The massive legal battle pitting thousands of Texas residents and small business owners against hundreds of energy companies, such as NRG Power, Calpine, Oncor Electric and ExxonMobil, over damages incurred during Winter Storm Uri two years ago is finally heating up.
This week’s two-year anniversary of the crippling winter storm, which brought record-low temperatures and freezing precipitation to Texas over four days resulting in a loss of electricity to tens of millions of residents and businesses, also means that the statute of limitations for filing most Winter Storm Uri-related lawsuits also takes effect this week.
The result is that lawyers representing more than 1,500 Texans and businesses have filed more than 80 new wrongful death, personal injury and property damage lawsuits against more than 360 energy companies, insurance companies and the Electric Reliability Council of Texas since last Thursday. Dozens more lawsuits are expected to be filed in Texas courts Wednesday and Thursday.
The newly filed lawsuits will be combined with the 230 cases already lodged in 20 counties across Texas. Those cases, which include more than 1,500 individuals and businesses, have been consolidated into one multidistrict litigation docket in Harris County for the purpose of case management. The plaintiffs seek billions of dollars in damages.
“Lawyers are hurrying this week to get the cases filed before the deadline, and I expect that in the neighborhood of a few thousand new personal injury and property damage cases will be filed this week,” said Gregory Cox, a partner in Houston’s Mostyn Law Firm, which represents hundreds of individuals in the litigation against the energy companies.
No trial dates have even been discussed, and lawyers for the energy companies are asking that the cases be dismissed arguing that allowing them to move forward would be “ruinous” to the industry.
“These are highly complex cases, and they often take a long time to get to resolution,” said Houston trial lawyer Eric Rhine, who represents scores of individuals in the litigation. “But these cases are moving forward.”
But those individual cases represent just a slice of the legal disputes involving Texas energy companies. A couple dozen power companies have sued ERCOT and the Texas Public Utility Commission challenging the two entities’ decision to increase the price of electricity by 650 percent to $9,000 per megawatt-hour. A decision is expected any day.
Two other cases are pending before the Texas Supreme Court challenging ERCOT’s contention of immunity from civil lawsuits. A decision is expected later this spring.
And three energy companies – Brazos Electric Coop, Just Energy and Griddy – filed for corporate bankruptcy and restructuring. (Editor’s note: The Lawbook earlier wrongly reported that San Antonio utility CPS Energy had filed for bankruptcy, but it did not. The Lawbook apologizes for this error.)
“This litigation is massive, unlike anything we have ever experienced in Texas,” CenterPoint Energy Executive Vice President Jason Ryan told The Texas Lawbook in a recent interview. CenterPoint is one of the companies being sued.
“What happened during those four to five days in February 2021 was the largest transfer of wealth in Texas energy history,” Ryan said. “The legal issues surrounding Winter Storm Uri are incredibly complex. Billions and billions of dollars are at stake.”
But the action the past two weeks have focused on the individual cases in the MDL litigation before Harris County District Judge Sylvia Matthews, who was appointed by the Texas Supreme Court to oversee the personal injury, wrongful death and property damage cases. Last year, she selected five of the lawsuits to be bellwether or test cases to move forward.
Two weeks ago, Judge Matthews issued an order dismissing all allegations in the individual lawsuits against more than a few dozen natural gas companies, including Anadarko, Apache, Energy Transfer and Kinder Morgan, adopting the legal arguments of those companies that their actions were “too remote to have caused the damages” to the injured individuals.
The power generators and power distributors – combined they account for more than 240 of the corporate defendants – would have to stand trial, Judge Matthews ruled.
Last week, scores of those Texas electric companies filed a mandamus petition – an emergency appeal – asking a Houston appeals court Friday to dismiss all the cases against them because the claims are without legal merit, would “upend the state’s electricity markets” and would “allow for ‘ruinous’ liability for entities that don’t contract with or deliver electricity to consumers.”
In two separate mandamus petitions, the power companies told the Fourteenth Court of Appeals in Houston that Judge Matthews “clearly abused [her] discretion in allowing the cases to proceed.”
“This litigation is as unprecedented as the 2021 winter storm that spawned it,” lawyers for the power generators, such as Dallas-based Luminant and Houston-headquartered NRG, argued in legal documents filed last week. “The stakes are exceedingly high. If permitted to proceed, this litigation will upend the state’s electricity markets, stretch Texas negligence and nuisance law beyond recognition, and make the state a national outlier.”
Lawyers for Gibson, Dunn & Crutcher and Baker Botts, who represent the power generators, say discovery in the multidistrict litigation will “likely take years to complete, will involve millions of pages of document production and require the depositions of hundreds of plaintiffs, defendants and third parties.”
Lawyers for Vinson & Elkins, who represent electric distribution and transmission utilities such as Oncor and American Electric Power, argue that their clients’ actions were “not a proximate cause of plaintiffs’ injuries.”
“Those injuries were caused by severely cold weather and the consequences thereof. They were not proximately caused by the absence of electric service,” the power companies told the Houston court of appeals last week.
Lawyers for the energy companies also argue that the cases should be dismissed because thousands of plaintiffs suing hundreds of companies means the litigation “will be plagued by complex issues of administrability and due process concerns at every step.”
“The sheer number of parties creates massive administrability problems,” Houston lawyers for Vinson & Elkins and Shipley Snell wrote to the Houston Court of Appeals. “Indeed, two years into the MDL, proceedings remain largely stalled by the threshold need to serve thousands of parties.”
Former Texas federal judge Royal Furgeson said he would “be stunned” if the Houston appeals court dismisses the cases against the power producers.
“This is a gigantic case with incredible importance to the people of Texas,” said Furgeson, who is the former dean of the University of North Texas College of Law. “The appeals court knows Judge Matthews has an impeccable reputation and are likely to give her wide discretion at this point in the litigation. They know Judge Matthews has a tiger by the tail in this litigation.”
The V&E lawyers representing Oncor and the power transmission and distribution utilities include Houston partners Patrick Mizell, Stacey Vu, Quentin Smith and John Wander. Shipley, Snell & Montgomery lawyers Amy Snell, Joel Montgomery, Brooksie Bonvillain Boutet and Christy M. Ho are advising CenterPoint.
Leading the litigation for the power generators Vista and Luminant are Gibson Dunn attorneys Allyson Ho, Michael Raiff, Elizabeth Kiernan and Stephen Hammer. Baker Botts lawyers Macey Reasoner Stokes, John Anaipakos, George Fibbe and J. Mark Little represent NRG and Calpine.