Scott Kreppein of Hagney, Quatela, Hargraves & Mari lives and
works on Long Island, where about 90 percent of the customers of
the Long Island Power Authority lost power in last week's storm.
Kreppein still doesn't have electricity or heat at his house in
Smithtown. Last week he got by on flashlights and a small
gas-powered generator. Over the weekend, he and his wife fled to
a hotel in Pennsylvania, and since they came back home, they've
been living with relatives who have heat and light. Kreppein, in
other words, has a personal interest in holding LIPA accountable
for any failures in its restoration of power across Long Island.
But Kreppein also knows that the odds are very low of
establishing LIPA's liability through a class action by
disgruntled customers of the power company. In 2006, when he was
working at Morelli Ratner, Kreppein represented several
businesses in Queens, New York, that sued Consolidated Edison in
state court for millions of dollars in damages that resulted
from a week-long blackout in Astoria, Woodside and neighboring
communities. According to Kreppein, there's nothing barring
customers -- whether they're businesses or individual ratepayers
-- from bringing such suits against power companies, even though
utilities are state-regulated. To win, however, New York
ratepayers have to show that their power company was not just
slow or inefficient. Instead, Kreppein said, under a 1985 New
York Court of Appeals ruling called Strauss v. Belle Realty,
electric company customers must establish that the utility was
grossly negligent -- that its conduct was way outside the bounds
of reasonableness.
In the Queens power outage case, that question was not
answered in court. Litigation over Con Ed's alleged negligence
proceeded alongside an investigation by the New York Public
Service Commission, which regulates power companies and other
utilities. With intense pressure from politicians and local
activists accelerating the process, Con Ed reached a global settlement in 2008, agreeing to put up $17 million for affected
homes and businesses and to waive rate increases intended to pay
for $40 million in plant repairs associated with the blackout.
New York Governor Andrew Cuomo has already committed to a
PSC investigation of post-Sandy power restoration efforts, and
New Jersey will almost certainly conduct a similar
investigation; last year New Jersey's Board of Public Utilities
reviewed the responses of the state's four power companies to
Hurricane Irene and the October snowstorm. That doesn't mean,
however, that the regulatory investigations will result in
findings that support allegations of gross negligence against
the utilities. According to Greg Reinert, a spokesman for New
Jersey's BPU, ratepayers didn't bring class actions after Irene
or the October storm.
Indeed, the trouble that all of the region's power companies
have had in turning their customers' lights back on could hamper
gross negligence claims against any one of them, according to
Kreppein. "If all of the companies did the same thing, and if
everyone was bad at handling outages after the storm, then
that's just the facts, that's not negligence," he said.
The high bar for claims against power companies didn't deter
Manhattan solo Richard Hershman, who filed a bare-bones class action against Con Ed on Thursday in New York State Supreme
Court in Westchester. Hershman told me he and his neighbors in
Tarrytown have been in the dark since last Monday and feel like
they've been ignored by their power company. "We think Con Ed is
responsible not just for gross negligence, but also for putting
out false or misleading information," he said. According to
Hershman, his neighbors' damages from the long outage range from
hundreds to thousands of dollars. "My personal opinion, and what
I told my neighbors, is that from the storm through Sunday was
okay," he said. "It was a bad storm. (Con Ed's) response was
poor, but I give them leeway. But this week, after warnings
about the nor'easter? They just did not put the necessary
equipment and personnel in place in Westchester."
A Con Ed representative said she could not comment on
litigation and referred me to the company's website, which says
that because the storm was beyond Con Ed's control, the company
"is not responsible for property damage or other losses."
Representatives of LIPA and power companies in New Jersey did
not respond to phone and email messages, and a spokesman for New
York's PSC did not return my call.
Kreppein told me he's planning to file a Freedom of
Information Act request with LIPA to find out whether his power
company had a plan for the storm and how it executed restoration
of power. He's not ruling out litigation, depending on what he
finds out. "I don't know what individual LIPA employees are
doing. I'm sure they're working as hard as they can," he said.
"But I'm not satisfied with LIPA's efforts. I don't have power."
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