Electromagnetic Field Litigation: A Growing Issue for Real Estate and Building Concerns

Bill S. Forcade

There is a growing public concern that electromagnetic Želds cause personal injury or property damage. That concern is expressed in toxic tort litigation, commercial property transactions, and insurance considerations. Because the number and variety of conicts is increasing, it is important for prudent property managers to understand what this conict is about, what kind of situations prompt EMF conicts, what the courts have done, and what to do to reduce the risks of an EMF conict.

Copyright 2002 West Group. This article was originally published in the Summer 2002 issue of the Real Estate Finance Journal and is reprinted with permission.

Wherever there is electric power, electric and magnetic monly, EMF are deŽned as electromagnetic Želds with Želds are produced by that power. As a general rule, frequencies from 0 to 300 GHz. This includes: where the power source is direct current, such as E Static Želds (0 Hz): Magnetic levitation trains for industrial electroplating or batteries, the electric and public transportation, magnetic resonance imag- magnetic Želds are independent. However, the electric ing devices used in medicine, batteries, and current in electric generating plants, electric transmis- electrolytic devices using direct electric currents sion lines, industry, businesses and homes is alternat- for materials processing in industry, ing current: current that varies with a frequency of 60 cycles per second (60 Hz.). As the frequency of the E Extremely low frequency (ELF) Želds (0 to 300 electric power variation increases, the electric and Hz): Trains for public transport, any device magnetic Želds become more coupled, and are more involved in the generation, distribution or use of properly described as an electromagnetic Želd. Com- (60hz) electric power, E Intermediate frequency (IF) Želds (300 Hz to 10

Bill S. Forcade is a partner in the Chicago oce of Jenner & Block. He may be reached at [email protected].

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MHZ): Anti-theft and security devices, induction ing to responsible parties. However, several factors heaters and video display units, and can exacerbate their fears and prompt vigorous action. E Radio-frequency (RF) Želds (10 MHZ to 300 Obviously anyone who perceives that they are not GHz): Mobile telephones or telecommunications receiving accurate, complete or candid information is more likely to take additional action. Second, people transmitters, radars, video display units and may become alarmed if they discover that their expo- diathermy units. sure levels exceed typical values. Electric Želds are typically measured in Volts per meter One issue has only marginal impact on the decision ("V/m"), and typical exposures at the home and work- to take action: a strong scientiŽc basis for concluding place are from 5 to 10 V/m. Electric Želds at ground that EMF cause harm. There is a strong scientiŽc con- level under a power transmission line may be 10,000 nection between exposure to asbestos and speciŽc V/m, which is suciently high to cause uorescent health consequences. Presently no such data exists for tubes to glow. Transmission line workers may have EMF. Any future strong scientiŽc connection between mean exposure values from 50 to 5,000 V/m. Magnetic EMF and speciŽc health consequences would greatly Želds are measured as magnetic ux density, typically increase the likelihood of personal action. But the expressed in microtesla ("µT") or milligauss ("mG"), absence of a strong scientiŽc connection between cause where 1 µT = 10 mG. Typical magnetic Želd exposures and eect may not preclude such action. at the home and oce range from 0.01 to 0.08 µT. Legal Conicts Concerns About EMF Most people are aware that there has been a great deal Generally, people will take some concrete action of litigation by homeowners against adjacent high regarding EMF only if they have a signiŽcant percep- power electric lines or cell phone towers and some liti- tion of risk, and there is a triggering event. Clearly, a gation by cell phone users against manufacturers. But large number of people perceive EMF as a potential the EMF conict has a broader scope, including litiga- risk. In 1999, USA Today conducted a survey of 4,567 tion, property transactions, and insurance coverage readers and reported that EMF are the number one issues. environmental concern in America. On August 25, EMF litigation typically includes personal injury 2000, ZD Net, a popular electronic technology news claims or claims of property damage or devaluation. magazine had an article, "Is Your Cell Phone Frying This toxic tort litigation may be founded in trespass, Your Brain?" ZD Net users were asked, "Do you think nuisance, products liability, inverse condemnation, cell-phone use is hazardous to your health?" Of the eminent domain or other theories. 11,000 people responding, 54% said yes, 24% said no, Personal injury claims based on EMF exposure have and 23% said they would wait for completion of the not fared well in the courts, because no one has pre- government studies before deciding. Nearly every sented persuasive scientiŽc evidence that EMF cause month some major newspaper or periodical has a sig- particular adverse health eects. Property claims have niŽcant article on possible links between EMF and an been much more successful in the courts. Most of the adverse health impact. property claims have asserted that EMF have dimin- Individual perception of risk may vary widely ished the value of the property, because the public fears depending on age, gender, background and other regarding EMF reduce the amount buyers will pay for factors. People are more likely to accept a perceived property subject to such exposure. These claims are risk if they know about it in advance and if they Žnd usually brought under theories of trespass, inverse some personal beneŽt from the activity. They are less condemnation or eminent domain. Courts have applied likely to accept the risk if they are not informed in four general theories to awarding diminished valuation advance, lack personal control over the risk, or derive damages related to public fears: the liberal (majority) little personal beneŽt from the exposure, such as may view, the intermediate view, the conservative (minor- be the case with installation of new power lines or EMF ity) view, and the preemption view. discovered in schools. The majority, or liberal, view holds that landowners The second factor prompting EMF action is a trig- can be compensated for decreased valuation of their gering event. That may be someone developing a seri- property due to public fears, whether that fear is rea- ous health eect such as cancer, or the announcement sonable or not. The leading majority view case, San of construction of a nearby high voltage power line. Diego Gas & Elec. Co. v. Daley,1 involved a condem- But the triggering event might have a less obvious con- nation proceeding for construction of overhead power nection with EMF, such as a business transaction to lines. The jury awarded the property owner $190,000 purchase property or their child starting in a new for the condemned property and $1,035,000 for the school. diminished value to the remaining property due to pub- Once people become concerned about EMF around lic fears from EMF. The Court of Appeals armed that a triggering event they want to take some action. This the issue before the court was not whether EMF cause may involve only investigating the issue or complain- health hazards, but whether the fear of danger from the

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@MAGNETO/MERCURY/TESTAREA/RM/REFJ/FROCADE SESS: 1 COMP: 07/25/02 PG. POS: 2 power lines aected the property's market value. Da- A one percent loss in property value could result in $1 ley was also awarded $486,066.68 in interest and in billion in damages.7 Some property valuation experts litigation expenses. Similarly, in Florida Power & have estimated the property devaluation from EMF and Light Co. v. Jennings,2 the court held that "all evidence power lines averages 20%.8 Susan Coveny, president relevant to the issue of full compensation is admissible of RE/MAX Prestige, a realty agency in Long Grove, in eminent domain proceedings. The public's 'fear' as Ill., says a home near a power line can sell for 30 to 35 a factor which may be relevant to the issue of just percent less than a comparable house at some distance compensation may be utilized as a basis for an expert's away.9 valuation opinion regardless of whether or not this fear Even without a claim of personal injury, damage is objectively reasonable." awards can be quite high. In 1996 a New Jersey jury The intermediate view is exempliŽed by Dunlap v. awarded a couple $762,524 for negligent iniction of Loup River Public Power District,3 involving construc- emotional distress, trespass, inverse condemnation and tion of an overhead power line on a farm. The Nebraska nuisance resulting from the utilities construction and Supreme Court armed the award of damages, stating operation of an underground power line outside of the that while general fears should not be compensable, if right of way. The jury unanimously rejected the plain- there is a basis in experience for the fears, and the fears tis' theory that EMF caused his leukemia.10 are reasonable and aect the price a purchaser of land Although most of the EMF litigation is Žled against is willing to pay, the loss should be compensable. those operating overhead power transmission lines, Similarly, in Willsey v. Kansas City Power & Light,4 there are other areas of growing litigation concern. the court armed a three part test for the intermediate Real estate developers could be subject to litigation by view, originally employed in Texas, ruling that "fear in disgruntled purchasers claiming failure to disclose the minds of the buying public on the date of taking is nearby power lines. And, as discussed below, residen- relevant to the proof of damages when the following tial and commercial building owners and managers can elements appear: (1) that there is a basis in reason or be subject to suit from tenants based on potentially experience for the fear; (2) that such fear enters into faulty building wiring that causes high EMF levels. the calculations of persons who deal in the buying and There are two important unrecognized aspects to selling of similar property; and (3) depreciation of mar- past EMF litigation. First, nearly all prior cases have ket value because of the existence of such fear." Nearly been Žled against a public utility, or product manufac- all recent intermediate view case law has allowed turers that are large, well funded entities where EMF diminished valuation damages for public fear of EMF are a central aspect of their products or activities. from power lines. Thus the intermediate view provides Realistically, these entities cannot settle a case claim- the same result as the liberal view for such cases. ing adverse health eects from EMF, or leave an The minority (conservative) view holds that com- adverse judgment unappealed, for fear that such action pensation for loss of value due to public fears is never would prompt a ood of additional litigation. They compensable.5 Most of the conservative view cases must provide a maximum defense against any and all were decided before the current publicity and scientiŽc such claims, even if legal and scientiŽc expert costs are studies regarding EMS, and the clear direction of quite high. If plaintis commence actions against less recent court decisions is toward the majority view. well funded companies or against entities where EMF A more recent judicial development is the Califor- are only incidental to their operations, the results may nia Supreme court decision that judicial evaluation of be quite dierent. property devaluation claims from EMS is preempted. Many large industrial facilities have substantial The Covalts owned a single-family residence in San electrical distribution equipment within their facility Clemente. They sued San Diego Gas & Electric, which that produce EMF. Commercial and residential prop- ran electric currents through power lines on adjacent erty owners are responsible for the internal electrical property. The court assumed that the Covalts could es- systems, and the EMF, within their premises. There tablish that EMF radiation substantially and unreason- are many small companies that manufacturer products, ably interfered with use of their property. However, such as electric blankets, that produce EMF. Schools, permitting such a cause of action would interfere with in particular, may Žnd it politically dicult to present the Public Utility Commission's policy on powerline an aggressive legal defense if they are charged with EMF, which would violate Public Utility Code section having high EMF levels in the classroom. If plaintis 1759. Therefore, judicial evaluation of property value begin to focus on these entities, the defendants may impacts from EMF is preempted by the utility code.6 not present as spirited and well funded a defense, or The recovery theories for property devaluation due they may settle, or they may accept adverse lower court to EMF are important because of the signiŽcant poten- rulings. This could signiŽcantly change the character tial impacts nationwide. The July 1992 issue of Sci- of the EMF case law. ence magazine concluded that "over one million homes Second, EMF litigation is profoundly dependent and 10 million acres of land in the United States are upon the character of the most recent scientiŽc studies suciently close to high-voltage transmission lines on the health eects of EMF. Even a single reputable that levels of EMF exceed what is considered normal." scientiŽc study showing that EMF are a direct cause of

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an adverse health eect could lead to an explosion in the magnetic Želd levels become highly elevated and a litigation. serious EMF threat. Stray grounding currents in the building steel, HVAC ducts, and metal conduits plus plumbing currents on the water pipes also generate Non-Litigation Conicts highly elevated levels. SigniŽcant ground currents not Litigation is not the only area with signiŽcant conicts only produce very high magnetic Želds, but are also relating to EMF. Public concerns, including concerns indicative of electrical wiring problems. from home owners, businesses, tenants and inside This problem is not unique to the industrial and contractors have changed the way we address EMF. commercial workspace. In 1994, a faculty member at Some have added EMF contingency clauses to pur- the Community College in New York City, found very high magnetic Želd levels between 35-150 mG (waist chase or lease contracts. Similar concerns are arising height) in the college Žtness center and two adjoining in the representations and warranties section of docu- areas (wrestling room and oces) located above four ments for industrial and commercial property transformers, four network protectors, and the main transactions. electrical room. A subsequent ELF EMF contour These concerns have not been lost on the insurance survey study found, at the peak spot in the Žtness industry. Most commercial general liability insurance center, the estimated worst case school-in-session oor policies cover all contingencies that are not speciŽ- levels were 850-mG.13 cally excluded. As a result, EMF claims are likely to Information on EMF levels is becoming widely be covered under the policy. That position may be available. The EMF Measurements Database is a proj- changing. Some insurers have recently expanded the ect sponsored by the U.S. Department of Energy pollution exclusions to include electric, magnetic, and through the EMF Research and Public Information electromagnetic contaminants and radiation. Some Dissemination (EMF RAPID) Program. The purpose commentators have suggested that now is the time for of the project is to make measurements of electric and insurers to act proactively, as with the Y2K problem, magnetic Želds publicly available. Its Web site, http:// and amend insurance coverage forms so as to speciŽ- www.emf-data.org/, allows the public to download a cally exclude or limit coverage on claims arising from substantial amount of information on EMF levels in a EMF exposure.11 variety of settings. Some states preclude general exclusion of EMF claims in insurance policies. The Maine Department of Reducing Risk Professional and Financial Regulation, Bureau of In- There are several steps for prudent companies to take surance has policies that preclude a general EMF to minimize exposure to adverse publicity, vexatious exclusion for Commercial General Liability and Non- litigation, and possible Žnancial awards regarding Medical Professional Liability insurance. For programs EMF. First, they should check their general liability Žled to cover risks associated with a high EMF expo- and other insurance policies for coverage. If they have sure, any exclusions must be supported by claims data. transferred property to or from others, the transactional documents or lease may have provisions that might Parties Involved In EMF Conicts shift the risk to other operations. If companies remain unsatiŽed with insurance coverage or liabilities, they Clearly the public has targeted electricity power lines should Žnd acceptable coverage before proceeding and cell phone manufacturers as likely EMF targets. with other evaluations (and give serious consideration But the available data shows that for many individuals to a "claims made" policy coverage). these sources may not be the most likely source of high If companies are satisŽed that they have appropriate EMF exposure. One frequently overlooked area of sig- coverage for any potential claims, they may wish to niŽcant potential exposure is the buildings in which investigate the nature of any EMF associated with their people live or work. location, their business activities or their product. It is very common for magnetic Želd interference There are many competent consultants that can give an problems to emerge following a building remodel or in-depth EMF report. But, businesses also can purchase upgrade, but these problems can be anticipated and simple EMF meters for under $200. Keep in mind that avoided. In one instance measurements, combined with this helps to develop information that may be subject computer projections conŽrmed that substantial levels to discovery in any future litigation. Therefore, it may -- in the tens of milligauss (mG) -- of magnetic Želds be appropriate to contact legal counsel about having would exist in tenant areas adjacent to the new facility, investigative studies conducted under the protections including the second-oor law oces. Corrective ac- of attorney-client privilege. Because small handheld tion kept actual EMF levels near typical oce levels.12 EMF meters are so inexpensive, it is not unreasonable Improper wiring can also lead to EMF problems. If to assume that employees, tenants, customers or others a four-wire three-phase circuit (service feeder/riser may measure EMF values, too. In addition to present busway) is unbalanced by more than 15% or the neutral activities, companies should keep EMF risk manage- has excessive net, ground, or plumbing currents, then ment in mind as they acquire or divest properties.

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@MAGNETO/MERCURY/TESTAREA/RM/REFJ/FROCADE SESS: 1 COMP: 07/25/02 PG. POS: 4 Investigating the EMF values of business locations, activities or products may help avoid some nasty 1 253 Cal.Rptr. 144 (Cal.Ct.App.1988). surprises. In a May 29, 2001 Complaint, in Arthur R. 2 Slater, et al. v. City of Albuquerque,14 county employ- 518 So.2d 895, 897 (Fla.1987). ees allege that they developed breast cancer because of 3 284 N.W. 742 (Neb. 1939). exposure to electromagnetic Želd radiation and toxins 4 631 P.2d 268 (1981). while working in the basement of the county courthouse. The complaint states that, "The statistical 5 See, Alabama Power Co. v. Keystone Lime Co., 67 So. probability that three men working in the same oce 833 (Ala. 1914), Central Ill. Light Co. v. Nierstheimer, 185 will get breast cancer by chance alone is less that one N.E.2d 841 (Ill. 1962), and Chesapeake & Potomac Tel. Co. in a trillion." The complaint also alleges that the county v. Red Jacket Consol. Coal & Coke Co., 121 S.E. 278 (W. was aware that EMF exposure, "has been excessively Va. Ct. App. 1924). high, at times in excess of 450 milliGaus . The industry 6 San Diego Gas & Electric Co. v. Superior Court, 13 standard for EMF strength is 3 milliGaus or less." As Cal.4th 893, 55 Cal.Rptr.2d 724, 920 P.2d 669 (Cal Sup. Ct. mentioned earlier, typical home and oce exposures Aug. 22, 1996). are about 0.01 to 0.08 µT. No one wants the adverse 7 Roy W. Krieger, On the Line, A.B.A. Journal, Jan. 1994, publicity, litigation exposure or surprise of learning at 40, note 7 at 45. their EMF levels are far above average, whether or not 8 those EMF values will cause adverse health eects. The Philadelphia Inquirer, Friday June 3, 1994, Section E, pg. 1. If a company's evaluation shows levels above aver- age, the company could consult an expert on ways to 9 Gary Stix, "Are power-line Želds a dead issue?" Scien- reduce those values. Many high EMF readings are the tiŽc American, March 1998. result of improper wiring or faulty equipment and can 10 John R. and Sandra H. Altoonian v. Atlantic City be corrected easily and inexpensively. If the problem Electric Company, No. CPM-L-1342-91; N.J Super., Cape turns out to be more complex, at least the company can May Co. make an intelligent decision on how to proceed. 11 David Thamann, "EMF Claims Could Still Overwhelm In addition to evaluating EMF levels, companies Insurers, 45 National Underwriter Property & Casualty-Risk may wish to acquire more information about EMF & BeneŽts Management Vol 103, pg. 6 November 8, 1999. exposure or to distribute appropriate information to 12 employees, tenants, or customers. Be very careful in Jon Munderloh, "Unseen, but not Unforeseeable - Tips abound on managing electro-magnetic interference" Build- any such eort. Even a properly conducted educational ings, Vol. 93, no. 3, March 1999. program intended to reduce public fears can substan- 13 tially increase the pubic fear of EMF. Eorts to reduce http://www.vitatech.net/pub6.html. public fears may only make them worse. 14 No. 2001-3644, N.M. Dist., Bernillo Co.

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