BEAUMONT – Only a week has passed since Winter Storm Uri froze Texas and left millions without power, yet lawsuits are already being brought against power companies and insurers.
Trial lawyers mobilizing after a natural disaster is somewhat old hat. And while Texans suing insurance companies over hurricane or hailstorm damages might be commonplace, bringing litigation because power companies weren’t equipped to handle the cold is something new.
The scramble to sign up Uri victims has already kicked off, as several suits seeking millions in damages were filed before the ice fully thawed.
On Feb. 18, XSocialMedia, a company that helps law firms promote torts on Facebook, posted the following on its website: “Is the Texas Power Grid Failure Shaping Up to Be the Next BP Oil Spill?”
“In this situation you have a 100 year winter storm that hits Texas and you have local power companies not able to deal with the demand,” the blog post states. “Now in the BP Oil Spill … the biggest claims where the commercial losses from the event. Similar here Commercial operations with things that need power to not go to waste or to grow will have the largest damages.”
Perhaps coincidently, the first two Uri lawsuits filed in Southeast Texas are being handled by attorneys who represented BP oil spill claimants – Tony Buzbee and Francis Spagnoletti.
Buzbee wants $100 million for the death of an 11-year old who died during the winter storm. Spagnoletti, who is currently on probation over his handling of BP oil spill claims, seeks $10 million in damages for his client.
Both attorneys sued the Electric Reliability Council of Texas, along with the their client’s local power provider, alleging the defendants placed profits over people.
For those who were forced to go days without heat and, in some cases, potable water, blaming ERCOT and the power companies might seem like a good place to start. However, even those who never lost power may still have suffered damages.
From water damage caused by burst pipes to business interruption claims, thousands upon thousands of Texans are turning to their insurance companies for help.
But whether they can be made whole again may prove to be difficult.
Attorney Paul “Chip” Ferguson, founder of The Ferguson Law Firm in Beaumont, believes there are “legitimate concerns” for Texans across the state, “given how a lot of this played out.”
“The rights of those Texans may be limited due to the pro-business climate that has led to many laws that overly protect utility companies and insurers,” Ferguson said. “There will rightfully be first party claims against insurance companies by home and business owners alike. As we see in virtually every hurricane or other disaster like this, those insurers will underpay and slow roll their own policyholders, paying them nickels on the dollar.
“These people have had their homes damages, pipes burst and, in the case of businesses, a loss of income.”
The losses mean more than just revenue - they include payroll for employees who are also suffering, Ferguson says.
“The brave souls who refuse to take partial settlements – and they are brave – will eventually be vindicated but only after a lawsuit that the insurance company will fight at every turn,” Ferguson said.
Still, as far as culpability goes, ERCOT will most likely remain at the forefront of the disaster, which might make things difficult for litigants who take on the governmental entity.
“If anyone fumbled the ball, it was ERCOT,” Ferguson said. “The problem with actions against ERCOT is that they will claim sovereign immunity, meaning they are immune from suit. As far-fetched and unfair as that may sound, that may well be the law in Texas.”
ERCOT is currently under investigation.
“The biggest losers are Texas citizens,” Ferguson said. “Beyond mere property damage or revenue loss are the thousands of individuals who had their health compromised or, in other instances, lost their lives because of power failures and inadequate water systems.
“I know that our hearts go out to these people and, personally, I count my blessings. This has been a tragedy of tremendous proportions.”