Federal judge returns class action suits against LUMA to local courts
By The Star Staff
U.S. Magistrate Judge Judith Dein, one of the judges overseeing Puerto Rico’s bankruptcy cases, returned to the local courts two consolidated class action suits that seek damages from LUMA Energy over its performance as operator of the Puerto Rico Electric Power Authority’s (PREPA) transmission and distribution (T&D) system.
LUMA objected to the decision.
On April 13 of this year, plaintiffs filed the case captioned Ismael Herrero Domenech and the Class Composed of all Residential Electric Energy Consumers, Customers of LUMA Energy LLC of Puerto Rico v. LUMA Energy LLC; Underwriters A,B,C; Richard Doe; Jane Doe; and Unknown Defendants.
On April 25, a group of plaintiffs filed the case captioned Wendco of Puerto Rico Inc.; MultiSystem Restaurant Inc.; Restaurant Operators Inc.; Apple Caribe Inc. all for themselves and on behalf of all Merchants doing business in the Commonwealth of Puerto Rico and subscribers of LUMA Energy LLC (Class A); Manuel Couvertié Barrera for himself and on behalf of all residential subscribers of LUMA Energy LLC referred to as (Class B) v. LUMA ENERGY LLC; Underwriters A, B, C; John Doe; Richard Doe.
In essence, the plaintiffs’ claims are premised upon LUMA’s performance of operation and maintenance services and its operation of the T&D system. Because the contract between LUMA Energy and the government expressly provides that PREPA shall indemnify LUMA for precisely these types of claims, the class action suit necessarily “could affect PREPA’s rights, liabilities or freedom of action, or otherwise conceivably have an effect on the adjustment of its debts or treatment of the debtor’s property in PREPA’s Title III case,” LUMA said in a court filing.
PREPA has been in bankruptcy since 2017 under Title III of the Puerto Rico Oversight, Management and Economic Stability Act, commonly known as PROMESA, to restructure some $9 billion in debt. The bankruptcy case is slated to be finished by July 2023 but as of press time, the Financial Oversight and Management Board had yet to present a debt adjustment plan for the power utility.
LUMA Energy had argued that the claims in the proposed class action suit are “incontrovertibly related to” PREPA’s Title III case because the allegations clearly involve the operation of PREPA’s electric power grid and the T&D system, the suit said.
Since June 1, 2021, LUMA has been in charge of operating PREPA’s electric power grid.