Riker Danzig Wins Appeal for Utilities Client in Superstorm Sandy Suit

Riker Danzig Wins Appeal for Utilities Client in Superstorm Sandy Suit
Apr 07, 2020

In a case presenting legal issues of first impression in New Jersey, partners Edwin F. Chociey, Jr. and James C. Meyer prevailed on clients New Jersey Resources Corp.’s and New Jersey Natural Gas Company’s behalf in an appeal by 47 plaintiff homeowners asserting that NJNG negligently failed to preemptively suspend gas service before Superstorm Sandy in October 2012. The plaintiffs also claimed that JCP&L negligently failed to preemptively suspend electric service. The plaintiffs’ houses in Brick Township’s Camp Osborn neighborhood were destroyed during Superstorm Sandy, and they alleged that NJNG’s and JCP&L’s negligent failure to preemptively suspend utility service caused or contributed to the fires that destroyed their houses.

The plaintiffs’ complaints originally were referred to the Board of Public Utilities for a determination as to whether New Jersey statute or regulation or the utilities’ tariffs with the BPU required the utilities to proactively suspend service before Superstorm Sandy. An Administrative Law Judge and the BPU determined that the utilities did not owe such a duty of preemptive suspension to the homeowners. After the BPU returned the matter to the Superior Court, we moved for summary judgment, arguing that the Court should apply the BPU’s findings as to the lack of a statutory, regulatory or tariff-based duty, and also determine that NJNG did not owe plaintiffs’ requested duty as a matter of common law. After extensive briefing and two lengthy oral arguments, Presiding Judge Craig L. Wellerson of the Ocean County Law Division granted summary judgment in NJNG’s and JCP&L’s favor in October 2019.

The plaintiffs appealed, seeking to reinstate their complaints. On April 3, 2020, the Appellate Division affirmed Judge Wellerson’s summary judgment decision. The Appellate Division explained that “[w]hile it may have been possible to shut down all electric and gas service to customers in Camp Osborn, accomplishing this task would have caused numerous logistical and technical problems resulting in serious adverse consequences for thousands of utility customers, including citizens, hospitals, emergency rescue units, and government services across an extremely large geographic area." The Appellate Division also ruled that it would not “impose upon defendants a new, far-reaching duty to preemptively suspend regular electric and natural gas service to thousands of customers in a large area while their systems are functioning properly, and before a forecasted major weather event, and before any damage to the utilities' systems has occurred.” 

See Law360 and NJSPOTLIGHT for coverage.