Without writing a single sentence to explain why, the Texas Supreme Court on Friday officially ended efforts by tens of thousands of Texas citizens and small businesses to sue power generators for personal injuries, wrongful deaths and property damages suffered during the 2021 winter storm.
The decision is a huge victory for large power generators such as Luminant, NRG, Calpine, Exelon and Sempra Energy, who argued that the lawsuits, which sought billions of dollars in damages, should be dismissed because the unprecedented weather, not the companies’ actions, was responsible for the injuries and damages.
In denying the appeal by lawyers for the victims, the state’s highest court left intact a December 2023 ruling by the First Court of Appeals in Houston that the lawsuits against large power generators had “no basis in law or fact.”
Lawyers representing the victims said Friday that they are stunned that the Texas Supreme Court rejected such a massive litigation involving so many Texans without even holding oral arguments or at least issuing a written opinion justifying its decision.
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Four Texas justices — John Devine, Evan Young, Rebecca Huddle and Kyle Hawkins — did not participate in the decision.
The mid-February 2021 winter storm sent temperatures into single digits and deposited frozen precipitation across Texas for four days.
A prolonged power outage left residents without electricity for days, resulting in an estimated 246 deaths. The families of those who died and more than 31,600 other Texans sued more than 220 energy companies for damages related to the storm. Tens of thousands of Texans claimed the power outages caused them serious medical injuries. And thousands of Texas businesses and homeowners say the energy companies owe them billions of dollars for property damages.
The lawsuits were combined into a single multidistrict litigation and assigned to Harris County District Judge Sylvia Matthews.
The only lawsuits brought by storm victims that remain active are those against Texas distribution utilities, such as Oncor. But lawyers for the TDUs plan on challenging the validity of those cases on the same legal arguments that led to the dismissal against the power generators.
The Texas Supreme Court’s action was also a huge loss for scores of insurance companies and their affiliates who joined with their old nemeses, plaintiff’s lawyers, to sue the energy companies, alleging the evidence showed that the power generators were partially or even mostly at fault for some of the power failures that caused so many deaths and injuries.
The insurance companies wanted the energy companies to reimburse them for claims paid to homeowners.
“Their negligent acts and omissions directly resulted in grid failure,” former Texas Supreme Court Justice Eva Guzman, who represents the insurance companies, wrote in a court document seeking the invention of that state’s highest court. “Their acts extended far beyond mere breaches of contractual duties, rising to willful interruption of service which undermined the entire grid integrity and resulted in a public calamity that cannot be endured.”
Mikal Watts, a Texas lawyer representing 6,000 of the storm victims, told The Texas Lawbook in an interview last month that the decisions by the Texas Supreme Court and the lower courts “do not reflect well on the Texas tort system.”
“By immunizing these energy companies, the Texas Supreme Court is almost guaranteeing that this will happen again and again,” Watts said. “It is incredibly disappointing that the Texans most victimized by the actions of these companies may never get to show a jury the evidence in this case.”
Executives at the energy companies are attributing the success to the legal work of a handful of corporate law firms, including Gibson, Dunn & Crutcher, Jackson Walker, Kirkland & Ellis, Baker Botts, Vinson & Elkins and Susman Godfrey.
The Texas Lawbook is an online news publication focused on business law in Texas. For more legal news, visit texaslawbook.net.