Texas Freeze Litigation - Q2 2024 Update
Texas Freeze Litigation - Q1 2024 Update
Update 01/15/24
Update 10/11/23
Update 04/28/23
Update 11/16/22
This hearings on the Defendants’ Motions that challenge their being included in the case are set for hearing in the middle of October. These non-case specific Motions were filed in 5 cases that are supposed to be representative by the defendant categories of Power Generators, Natural Gas Companies, Transmission and Distribution Utilities, and Retail Electric Providers. If the MDL Judge rules against any of these categories of Defendants, they then have an immediate, automatic right of appeal. If the Judge rules against our clients, their claims against those prevailing Defendants are dismissed with a right of appeal, as well. The fact that the defendants not only have the right to file these Motions and have an immediate right to appeal the denial of their Motion is indicative of the Texas Supreme Court's favoring corporate defendants over consumers and harmed individuals in litigation.
These Motions are based on Rule 91a of the Texas Rules of Civil Procedure and address issues of governmental immunity, jurisdiction of the MDL Court over the matter of these entities who are members of ERCOT and regulated by the Texas Utility Commission, to name a few. This Rule was created by the Republican Texas Supreme Court to provide corporate defendants with a way to seek dismissal of lawsuits prior to any discovery of facts in the case, basing dismissal on the absence of a basis for the case in either law or fact. Rule 91a simply gives the defendants an opportunity to have cases dismissed before any work is done on the case to “discover” the facts and obtain documents from these defendants.
A claim or cause of action has no basis in law if the allegations, taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to the relief sought. A claim has no basis in fact if no reasonable person could believe the facts pleaded. We believe, of course, that our clients’ claims resulting from this devastating winter storm (Uri) have a basis in both law and fact or we would never have gotten involved in this litigation. The questions is and that remains to be seen is whether the MDL Judge agrees with us.
We will keep you posted on the outcome of these Motions, again, valuable time is being wasted in this litigation by these dispositive Motions that may well have a negative impact on the litigation.
These Motions are based on Rule 91a of the Texas Rules of Civil Procedure and address issues of governmental immunity, jurisdiction of the MDL Court over the matter of these entities who are members of ERCOT and regulated by the Texas Utility Commission, to name a few. This Rule was created by the Republican Texas Supreme Court to provide corporate defendants with a way to seek dismissal of lawsuits prior to any discovery of facts in the case, basing dismissal on the absence of a basis for the case in either law or fact. Rule 91a simply gives the defendants an opportunity to have cases dismissed before any work is done on the case to “discover” the facts and obtain documents from these defendants.
A claim or cause of action has no basis in law if the allegations, taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to the relief sought. A claim has no basis in fact if no reasonable person could believe the facts pleaded. We believe, of course, that our clients’ claims resulting from this devastating winter storm (Uri) have a basis in both law and fact or we would never have gotten involved in this litigation. The questions is and that remains to be seen is whether the MDL Judge agrees with us.
We will keep you posted on the outcome of these Motions, again, valuable time is being wasted in this litigation by these dispositive Motions that may well have a negative impact on the litigation.
Update 09/28/22
Q3 2022 Update
This litigation is moving forward with the scheduled Motions filed by the Defendants to challenge their being included in the case. These non-case specific Motions were filed in 5 cases that are supposed to be representative by the defendant categories of Power Generators, Natural Gas Companies, Transmission and Distribution Utilities, and Retail Electric Providers. These Motions seek dismissal of cases who have sued these category defendants based on Rule 91a of the Texas Rules of Civil Procedure and address issues of governmental immunity, jurisdiction of the MDL Court over the matter of these entities who are members of ERCOT and regulated by the Texas Utility Commission, to name a few. Texas Supreme Court created Texas Rule of Civil Procedure 91a, which permitted trial courts to dismiss actions that have no basis in either law or fact. A claim or cause of action has no basis in law if the allegations, taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to the relief sought. A claim has no basis in fact if no reasonable person could believe the facts pleaded. We believe, of course, that our clients’ claims resulting from this devastating winter storm (Uri) have a basis in both law or fact. These Motions were filed on May 18, 2022 and we have 30 days to respond, after which Defendants will have another 30 days to respond to our responses. If the MDL Judge rules against any of these categories of Defendants, they then have an immediate, automatic right of appeal.
Rule 91a simply gives the defendants an opportunity to have cases dismissed before any work is done on the case to “discover” the facts and obtain documents from these defendants. The fact that the defendants not only have the right to file these Motions and have an immediate right to appeal the denial of their Motion is indicative of the Texas Supreme Court's favoring corporate defendants over consumers and harmed individuals in litigation.
We will keep you posted on the outcome of these Motions, again, that will take up to 6 months of precious, wasted time in this litigation.
Rule 91a simply gives the defendants an opportunity to have cases dismissed before any work is done on the case to “discover” the facts and obtain documents from these defendants. The fact that the defendants not only have the right to file these Motions and have an immediate right to appeal the denial of their Motion is indicative of the Texas Supreme Court's favoring corporate defendants over consumers and harmed individuals in litigation.
We will keep you posted on the outcome of these Motions, again, that will take up to 6 months of precious, wasted time in this litigation.
Q1 2022 Update
The State MDL Judge Sylvia Matthews entered her first Case Management Order on December 15, 2021. The freeze occurred 11 months ago, the first lawsuits Brent Coon & Associates and its Joint Venture Partner filed were on March 1, 2021, and the Texas Supreme Court’s Multidistrict Litigation Panel consolidated and assigned this case to the Honorable Sylvia Matthews in Houston Texas on July 7, 2021. Over the past six months, Judge Matthews has held hearings and meetings with the parties over many procedural issues.
This is a complicated piece of litigation. The 300 entities in Brent Coon & Associates’ lawsuits make up 4 distinct categories:
The Electric Reliability Council of Texas (“ERCOT”) was not made a party to our cases because of concerns about its exempt status. It is an independent system operator that manages approximately 90 percent of the State of Texas’s electric load and the flow of electric power to 23 million Texas consumers.
These Defendants, called Power Generators, simply failed to weatherize their facilities and equipment to be prepared for this storm. But this was not the first winter storm where the power grid went down. There were also cold weather events that were disruptive to the power grid in 2003, 2006, and 2014, and it went down in 2011, and previously in 1989. In December 1989, a cold weather event descended on Texas for three days, increasing electricity demands beyond seasonal averages, but below peak levels and total system capacity. After investigating the ERCOT power grid in the wake of the cold weather event of 1989, the Public Utilities Commission of Texas made five recommendations to these companies, which included weatherizing by maintaining insulation integrity and heat tracing systems in proper working order.
During the February 2011 winter storm event, Federal Energy Regulatory Commission (“FERC”) and the North American Electrical Regulatory Corporation (“NERC”) issued a report (“the FERC 2011 Report”) that found that “the majority of the problems generators experienced in 2011 resulted from failures of the very same type of equipment that failed in the earlier event” and “in many cases, these failures were experienced by the same generators.”
In September 2014, NERC issued another report following the January 2014 winter storm and again recommendations were issued and observations were made, including many of the same recommendations that had been issued in 1989 and 2011, including that Defendants “review and update of power plant weatherization programs.” Nonetheless, Defendants ignored these recommendations.
The failure to weatherize by these Power Generator Defendants resulted in a variety of equipment-related issues arising during Winter Storm Uri, including frozen sensing lines, frozen water lines, frozen valves, ice accumulation on wind turbine blades, ice/snow cover on solar panels, exceedances of low temperature limits for wind turbines, and flooded equipment due to ice/snow melt. These resultant malfunctions resulted in systemic widespread outages.
Again, thee are thousands of cases in the MDL and it will take an extended period of time to bring this case to a settlement. There are, however, many significant legal hurdles that we have to overcome along the way to get to that point.
This is a complicated piece of litigation. The 300 entities in Brent Coon & Associates’ lawsuits make up 4 distinct categories:
- Power Generator Defendants “market participants,” “resource entities,” and/or “qualified scheduling entities” (“QSEs”) in the ERCOT power region in the State of Texas and use wind, solar, methane gas, biomass, hydroelectricity, or other processes to generate electricity, which is supplied to the ERCOT Power Grid.
- Natural Gas Company Defendants are natural gas producers and/or owners and/or operators of natural gas pipelines that supply natural gas to power generation plants and/or facilities that are powered by natural gas.
- Transmission and Distribution Utilities Defendants (“TDUs”) are responsible for the delivery of electricity from Power Generators to customers. The TDUs are tasked with constructing, owning, operating, and maintaining their delivery systems within their given service territory. They own and are responsible for the lines and meters in their respective service areas.
- Retail Electric Provider Defendants (“REPs”) sell electric energy directly to retail customers in the State of Texas.
The Electric Reliability Council of Texas (“ERCOT”) was not made a party to our cases because of concerns about its exempt status. It is an independent system operator that manages approximately 90 percent of the State of Texas’s electric load and the flow of electric power to 23 million Texas consumers.
These Defendants, called Power Generators, simply failed to weatherize their facilities and equipment to be prepared for this storm. But this was not the first winter storm where the power grid went down. There were also cold weather events that were disruptive to the power grid in 2003, 2006, and 2014, and it went down in 2011, and previously in 1989. In December 1989, a cold weather event descended on Texas for three days, increasing electricity demands beyond seasonal averages, but below peak levels and total system capacity. After investigating the ERCOT power grid in the wake of the cold weather event of 1989, the Public Utilities Commission of Texas made five recommendations to these companies, which included weatherizing by maintaining insulation integrity and heat tracing systems in proper working order.
During the February 2011 winter storm event, Federal Energy Regulatory Commission (“FERC”) and the North American Electrical Regulatory Corporation (“NERC”) issued a report (“the FERC 2011 Report”) that found that “the majority of the problems generators experienced in 2011 resulted from failures of the very same type of equipment that failed in the earlier event” and “in many cases, these failures were experienced by the same generators.”
In September 2014, NERC issued another report following the January 2014 winter storm and again recommendations were issued and observations were made, including many of the same recommendations that had been issued in 1989 and 2011, including that Defendants “review and update of power plant weatherization programs.” Nonetheless, Defendants ignored these recommendations.
The failure to weatherize by these Power Generator Defendants resulted in a variety of equipment-related issues arising during Winter Storm Uri, including frozen sensing lines, frozen water lines, frozen valves, ice accumulation on wind turbine blades, ice/snow cover on solar panels, exceedances of low temperature limits for wind turbines, and flooded equipment due to ice/snow melt. These resultant malfunctions resulted in systemic widespread outages.
Again, thee are thousands of cases in the MDL and it will take an extended period of time to bring this case to a settlement. There are, however, many significant legal hurdles that we have to overcome along the way to get to that point.
Q4 2021 Update
As discussed in the 3rd Quarter edition of the Newsletter, we filed two large cases, and the first case was “removed” to federal court in the Houston Division of Southern District of Texas. On September 21, 2021, The Honorable Judge Lee H. Rosenthal, Chief United States District Judge, agreed with Brent Coon & Associates and our several joint venture law firms and ruled that the case should proceed in the Texas state district court where it was filed. That case was then transferred back to the 157th District Court of Harris County Texas. It was soon thereafter consolidated with all other cases related to Winter Storm Uri which occurred during the week of February 14, 2021. That consolidation was by order of The Texas Supreme Court for a state-consolidated proceeding in the form of a Multidistrict Litigation Court that will preside over all cases related to Winter Storm Uri which occurred during the week of February 14, 2021.
Brent Coon & Associates and our several joint venture law firms sit on a Plaintiffs’ Counsel Committee that works with Judge Sylvia Matthews and the Defense lawyers to organize and assist Judge Matthews in leading the MDL litigation. Procedural matters and the MDL process have been the focus up to this point. Work on any individual cases could be months away as the issue of whether the defendants are liable for the power losses during Winter Storm Uri has to be determined first.
Keep In mind that this is a large and complex case and like all complex litigation Brent Coon & Associates is involved in, will take years to move through the legal system. If you have had your property claim adjusted, please send a copy of the loss appraisal to us. If you have documentation regarding personal property loss, loss of income, business interruption or other economic damage, please forward that to us.
Brent Coon & Associates and our several joint venture law firms sit on a Plaintiffs’ Counsel Committee that works with Judge Sylvia Matthews and the Defense lawyers to organize and assist Judge Matthews in leading the MDL litigation. Procedural matters and the MDL process have been the focus up to this point. Work on any individual cases could be months away as the issue of whether the defendants are liable for the power losses during Winter Storm Uri has to be determined first.
Keep In mind that this is a large and complex case and like all complex litigation Brent Coon & Associates is involved in, will take years to move through the legal system. If you have had your property claim adjusted, please send a copy of the loss appraisal to us. If you have documentation regarding personal property loss, loss of income, business interruption or other economic damage, please forward that to us.