I hope I'm wrong about this. But I highly doubt it.
I just had my power restored on Sunday morning, and my phones and internet were just restored earlier today in the aftermath of Sandy. I just heard over the radio that a class action lawsuit charging LIPA with negligence has been filed. Since, at least in theory, I would be a member of that class, I certainly hope it succeeds. But I don't think it will.
Here's why:
In the aftermath of another blackout, New York State's highest court issued a decision issued in 1994 and went to the unusual step of acknowledging publicly their reluctance to impose liability for negligence on a public utility because of broader policy concerns, including potentially devastating financial damages, stating:
"This Court has from time to time addressed the scope of the duty of a utility, or a similarly situated entity, arising from negligence in the performance of contractual obligations ( see, e.g., Eaves Brooks Costume Co. v. Y.B.H. Realty Corp., 76 N.Y.2d 220, 557 N.Y.S.2d 286, 556 N.E.2d 1093; Strauss v. Belle Realty Co., 65 N.Y.2d 399, 492 N.Y.S.2d 555, 482 N.E.2d 34, supra; Moch Co. v. Rensselaer Water Co., 247 N.Y. 160, 159 N.E. 896). Consistently, this Court has emphasized that determining the scope of the duty and the consequent sphere of potential liability is fundamentally a policy question, with the objective being to “ ‘fix[ ] the [entity's] orbit of duty’ ” so as to “ ‘ “limit the legal consequences of wrongs to a controllable degree” ’ ” ( Eaves Brooks Costume Co. v. Y.B.H. Realty Corp., supra, 76 N.Y.2d at 226–227, 557 N.Y.S.2d 286, 556 N.E.2d 1093; Strauss v. Belle Realty Co., supra, 65 N.Y.2d at 402, 492 N.Y.S.2d 555, 482 N.E.2d 34; Moch Co. v. Rensselaer Water Co., supra, 247 N.Y. at 164–168, 159 N.E. 896; cf., ***689 **271 Palka v. Servicemaster Mgt. Servs. Corp., 83 N.Y.2d 579, 585–587, 611 N.Y.S.2d 817, 634 N.E.2d 189). We noted in Palka that the existence and scope of an alleged tortfeasor's duty, at the threshold, is a legal, policy-laden determination dependent on consideration of different forces, including logic, science, competing socioeconomic policies, and contractual assumptions of responsibility."
Simply put, even if the plaintiffs could prove that LIPA was grossly negligent and incompetent, I don't see a New York court opening Pandora's box and allowing them to recover consequential damages.
In fact, I would be quite surprised if LIPA doesn't move to dismiss the lawsuit from the get-go on these grounds.
