FirstEnergy lawsuit proposed settlement; what you need to know
Valley residents and FirstEnergy customers in Ohio are receiving a legal notice postcard in the mail about a proposed settlement from a class-action lawsuit filed against the electric provided in 2020.
The proposed $49 million settlement stems from the class action lawsuit filed in the U.S District Court for the Southern District of Ohio, Smith v. FirstEnergy Corp. et al. The lawsuit alleges that FirstEnergy and Energy Harbor engaged in a racketeering scheme in order to pass House Bill 6, which the lawsuit claims led Ohioans to pay monthly surcharges for electricity, according to the lawsuit. Former Speaker of the Ohio House of Representatives Larry Householder and some of his associates allegedly received $60 million from FirstEnergy for allegedly coordinating the passage of HB6, a billion-dollar bailout to assist two Ohio failing nuclear plants, both affiliated with FirstEnergy.
The proposed settlement hasn’t received final approval from Judge Edmund Sargus in Columbus, but a scheduled hearing is set for Nov. 9 to make a final determination on the proposed settlement. If approved, the settlement money would then be paid out to customers.
WHAT YOU NEED TO KNOW ABOUT THE LAWSUIT
Plaintiffs in the suits claim FirstEnergy and Energy Harbor violated the federal Racketeer Influenced Corrupt Organizations Act (RICO) and the Ohio Corrupt Practices Act; while the defendants have denied any liability, a settlement is still pending in federal court.
WHO IS INCLUDED?
People who paid any rates charges, fees, tolls, or other costs pursuant to HB 6 to Ohio Edison, Toledo Edison, or Cleveland Electric from January 1, 2020, through June 22, 2022.
The plaintiffs reached a proposed settlement with the defendants that includes a payout of $49 million, and anyone that accepts part of the settlement money is not able to have any additional claims with regards that could come from the allegations of HB6. If you received a legal notice postcard, you are automatically part of the settlement.
IF I WANT OUT OF THE SETTLEMENT, WHAT DO I DO?
Anyone wanting to be excluded from the settlement must submit a written request that must be postmarked by October 5. If you exclude yourself, you will not receive a share of the settlement but would retain the right to file litigation if so desired against the defendants in conjunction with HB6 allegations.
But opting out may not be as simple as one might think.
According to the federal court-issued settlement notice, you must:
- Prepare and sign a written objection that includes the case name and number (Smith v. FirstEnergy Corp. et al., Case No. 2:20-cv-3755), your full name, current address, and telephone number.
- It also must include a written statement of your objections and specific reasons for each.
- A letter must be written to the court, the three attorneys for the plaintiffs, FirstEnergy's attorneys, and to Energy Harbor's attorneys... a total of nine letters.
- You must also include any supporting papers, evidence, or documents with each letter
- A statement if intending to appear and present your objections at the Fairness Hearing on Nov. 9 at the US District Court for the Southern District at Judge Joseph Kinneary Courthouse in Columbus. Attendance is not required to object to the settlement.
WHAT YOU NEED TO KNOW ABOUT CLASS-ACTION SUITS
WFMJ's Lindsay McCoy spoke with Marc Dann, a consumer law attorney, who said there is a misconception when it comes to class-action lawsuits that all consumers are treated exactly the same way, essentially saying that all involved are harmed in the same way, which may not be the case Dann said.
Dann added, "When a large company rips off a small amount from a lot of people, it doesn't usually make sense to bring individual lawsuits. That is why the class-action mechanism was created," Dann said.
Another option is to stay in the lawsuit but object to the amount with the judge in the case, Dann said.
Dann said that he believes the settlement will be a deterrent for other utilities that might decide to "cheat, bride and use corruption."
Ira Rheingold with the National Association of Consumer Advocates told 21 News that the class-action is a small part of the bigger picture, in this case, saying, "There should be fines against that company, there should be penalties for these companies that worked to cheat consumers."
Rheingold said the proposed settlement would not reimburse consumers for the amount they paid but added that to attempt a lawsuit to recoup more is a difficult road. But Rheingold said the bigger question consumers need to consider is whether the company is being forced to pay enough.
According to the proposed settlement document, out of the $49 million settlement, the attorneys are asking the court to award 1/3 of the settlement, or $16.33 million for ligation and fees associated with the case, leaving $32.66 million to be decided.
The final decision on the proposed settlement and how much consumers will receive will be decided on Nov. 9.