November 26, 2019

IPL Can Be Sued For Stoplight Outage; Tyus v. Indianapolis Power & Light Company

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Following a storm, IPL-operated traffic signals failed to function for more than eight hours at the intersection of Kessler and Binford on the Northeast side of Indianapolis. During the outage, a traffic accident occurred at the intersection resulting in catastrophic injuries to Amber Tyus and her three children. The Tyus family sued IPL claiming it was negligent for, among other reasons, failing to timely restore power to the intersection.

IPL moved for judgment on the pleadings based on a Release Clause in the schedule of rates, rules and regulations for supplying electricity (2016 Tariff) which IPL had filed and the Indiana Utility Regulatory Commission (IURC) had approved. The Release Clause stated that IPL “shall not be liable for damages resulting to the Customer, or to third persons from the use of electricity, interruption of service or supply, or the presence of the [IPL]’s property on the Customer’s premises, unless due to willful default or neglect on the part of [IPL].”

Judge Dietrick of the Marion Superior Court granted IPL’s motion in part, dismissing the negligence claim based on the 2016 Tariff, but he allowed the Tyus family to pursue their claims of gross negligence and reckless conduct. On interlocutory appeal, amicus briefs were filed by the ITLA, the Indiana Energy Association and the Indiana Legal Foundation addressing whether the IURC has the power to immunize a public utility from suit for personal injury or property damage caused to noncustomers by IPL’s own negligence and in connection with IPL’s interruption of service.

The Court of Appeals rejected IPL’s claim of immunity:

The legislature conferred upon the IURC the power to “formulate rules necessary or appropriate to carry out the provisions of [this] chapter.” Ind. Code § 8-1-1-3(g). However, without additional specificity, we find no evidence that the legislature gave, or intended to give, the IURC power to shield IPL from liability for injuries caused by IPL’s negligence to noncustomers. “[A]ny doubt about the existence of [IURC’s] authority must be resolved against a finding of authority.” … Furthermore, although agencies may promulgate rules and regulations to implement the legislature’s regulatory scheme, they are prohibited from adopting rules or regulations that are outside the scope of the power conferred by the legislature.

Here the legislature provided no specific language from which we can find that the legislature gave, or intended to give, the IURC the authority to shield IPL from liability for injuries caused to noncustomers by IPL’s negligence.

The trial court erred in granting IPL judgment on the pleadings because the 2016 Tariff is unlawful and unreasonable to the extent it allowed IPL immunity from liability for personal injury or property damage caused to noncustomers, by IPL’s own negligence, and in connection with IPL’s interruption of service. Such grant of immunity was beyond the IURC’s delegated authority and, therefore, that part of the Release Clause is ultra vires and void.

The Court also rejected IPL’s procedural argument that the Tyus Family was required to initiate their appeal of the 2016 Tariff’s Release Clause within 30 days of the IURC’s approval of the Tariff and rate order, finding:

When IPL raised the Release Clause as a bar to the Tyuses’ claims for negligence, IPL opened the door for the Tyuses to challenge that part of the 2016 Tariff as being invalid and unconstitutional.

[A] court may always properly inquire . . . whether or not the order is contrary to law. . . . In other words, did the Commission stay within its jurisdiction and conform to the statutory standards and legal principles involved in producing its order? This is purely a legal question and a proper one for the courts to determine in any judicial review regardless of any statutory provision. These issues include questions of legality of the administrative procedure and violations of fixed legal principles as distinguished from questions of fact or expert judgment or discretion.

Lessons:

1. The authority of administrative agencies is limited to that which is granted by statute and does not include the power to make a law.
2. A plaintiff need not challenge a release provision in a Tariff and rate making process before injury.
3. IPL can be sued if they are negligent in failing to timely fix a stoplight outage.