 132 A.2d 445 (1957); Gorman v. Sabo, 210 Md. 155,159 , 122 A.2d 475 (1956); Anne Arundel Fish & Game Conservation Ass’n, Inc. v. Carlucci, 83 Md.App. 121, 131 , 573 A.2d 847 , cert. denied, 320 Md. 800 , 580 A.2d 218 (1990).

The Court of Appeals held in Taylor v. Mayor and City Council of Baltimore, 130 Md. 133 , 99 A. 900 (1917), that the City of Baltimore could be liable for nuisance even though it constructed a sewage treatment plant under the authority of state law. The Court, discussing nuisance, posed the question: “Is it to be said that a municipal corporation can thus interfere with the rights of others and injure their property without being liable in damages, merely because it, in constructing its work, is acting under legislative authority?” Taylor, 130 Md. at 140 , 99 A. 900 . The Court answered, “The Legislature has no power to grant such rights to any corporation, public or private.” Id. See also Richards v. Washington Terminal Co., 233 U.S. 546, 556-58 , 34 S.Ct. 654, 658 , 58 L.Ed. 1088 (1914), where the Supreme Court held that even though a defendant’s activity is so important to the public that he is given the power of eminent domain, if it causes an unreasonable invasion of another’s property interests, defendant will be liable for damages for the nuisance.

At oral argument, Appellee suggested that even with a “state of the art” facility some obnoxious odors may well be emitted from the site. When suggestions were made that such emissions might well necessitate the obtaining of sufficient property (or easement rights) by WSSC to contain such odors on site, it was proffered that to do so would be so costly as to be economically unfeasible and/or impossible. Without accepting the logical inconsistency of WSSC’s position that, first, it is not maintaining a nuisance and that, second, it would have to purchase so much land to contain the smell that it would be financially impossible, we note that its position assumes that the nuisance burden it creates should be borne only by the Site II neighbors, rather than ⁶¹⁷ spread through condemnation costs or damages 5 to all of its users, i.e., the sources of the material creating the odors. WSSC’s position is that it can create a nuisance with impunity.

It does not acknowledge that it can allot the costs of the damage it creates throughout its user base by additional condemnation financed by charges directly or indirectly assessed against its users, or through damages similarly financed. If the users within the entire area serviced by WSSC, through the operation of Site II, are going to inflict the odors generated by the treatment of their sludge on a limited number of Site II neighbors, we see no reason why they should not be required to alleviate that damage or compensate those they damage. That, as we see it, can be accomplished by operating an odor-free facility, obtaining sufficient property to contain odors on site, or by the payment of damages. Appellee, during oral argument, forcefully argued that at the time it built the composting facility they used the “state of the art” technology and, accordingly, should not be held liable.

We said in Little v. Union Trust Co. of Maryland, 45 Md.App. 178 , 412 A.2d 1251 (1980), that “a ‘nuisance exists because of a violation of an absolute duty so that it does not rest on the degree of care used____’ ” Id. at 185 , 412 A.2d 1251 (quoting Sherwood Bros., Inc. v. Eckard, 204 Md. 485, 493 , 105 A.2d 207 (1954)). See also Benson v. Loehler, 228 Md. 55, 60 , 178 A.2d 909 (1962); Edwards v. Chadwick, 22 Md.App. 140, 155 , 321 A.2d 792 (1974). See generally Sherwood Bros. v. Eckard, 204 Md. 485, 493 , 105 A.2d 207 (1954) (noting distinction between nuisance and negligence); Gilbert, Maryland Tort Law Handbook § 18.0 ⁶¹⁸ at 185 (1986) (nuisance is distinguished from negligence in that even though a person or corporation complies with all laws, rules and regulations they might nevertheless commit a nuisance). In the instant case, extensive testimony was presented that WSSC’s operation of Site II interfered with the use and enjoyment of Appellants’ properties.

Several employees from Appellant companies testified that there was a foul odor in the air that could not be detected prior to the operation of the composting facility. Several employees became nauseated and complained of headaches. These complaints related to odors both inside and outside of the various buildings operated by Appellants. 6 There was also testimony that the smells remained for days and sometimes weeks depending on the weather. The evidence showed that, on occasion, the vents on some of Appellants’ buildings allowing fresh air intake had to be closed and inside air recirculated because of odor.

Additionally, when the intakes were open, the intake filters had to be replaced on a weekly rather than a monthly basis, which was more costly. One of the Appellant companies cancelled plans to double the size of its facility in part because of the odor emanating from the composting site. We believe that the evidence might