The Texas Supreme Court will review a Houston [14th] Court of Appeals decision allowing a mass $10 billion nuisance suit against electric transmission and distribution utilities to proceed in a Harris County multidistrict litigation court. In November TCJL filed an amicus curiae brief in in support of the utilities’ petition for writ of mandamus.
In In Re ONCOR Electric Delivery Co. LLC; ONCOR Electric Delivery Co. NTU LLC; AEP Texas Inc.; American Electric Power Co.; Centerpoint Energy Houston Electric, LLC; and Centerpoint Energy, Inc. (No. 24-0424; granted December 20,2024), thousands of plaintiffs are seeking to recover $10 billion in damages allegedly caused by the utilities’ response to ERCOT’s load-shed order that saved the power grid from collapsing during the height of Winter Storm Uri in February 2021. Initially, the plaintiffs sued several entities, including gas producers, power generators, retail electric providers, and ERCOT. By virtue of prior judicial decisions, these parties have all been dismissed from the case, leaving the utilities potentially to bear entire responsibility for complying with a mandatory regulatory order in extreme emergency conditions.
Left alone in the case, the utilities moved to dismiss plaintiffs’ claims under Rule 91a. The MDL trial court denied the motion. The Houston [14th] Court of Appeals granted in part and denied in part the utilities’ petition for writ of mandamus, reversing the trial court’s ruling on the plaintiffs’ negligence-based claims but affirming on their gross negligence and intentional nuisance theories. The effect of the court of appeals’ ruling, in our view, is to create new common-law duties—amounting to strict liability—that apply even when the utilities do exactly what the regulator tells them to do when it tells them to do it.
Our brief focused on the catastrophic effect that this litigation, if successfully prosecuted, will have on Texas businesses and consumers, who will have to foot the bill for billions of dollars in damages and attorney’s fees. It will also send a signal to businesses nationwide that the risks of doing business in Texas have dramatically increased, particularly for regulated industries that may become strictly liable for actions taken in response to regulatory mandates. We also fear that the “intentional nuisance” theory that the trial court and court of appeals approved, if it ultimately holds up, will subject all businesses to new, expansive liability without any adequate defenses.
