Class-action claims for widespread utility service interruptions are a growing trend.
Gavin J. Rooney is a member of, and Nicole Bearce Albano is counsel with, the law firm of Lowenstein Sandler PC based in Roseland, N.J. Rooney and Albano defended an electric utility in a blackout class action pending in New Jersey, Muise v. GPU Inc., in which they recently convinced the court to rescind its earlier decision certifying the class-action suit.
During the dog days of summer, a severe heat wave settles over the service territory of an electric utility. Electricity demand reaches an all-time peak as customers turn their air conditioners to the highest setting. Service interruptions occur throughout the utility's territory as high loads and low voltages cause breakers to trip, fuses to operate, transformers to overheat, and equipment to fail. When the heat at last subsides, the utility wants to repair its damaged image among customers and its worsened relationship with regulators.
But what kind of legal exposure does a utility face as a result of losses caused by the blackout-such as spoiled food and damaged electrical equipment for residential customers, and business interruption for commercial customers? Is that exposure limited to individual claims by disgruntled customers, or can the claims of all customers be litigated in a single proceeding to secure an aggregate damages award on behalf of all affected customers (see sidebar, “Class-Action Lawsuits: A Reference”)?