The Texas Fourteenth Court of Appeals in Houston ruled Tuesday that 20,000 plaintiffs in wrongful death, personal injury and other Winter Storm Uri-related lawsuits seeking billions of dollars in damages from Texas electric transmission and distribution utilities — the actual businesses providing power via wires connected to people’s homes — may move forward to trial.
A three-judge panel of the Houston Court of Appeals unanimously ruled that Harris County trial judge Sylvia Matthews was correct in allowing allegations of gross negligence and intentional misconduct to proceed against the TDUs, which include CenterPoint Energy, Oncor Electric Delivery and American Electric Power.
The 21-page opinion written by Fourteenth Court of Appeals Chief Justice Tracy Christopher handed the electric utilities two victories by reversing Judge Matthews and declaring that charges of common-law negligence and strict-liability nuisance are prohibited by state law.
“The TDUs were entitled to dismissal of the plaintiffs’ claims for negligence because Texas law does not impose on TDUs common-law negligence duties associated with emergency load shedding, ensuring adequate generation, or warning of anticipated power outages. The plain language of the tariff bars the TDUs’ liability for ordinary negligence,” Chief Justice Christopher wrote.
But the court wrote that the tariff, which is essentially the state-law mandated contract between the Texas customers or residents and the electric transmission and distribution companies, does allow for gross negligence and intentional misconduct.
Lawyers representing the plaintiffs described the Fourteenth Court’s decision as a huge victory for their clients.
“The companies acted in callous disregard for their own customers,” Dallas lawyer Ann Saucer of Nachawati Law Group told The Texas Lawbook. “The TDUs deliberately cut power to some neighborhoods. Their intentional decision to cut off power to specific neighborhoods for long periods of time resulted in some people paying with their lives.”
“We know these companies were warned about this kind of event and didn’t want to spend the money to be better prepared and to do the right thing,” Saucer said. “And we know the state of Texas wasn’t going to make them do the right thing.”
Vinson & Elkins partners Pat Mizell, Stacey Vu and Quentin Smith are lead counsel for the defendants.
Legal experts say the Fourteenth Court’s opinion is a partial win for both sides. The negligence and strict-liability nuisance claims are easier to prove at trial. The gross negligence and intentional misconduct claims require that the plaintiffs’ lawyers meet a higher burden of proof to win their cases in court, but those are the allegations that are likely to bring the largest damage awards against the power transmission and distribution companies.
The appeals court cited specific allegations made by plaintiffs’ lawyers that survive the gross negligence and intentional misconduct legal standard, including that the TDUs:
- decided where to cut power and whether to rotate outages;
- refused to follow any plan for load shedding and instead flipped switches without foresight or concern;
- had the power to flip switches back on after turning them off; and
- favored some neighborhoods over others.
Chief Justice Christopher wrote that Texas law “does exclude liability for damages ‘for any act or event that is beyond such party’s control and which could not be reasonably anticipated and prevented through the use of reasonable measures,’ plaintiffs’ core allegations against the TDUs complain of the manner that the TDUs executed the load shed orders.”
“Plaintiffs pleaded that this catastrophe was not caused by an act of God, but instead was caused by intentional decisions by individual defendants made both before and during Winter Storm Uri that were known to other defendants and caused multiple operational failures which combined to cause the failure of the ERCOT grid,” the chief justice wrote. “They have alleged that the TDU’s conduct, when viewed objectively from the standpoint of the TDUs, at the time of its occurrence, involved an extreme degree of risk, considering the nature of the risk and the probability and magnitude of potential harm to others, of which the TDUs had actual, subjective awareness but nevertheless proceeded with conscious indifference to the rights, safety, and welfare of others. These are essential allegations to support a gross negligence claim.”
Both sides have 15 days to file a notice of appeal to either the full court of the Fourteenth Court of Appeals or to the Supreme Court of Texas.
The Fourteenth Court’s decision does not reference a ruling by its sister court in Houston, the First Court of Appeals, which took an exactly opposite view in December 2023 in a case involving the Winter Storm Uri lawsuits against the power generators.
In that decision, a three-justice panel of the First Court of Appeals in Houston ruled that “Texas does not currently recognize a legal duty owed by wholesale power generators to retail customers to provide continuous electricity to the electric grid, and ultimately to the retail customers, under the allegations pleaded here by the retail customers.”
When Winter Storm Uri hit on Feb. 14, 2021, it brought record-setting, near-zero-degree temperatures and freezing rain to Texas. Power outages occurred throughout the state that left more than nine million people without electricity. About 130 deaths are attributed to Winter Storm Uri.
The case is In Re Oncor Electric Delivery, No. 14-23-00095-CV.