Third District Court of Appeal
State of Florida
Opinion filed March 22, 2023.
Not final until disposition of timely filed motion for rehearing.
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No. 3D22-181
Lower Tribunal No. 17-22854
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Florida Power & Light Company,
Appellant,
vs.
Heydi Velez, et al.,
Appellees.
An Appeal from a non-final order from the Circuit Court for Miami-Dade
County, David C. Miller, Judge.
Squire Patton Boggs (US), LLP, Alvin B. Davis and Digna B. French;
Joseph Ianno, Jr. (Juno Beach); Boies, Schiller & Flexner, LLP, Stuart H.
Singer, Sashi C. Bach, and Pascual Oliu (Ft. Lauderdale), for appellant.
Armas Bertran Zincone and J. Alfredo Armas; MSP Recovery Law
Firm, John H. Ruiz and Alexis Fernandez; Acosta Law Firm, Julio C. Acosta
and Simeon Genadiev; Dorta Law and Gonzalo R. Dorta, for appellees.
Before FERNANDEZ, C.J., and LINDSEY, and HENDON, JJ.
FERNANDEZ, C.J.
Florida Power & Light Company (“FPL”) appeals the trial court’s non-
final order certifying a class of FPL customers who sued FPL for breach of
contract and gross negligence after Hurricane Irma. Because the trial court
correctly determined that plaintiffs satisfied the elements necessary to
establish class treatment of their claims against FPL under Florida Rule of
Civil Procedure 1.220(b)(3), we affirm.
FACTS AND PROCEDURAL BACKGROUND
In 2005, FPL filed a base rate proceeding before the Public Service
Commission (“PSC”). The parties reached a Settlement Agreement whereby
FPL would be allowed to recover storm restoration costs and replenish its
Storm-Recovery Reserve through the monthly storm surcharge.
Thereafter, FPL customers were affected by Hurricanes Dennis,
Katrina, Rita, and Wilma. FPL petitioned the PSC to approve the issuance
of storm recovery bonds pursuant to section 366.8260, Florida Statutes
(2005). The bonds would allow FPL to recover over $213 million and $815
million for 2004 and 2005 storm costs; replenish its storm-recovery reserve
to a level of approximately $650 million; and recover interest incurred
through the bond issuance date and bond issuance costs of $23 million. As
a result of the bonds, FPL customers would have to pay a monthly storm
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surcharge. In return, FPL was to improve and strengthen its facilities for
future storms, remove decaying utility poles, and remove vegetation that was
making contact with local power lines.
During hearings the PSC scheduled on the bond issue, FPL stated the
storm charge would be used for, among other things, restoring FPL’s
facilities to their pre-storm condition; repairing and replacing poles that were
leaning or were braced during the initial restoration stage; replacing lightning
arrestors; repairing or replacing capacitor banks; and strengthening system
infrastructure. FPL’s Storm Secure Plan further would adopt the National
Electric Safety Code (“NESC”) to improve FPL’s system infrastructure to
withstand extreme wind conditions. The PSC approved the order and the
issuance of the storm-recovery bonds in the amount up to $708 million.
Later, in 2012, FPL petitioned for a permanent increase in base rates
and charges. It requested a base rate increase of $528 million. A Settlement
Agreement was reached, and the PSC gave FPL a revenue increase of $378
million effective January 1, 2013.
In 2016, FPL requested another base rate increase. FPL's request was
intended to "reduce outages and enable FPL to restore power for customers
and help local communities recover more quickly when severe weather
strikes." The PSC authorized a revenue increase of $400 million effective
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January 1, 2017. Also in 2016, FPL filed a petition seeking to implement a
storm surcharge to recover $318.5 million for Hurricane Matthew restoration
costs and to replenish its Storm-Recovery Reserve. The PSC granted FPL's
2017 storm surcharge on each customer’s monthly residential bill, beginning
on March 1, 2017, which was to last for twelve months.
On March 15, 2016, FPL filed its petition with the PSC for approval of
FPL’s Storm Hardening Plan. FPL stated it would comply with NESC
extreme wind loading (“EWL”) standards by hardening its system so that it
would withstand winds of 145, 130, and 105 mph in the three different wind
regions of the state.
In September 2017, Hurricane Irma sideswiped Florida. Named class
members Heydi Velez, Miriam Perez, Guillermo Patino-Hidalgo, Enrique
Arguelles, Mercedes Sastre, Ruben N. Mendiola, Carlos M. Colina, Shalom
Navarro, and Jose Zarruk (collectively, “plaintiffs”) were FPL customers
whose power went out for an extended period after Hurricane Irma. As
customers, they entered into a contract with FPL, the Tariff, for electrical
services that set out the parties’ obligations. In the Tariff, FPL agreed to use
“reasonable diligence at all times to provide continuous service and storm
recovery activities.”
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During Hurricane Irma, the very highest sustained wind recorded by
the National Weather Service was 115 mph in Marco Island where the storm
first made land fall. The highest gust recorded was 142 mph near Naples
Airport. Although Irma did not approach any county east of Lake
Okeechobee, over 75% of FPL customers in South Florida lost power for
close to a week. In the western half of South Florida, over 90% of FPL
customers lost power for over a week.
On February 1, 2018, plaintiffs brought a class action lawsuit against
FPL. They alleged one count for breach of contract seeking compensatory
damages for FPL’s failure to comply with its contractual obligations to use
reasonable diligence at all times to provide continuous service in accordance
with FPL’s Tariff and industry standards. Plaintiffs alleged that each of the
individual plaintiffs entered into a uniform contractual agreement with FPL
for services (the Tariff), for which plaintiffs paid a monthly fee. They alleged
each plaintiff was individually charged a surcharge for storm restoration and
hardening activities, pursuant to section 366.8260, Florida Statutes (2017).
Plaintiffs suffered consequential damages such as loss of food and incurred
expenses, loss of income, loss of sleep, intense discomfort, and more.
The Tariff specifically stated that FPL “will use reasonable diligence at
all times to provide continuous service at the agreed nominal voltage” and
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storm recovery activities. Plaintiffs claim that FPL failed to use reasonable
diligence by failing to meet NESC standards and its own standards, and that
as a result of FPL’s breaches, Florida residents suffered unnecessary and
prolonged power outages from Hurricane Irma that sideswiped South
Florida.
In Count II for gross negligence, plaintiffs claimed FPL “acted with
reckless, willful, and wanton disregard for plaintiffs in the gross negligent
maintenance and management of its system infrastructure, storm
organization, restoration plan, and outright failure to restore, replace, and
better the distribution system and hazards posed by vegetation and trees
close to power lines.” They alleged FPL became aware of this need after
previous storms hit Florida and undertook a duty to strengthen its distribution
system in anticipation of the next hurricane. Plaintiffs further alleged that FPL
was grossly negligent in performing various actions such as in replacing
outdated grids, decaying utility poles, and hardening its power grid after the
prior storm; failing to clear vegetation from the vicinity of distribution facilities
and equipment; failing to clear vegetation from all feeder circuits serving top
critical infrastructures prior to the peak of hurricane season; and failing to
replace defective equipment, including but limited to, company power poles,
power lines, and transformers.
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Thereafter, FPL moved to dismiss the action, which the trial court
denied. FPL then petitioned this Court for a writ of prohibition to require the
parties to take their dispute before the PSC. This Court denied the writ in
Florida Power and Light Company v. Velez,
257 So. 3d 1176 (Fla. 3d DCA
2018). Thus, the matter returned to the trial court.
Plaintiffs then proceeded with class discovery. Pursuant to a discovery
settlement agreement the parties entered, FPL produced data regarding its
hurricane readiness and performance delivery reports to the PSC. FPL also
produced data relating to power outage assessments, diagnoses, causes,
and repairs during and after Hurricane Irma.
On October 18, 2021, plaintiffs filed their Motion for Entry of Class
Certification Order. The plaintiffs moved to certify the following class:
All persons and business owners who reside and are otherwise
citizens of the state of Florida that entered into contractual
agreement with FPL for electrical services, were charged a storm
charge, experienced a power outage after Hurricane Irma, and
suffered consequential damages, directly and proximately,
because of FPL’s breach of contract and/or gross negligence.
The trial court held a three-day evidentiary hearing on class
certification and other issues in December 2021. Plaintiffs argued that the
trial court should focus not on who would prevail on the issues raised related
to the breach of contract or gross negligence counts, but rather whether the
requirements of rule 1.220 were met. Plaintiffs contended that based on
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FPL’s own structured data, FPL could identify exactly which customer lost
power, at what address, when they lost power, and the reason why they lost
power. At the end of the hearing on the third day, the trial court granted
plaintiffs’ motion and certified the class. Thereafter, the trial court entered its
detailed, twenty-four page “Order Granting Plaintiffs’ Motion for Class
Certification.” FPL then appealed.
DISCUSSION
“A trial court’s order certifying a class is a non-final appealable order
that is reviewed for an abuse of discretion.” Miami Auto. Retail, Inc. v.
Baldwin,
97 So. 3d 846, 851 (Fla. 3d DCA 2012). This is because “‘the
determination that a case meets the requirements of a class action is a
factual finding,’ which falls within a trial court’s discretion.” Sosa v. Safeway
Premium Fin. Co.,
73 So. 3d 91, 103 (Fla. 2011). “[T]he appellate court must
fully recognize the superior vantage point of the trial judge and should apply
the ‘reasonableness’ test to determine whether the trial judge abused his
discretion. If reasonable men could differ as to the propriety of the action
taken by the trial court, then the action is not unreasonable and there can be
no finding of an abuse of discretion.” Canakaris v. Canakaris,
382 So. 2d
1197, 1203 (Fla. 1980). “A trial court should resolve doubts with regard to
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certification in favor of certification, especially in the early stages of litigation.”
Sosa,
73 So. 3d at 105.
FPL contends that plaintiffs did not meet their burden under Florida
Rule of Civil Procedure 1.220(b)(3) because individual issues predominate
in this case, and a class action is not manageable or superior to other forms
of resolving this controversy. We find no merit in this argument.
Parties seeking class certification have the burden of pleading and
proving each element of Florida Rule of Civil Procedure 1.220(a) and one of
the three requirements of Florida Rule of Civil Procedure 1.220(b). Terry L.
Braun, P.A. v. Campbell,
827 So. 2d 261, 265 (Fla. 5th DCA 2002). Under
Rule 1.220(a), the four prerequisites for class certification are numerosity,
commonality, typicality, and adequate representation. Broin v. Philip Morris
Cos.,
641 So. 2d 888 (Fla. 3d DCA 1994). FPL makes the general statement
that plaintiffs have not satisfied the elements of Rule 1.220(a). However, it
does not address this argument in its briefs. We have carefully reviewed the
record and find no abuse of discretion in the trial court's determination that
the class established the four elements under Rule 1.220(a). Love v. General
Dev. Corp.,
555 So. 2d 397 (Fla. 3d DCA 1989).
In addition to establishing numerosity, commonality, typicality, and
adequacy of representation, plaintiffs must also demonstrate that the action
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meets the criteria under at least one basis for class certification under Rule
1.220(b). Here, plaintiffs sought class certification under rule 1.220(b)(3).
This rule states:
(b) Claims and Defenses Maintainable: A claim or defense may
be maintained on behalf of a class if the court concludes that the
prerequisites of subdivision (a) are satisfied, and that
…
(3) … the questions of law or fact common to the claim or defense
of the representative party and the claim or defense of each
member of the class predominate over any question of law or
fact affecting only individual members of the class, and class
representation is superior to other available methods for the fair
and efficient adjudication of the controversy. …
Thus, predominance and superiority must be shown. Freedom Life Ins. Co.
of Am. v. Wallant,
891 So. 2d 1109, 1118 (Fla. 4th DCA 2004) (“For class
certification to be appropriate under Rule 1.220(b)(3), ‘the issues in the class
action that are subject to generalized proof, and thus applicable to the class
as whole, must predominate over those issues that are subject only to
individualized proof.’”).
Plaintiffs must first establish that common questions of law and fact
predominate over individual, plaintiff-specific issues. Fla. R. Civ. P.
1.220(b)(3); Sosa,
73 So. 3d at 111. “Florida courts have held that common
questions of fact predominate when the defendant acts toward the class
members in a similar or common way.” Sosa,
73 So. 3d at 111. “The
methodology employed by a trial court in determining whether class claims
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predominate over individual claims involves a proof-based inquiry.”
Id. at
112. Thus, a class representative establishes predominance if “the class
representative can prove his individual case and, by so doing, necessarily
prove the cases for each of the other class members.” InPhyNet Contr.
Servs. v. Soria,
33 So. 3d 766, 771 (Fla. 4th DCA 2010).
Here, Rule 1.220(b)(3) certification was proper because even where
some individualized issues of proof exist in a case, where an issue raised by
a common contract provision predominates, “the better reasoned approach
is to maintain the suit as a class action and, if required after further
development of the issues, permit the lower court to create subclasses.”
Paladino v. Am. Dental Plan, Inc.,
697 So. 2d 897, 899 (Fla. 1st DCA 1997).
Further, “[N]umerous courts have recognized that the presence of
individualized damages issues does not prevent a finding that the common
issues in the case predominate.” Allapattah Servs., Inc. v. Exxon Corp.,
333
F.3d 1248, 1261 (11th Cir. 2003).
The record supports the trial court’s conclusion that plaintiffs
established that common questions of law and fact predominate over
individual plaintiff issues. FPL’s Tariff is a form document, and FPL admitted
it applies to all plaintiffs and class members. As previously discussed, FPL
drafted the Tariff, and it was presented to its customers on a take it or leave
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it basis. Plaintiffs and class members had no bargaining power in the drafting
of the Tariff. The Tariff also incorporates FPL’s “Service Standard” as
previously discussed and incorporated the latest edition of the NESC. The
Tariff further provides for the storm charge that plaintiffs referenced in their
amended complaint. Plaintiffs claim that due to FPL’s breach of the Tariff,
plaintiffs and class members experienced consequential damages.
Predominance exists where common questions can be answered by
use of computerized software systems. Roper v. Consurve, Inc.,
578 F.2d
1106, 1113 (5th Cir. 1978) (“While it may be necessary to make individual
fact determinations with respect to charges, if that question is reached, these
will depend on objective criteria that can be organized by a computer,
perhaps with some clerical assistance.”). As the trial court noted in its order,
“It is well-settled in data-driven cases like this one, even if there are potential
individualized determinations, that ‘the necessity of making individualized
factual determinations does not defeat class certification if those
determinations are susceptive to generalized proof like [business] records.’
Minns v. Advanced Clinical Employment Staffing LLC,
2015 WL 3491505, at
*8 (N.D. Cal. 2015) …”.
The evidence showed that FPL uses “cause codes” among other data
related to customer power outage, which the trial court noted would provide
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the court with “a reasonable methodology for generalized proof of class-wide
impact.” Thus, FPL’s conduct in determining the cause of power loss for each
client is the same. In addition, the standard Tariff is the same one given to
all customers. Thus, the evidence used to prove one of the named plaintiffs’
breach of contract claims is the same evidence that will be used to prove the
rest of the class members’ breach of contract claims. Accordingly, plaintiffs
can use FPL’s data to prove FPL’s liability for the entire class. Regarding this
predominance factor, the trial court further noted:
FPL deploys “patrollers” and “forensic patrollers” in order to
determine outage causes and restore power. FPL uses multiple
data systems to track that information, makes outage information
and restoration projections available to customers in real-time,
draws conclusions from its data-rich systems, and reports outage
causes (and makes its data available) to Florida’s Public Service
Commission. It stands to reason that FPL has identified the
cause of an outage where it has been able to turn the power back
on. FPL, though, has now dedicated the bulk of its presentation
to undermining the accuracy of its own records. The Court is
unmoved by those efforts.
FPL’s “very business model includes gathering and distilling
information from a variety of sources in order to [determine the
cause of outages].” . . . And, in general, “courts do not look
favorably upon the argument that records a defendant treats as
accurate for business purposes are not accurate enough to
define a class.” (citations omitted). The Court finds that the
evidence supports Plaintiffs’ theory and methodology for utilizing
FPL’s business records and data systems for determining liability
on a class-wide basis.
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Similarly, regarding the gross negligence claim, the court found that
“these issues are common to Plaintiffs and all putative class members and
will be resolved by common proof that does not vary from customer to
customer based on FPL’s course of conduct to utilize the same data systems
and methodologies for all 5.6 million customers.” The court specifically found
from the information presented to it by FPL that FPL “blurred” the difference
between how it collected data on customer outages on a “blue-sky day” (non-
hurricane days) as opposed to how it collected data on customer outages
during a hurricane. On a “blue-sky” day, the “cause code” pertaining to a
power outage for a customer was the actual cause for a customer’s power
outage. However, FPL trained its employees to select the “cause code” of
“hurricane” as the actual cause of a customer’s power outage following a
hurricane like Hurricane Irma. Thus, the trial court found that whether FPL
adopted or did not adopt these procedures/training instructions evidenced a
conscious disregard of an imminent or “clear and present danger.” The court
stated that “a jury could find that FPL’s conscious decision to categorically
subject information about outages following a storm to a different standard
than information about outages on a blue-sky day, and inherently invites
breaches of the type that are alleged above to be grossly negligent.” The
court noted that a jury could also find that FPL understood the risks
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associated with its manner of documenting “causes” of customer power
outages after a storm, and its integration or lack of integration with other FPL
databases and that because FPL was aware, its common course of
conducted evinced a conscious disregard of an imminent or “clear and
present danger.” Thus, the court correctly determined that common
questions of law and fact predominated over individual questions in this
case.
In addition, contrary to FPL’s position, the superiority requirement of
Rule 1.220(b)(3) was also met in this case. Under Rule 1.220(b)(3), the court
examines whether class representation is superior to other available
methods for the fair and efficient adjudication of the controversy. “Three
factors for courts to consider when deciding whether a class action is the
superior method of adjudicating a controversy are (1) whether a class action
would provide the class members with the only economically viable remedy;
(2) whether there is a likelihood that the individual claims are large enough
to justify the expense of separate litigation; and (3) whether a class action
cause of action is manageable.” Sosa,
73 So. 3d at 116.
Here, the trial court was correct in concluding that class representation
was superior to other methods of adjudication. The court accurately noted
that there were potentially millions of prospective class members and that
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their small, individual economic claims were not large enough to justify each
individual plaintiff filing a separate action. Thus, the court found a class
action would be the “most economically feasible remedy given the potential
individual damage recovery for each class member.” In addition, a class
action recovery system in this case would be a more manageable and
efficient use of judicial resources than if each plaintiff was required to file
their own individual claim against FPL. The trial court stated in its order that
MSP Recovery LLC’s (class action plaintiff trial counsel) chief information
officer testified in his deposition that through MSP Recovery, LLC, plaintiffs
would have the ability to assess FPL’s data regarding this class action. The
chief information officer reviewed the documents produced by FPL and
testified that FPL’s data contain outage tickets and other information used to
calculate metrics and pinpoint the cause of a customer’s power outage.
Consequently, the trial court was correct in determining that plaintiffs
presented evidence that a class action was superior to other available
methods for resolving this controversy.
CONCLUSION
The trial court correctly concluded that in this case, common questions
of law and fact predominate over individual questions, and that class
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representation is superior to other methods of adjudication. Accordingly,
finding no abuse of discretion in the trial court’s decision to certify the class
under Rule 1.220(b)(3), we affirm the trial court’s “Order Granting Plaintiffs’
Motion for Class Certification.”
Affirmed.
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