A state appellate court has ruled that a breach-of-contract lawsuit on behalf of Long Island ratepayers against LIPA and National Grid after superstorm Sandy can move forward as a potential class action, finding that lawyers for customers “have adequately alleged a threat of serious and irreparable harm.”
The original suit, filed in November of 2012, sought unspecified money damages and an injunction to force LIPA to implement corrective measures recommended by Gov. Andrew M. Cuomo’s Moreland Commission and several prior storm-preparedness studies. The four-judge appellate panel, in their Dec. 30 ruling, denied a request by LIPA and National Grid to dismiss the suit as a potential class action. A lower court has yet to certify the suit as a class action, and lawyers for consumers must still make that case.
The state Appellate Division ruling follows a state Supreme Court judge’s decision in 2014 that also rejected LIPA and National Grid’s motions to dismiss.
At the same time, the appellate panel denied customers’ request for an injunction that sought to implement the recommended changes at LIPA, saying that wasn’t the court’s decision to make. “Such recommendations plainly implicate ‘broad policy choices, which involve the ordering of priorities and the allocation of finite resources,’ which are reserved to the legislative and executive branches of government,” the judges wrote.
A lawyer for ratepayers was quick to declare victory. LIPA and National Grid “have now lost in two separate courts, spending [ratepayer] money to try to dismiss claims that are clearly valid,” said Kenneth Mollins, a Hauppauge attorney who filed the original claim against LIPA and National Grid.
Several large class-action firms are now leading the consolidated case. “We are going to actively litigate on behalf of the consumers,” said Michele F. Raphael, an attorney for consumers at the firm Wolf Popper LLP of Manhattan.
The suit was filed weeks after superstorm Sandy following the largest and longest restoration effort in LIPA’s history. Ratepayers alleged the authority and its then-operating partner, National Grid, were “grossly negligent” in restoring power to more than 945,000 customers. PSEG Long Island has since replaced National Grid in managing the system.
The original suit said LIPA and National Grid “grossly neglected vital maintenance,” failed to fortify substations, delayed replacing LIPA storm outage management computer system, provided false information to ratepayers, and ignored a 2006 study that identified problems and would have minimized outages.
A spokesman for LIPA declined comment.
National Grid spokeswoman Wendy Ladd said the company was reviewing the decision and “will respond with any appropriate motions or appeals” on time. She added it was proud of its response to Sandy and “we will continue to defend National Grid’s storm response as the litigation progresses.”
The consolidated suit is separate from a group of claims brought by 120 residents of Breezy Point who alleged that LIPA and National Grid’s failure to de-energize the grid in that region during the storm led to electrical fires that ravaged the community. Keith Sullivan, a lawyer for homeowners, said that after a state Supreme Court judge denied the companies’ request to dismiss in the suit, they appealed to the state Appellate Division. That appeal is pending.