In 2018, the Texas Supreme Court tossed out a $416 million verdict for Chapparal Energy against Oncor Electric.
Although Oncor Electric Delivery v. Chapparal Energy involved a breach of contract dispute between the two companies, a unanimous SCOTX ruled that Chapparal should have involved state regulators — the Public Utilities Commission — as its court of first resort.
Since then, the court has been asked to explain when and how the regulatory body should be required to settle disputes that have been traditionally settled in the courts. And in three decisions issued over the past week — the latest issued on Wednesday — the court has.
But not happily.
In re CenterPoint Energy Houston Electric held 5-2 Wednesday that a “trier of fact” — not the PUC — should decide the merits of a lawsuit brought by the estate of a good Samaritan electrocuted while trying to aid victims of a motor vehicle accident.
Glenn Wood Higgins was killed from severe burns apparently sustained when he was knocked into a live power line by vibrations from electricity radiating from an underground line. His family sued CenterPoint, alleging that proper fusing of the lines would have deactivated the electrical connections and, thus, prevented his death.
CenterPoint argued to a probate court that PUC’s exclusive jurisdiction over utility rates and operations required the family to exhaust their remedies at the state regulator before pursuing the lawsuit. And when the trial court rejected CenterPoint’s claim, they pursued mandamus relief, arguing that the fusing issue was a regulatory issue.
The court said it wasn’t. By CenterPoint’s own testimony fusing is governed by industry practice not regulatory standards, the court noted. “And it is for a court — not the PUC — to decide whether the common law or statutes and regulatory actions provide the duty by which an electric utility’s tort liability must be judged.”
Justice Jeffrey Boyd, who wrote the 2018 decision in Chapparal, reluctantly concurred, citing a decision issued by the court last Friday, June 25: In re Oncor Electric Delivery Co.
In that case Oncor provided electricity to a house in Graham, Tx. owned by Stacey Taylor, as well as a house next door. Taylor says he complained to Oncor that the trees surrounding a power line that drops into the neighbor’s house posed a potential hazard. When he asked that the trees be trimmed or the line be redirected, Oncor refused, claiming that tree-trimming was his responsibility. When Taylor undertook to trim the trees himself, he was shocked by a powerline. He then sued Oncor for negligence and consumer protection claims.
As they had in the Chapparal case, Oncor argued that Taylor should have first exhausted his “administrative remedies” before the PUC and asked the trial court to abate the case until he did. Rebuffed by the trial court and the court of appeals, SCOTX agreed to hear the case.
Justice Jane Bland wrote for a 5-3 majority. Bland, who was not on the court for Chapparal v. Oncor, seemed to walk back some of the more strident implications of the 2018 decision.
For Bland and the majority, nothing about the establishment of the PUC suggests that the legislature intended to abrogate private common law tort claims, or to allow PUC regulators to be used as a procedural defense against them.
As a regulator, PUC can provide balance and fairness in setting rates or requiring adequate service, Bland argues. But in the context of a personal injury claim, not so much. Filling the commission docket with personal injury cases would not only slow down PUC’s regulatory agenda, it would also impede the progress of those private claims, particularly in those areas of the state where municipalities, not the PUC, are the front line regulators of their local utilities.
“Exclusive regulatory jurisdiction promotes uniformity, checks the utilities’ monopoly power, and harnesses the Commission’s ‘unique expertise.’ Jurisdiction over every dispute involving a utility does not serve the same ends,” Bland writes.
“The Legislature’s decision to regulate an issue is not coextensive with a wholesale disruption of the adjudication of private disputes touching on that issue,” Bland writes. “We will not impart such authority in the absence of the Legislature’s clear instruction.”
Chief Justice Nathan Hecht wrote dissenting opinions for In re CenterPoint and In re Oncor Electric. He was joined in both by Justice Jimmy Blacklock. Boyd dissented in Oncor Electric. He concurred with the conclusion in CenterPoint, but did not join the opinion — creating a plurality.
In his CenterPoint dissent, Hecht reiterated the language of the 2018 case, as well as its logic. The PUC is given exclusive jurisdiction over matters related to utility rates, service and availability. Once the PUC had used “its unique expertise to resolve issues,” the plaintiff can proceed “to establish its claim and obtain relief in the courts.”
“The plurality breaks from this precedent,” Hecht argues. “But the issue in Chapparal Energy and Oncor and the present case (CenterPoint) are the same: Must issues over which the PUC has exclusive jurisdiction be resolved by the PUC before the lawsuit can be prosecuted to a conclusion in court?”
Hecht also declared “nonsensical” the contention that those injured in the Oncor and CenterPoint cases would have no standing before the PUC. It’s the regulatory issues their situations represent — the fusing of the lines by CenterPoint and the access to power lines in Oncor — that are linked to PUC’s exclusive jurisdiction and administrative review.
In his CenterPoint concurrence, Boyd allowed that he would have voted to grant the mandamus requested by CenterPoint were it not for last week’s ruling in Oncor. He also expressed concern that the Court’s “new limitations” would produce “greater confusion and generate further litigation over the extent of the Commission’s jurisdiction.”
But precedent is precedent: “Although I disagreed with that decision, it now constitutes the Court’s binding precedent,” Boyd wrote.
In the third related case, In re Texas-New Mexico Power Company, Hecht authored the opinion for the unanimous court. The case related to flooding in a residential area near the Junemann Bayou in La Marque in the wake of Hurricane Harvey. As with the other cases, the utility sought a mandamus seeking to place the case before PUC.
The homeowners claim that wooden mats being used in the construction of a new utility substation were left loose at the site as the storm approached. Sucked into flooding waters, the mats were alleged to have clogged storm drains that could have prevented the homes from being under water.
The court agreed that the problem with the mats had nothing whatever to do with the operation of or service by the utility, presenting no issues whatever that would have been a concern for PUC.
The cases/lawyers are:
In re CenterPoint Energy Houston Electric No. 19-0777 Opinion. Concurrence. Dissent.
For CenterPoint: Macey Reasoner Stokes of Baker Botts (Houston)
For real parties in interest: J. Christopher Dean of Dean Law Firm (Houston)
In re Oncor Electric Delivery Company No. 19-0662 Opinion. Dissent.
For Oncor Electric Delivery: Robert K. Wise of Lillard Wise Szygenda (Dallas)
For real parties in interest: James Hatchitt of Howry, Breen & Herman (Austin)
In re Texas-New Mexico Power Co. 19-0656 Opinion.
For Texas-New Mexico Power: Lorin Subar, formerly of Fletcher, Farley Shipman & Salinas (Dallas)
For real parties in interest: Lawrence Tylka of Tylka Law Center (League City)