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Thelen Reid Brown Raysman & Steiner LLP
INTRODUCTION
Every state has a One-Call damage-prevention statute governing the activities of excavators and utilities. Although the statutes share common elements, no two are identical. One-Call laws also are complex, creating potential pitfalls for those covered by them. For example, some states require participation by every utility while others do not, resulting in additional burdens on excavators. Some states have imposed affirmative duties on designers, owners and construction professionals in addition to those imposed on excavators. The One-Call statutes require every person covered by them to know the law. The following article will discuss the liability and damage exposure arising from One-Call statutes.
UTILITY NON-COMPLIANCE
Once an excavator contacts the One-Call center with authority over a project and, in some states, non-participating utilities, the utilities must respond within the time frame set by the controlling One-Call statute and mark their facilities. But, utilities do not always respond within the statutorily prescribed time. This is a common and costly problem for excavators, who then must determine whether to proceed with excavation. Some state laws address this issue.
In the most restrictive states, One-Call statutes are worded so that an excavator may not proceed until every utility has marked its underground facilities, regardless of how many notifications have been given. The Alaska statute is a good example: "An excavator may not begin to excavate until each underground facility has been field marked." 1/ Other states specify that only one re-notification is required. Some states allow excavation after the first failure to respond. 2/
Excavators can face liability even when they are given permission to begin after a utility fails to respond. The Kansas statute, for example, expressly leaves open the issue of property damage and personal injury when the excavator proceeds without full utility compliance. 3/ Maine law, on the other hand, provides:
If an excavator complies... and if information... is not provided within the time specified or if the information provided fails to identify the location of the underground facilities. then an excavator damaging or injuring underground facilities is not liable for any damage or injury caused by the excavation, except on proof of negligence. 4/
Many states require re-notification as soon as an unmarked utility is discovered. Arizona law provides that "an excavator shall notify either the underground facility operator or an organization designated by the underground facilities operator if the excavator encounters an underground facility that has not been located and marked or has been marked in the wrong location." 5/ A case arising under the Arizona law illustrates the danger of unmarked facilities and the potential consequences of not following One-Call procedures exactly. 6/
That case involved violations of the One-Call statute by both the utility and the excavator. The excavator called, as required, but one utility did not locate and mark an electrical line that it owned. When the excavator discovered the line, he tried to determine who owned it but did not re-notify the One-Call center as statutorily required. After contacting the utilities he thought might own it, the excavator determined that it was an abandoned water line. It wasn't. It was a live electrical line, and both the excavator and another contractor were injured. The Arizona Supreme Court concluded that both the excavator and the owner were liable for the proportion of damage that each caused. 7/
Every state requires a certain degree of precision when utilities mark their underground facilities. This is reflected in safety/tolerance zone requirements and in the special excavation procedures prescribed by many One-Call statutes. Statutory language addressing precision often will determine liability when utility damage occurs near utility markings, for example when utility marking standards are approximate and not exact.
In New Mexico, utilities must "locate and mark on the surface the actual horizontal location, within twelve inches." 8/ This is a very exact standard, and one that could result in utility liability if the utility makes a mistake. Ohio, on the other hand, employs a more general standard:
If the utility cannot accurately mark the approximate location, the utility shall mark the approximate location to the best of its ability, notify the excavator that the markings may not be accurate, and provide additional guidance to the excavator in locating the facilities as needed during excavation. 9/
More lenient standards, like the Ohio statute, work in favor of utilities when accidents occur. Thus, a jury found in favor of a utility even though an excavator was harmed after striking an electric line more than 5 feet from where the utility had marked it. 10/ The Ohio Court of Appeals affirmed, holding that the utility had used the appropriate technology and methodology and experienced personnel in attempting to locate its electric lines. The utility simply could not locate them because of interference from nearby telephone and cable lines, the court held. Accordingly, under Ohio law, a trier of fact could determine that the utility was not liable for harm to the excavator.
Many states also describe the special care required when excavators are working within safety zones. Nevada, for example, requires that the person responsible for excavation must, "prior to using any mechanical equipment, determine the exact location of the subsurface installation. with hand tools or by any other method agreed upon.." 11/ Non-compliance with such requirements likely will result in liability.
Several cases illustrate the reach of safety zone rules. A utility attempted to locate its underground facilities and eventually determined the approximate location of its 6-inch pipe. The excavator was unable to find a 6-inch pipe after carefully digging in the marked area. It did, however, locate a 3-inch pipe and, in the presence of the utility's personnel, concluded that this was the pipe at issue. Subsequent use of mechanized excavation equipment resulted in significant damage to the 6-inch pipe, which, it turned out, was a foot below the 3-inch pipe. Although most of the damage occurred outside the safety zone, the "start of the damage to the 6-inch pipe began less than 18 inches from [the utility's] mark" and, accordingly, the excavator was held liable for all damage. 12/
In another case, the telephone utility provided the approximate location of its cable by noting the horizontal location on the east and west sides of a street. Because the excavator then "proceeded full-steam ahead without knowing the precise location of its bore, nor the exact location of the cable," it was "irrelevant that defendant [excavator] crossed the cable in the northbound lane. when it anticipated crossing it closer to the curb on the west side of the street." 13/
Even the most up-to-date technology can result in mistakes. While some states now impose recording and technology requirements on underground utilities placed after certain dates, excavators still must use the utmost care when their work could damage underground utilities. 14/
PRESERVATION OF MARKS
Excavators are responsible for preserving underground facility designations. To aid excavators in preserving these marks, some states impose criminal or civil penalties for intentional removal or destruction.
When marks fade or are destroyed, excavators must re-notify their One-Call center and request remarking. Some statutes provide incentives for such re-notification. In Massachusetts, excavators are "responsible for maintaining the designation markings" but can shift that liability back to the utility by "request[ing] remarking at a location due. to the obliteration, destruction or other removal of such markings." 15/
NOTICE
Parties must carefully observe all of the applicable state's notification periods because even small deviations can shift liability.
Every state sets a time frame within which excavators must notify One-Call centers and utilities. Compliance involves careful scheduling by excavators.
For example, Florida provides that tickets must be requested "Not less than 2 nor more than 5 full business days before beginning any excavation or demolition." 16/ Failure to comply results in excavator liability. A Florida excavator made two mistakes: It gave the wrong address to the one-call notification center and did not begin excavation until 10 days after giving notice. 17/ Because "the time frame provided by the [One Call statute] serves valid policy considerations," the excavator was held liable for all damage. Similarly, the Nebraska Supreme Court found an excavator strictly liable for damage to utilities when "[t]he only notice given by [the excavator] occurred in May 1997, more than 10 business days before [the excavator] commenced the April 1999 excavation during which it struck and damaged [the utilities]." 18/
Not only can excavators be liable when they wait too long to begin excavation, they can be held liable for utility errors when excavation starts too soon. Unless the applicable statute provides otherwise, excavators should beware of beginning excavation until the utility response time has expired. This is true even if every utility has consented to excavation. One excavator was fined $1,000 after damaging an underground facility because it failed to wait the full 48-hour notice period - even though the contractor had received authorization from all utilities just before excavation. 19/
While typical notification periods range from 2 to 10 days, significant deviations exist in some states.
Under some statutes, utility marks expire after a specified number of days, usually in the range of 10 to 30 days. Re-notification usually is required a specified number of days before expiration. Failure to re-notify constitutes noncompliance, and excavators are liable for any damage caused after expiration. These expiration periods apply even when the marks are well-preserved and when excavation is ongoing.
In states without expiration dates, utility markings generally remain in force as long as they are visible. In Ohio, for example:
It is not necessary to update tickets unless markings are no longer visible and you need remarking. Ticket numbers are good until remarkings are needed and if the crew has started within ten days and has not left the site. 20/
Thus, a utility in Ohio was found liable for an excavator's damage to a gas line even though the damage occurred more than three months after the initial markings were made. 21/ Liability was premised on the fact that "the flags indicated the gas line continued in a straight path, [but] there were actually curves in the line that were not marked. [and] the pipe was struck in an area where there was a curvature" and that despite the passage of time, "no evidence was presented suggesting either that the markings were destroyed or removed prior to excavation or that appellee failed to preserve them."
EMERGENCY EXCAVATION PROCEDURES
Many states shorten the required notice period when an emergency excavation procedure is required. But, excavators proceeding before the normal notice period runs often do so at their own risk.
In West Virginia, "compliance with. notification requirements. is not required of any person engaging in excavation or demolition in the event of an emergency." 22/ Moreover, excavation may begin immediately, provided reasonable precautions are taken. But, "such precautions may not serve to relieve the excavator from liability for damage to underground facilities." 23/ Under this type of statute, proceeding on shortened notice excuses noncompliance for penalty purposes but costs excavators the standard One-Call liability protections.
Other states are less clear on the issue of liability. Kentucky, for instance, provides that "Compliance. shall not be required of authorized persons responding to emergency situations. However, these persons shall take every reasonable precaution to protect the public safety and underground facilities of others." 24/
DUTY TO REPORT DAMAGE
Excavators must immediately report any damage to utilities. Under federal law, failure to report damage to a pipeline can result in steep fines and jail time:
A person shall be fined under title 18, imprisoned for not more than 5 years, or both, if the person-- (1) knowingly and willfully engages in an excavation activity-- (A) without first using an available one-call notification system to establish the location of underground facilities in the excavation area; or (B) without paying attention to appropriate location information or markings the operator of a pipeline facility establishes; and (2) subsequently damages-- (A) a pipeline facility that results in death, serious bodily harm, or actual damage to property of more than $50,000; (B) a pipeline facility, and knows or has reason to know of the damage, but does not report the damage promptly to the operator of the pipeline facility and to other appropriate authorities; or (C) a hazardous liquid pipeline facility that results in the release of more than 50 barrels of product. 25/
Some state One-Call statutes also make it a crime to damage an underground utility and not immediately report such damage.
Damage can be interpreted broadly under One-Call statutes. A typical definition is "any impact or contact with an underground facility, its appurtenances or its protective coating, or any weakening of the support for the facility or protective housing which requires repair." 26/ Some states also have established specific procedures in the event of damage, such as backfilling or refraining from backfilling, ceasing excavation altogether or contacting emergency personnel. It is advisable to ascertain the applicable procedure before excavation begins because non-compliance can affect excavator liability.
STATUTORILY IMPOSED LIABILITY
Many statutes limit or impose liability, depending on compliance with One-Call procedures. In Kansas, for example, the One-Call statute imposes a rebuttable presumption of negligence on any violator in civil actions for "personal injury, death or other damages." 27/
| A. | Failure to Comply as a Utility |
In general, utilities that fail to respond in compliance with One-Call statutes cannot collect damages from excavators who damage their facilities. Some statutes address only facility damage, such as New Mexico's, which provides: "the person engaging in excavation shall have no liability for the damage to [a] facility" when the damage "is caused by the failure of the owner or operator to correctly locate that. facility." 28/ Broader statutes, such as Colorado's, address liability for all resulting damages:
[I]f any underground facility is damaged as a result of the owner or operator's failure to [participate] or failure to use reasonable care in the marking of the damaged underground facility, such owner or operator shall be presumably liable for:. Any injury or damage to persons or property resulting from the damage to the underground facility. Any such owner or operator shall also indemnify and defend the affected excavator against any and all claims or action, if any, for personal injury, death, property damage, or service interruption.." 29/
Colorado's broad One-Call statute also imposes liability on utilities for excavators' damages resulting from "any delay in the excavation project while the underground facility is restored. with reasonable costs and expenses of suit, including attorney's fees." 30/
| B. | Failure to Comply as an Excavator |
Many statutes make non-compliance prima facie evidence of negligence. Maine law, for instance, provides: "An excavation that is made without the excavator providing any or all of the notices required by this section that results in any damage to an underground facility or facilities is prima facie evidence in any civil or administrative proceeding that the damage was caused by the negligence of the excavator." 31/
Damaged utilities will hold a strong hand when seeking to recover the cost of repairs if an excavator fails to comply with notice requirements. Liability may be established by non-compliance alone. 32/ When loss-of-use damages are not precluded by legal rules, excavators could be liable not only for damage to the utility but also for lost revenues, loss of use, uncovered overhead and consequential damages.
| C. | When Both Parties Comply, But Damage Occurs Anyway |
Sometimes underground facilities are damaged despite the best efforts of both parties. In these cases, One-Call statutes may determine liability. An Illinois utility recovered its costs of repair and lost gas when both parties had complied with the One-Call statute. 33/ The U.S. District Court for the Southern District of Illinois applied a strict liability standard based on the Illinois statute, which provides:
Every person who, while engaging in excavation or demolition, has provided notice to the owners or operators of the underground utility. in and near the excavation or demolition. but otherwise, while acting reasonably, damages any underground utility. shall not be subject to a penalty, but shall be liable for the damage caused to the owners or operators of the facility provided that the underground utility facility. is properly marked. 34/
Because the utility had accurately and properly marked its gas lines, the excavator was liable. In other states, liability will depend upon the applicable statute.
TORT LAW CLAIMS
Excavators that encounter unexpected underground utilities may suffer harm in addition to physical damage. This includes project delays, the cost of stand-by labor and equipment, and liquidated damages. Excavators may be able to recover for such damages outside the penalty provisions of a One-Call statute.
An Illinois utility was notified of planned excavation but failed to identify its lines in a timely manner, as required by the One-Call statute. 35/ The excavator sued for damages caused by the resulting delay to the entire project. The utility argued that the suit was barred by Illinois' economic loss rule, But, the Illinois Court of Appeals disagreed, holding that an excavator can recover economic losses, including delay damages, when a utility fails to properly locate its facilities. The court applied the exception to the economic loss rule for negligent provision of information by one in the business of providing information.
In another Illinois case, a utility prevailed against an excavator despite the economic loss rule. 36/ There, the U.S. District Court for the Northern District of Illinois determined that a utility's claim was not barred by the economic loss rule after an excavator failed to provide the required notice of excavation. "Given Big John's alleged failure to notify the JULIE system of its excavation and to take the regulatory steps required by both Illinois and the federal government to help reduce dangers associated with excavation, we find that MCI sufficiently alleges a sudden or dangerous occurrence" so as to qualify for an exception to the economic loss rule.
Conversely, compliance with One-Call statutes can protect parties against common law remedies. A Florida District Court of Appeal noted that "[a]t common law, there was no duty to mark the underground utilities. [and] common law is in effect only to the extent it is not modified or superceded by statute." 37/ Accordingly, "[t]o allow plaintiff to pursue a negligence claim outside the statute would render the statute meaningless." Thus, an excavator was unable to pursue a negligence claim when the utility complied with all of its statutory obligations.
Similarly, when an unmarked utility line is damaged, the excavator probably will not be liable - if it satisfied its notification duties. For example, Alaska Statutes §42.30.410 (h) provides: "An excavator may not be held liable for inadvertent damage caused to an unmarked or an inaccurately marked underground facility."
CRIMINAL AND CIVIL PENALTIES
At least 40 states expressly provide for penalties and fines ranging from $200 to $5,000 for non-compliance with One-Call statutes.
Some states even impose criminal penalties for non-compliance. In New Jersey, for example, excavators who knowingly fail to comply with the One-Call Statute are "guilty of a disorderly offense." When serious damage results, they can be charged with "a crime of the third degree." 38/
Many states determine the penalty amount on a case-by-case basis. Colorado's statute, for example, provides that "[i]n determining liability for or the amount of any damages or civil penalty pursuant to this article, a court or arbitrator shall consider the nature, circumstances, and gravity of the alleged violation and the alleged violator's degree of culpability, history of prior violations, and level of cooperation with the requirements of this article." 39/
Some states restrict enforcement to the attorney general and prosecuting attorneys. Others allow for private party enforcement but do not allow for private-party recovery of the civil penalties. In New Jersey, "All civil penalties recovered pursuant to this act shall be paid into the general fund." 40/
Other states allow for private enforcement and recovery. Under Maine Title 23, §3360-A(12), a utility may request a cease and desist order under certain circumstances. If the utility prevails, it "is entitled to an award of costs in bringing the action, including reasonable attorney's fees." In Colorado, "[a]n action to recover a civil penalty. may be brought by an owner or operator, excavator, aggrieved party, district attorney, or the attorney general," and "[a]ny civil penalty imposed pursuant to this section, including reasonable attorney's fees, shall be paid to the prevailing party." 41/
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ENDNOTES
(All citations to state statutes are as of 2005. All web citations were last visited on November 10, 2005.)
| 1/ | Alaska Statutes §42.30.410 (f).
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| 2/ | See, Minnesota Equal Access Network Services v. Burlington Northern & Santa Fe Railroad Co., 2002 WL 32360835 (Minn. Jan. 25, 2002) [utility could not recover for damages when it failed to mark its utilities in compliance with One-Call law].
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| 3/ | Kansas Statutes Annotated §66-1806.
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| 4/ | Maine Revised Statutes Annotated Title 23, §3360-A (6).
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| 5/ | Arizona Revised Statutes Annotated §40-360.23 (B).
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| 6/ | Gunnell v. Arizona Public Service Company, 202 Ariz. 388 (2002).
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| 7/ | Id.
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| 8/ | New Mexico Statutes Annotated §62-14-5 (A) [emphasis added].
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| 9/ | Ohio Revised Code Annotated §3781.29 (A) (1).
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| 10/ | Bede v. Dayton Power & Light Co., 2002 WL 1000400 (Ohio App. May 17, 2002).
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| 11/ | Nevada Revised Statutes §455.137 (1).
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| 12/ | Ohio Gas Co. v. Blaze Building Corp., 2004 WL 1232037, at *4 (Ohio App. June 4, 2004).
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| 13/ | MCI Worldcom Network Services, Inc. v. Atlas Excavating, 2005 WL 1300766 (N.D. Ill. Feb. 23, 2005).
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| 14/ | See, Arizona Revised Statutes Annotated §40-360.22 (J).
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| 15/ | Massachusetts General Laws Annotated Chapter 82, §40C [once re-marking is requested, the responsible utility "shall then remark such location within 24 hours following receipt of such request"].
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| 16/ | Florida Statutes Annotated §556.105 (1) (A).
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| 17/ | Martin v. Florida Power and Light Co., 909 So.2d 555, 557 (Fla.App. 2005).
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| 18/ | Galaxy Telecom, L.L.C. v. J.P. Theisen & Sons, Inc., 265 Neb. 270, 275 (2003).
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| 19/ | Green Mountain Power Corp. v. Sprint Communications, 779 A.2d 687 (Vt. 2001).
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| 20/ | Frequently Asked Questions, available at www.oups.org/.
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| 21/ | Ohio Natural Gas Corp. v. Stout Excavating, Inc., 156 Ohio App. 3d 144 (2004).
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| 22/ | West Virginia Code §24C-1-7 [oral notification must be given "as soon as reasonably practicable"].
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| 23/ | Id. [emphasis added].
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| 24/ | Kentucky Revised Statutes Annotated §367.4907.
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| 25/ | 49 USC §60123.
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| 26/ | Kansas Statutes Annotated §66-1802 (a).
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| 27/ | Kansas Statutes Annotated §66-1811 (a).
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| 28/ | New Mexico Statutes §62-14-6 (C) [emphasis added].
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| 29/ | Colorado Revised Statutes Annotated §9-1.5-104.5 (1) (d).
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| 30/ | Colorado Revised Statutes Annotated §9-1.5-104.5 (1) (d) (I).
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| 31/ | Maine Revised Statutes Annotated Title 23, §3360-A (6-B) [emphasis added]. See also, New Jersey Statutes Annotated §48:2-89: "Evidence that an excavation or demolition that results in any damage to an underground facility was performed without providing the notice pursuant to section 10 of this act shall be prima facie evidence in any civil or administrative proceeding that the damage was caused by the person engaged in the excavation or demolition."
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| 32/ | See, Southwestern Bell Telephone Co. v. Harris Co. of Fort Smith, 353 Ark. 487, 490 (2003).
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| 33/ | Centerpoint Energy-Mississippi River Transmission Corp. v. Stein Steel Mill Services, Inc., 2005 WL 2089215 (S.D.Ill. Aug. 25, 2005).
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| 34/ | Id. at *2, quoting 220 Illinois Revised Statutes Chapter 50, ¶11 (c). See also, MCI Worldcom Network Services, Inc. v. Atlas Excavating, 2005 WL 1300766, *8 (S.D.Ill Feb. 23, 2005) [referring to claim for "strict statutory liability," court held that "Plaintiff is thus correct that an excavator is responsible for damages even if it acted reasonably"].
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| 35/ | Illinois Bell Telephone Company v. Plote, Inc., 334 Ill.App.3d 796 (2002).
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| 36/ | MCI Worldcom Network Services v. Big John's Sewer Contractors, Inc., 2003 WL 22532804, *3 (N.D.Ill. Nov. 7, 2003).
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| 37/ | Martin v. Florida Power and Light Co., 909 So.2d 555, 557 (Fla.App. 2005) at 558.
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| 38/ | New Jersey Statutes Annotated §48:2-87.
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| 39/ | Colorado Revised Statutes Annotated §9-1.5-104.5 (5).
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| 40/ | New Jersey Statutes Annotated §48:2-90.
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| 41/ | Colorado Revised Statutes Annotated §9-1.5-104.5 (3). |
©2006 Thelen Reid Brown Raysman & Steiner LLP
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