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Farrar v. Centerpoint Energy Resources Corp.

Court of Appeals of Louisiana, Second Circuit

April 10, 2019

KELLY FARRAR Plaintiff-Appellant

          Appealed from the Twenty-Sixth Judicial District Court for the Parish of Webster, Louisiana Trial Court No. 74871 Honorable Jeff R. Thompson, Judge

          DOWNER, JONES, MARINO & WILHITE, LLC By: Pamela R. Jones Counsel for Appellant

          BLANCHARD, WALKER, O'QUINN & ROBERTS, APLC By: M. Thomas Arceneaux Stacey D. Williams Counsel for Appellee

          Before PITMAN, COX, and STEPHENS, JJ.

          PITMAN, J.

         Plaintiff Kelly Farrar appeals the judgment of the trial court granting a motion for summary judgment filed by Defendant CenterPoint Energy Resources Corp., d/b/a/ CenterPoint Energy Arkla, and dismissing the suit. For the following reasons, we affirm.


         Plaintiff sued Defendant, which provided gas service to his home in Minden, Louisiana, alleging that, without his permission, Defendant installed an "Encoder Receiver Transmitter" device ("ERT") on the gas meter at his home. The ERT replaced the analog meter with index dials that had previously measured his utility usage for purposes of reading the meter, but the ERT was still attached to the analog meter with dials. He alleged that this ERT contains a radio transmitter, a radio receiver and a digital encoding and electronic storage device and is electronically programmable. He also alleged that the device not only allows Defendant to monitor gas consumption for billing purposes, but also allows it to "collect precise and detailed measurements about customers' activities within their homes, to collect and store that data, and to communicate data to and from customers' meters." He further alleged that this ability to collect, store and communicate data has resulted in an unreasonable invasion of his privacy in his home because the data collected renders precise information about the details of activities within his home, such as the number of people within the house at any given time; their likely ages, gender and activity level; when they are home; when they wash dishes and clothes and bathe; and when they cook meals. He claimed that this expansive collection of unnecessary data exceeds that necessary for billing purposes and, in fact, is data for which there is a growing market and which Defendant can now sell.

         Plaintiff also alleged that the ERT was installed without his permission and that when he discovered his gas usage was being monitored through the device, he demanded that Defendant remove it from his meter. Defendant conditioned the continuation of service upon the acceptance of the ERT, and when he refused, Defendant removed the ERT and discontinued his gas service. Plaintiff claimed he had a constitutional right to privacy under La. Const. art. 1, § 5, against both governmental and private intrusions and noted that the unreasonable invasion of privacy is a tort actionable under La. C.C. art. 2315. He further alleged he was monetarily damaged by termination of gas utility services and that he had to incur the cost of converting to alternative energy sources and purchasing appliances that could be operated by an alternate energy source. He sought monetary damage for injuries resulting from Defendant's invasion of his privacy and the consequent loss of utility services.

         Defendant filed a motion for summary judgment, claiming that the ERT allows it to obtain readings of gas usage remotely; thus, it is cost efficient and helps the company keep its rates low. It pointed out that Plaintiff objected to the ERT attached to his meter because he believed it to be an electronic surveillance device that allowed it to know precise details concerning the use of gas in the home and details of activities and persons in the home. When Plaintiff objected to the ERT being located on his meter, it was removed six months after installation, at which time he used gas for heating his home only through central heating and a gas water heater.

         Defendant claimed Plaintiff has asserted three ways his privacy was invaded by the ERT: (1) The ERT was installed for purposes of obtaining more information than necessary for billing purposes, which gathering of excessive data was a violation of his right to privacy; (2) Defendant failed to provide any protection against third-party interception of the ERT's transmissions of the excessive data; and, (3) Defendant installed the ERT without his knowledge or consent and without a right to enter his property to install the electronic surveillance device.

         Defendant claimed it had an obligation to provide Plaintiff with a meter at his residence that would allow him to see the meter dial and ascertain how much gas was being consumed. It argued that the ERT was installed on the existing meter and did not affect the meter dials or Plaintiff's ability to see them and ascertain how much gas was being consumed. It alleged that it had the authority to install the ERT per the "Standard Gas Tariff" ("the Tariff") filed with the Louisiana Public Service Commission, which provides that it has the right to enter the premises of customers at reasonable hours to change or remove equipment it owns. It asserted that the ERT is not a surveillance device and Plaintiff cannot prove that it gathered more information about him than was necessary for the provision of natural gas and the billing for that service or that it had not provided protection against third-party interception of the ERT's transmissions. Last, it alleged that Plaintiff cannot prove that data about his gas usage was shared with, or sold to, any third party; thus, he has failed to state a viable action for invasion of privacy.

         In support of its motion for summary judgment, Defendant filed the affidavit of Bobby R. Burns, its regional operations director; a copy of the Tariff; letters written to it by Plaintiff detailing all the conflicts he had with its employees and his reason for demanding the removal of the ERT; the affidavit of Charles Engelken, its manager of meter reading; the affidavit of Mary James, its IT director in Houston, Texas; and Plaintiff's deposition.

         Burns's affidavit states he is Defendant's regional operations director and has been employed for 40 years. He stated that Defendant's operations are governed by the Tariff and that it contains the terms and conditions of service between it and its customers. He stated that the Tariff allows Defendant or its contractors, agents or employees to enter a customer's premises at reasonable hours to repair, replace or modify Defendant's equipment and notes that a copy of the relevant portion of the Tariff is attached to his affidavit. He stated that nothing in the Tariff requires particular metering or measuring devices or regulates the frequency with which Defendant may collect or store data measuring gas usage by a customer. Plaintiff was a customer beginning in August 2003, and the ERT was installed at his residence on September 7, 2014. Plaintiff made repeated requests for the ERT to be removed; and, after he was informed that he would no longer be able to receive gas service to his house if the ERT was removed, he elected to have it removed anyway. The ERT was removed and gas service to his house ended on March 2, 2015.

         The affidavit of Engelken stated that the ERTs were installed to accelerate the meter readers' ability to read the meters and thereby reduce that cost. The cost went from $1 per meter to $0.10 per meter after the ERTs were installed. He stated that the ERT works with the wheel on the meter, counting each revolution of the wheel in order to determine the amount of gas passing through the meter and that the dials of the meter function the same way and remain operational after the ERT is installed. He further stated that the ERT stores the data it collects for 40 days. Starting with the 41st day after the installation of the ERT, the oldest data is replaced by the newest data. Thereafter, as each new day's data is added, the oldest data is replaced. The ERT is only capable of transmitting data. It cannot receive data from remote sources. Once a month, when Defendant's utility vehicle passes by, the ERT is awakened by a signal sent from the vehicle. It transmits data to the vehicle consisting of the meter number, ERT module number and the reading of the gas meter. Transmissions are made over a 900 mhz FM frequency. Only the reading of the gas meter is transmitted, not the stored data. He stated that when the data is received by the meter reader, special software and equipment is used to translate the data into usable information for billing purposes. The software used to translate the data is proprietary and confidential. Prior to and after installation of the ERTs, the only information gathered from individual meters is the volume of gas that passed through the meter between readings. There has been no change in the information that is obtained from the meter reading, just in the way the meter is read.

         The affidavit of James states that she is responsible for maintaining the SAP software licensed and used by Defendant for billing purposes and ensuring that it is used in accordance with its policies. She stated that the SAP software used for billing applies the data gathered from meter reads to customer account data in order to generate monthly bills. The data gathered from meter reads includes the meter number, ERT number and the volume of gas that passed through the meter since the last time it was read. Customer account data includes, but is not limited to, the customer's name, address, account number and billing history. All of the data gathered from meter reads remains on servers within Defendant's control, and it does not commercially share or sell the meter reads or customer account data with SAP or any other party.

         Defendant's brief in support of its motion for summary judgment points out that the law describes two different types of claims that exist for invasion of privacy, i.e. actionable and non-actionable. It points out that an actionable invasion of privacy arises only when a defendant's conduct is unreasonable and seriously interferes with a privacy interest. The reasonableness of the defendant's acts is determined by balancing the interests of the plaintiff in protecting his privacy from serious invasions with the defendant's interest in pursuing his course of conduct. A defendant's conduct is deemed reasonable and non-actionable when it is properly authorized or justified by circumstances, even if there is a slight invasion of the plaintiff's privacy.

         In opposition to the motion for summary judgment, Plaintiff filed his own affidavit and that of Stephen A. DeLurigio, Sr., a professor emeritus and retired professor of operations management from the University of Missouri with an MBA and Ph.D in Management Science/Operations Research. Dr. DeLurigio's affidavit states he was asked to offer an opinion on whether the ERT device captures and transmits data from which detailed information about activities within the home is revealed, the commercial uses of that data and the consequential customer privacy concerns implicated in the over-collection of data. Scientific charts, data and analysis (27 pages) are attached to his affidavit. He concludes his affidavit with statements that the ERT is capable of collecting other data (as proposed by Plaintiff) and that companies are now acquiring ...

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