Federal judge denies Sho-Me electric cooperative's motion in dispute in landowners

By Sandra Lane | May 7, 2018

JEFFERSON CITY - The U.S. District Court for the Western District of Missouri on April 10 ended an electric power company's efforts to avoid the massive damages awarded to landowners as a result of its placing a fiber optic cable on its electric transmission easement across a class member’s land for telecommunications purposes.

Neither Sho-Me Power nor Sho-Me Tech had an easement to cross the property owned by Chase Barfield and other landowners for the purpose of installing commercial telecommunications, according to the ruling.

As stated in the court’s ruling, “While Sho-Me Power had the right to condemn property for electric transmission and even telecommunications purposes related to its electric services, it had no right to condemn property for commercial telecommunications. In fact, Missouri law prohibited it from operating a commercial telecommunications business at all.”

This dispute had been through more than one court hearing before reaching the judgment rendered on April 10. 

Judge Nanette K. Loughrey  

On March 31, 2014, the court ruled that “Defendants Sho-Me Power Electric Cooperative and Sho-Me Technologies were both liable for crossing class members’ land to operate their commercial telephone business without first obtaining commercial telecommunications easements from the landowners.”  The Court found liability based on both trespass and unjust enrichment.

As a result, the landowners elected to proceed on their unjust enrichment claim, and a jury awarded them $79,014,140. In response, the Sho-Me Defendants appealed.

On appeal, the 8th Circuit Court of Appeals reversed the U.S. District Court’s grant of summary judgment on the unjust enrichment claim but affirmed summary judgment on the trespass claim.  The 8th Circuit ordered the matter remanded, giving the landowners a right to pursue damages on their trespass claim.

At the second trial, a jury awarded damages to the plaintiffs for trespass in the amount of more than $1.2 million and awarded punitive damages in the amount of $1.3 million, according to the ruling.

Before the matter was submitted to the jury, however, the defendants filed a Rule 50(a) motion, but the court denied it. 

A Rule 50 motion preserves for appeal a challenge to the legal sufficiency of the evidence presented. Such motions test whether there is a “legally sufficient evidentiary basis for a reasonable jury to find” for the moving party. Obviously, this case didn’t pass the test.

Judge Nanette K. Laughrey, who wrote the opinion, found, “The evidence before the jury included testimony that Defendants knew that Sho-Me Power was empowered to sell electricity and related products, but not telecommunications services and that they might have had to pay more money to operate a commercial telecommunications business across Plaintiffs’ land, and they concealed that intended use from the plaintiff class members.”

She said wrote that these "facts supported the jury’s conclusion that Defendants acted with 'reckless indifference' to the Plaintiffs’ rights.”

In conclusion, she wrote, “Neither Sho-Me Power’s status as a not-for-profit rural electric cooperative nor its purported belief that the ends justified the means immunizes either Sho-Me Electric or Sho-Me Power from punitive damages.”

The defendants’ Rule 50 motion for judgment was denied in full by the judge. 

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