Lawsuits alleging a multibillion-dollar market manipulation conspiracy among natural gas companies during Winter Storm Uri will remain a part of the multidistrict litigation before a single Houston judge, a Texas panel of judges has ruled.
The five-judge panel that decides which Texas civil lawsuits should be included in statewide MDLs last week rejected a plea by lawyers representing data analytics firm CirclesX Recovery and other plaintiffs in the conspiracy cases to have their lawsuits returned to the courts where they originally filed their petitions.
Lawyers for CirclesX and plaintiffs in two other lawsuits contend that their cases, which claim that 92 of the nation’s largest energy companies conspired during the unprecedented winter storm in February to reduce natural gas supplies to artificially increase rates and thus profits, are very different from the hundreds of other wrongful death, personal injury and property damage cases currently assigned to the MDL, which accuse energy companies’ negligence to winterize to their operations.
The lawyers for the plaintiffs contended that Harris County District Judge Sylvia Matthews, who was appointed by the five-judge panel to handle the Winter Storm Uri MDL, misinterpreted the language of the court order forming the MDL and that she abused her discretion in expanding the MDL to allow cases like theirs to be combined with the other lawsuits as “tag-along cases.”
In a six-page order, the five-judge panel declined to reverse Judge Matthews decision.
“The pretrial judge was aware of and well-positioned to understand the facts and realities of the litigation,” Presiding Judge David Evans wrote for the unanimous panel. “It is clear from the reporter’s records of the two hearings that the pretrial judge considered and assed both relatedness and convenience, efficiency and justice.”
The ruling is a victory for the energy companies, which want the more than 300 cases against them related to the winter storm 33 months ago to remain consolidated before Judge Matthews.
Allan Kanner, lead lawyer for CirclesX and a partner at Kanner & Whiteley in New Orleans, said that his clients have “completely conflicting arguments and discovery needs” from the plaintiffs in the other cases and that the arguments he makes will put him in “an adversarial posture” with those he would be required to work beside.
Kanner argued that the other MDL plaintiffs “would be better off if our cases are dismissed.”
“It is going to create a mess,” he said.
A critical issue is that the new cases claim the natural gas companies conspired to withhold their product from the electric producers and providers. The problem is Judge Matthews has already dismissed claims against 60 natural gas companies from the MDL litigation because their conduct was too remote to have caused the plaintiffs’ injuries.
But none of those lawsuits contended that the natural gas companies were involved in market manipulation.
Vinson & Elkins partner Pat Mizell, who represents the energy company defendants, argued that the CirclesX cases remain in the MDL because there is “significant overlap” in all the cases and that “the purpose of the MDL will be met” by consolidating the cases for pretrial purposes.
Mizell, a former state judge, said the market manipulation cases “present multiple common issues of fact, most fundamentally what caused the gas shortage and electrical outages during Winter Storm Uri and whether plaintiffs suffered some injury or damages because of wrongful conduct of the defendants.”
The lawyers representing CirclesX Recovery also include Kanner & Whitely lawyers Conlee Whiteley, Cynthia St. Amant, Ryan Casey, Meredith Madderra and Thuy N. Le.
The lawyers in the Linda Hawk lawsuit are Jason Itkin, Cory Itkin and Michael Darling of Arnold & Itkin in Houston.
There are more than 200 lawyers identified in the MDL docket as representing the energy company defendants, but the corporate lawyers who have worked on the CirclesX and Hawk litigation include V&E partners Stacey Vu and Quentin Smith, as well as Hicks Thomas lawyers Eric Grant, Diane Bounds and Colin Watterson.
Jackson Walker partner Tré Fischer is the lead liaison counsel for the corporate defendants.
The cases are CirclesX Recovery v. BP Energy (No. 2023-08628) and Linda Hawk v. Atmos Energy (No. 2023-09167).