Oncor Electric Delivery and CenterPoint Energy should not face thousands of wrongful death, personal injury and property damage lawsuits stemming from Winter Storm Uri four years ago because they were following the rules and orders of Texas regulators when they decided where to implement power blackouts and for how long those electric outages should last, a lawyer for the electric transmission and distribution utilities argued Wednesday at the Texas Supreme Court.
But the attorney for the 15,000 individuals and small businesses suing Oncor, CenterPoint and other utilities told the justices that those regulations provide the utilities no sanctuary from legal liability because it was the companies — not regulators — that decided not to heed a decade of warnings to be better prepared for such a catastrophic storm and because they provided power to “favored customers” or communities over others — conduct that lawyers say led to the deaths of 246 people.
For 45 minutes Wednesday, members of the Texas Supreme Court aggressively questioned lawyers on both sides of the dispute about whether the entire litigation should be dismissed or whether it should proceed toward trial.
While the first lawsuits against the energy companies were filed before the ground had even thawed after subzero and single-degree temperatures bedeviled Texas for four days in February 2021, not a single case has been set for trial, not a single deposition has been taken and no discovery has taken place.
The lawsuits alleged that the electric utilities lied to their customers by telling them there would be rolling blackouts but that the companies made the intentional decision to keep providing power to certain preferred neighbors while leaving other communities in the dark for days, which led to severe injuries and death.
Lawyers for Oncor and CenterPoint argue that no trials should take place because the lawsuits filed by the 15,000 individuals and small businesses have no basis in law. They filed a 91a motion to dismiss the cases three years ago, but the Houston trial judge appointed by the Texas Supreme Court to hear all of the consolidated Winter Storm Uri cases ruled that the allegations of gross negligence and intentional nuisance against the companies could go to trial.
The utilities filed a mandamus petition claiming the trial judge “abused her discretion” by refusing to dismiss all the lawsuits, but the Fourteenth Court of Appeals in Houston unanimously rejected the utilities argument and ruled that the cases should proceed toward trial. Oncor and CenterPoint appealed to the Texas Supreme Court, which is expected to decide the case later this spring or early summer.
In a ruling two years ago, the state’s highest court gave the Electric Reliability Council of Texas immunity from Winter Storm Uri lawsuits declaring that the entity is a government agency.
Vinson & Elkins partner Michael Heidler, who represents Oncor and CenterPoint, told the justices that the decisions made by the utilities during Winter Storm Uri “were restrained by ERCOT protocols” and that the companies have “no common law duty” as alleged by the plaintiffs because the utilities are a highly regulated industry. He told the court the utilities were merely following the rules that the Texas Public Utility Commission implemented.
“During Winter Storm Uri, the PUC knew exactly what was happening,” Heidler said. “The PUC regulations restrained what we could do. Everything the plaintiffs complain about in their petitions is heavily regulated by the PUC.”
But some of the justices clearly struggled with that argument.
“The heavily regulated duty [defense] is out,” Justice Brett Busby responded. “What in the record shows that ERCOT’s orders prevented you from doing rolling blackouts?”
Justice Busby pointed out that the “tariffs” — the agreements that electric utilities have with their customers — state that the companies “should use reasonable duty [and] diligence to provide continuous and adequate delivery of electric power.”
Heidler said a key problem with the plaintiffs’ cases is that they “misunderstand how the ERCOT protocols work.”
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Dallas lawyer Ann Saucer, who represents the 15,000 plaintiffs, told the justices that the utilities’ defense that they should not be sued because they are a regulated industry “flies in the face” of past Texas Supreme Court decisions.
“The fact that they are regulated does not take away their common law duties,” Saucer argued. “These defendants decided who to cut power to and for how long. ERCOT did not tell them who to cut power to.”
“There is absolutely no proof in this record that anything [in the ERCOT rules] are any excuse at all,” Saucer said.
“That’s because we are only on 91a,” Busby responded, referring to the defendants’ motion to dismiss the plaintiffs’ claims as baseless.
“Yes, your honor. Yes,” Saucer responded, highlighting the fact that the defendants are asking the justices to decide such a monumental case before any witnesses have testified or any evidence has been produced. “There is no evidence to prove their arguments.”
Saucer said the evidence does show that the utilities were “consciously indifferent” to people dying. She said the companies were warned by federal officials in 2011 to be better prepared or to winterize.
“They had a decade — a decade,” she argued. “They had no plan. They had no plan. This did not need to happen. These people did not need to die.”
Justice Jane Bland and Justice Evan Young did not participate and have recused themselves from hearing the case.
The lawsuits against the electric utilities are only half of the Winter Storm Uri litigation that is pending in the Texas courts. There are also thousands of cases filed by individuals, small businesses and insurance companies against the power generators, such as Luminant. The allegations in those cases mirror many of the charges levied against the electric utilities and that litigation is also on appeal to the Texas Supreme Court.
The case is In re Oncor, No. 24-0424.