Goldstein v. Potomac Electric Power Co.

Murphy, C. J., delivered the opinion of the Court. Pursuant to the Uniform Certification of Questions of Law Act, Maryland Code (1974), §§ 12-601 to 12-609 of the Courts and Judicial Proceedings Article, the United States Court of Appeals for the Fourth Circuit has certified for our consideration the following question of state law: “Where a nearby landowner seeks past, present and prospective damages for injuries to his property, measured by the diminution in its market value, from a public utility company whose operations allegedly have caused, are causing, and will cause daily air and noise pollution, is plaintiff barred by reason of Ann. Code of Md., Cts. & Jud. Proc., § 5-101, from bringing suit more than three years from the date that the landowner alleges that the injuries commenced?” The statement of relevant facts, as set forth by the certifying court, discloses that in 1964 the Potomac Electric Power Companv (Pepeo) commenced operating its Chalk Point electric generating station at Aquasco, Prince George’s County, Maryland. At that time, Joseph and Shirley Goldstein owned a 500-acre tract of land located across the Patuxent River from Chalk Point at a distance of approximately two miles.

In 1967, the Goldsteins purchased an additional 1100-acre tract located three-tenths of a mile from Chalk ⁶⁷⁶ Point. They sold this property the same year to Star Enterprises, Ltd., a corporate enterprise wholly owned by them. On November 21,1974, the Goldsteins and Star (hereinafter the appellants) instituted a civil action for damages and injunctive relief in the United States District Court for the District of Columbia, alleging that air, water and noise pollution emanating from Pepco’s Chalk Point plant constituted an actionable nuisance under the common law of Maryland and that Pepeo was negligent in failing to install state-of-the-art pollution control equipment. The appellants subsequently withdrew their claims for damages based on water pollution and on negligence, thus alleging an actionable nuisance only from air and noise pollution.

On March 5,1975, the case was transferred for trial to the United States District Court for the District of Maryland. The appellants alleged in their complaint that the damage to their properties began when the Chalk Point station commenced operations and was aggravated when the size of the plant was expanded at later dates. The parties stipulated that Unit No. 1 of the Chalk Point plant became operational in 1964, Unit No. 2 in 1965 and Unit No. 3 in 1975. It was also stipulated that the level of the alleged particulate pollution emanating from the plant has not been significantly greater since November 21, 1971 (the date three years prior to the filing of the suit) than it was before that date.

Pepeo moved for summary judgment asserting that Maryland’s three-year statute of limitations, § 5-101 of the Courts Article, barred appellants’ cause of action since it provided that: “A civil action at law shall be filed within three years from the date it accrues unless another provision of the Code provides a different period of time within which an action shall be commenced.” By the time Pepco’s motion for summary judgment was before the District Court for determination, the appellants had limited the relief requested to permanent damages, i.e., monetary relief in an amount equal to the diminution in ⁶⁷⁷ market value of their properties as a result of air and noise pollution caused by Pepco’s Chalk Point operations. Pepeo argued before the District Court that if its plant constituted a- nuisance, the nuisance was permanent and became permanent prior to November 21,1971 — three years before the filing of the appellants’ suit. Pepeo contended that since the alleged nuisance was permanent, the appellants’ cause of action arose when the Chalk Point station was placed in operation, and since the appellants failed to institute suit within the three-year limitations period, the action was barred by § 5-101 of the Courts Article. The appellants did not dispute Pepco’s assertion that the operation of the Chalk Point plant, if a nuisance at all, was permanent.

They contended that the nuisance, though permanent, was an ongoing activity which damaged their properties on a continuing basis, and consequently their cause of action should be barred only if the nuisance continues for the prescriptive rights period of twenty years. 1 Under this theory, it was argued that while § 5-101 may limit past damages from “ongoing activity” nuisances to those suffered no more than three years prior to suit, it would not bar recovery of present and prospective permanent damages so long as the prescriptive rights period has not elapsed. In support of their contention, the appellants relied upon Professor Charles T. McCormick’s article entitled Damages for Anticipated Injury to Land in 37 Harv. L. Rev. 574 (1924). In deciding the case on Pepco’s motion for summary judgment, the District Court recognized the distinction between a permanent and a temporary nuisance.

It noted that under Maryland law, damages — past, present and future — for permanent reduction in the market value of the land can only be recovered for a permanent nuisance, citing Donohue Realty Co. v. Wagner, 154 Md. 588 , 141 A. 337 (1928), and Carroll Springs Co. v. Schnepfe, 111 Md. 420 , 74 A. 828 (1909). Where the nuisance is only temporary, the court said that the injured party must resort to successive suits to recover for ⁶⁷⁸ injuries if and when they actually occurred, citing Aberdeen v. Bradford, 94 Md. 670 , 51 A. 614 (1902). In determining whether a nuisance is temporary or permanent, the District Court held that if the source of the nuisance is abatable, by either discontinuing the offending activity or eliminating the nuisance element, it is not permanent, citing Carroll Springs and Lurssen v. Lloyd, 76 Md. 360 , 25 A. 294 (1892). It thus observed that since appellants did not complain of the existence of Pepco’s plant per se, but only of its operation, the nuisance, if any, would disappear if Pepeo were to discontinue its operations.

The court recognized that the distinction between a temporary and a permanent nuisance is sometimes difficult to draw, that abatability per se can be a “close question” and that courts examine the nature of the activity and whether, under the circumstances of its existence, it presumably will continue indefinitely. Because appellants sought permanent damages measured by the diminution in the market value of their properties, the District Court concluded that the appellants were alleging a permanent nuisance. It said that the general rule as to such nuisances, applicable in Maryland, is that an action to recover past, present and future damages must be brought within the three-year period of limitations and failure to do so acts as a bar to all recovery, citing Donohue Realty Co. v. Wagner, supra. The District Court concluded that the appellants had a cause of action for permanent nuisance prior to November 21, 1971, and that in no event could they recover permanent damages suffered prior to that date.

It gave in-depth consideration to appellants’ contention, based on McCormick’s article, that because the ongoing pollution generated by Pepco’s facility amounted to a continuing burden on their properties, the three-year statute of limitations should not be applied to bar recovery in one action for permanent damages for all future injuries. The court recognized McCormick’s view that an injured party should almost always have the election either to sue in one action for all future damages or to bring successive suits within the prescriptive period to recover damages as they occurred, ⁶⁷⁹ regardless of the statute of limitations. The court observed that McCormick’s thesis was based in part on the uncertainty-inherent in the definition of a “public nuisance” and in the fact that great confusion surrounds the use of that term — so much so that a plaintiff will often not know whether a court will find a nuisance to be permanent or not. Thus, if he mistakenly believes that the nuisance is not permanent, then he may be barred when he attempts to bring a second suit to recover for damages suffered since the first suit, the likely result being, according to McCormick, that the court will hold that the first suit was for permanent damages — past, present and future — and that he has no claim remaining to assert in the second action.

The District Court said that Professor McCormick found significance in the fact that the defendant in most cases is under a continuing legal duty to stop his offending activity. As to this, the court said: “This is so even if a court, because of the comparative hardships involved, or for other equitable reasons, refuses to enjoin the nuisance. [McCormick] believes the plaintiff should be permitted to wait until his injuries occur before being forced to sue for damages and should not be required to anticipate those injuries. It is only reasonable that if at any point a plaintiff wishes to end the succession of law suits, he should still be permitted to recover damages for future injuries to be caused by the permanent nuisance.” Although believing that there was merit in McCormick’s position, the District Court declined to apply his teachings to the facts of the instant case, stating: “The defendant here is engaged in the generation of electric power as a public utility. Its activity is a service of vital importance to the public.

The construction and operation of the Chalk Point plant was pursuant to a certificate of public convenience and necessity issued by the Maryland Public Services Commission (PSC). Under Maryland law, the PSC is ⁶⁸⁰ specifically directed to consider the effect on air quality of operations it approves. Article 78 § 54A. The plant’s operation about which plaintiffs complain is an exercise of authority granted by the PSC.

The defendant therefore falls within the class of ‘quasi-public corporations’ which, under Maryland law, cannot be enjoined from performing acts necessary to the exercise of their lawful authority, even though, in the absence of such authority, an injunction would lie. Transcontinental Gas Pipe Line Corp. v. Gault, 198 F.2d 196, 198 (4th Cir. 1952).” As a result of these considerations, the court reasoned that Pepeo has never been under a legal duty to the appellants to discontinue operations at its Chalk Point plant, although it may have been liable in damages for the injuries it caused. It said that the appellants “must be presumed to have known from the moment their cause of action arose that they could not obtain equitable relief.” The proper course of action, the court said, “was to bring suit within three years to recover for injuries which plaintiffs could only assume would continue indefinitely given the physical nature of the Chalk Point plant and its obvious purpose.” In support of its holding, the court relied upon Donohue Realty Co. v. Wagner, supra, which in dicta indicated that an action for permanent nuisance to recover past, present and future damages must be brought within Maryland’s three-year period of limitations. In that case, the seller sought specific performance of a contract to purchase land.

The buyers claimed that a release executed by the sellers eight years previously so affected the property that the sellers’ title was unmarketable. Specifically, the sellers had released Baltimore City from all damages arising out of the city’s operation of a nearby city sewage plant. In granting specific performance, the court observed that the sewage plant “in the very nature of things is of a permanent character” and must have been so known by the purchaser; consequently, the purchaser must be presumed: “to have known that such damages to the property, past, present, and future, occasioned by the location, ⁶⁸¹ establishment, or operation of the plant in a normal manner, accrued to the person or persons owning the property at the time the conditions causing the damage first came into existence, and must have been recovered by such person or persons in one action (Sedgewick on Damages, par. 95; Wood on Nuisances, par. 869; 29 Cyc. 1273), and that such action must have been brought within the period fixed by the statute of limitations, which began to run when the conditions causing the damages first came into existence... 154 Md. at 594 . The District Court, after analyzing Donohue Realty, and observing that the sewage plant there involved had been constructed under legislative authority and was of a permanent character, said: “The same is true in this case.

It does not serve the public interest, and it is not the law of Maryland, that plaintiffs may bring successive suits where it is clear from the beginning that the injury is by its ‘very nature’ a permanent one.” In holding that appellants’ suit was barred by Maryland’s three-year limitations statute, the District Court said that the result reached was in full agreement with McCormick “who recognized there were cases in which plaintiffs were not entitled to the election he proposed. Such a case was one where a public body had the power of eminent domain. The act of building a structure and using it in an offensive way by such a defendant was a legally privileged act, and, consequently, all damages had to be recovered in one action brought within the limitations period. McCormick, at 585-86.

The defendant is in an identical position, and plaintiffs should be barred from pursuing the action any further.” 2 ⁶⁸² On appeal of the District Court’s judgment, the United States Court of Appeals for the Fourth Circuit expressed uncertainty as to whether “the Maryland Court of Appeals, if confronted with the facts of the instant case, would hold the suit barred by § 5-101.” In propounding the certified question, the Fourth Circuit acknowledged in its statement of relevant facts that the appellants’ action was one solely for damages for permanent nuisance, i.e., for one recovery for all damages, past, present and prospective. It said that “the applicability of § 5-101 to the facts of the instant case presents a potentially dispositive question of state law as to which there appears no controlling precedent in the Maryland case law.” I Under Maryland law, permanent damages, past, present and prospective, for diminution in the market value of land caused by a nuisance can only be recovered if the nuisance is permanent. Donohue Realty Co. v. Wagner, 154 Md. 588 , 141 A. 337 (1928); State v. Shawinigan Electric P. Co., 132 Md. 128 , 103 A. 453 (1918); Carroll Springs Co. v. Schnepfe, 111 Md. 420 , 74 A. 828 (1909). This principle of law is predicated on the assumption that the nuisance will continue into the indefinite future, that it will continue to cause injury to the land, and that the only appropriate measure of damages is permanent reduction in the market value of the property resulting from the nuisance.

In suing for permanent damages, the appellants assert that there is now “virtually no doubt that the Chalk Point plant constitutes a permanent nuisance, given the continuation of the air pollution despite intense federal and state regulatory efforts over the last several years aimed at alleviating the problem.” The damages they seek, appellants explain, are not because of the existence of the electric generating facility per se, but rather on account of the air and noise pollution emanating from the facility on an ongoing daily basis — pollution which they say will continue indefinitely and will not be abated. ⁶⁸³ Appellants’ characterization of the nuisance as permanent is accepted by Pepeo solely for the purpose of determining whether the action is barred by the Maryland three-year statute of limitations. Similarly, underlying the substance of the certified question is the Fourth Circuit’s recognition that the nuisance sued upon is permanent and not temporary. While we address the certified question on the basis that the nuisance is permanent and not abatable, we point out that, undisclosed by the record before us, Pepeo and the Maryland State Department of Health and Mental Hygiene entered into a consent decree in the Circuit Court for Montgomery County on February 27, 1978 whereby Pepeo agreed to operate its Chalk Point facility in full compliance with Maryland air pollution requirements by 1981 and to take immediate interim steps toward achieving that result. Thus, the nuisance here alleged may not be of permanent duration, but may be abated.

We also point out that the nuisance alleged by appellants, if it exists, is subject to abatement through the injunctive process by the State Department of Health and Mental Hygiene and the Public