BulletProofBlog the blog on crisis communications

In this regular feature, Bulletproof interviews top plaintiffs' attorneys for their perspective on the crises likely to affect businesses in the near future. Today we talk to Joel A. Kaplan of Kaplan and Freedman, P.A. in Miami, who, with Coral Springs, Fla. Attorney Scott N. Gelfand, has filed suit against Florida Power & Light Co. (FP&L) after a power outage during the second weekend in January ostensibly left 25,000 homeowners in Broward and Palm Beach counties without heat. The plaintiffs are seeking class certification to require FP&L to pay damages and ensure such outages don’t happen again.

What message is this case sending to utilities? To what extent does it underscore the responsibilities of utility companies?

Joel Kaplan: It sends a threefold message, at least. First, it must be emphasized that this outage was predictable and controllable. So the message to utilities is that, when such events are indeed foreseeable, they are accountable for the damages that result.

Second, when you’ve got a captive consumer audience – here, a captive audience of 75,000 to 100,000 people – you are under a particular duty to foresee the foreseeable, and to respond accordingly. Some of those people were elderly and have consequently required medical care.

People don’t mind sweating a little. But they won’t tolerate shivering.

Finally, utilities must be proactive with respect to both their equipment and to changing patterns of customer demand. Here, three different transformers all failed because they were undersized and obsolete. Wear-and-tear on equipment is always eminently foreseeable.

At the same time, the demographics of Broward and Palm Beach counties have undergone major transformations as populations have shifted and user numbers have risen dramatically. These demographic trends obviously meant there would be significant additional stress load on the system.

In this case, the combination of ongoing equipment problems with accelerating public demand required that PF&L be proactive but the necessary periodic maintenance simply did not happen.

How, as your filing stipulates, can a utility ensure that “such power outages never happen again?” Aren’t there circumstances that cannot be foreseen?

Joel Kaplan: We’re not talking about a meteor shower. We’re talking about foreseeable circumstances – and what makes this case additionally significant is that it happened in Florida and involved near-freezing temperatures. That kind of weather in Florida is anomalous but by no means unheard of. In fact, there have been 125 such temperature drops in the affected counties since 1940. These temperatures are hardly foreign to Florida during the winter.

So the short answer to your question is that utilities must know the history of the areas they service and they must plan for the contingencies that that history shows to be extremely possible.

Your lawsuit was filed on the same day that the utility put in for a rate increase. How does that play in to the dynamics of this case?

Joel Kaplan: It’s a complete coincidence. The cost of upgrading the equipment was de minimis in any event.

Do you anticipate that, in the future, plaintiffs will seek class certification for such cases?

Joel Kaplan: What I can say in that regard is that such cases by definition merit class action treatment since the affected homeowners were all subject to the same set of circumstances and all suffered damage as a result.

The utility does not have immunity for exceptional negligence, nor do their directors and officers. By law they are responsible for planning and maintenance – which means that, by law, they must be proactive. This power outage occurred at the heart of the pump system, not at any of the points of delivery. Band-aid solutions after the fact are unacceptable.

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Larry Smith is Senior Vice President of Levick Strategic Communications, the nation's top crisis communications firm, and a contributing author to Bulletproof Blog. Connect with Levick on Twitter: @Levick.