In 2007, CATV subcontractor Sifa Tuiaki was working in an elevated bucket installing fiber optic lines, when the truck made a sharp turn — causing Tuiaki to contact a 7,200-volt power line. He was burned over 45 percent of his body, paralyzed, and had both arms partially amputated. Tuiaki ultimately negotiated a $29 million settlement agreement with multiple defendants.
In another case, a major electric utility was required to pay $740 million in 2009 to settle claims arising out of a wildfire, which was caused when overlashed communications lines broke and contacted the electric utility’s primary.
Accidents involving utility poles can happen at any time. And when they do, the potential legal liability of the utility pole owner or of pole occupants can be significant.
When a utility pole owner or occupant faces legal action arising out of an accident involving one of its utility poles or related facilities, it is almost always in the nature of a “tort” claim. What’s important about this distinction is that a tort claim, as opposed to a breach of contract claim, generally asserts that the defendant was “negligent.”
There are four basic elements of a tort claim: duty, breach, causation and damages. This means that the plaintiff bears the burden of persuading the court that the defendant failed to satisfy its legal duty to keep the plaintiff safe from harm. Also, the plaintiff has to persuade the court that the defendant’s actions (or inaction) directly caused the plaintiff to incur financial harm that is redressable by the court.
1. Duty – It is likely that a court would find that utility pole owners and occupants owe a legal duty to the general public to design, install, operate and maintain their facilities in a reasonably safe condition. This means that utility pole owners and occupants have a duty to practice design and maintenance standards that are at least consistent with industry standards. The legal duty applies to the entire general public and is not limited to persons with whom the utility pole owner or occupant has a contractual obligation, or to persons who may use the poles, such as employees and contractors. It does not mean, however, that the pole owner or occupant is automatically or strictly liable for any accident involving its poles. The legal standard is one of reasonable care, not absolute care.
2. Breach – There are several ways in which a utility pole owner or occupant might be found to have breached its legal duty. First, the utility may be negligent in the location or design of the facilities — for example, placing a pole at the apex of a sharp bend in the road, where it is reasonably foreseeable that a car could strike the pole. Second, the utility pole owner or occupant may be found guilty of failing to adequately maintain its facilities. A rotten or failed pole cross-arm, which should have been replaced in the normal course of business, would be fodder for any plaintiff’s attorney. Finally, pole owners and occupants should be aware that they could breach their legal duty simply by failing to adequately supervise third parties. For example, if a pole owner were to fail to inspect and diagnose faulty work performed by a subcontractor, then the pole owner may be just as liable as the person performing the shoddy work.
3. Causation – The third element of any tort claim is causation. The plaintiff must prove that the defendant’s breach of its legal duty caused the plaintiff’s injury. In many cases, causation will be clear-cut. But imagine the following hypothetical scenario: A pole occupant’s uninsured subcontractor installs a low-hanging cable across a roadway, which is then snagged by a truck that is taller than permitted by law and the truck driver is under the influence of alcohol. Who and what “caused” the accident?
The cynical answer, of course, is that it depends on which party has the deepest pockets to pay or settle a tort claim. In many cases, the deepest pockets belong to the utility pole owner or occupant.
4. Damages – The final element of a tort claim requires the plaintiff to prove compensable damages. In this case, the legal system tends to reduce all injuries to their monetary value. If the plaintiff cannot show direct monetary loss, they are unlikely to prevail.
What utility pole owners should be wary of, however, is being hit with punitive or exemplary damages. Although rare, punitive damages may be awarded by a court to incentivize the defendant to change its behavior in the future. In one highly publicized case, a utility pole owner was ordered to pay over $62.5 million dollars in punitive damages (in addition to another $21.5 million in compensatory damages) to a lineman who was injured when a pole failed. The issue was that the pole owner not only failed to properly inspect and maintain its poles, but also even after the accident in question, the pole owners failed to implement a plan for inspecting and maintaining its poles.
There are some practical steps that all utility pole owners should observe in order to mitigate the risk of a tort claim. These include:
Comply with all applicable industry safety standards. There are several published safety codes, such as the National Electrical Safety Code, that may be directly applicable to electrical facilities. At a minimum, utility pole owners and occupants should insist upon, strict compliance with all applicable code provisions. Compliance with the applicable industry code requirements will provide a helpful, if not complete, defense to a claim that the utility has breached its legal duty. On the flip side, the failure to comply with a code provision will be almost presumptive of a breach of a legal duty.
Regularly inspect all facilities. As the example above involving punitive damages illustrates, all utility pole owners and occupants should have a detailed plan for inspecting their poles and facilities on a regular basis. Moreover, the pole owners and occupants must follow their inspection plan. From a legal perspective, perhaps the only thing worse than not having an inspection plan, is having an inspection plan and not following it.
Implement appropriate contract terms. Utility pole owners should make sure that any person who attaches facilities to their poles, or who otherwise has access to their poles, fully indemnifies the pole owner against third-party tort claims. The pole owner also should insist that pole occupants or users have appropriate liability insurance, and that they post adequate financial security to make sure that the indemnity is not toothless.
In the event that a utility pole owner or occupant does experience an accident involving one or more of its poles or facilities, there are several things that it can and should do to mitigate the risk of an adverse tort claim:
Immediately correct the problem. When an accident happens, the first thing the utility pole owner or occupant should do is to identify and correct the cause of the accident. If the pole owners fail to do so, and repeat accidents occur, they face the risk of punitive damages. Under the rules of evidence, the fact that the defendant took corrective action after an accident cannot be used as an admission of liability or to prove culpability. The law generally wants people to take corrective action to remove hazards, not punish them for doing so.
Never admit fault. Every utility pole owner and occupant should have a policy about public statements, and they should educate their employees and subcontractors of the following: never make a statement admitting fault or liability unless that admission comes at the direction of the senior management or governing body following a thorough investigation. While the initial impression may make it seem likely that the utility pole owner or occupant is at fault in a given incident, additional facts may show that not to be the case or that other persons are also liable. Once an admission of fault has been made, however, it will almost certainly be used against the defendant notwithstanding contrary facts that may be discovered later.
Preserve privilege and confidentiality of communications. If there is an accident where a person has been injured or property has been damaged, it is reasonable to assume that legal claims may follow. The utility pole owner can therefore protect its legal position going forward by conducting an investigation and communicating internally about the accident at the advice and direction of legal counsel. Doing so will help shield such investigations and communications from discovery by a potential plaintiff due to the attorney-client privilege. Any communications directly with the potential plaintiff should be made in writing and labeled as a “confidential settlement communications,” so that such communications cannot later be used as evidence against the pole owner.
Immediately notify any and all possible insurance providers. Finally, the utility pole owner or occupant, whose property has been involved in an accident, should immediately notify in writing any and all possible insurance providers of a potential claim. The pole owner or occupant should not rely entirely on its assessment that certain types of coverage do not apply. Insurance agreements require special expertise, and in some cases, events may be covered that the insured does not even realize. The reason to provide immediate notice is two-fold: First, many insurance policies do not just cover the loss; they also pay for or provide a legal defense against claims made. Second, the failure to provide immediate notice to the carrier could open the door for the carrier to claim that its defense rights have been prejudiced and therefore deny the claim.