PHCC Wins Class Action Settlement Against Utilities
The suit was filed in November 1992 and sought damages under Connecticut’s Unfair Trade Practices law. PHCC of Connecticut contended that the utilities’ use of unlicensed personnel to do residential service and repair work constituted an unfair trade practice. Contractors asked the courts to require gas companies to reimburse the construction trades for losses sustained by the utilities’ unauthorized and illegal activities.
The suit was concluded this summer with an out-of-court settlement. Although the utilities admitted no wrongdoing, they agreed to pay $542,500. Most of this money went to pay the legal fees incurred by the trade associations that fought unfair utility competition in several different arenas. The settlement also included non-monetary agreements such as requiring the utilities to promote the use of professional contractors in utility mailings for the next five years; a prohibition of placing utility advertising material on residential equipment; a prohibition on the use of utility employees for installing certain residential and commercial equipment; and assistance in developing a contractor referral system.
This legal action cam after contractors won key regulatory and legislative victories. In early 1995, the Connecticut Occupational Licensing Board issued a ruling that the use of unlicensed persons by gas utilities was illegal. That ruling was upheld by the state superior court after being challenged by the utilities. Following the regulatory decision, the contractors went to the state legislature and were able to have legislation introduced requiring utilities to have their training programs approved by the State Apprenticeship Division and calling for the mandatory registration of utility service technicians. The bill quickly passed through the legislature and became law. Those two victories gave contractors in Connecticut the legal footing they needed to take the next step and get compensation for their lost business.
The three utilities involved were Southern Connecticut Gas Company, Connecticut Natural Gas, and Yankee Gas Services. Local contractors and state associations participated in the suite. In addition to the Connecticut Association of Plumbing-Heating-Cooling Contractors, the Connecticut Mechanical Contractors Association, the Connecticut Independent Electrical Contractors Association, the Connecticut Heating Cooling Contractors Association, and Independent Connecticut Petroleum Association participated either directly in the case or in the previous regulatory and legislative battles that laid the groundwork for the lawsuit. The contracting community was represented by the law firm Halloran & Sage.
This settlement is the first victory of its kind. Connecticut PHCC Executive Director Robert Huppelsberg said, “It has been an expensive undertaking. But it has proven that our industry can accomplish a lot it its members cooperate.”