PG&E Agrees to Pay

At 2:00 p.m. today, the lawyers will report to Judge Dylina that PG&E has agreed to settle all but two of the lawsuits brought against it by the victims of the PG&E explosion.  PG&E agreed to settle with 286 of its victims on Friday, September 6, and with the remaining 61 on September 9 -- the third anniversary of the explosion.  The 59 clients we represent were the last to reach agreement with PG&E on Monday.  The amounts of the settlement are confidential, but PG&E told the Securities and Exchange Commission that it expects to record a charge of approximately $110 million in connection with the agreements.

Why did the cases settle?

PG&E finally agreed to pay amounts that made sense to its victims.

Why now?

Before PG&E would agree to compensate the victims, the victims had to prove to PG&E that they were willing to go all the way to trial. 

How did they prove they were willing to go to trial?

For three years, the victims put up with PG&E’s prodding, poking and questioning.  They agreed to undergo the mental exams that PG&E insisted upon.  They tolerated PG&E calling them fakers and whiners.  They stood up to PG&E and never gave in.  

Are the victims happy with the settlements?

Though each victim’s story is different, each lost a certain peace of mind as a result of the explosion.  They will never that get back.  They will never sleep the same again.  Money is a poor substitute for peace of mind.  But the victims are satisfied that they did their part to hold PG&E accountable for its actions and for what it did to their neighborhood.  The victims did their part in exposing PG&E’s wrongdoing, and in perhaps bringing about change for the better, making it less likely that something like this will happen again.  To that extent, the victims are pleased with the settlement. 

San Bruno Trial Halted

The jury was supposed to be empanelled in February to hear and decide ten families’ test cases against PG&E. But over the last few weeks, while the attorneys argued pre-trial motions, a number of those families’ cases  settled. Today, the judge ruled that the four cases that are still on for trial (Healy, O’Neill, Chea, and Kim) are not a sufficient representative sample of the more than 100 lawsuits that remain. So he ordered the trial date off calendar.

About a quarter of the more than 100 cases filed against PG&E have now settled. Many of the settlements have come in the last couple of months. With the trial date off calendar, all the lawyers are to return to court on January 23 to provide the court with a plan for proceeding. The plan is to include a way of possibly settling all families’ claims without the need for any trial at all.

Certainly, PG&E has settled more cases recently.  Is that because PG&E has decided settling the cases was the right thing to do for the victims of the explosion? Or was it simply because trial was right around the corner? 

We’ll know more about that in the next few weeks.

Related coverage from Joshua Melvin at the San Mateo County Times.

San Bruno Judge Makes More Rulings As Trial Approaches

With the January 2 trial date fast approaching, today’s case management conference before Judge Dylina lasted most of the day.

Punitive Damages Claim Won’t Be Split Off

PG&E asked the court to split off the issue of whether PG&E should pay punitive damages and save that issue for a second trial later next year. The judge denied PG&E's request. He agreed with the plaintiffs' lawyers that the issue of punitive damages should be presented along with all the other issues involved in the case to the jury that is empaneled in January. Nothing should be carved out from that trial and reserved for later.

Should the Judge Speak Personally to PG&E’s CEO about Settling the Cases?

The judge noted that PG&E’s chairman of the board, Tony Earley, has stated publicly that it is PG&E’s desire to settle the cases before trial. Yet, settlement discussions seem to have stalled. The judge noted that PG&E has not been complying with his order that requires PG&E to make a response to any plaintiff’s settlement demand 5 days before the settlement conference takes place. Instead, PG&E seems to be waiting until the day of the settlement conference to state its settlement position. Eighty percent of the cases remain unsettled.

The Settlement Judges have reported back to him that they are experiencing some frustration with the process. The judge is considering inviting Mr. Earley to appear in court, so that he can hear first-hand the judge’s thoughts on the importance of the cases and the seriousness of the punitive damages claims against PG&E. PG&E’s lawyers objected to Mr. Earley appearing in court, saying that they have already explained things to the CEO. The judge is going to mull over whether he will ask Mr. Earley to appear in court.

Too Many Motions in Limine

The judge will hear arguments on December 21 concerning what evidence should be kept out of the January trial. Hearings on such arguments are routine before every trial. In this case, however, thousands of pages of briefs have been filed. The volume of the briefing is overwhelming as, according to the judge, perhaps unnecessary. The lawyers are to meet and attempt to trim down the issues to be argued on December 21.

Lawyers Return to Court

Next Case Management Conference: December 11.

San Bruno Judge Refuses to Throw Out Victims' Claim for Punitive Damages

Today Judge Dylina denied PG&E’s request to throw out of court the victims’ claims for punitive damages.  Instead, he is leaving  the question of whether PG&E should pay punitive damages to the jury. 

PG&E argued that the punitive damages issue was getting in the way of settlement negotiations. PG&E says it has done nothing deserving of punishment.  (Of course, lawyers for the victims disagree.) Throw out of court the victims' claims for punitive damages now, PG&E argued, and the victims might well view PG&E’s settlement offers as being more attractive than they have to date.

The judge agreed that a ruling on the punitive damages issue might help the parties get more realistic in their settlement discussions. But instead of telling plaintiffs that he was throwing their claims out, he told PG&E that he was leaving them in. The judge ruled that it's up to the jury to decide whether PG&E's conduct -- in particular its failure to test and replace segment 180 -- shows that PG&E "consciously disregarded" the safety of the public.  If the jury decides that it does, then it would be justified in assessing punitive damages.

Let’s see if PG&E gets the message. 

Other news from the two-day hearing:

  • Yesterday the judge threw out PG&E's claim that the victims were somehow responsible for the fire.  He found that there simply was no evidence to support it. PG&E will not be allowed to blame the victims at trial.
  • The judge ruled that PG&E's installation of the faulty gas line constituted a “taking” of plaintiffs’ property. This ruling clears the way for at least certain plaintiffs to recover against PG&E for the diminution in the market value of their property that PG&E’s conduct caused.
  • PG&E has asked the court to “bifurcate” the issue of punitive damages.  That is, PG&E has asked that a trial first be held on the issue of how much money should be awarded to compensate the victims for their actual losses.  Then, once all the victims’ cases have been tried by that jury, a second jury be empaneled to decide the issue of punitive damages.  The judge set November 20 as the date to hear arguments on that request.  But the judge made it clear that he was unlikely to "bifurcate" the trial in this fashion, as he had already considered and rejected this idea at the outset of the case.

 

San Bruno Gas Explosion: Punitive Damages Hearing Postponed

Judge Dylina has postponed argument on whether the victims' claims for punitive damages against PG&E should be thrown out of court.  Arguments will now be heard on October 29 instead of October 15.

The judge also postponed to December 21 arguments on what evidence, if any, will be excluded from trial.

The trial date of January 2 remains unchanged.

PG&E's Lawyer Denies PG&E Ever Lost Its Way

PG&E's new $10 million media campaign features Tony Earley, PG&E's CEO, saying that in recent years, PG&E had "lost its way." (Cue the music and the video of cute little kids.)

That, I suppose, is what passes among PG&E's top management as an apology.

Seems that Earley forgot to run his sound bite by PG&E's lawyers.  After all, it's the lawyers who run the show at PG&E and they seem to disagree with this "we lost our way" nonsense.

According to Jaxon Van Derbeken at the Chronicle, at this week's hearings, CPUC staff accused that

PG&E's pipeline integrity management program, record keeping and emergency response the night of the blast violated the law. In particular, the PG&E Lawyer Joseph Malkincompany was accused by regulators of failing to test the San Bruno line in recent years even after it twice boosted gas pressures above legal levels."

In response, rather than repeating Earley's "we lost our way" mantra, PG&E's lawyer denied everything.  The lawyer, Joseph Malkin (pictured) claimed that PG&E's practice of spiking the pressure in its gas lines was legal, that it posed no danger to the pipeline and that it had nothing to do with the blast.

According to Van Derbeken, PG&E's lawyer said that

PG&E's only responsibility in the blast was unwittingly installing and operating a defective pipe [in 1956]."  

Far cry from Earley's "we lost our way" stuff. 

San Bruno Explosion: Two Years Later

Hundreds of PG&E’s victims still haven’t been compensated for what they’ve been through.  PG&E admits it caused the explosion, but it still hasn’t settled their claims. 

Once the lawsuits started, some thought PG&E would want to “settle quick.”  Those folks were wrong. The fact of the matter is that PG&E has paid settlements on very few cases – perhaps one out of ten. 

What about the hundreds of cases that PG&E won’t settle? The victims are supposed to be able to take PG&E to trial and have a jury decide. That’s why, after all, we have courthouses. But for the people of San Bruno, getting to trial has been a struggle.

There was going to be a trial this past July.  The trial was going to include only a very small number of the families who were affected by the explosion.  The hope was that after the jury rendered its verdicts for a few of the families, PG&E would see the writing on the wall and settle the remaining cases.  Additional trials might not be necessary.   

Unfortunately, that first  trial was postponed.  Then it was postponed again. And again.  Now it won’t start until January, 2013.    

Some frequently asked questions:

Who are the families who will be included in the first trial set for January?

As of now, the families are:

  • Locon
  • Ruigomez
  • Tafralis
  • Vasquez
  • Barr
  • Healy
  • O’Neill
  • Kim
  • Magoolaghan
  • Chea

How did those particular families get picked?

Months ago, the judge allowed PG&E to pick some families, and then allowed the plaintiffs’ attorneys to pick some.  Then, just before one of the previous trial dates, PG&E decided it didn’t like some of the cases it had picked.  The judge dropped those families from the list and stuck others in their place.  That’s one of the reasons why the current list looks different from the one here.

Can PG&E still decide to pay settlements?

Sure.  PG&E can decide to pay anytime.  But people with experience dealing with PG&E aren’t holding their breath. Instead, they are counting on trial. It’s just a question of when that trial will happen. 

Many victims still struggle with post traumatic stress.  Some have lost their jobs. Why is PG&E spending $10 million on public relations when they still haven’t compensated these folks? 

Watch what PG&E spokesman Joe Molica says and decide for yourself.

 

 

 

Trial Against PG&E Postponed. (Again.)

Trial was set to begin October 9. But because an important witness became ill and could not attend his deposition, everyone expected that the date would have to slip a couple of weeks.

But today, Judge Dylina ruled that trial will not begin until January 2, 2013. That’s a disappointment for the plaintiffs, who had originally been told that trial would begin July 2. Then July 23. Then, they were told they would need to wait until October 9 for their day in court. Now, it’s next year.

The judge cited a number of reasons for pushing the trial out to next year, including the budget crisis that is affecting the courts generally.

The new schedule:

  • Argument on whether plaintiffs’ punitive damages claims should be thrown out: October 15
  • Arguments on what evidence, if any, should be excluded from trial: November 30
  • Trial to begin with lawyers only: January 2
  • Jury selection to start: January 3
  • Opening statements to start: January 14 

Gas Leak Fuels Victims' PTSD

Today's gas leak at the intersection of Glenview and Earl Avenue served as a frightful reminder to the Crestmoor residents of the September 2010 San Bruno explosion.  For many residents the sight of fire engines and the call to evacuate will rekindle flashbacks and distressing dreams of the event.  There's no doubt that this gas leak will exacerbate many San Bruno residents’ Post Traumatic Stress Disorder (PTSD). 

Even PG&E’s psychological experts agree that many Bruno residents now suffer from PTSD.  Psychiatrists rely upon the DSM IV for the diagnostic features of PTSD.  Those who suffer from PTSD may have personally experienced the explosion and suffered from the threat of death or physical injury to self or the threat of death or injury to a family member or other close associate.  

The PTSD  victim's response involves intense fear, helplessness, horror, and agitated behavioror.  The symptoms include persistent re-experiencing of the traumatic event; often referred to as flashbacks.  The victim also may show a persistent avoidance of stimuli associated with the trauma such as fire engines or loud noises that sound like the roar of the uncontrolled gas fire. Other symptoms include a general numbing resulting in feelings of detachment or estrangement; and an inability to feel emotions such as intimacy or tenderness.   

Another common symptom of PTSD is a sense of a foreshortened future:  not expecting to have a career, marriage, children or even a normal life span.

Although today's gas leak is a sad reminder of the tragedy nearly two years ago, it also confirms the intensity of emotional distress the residents have suffered.  Not all residents know that their symptoms amount to PTSD.  But victims should not delay contacting an attorney.  The two year anniversary of the event – September 9, 2012 is also the deadline for filing a claim for any damages (physical, emotional, or property related) against PG&E.

With Trial Approaching, PG&E Launches $10 Million Ad Campaign

PG&E says that its first priority is safety.  PG&E says its next priority is compensating the victims of the San Bruno fire. 

But are those really PG&E's priorities?

PG&E has just launched a multimedia advertising campaign designed to make itself look good.  According to the San Francisco Chronicle, the campaign will cost $10 million.

It might appear that, with the trial approaching, PG&E's first priority is repairing its public image.  Otherwise, why wouldn't PG&E spend the $10 million on badly needed safety upgrades instead?  Or on compensating those victims who, to this day, have received nothing from PG&E for the explosion PG&E admits it caused?

PG&E told the Chronicle that it is running the PR campaign because customers want it.

[Customers] want to hear what we are doing, about the work we are doing every day about safety and reliability . . .[they want to know about] what we are doing to make our pipelines safe and reliable."

Maybe PG&E could have just tucked a flyer in with next month's utility bill.  That might have cost a little less than $10 million.

 

San Bruno Explosion Trial Date Moved

Though PG&E previously admitted liability for the explosion and stated that it was "committed" to fully compensating its victims, PG&E has asked the court to throw certain of plaintiffs' claims out of court. In particular, PG&E has asked the court to throw out all the plaintiffs' claim for punitive damages, and to throw out certain plaintiffs' claims for emotional distress. The court will hear will hear PG&E's arguments on September 4.

Trial will now begin October 9. On that date, the judge will decide what evidence should be excluded from trial. Jury selection will begin on the next day, October 10, and is likely to take a least a week. Opening statements will begin as soon as a jury has been selected.
 

PG&E: Judge Picks Cases To Be Tried

At today’s court hearing, Judge Dylina tentatively selected the cases to be included in the trial that is scheduled to begin against PG&E on July 23:

  • Bullis v. PG&EPG&E Gas Explosion Cases
  • Estate of Franco v. PG&E
  • Ruigomez v. PG&E
  • Low v. PG&E
  • Zapata v. PG&E
  • Healy v. PG&E
  • Chea  v. PG&E
  • Viscarra v. PG&E

The judge will finalize the selections next week.

Beginning next week, the judge will hold a conference with the attorneys every Thursday afternoon. The purpose to the conference is to ensure that each side turns evidence over to the other as appropriate and that trial preparations proceed smoothly.  

The judge also ordered that the victims involved in the cases that have been selected for trial will each be required to participate in a mandatory settlement conference with PG&E before trial begins. Other victims may participate in settlement conferences if they would like, but the judge will not require them to do so before the July trial.

CPUC President Appoints Himself to Lead Investigation Against PG&E

In the five years leading up to the fire, the CPUC found that PG&E committed more than 400 safety violations.  Each time, instead of fining PG&E, it let it off with a warning.

It was the CPUC’s job to keep the public safe from PG&E.  The CPUC failed to do that job.  The CPUC has never adequately explained why it let PG&E slide for so many years.

Michael Peevey has been at the helm of the CPUC since 2002.  Instead of stepping down, he has now appointed himself to lead the investigation against PG&E.

Is it any wonder that the public has no trust in the regulators?

 

PG&E's Admission of Liability No More Than a Litigation Ploy

PG&E made a show of finally “admitting liability” for the explosion.  What brought that about?  A sudden pang of conscience?

Not quite. 

PG&E's latest move is classic litigation strategy.  It's designed to help PG&E escape full responsibility for what it did rather than own up to its responsibility.  The move paves the way for PG&E to ask the judge to keep out of trial any evidence concerning what caused the explosion. Expect PG&E to argue that, since it admits liability, there’s no reason to allow the victims' lawyers to uncover what really happened. Or to explain it to the jury.  Instead, PG&E will argue that all that evidence should be swept under the rug.

This strategy isn’t really new.  It’s common when a defendant’s conduct is really, really bad.  For example, a driver who was momentarily inattentive and injures someone in a crosswalk might dispute responsibility for an accident all the way through trial.  But if that same driver was drunk, he will quickly admit liability. Then the driver will argue to the judge that that since he admits liability, the fact that he was drunk is irrelevant and should not be told to the jury.

The trick is an old one.  Do everything possible to keep the public from finding out what really happened.

We'll see how this plays out.

San Bruno Judge Orders 16 "Representative" Fire Cases to Trial in 2012.

On July 2, 2012, trial will begin in 16 San Bruno Explosion cases. The Court ordered that the cases to be tried first will be representative of the following eight categories of lawsuits that have been filed:

  1. Wrongful death
  2. Serious bodily injury which required hospitalization.
  3. Minor bodily injury which required some medical treatment and total property loss.
  4. Minor bodily injury which required some medical treatment and lesser or no property loss.
  5. Bodily injury, present at the time of the explosion and total property loss.
  6. Bodily injury, present at the time of the explosion and lesser or no property loss.
  7. Homeowner not present at the time of the explosion and total property loss.
  8. Homeowner not present at the time of the explosion and lesser or no property loss.

"Bodily injury" includes emotional distress cases. Victims select eight cases and PG&E selects the other eight. Often a case includes members of the same household who have suffered varying degrees of injuries. If so, then the case will be defined by the most severe category of claim.

PG&E continues its double speak. Repeatedly, PG&E attorneys told the Court that it doesn’t blame the explosion victims for their injuries. But when pressed, PG&E would not withdraw its legal arguments that the victims may bear some responsibility for their injuries. The touchy-feely public relations voice cannot be trusted until PG&E changes its legal position. Because of the double speak, the selection of representative cases will be tricky. PG&E may have evidence of turpentine in the garage or failure to timely evacuate – right now victims can only speculate how PG&E intends to cast blame at trial.

The Public Reacts to PG&E Blaming San Bruno Victims

PG&E had the perfect opportunity to stand up in court and take responsibility for what it has done to the people of San Bruno.  Instead, when it filed its written answer to the victims' lawsuits, it denied everything, and blamed everyone else, including its victims. PG&E stated that it should not be required to compensate plaintiffs because of the legal doctrines of "comparative negligence" and "contributory negligence."  In other words, according to PG&E, the victims were responsible for their own injuries.

I wrote about PG&E's legal position here.  Then, a few days ago, Jaxon Van Derbeken of the San Francisco Chronicle, wrote about it.  By Tuesday, most of the bay area TV stations were on the story, including NBC 11.

 

Once PG&E saw that blaming the victims wasn't exactly winning over any new fans, it issued a hasty press release stating that it never "intended" to blame the victims.  It filed new papers with the court saying the same thing.  Trouble is PG&E's new court papers assert the defenses of "comparative negligence" and "contributory negligence"  too. That is, PG&E's new papers, just like its old, blame the victims for their own injuries. 

As CBS 5 noted, PG&E's blame game is "astonishing," and its backpedalling is too little, too late.

 

PG&E Denies Everything

PG&E filed today its answer to the lawsuits brought by the victims of the San Bruno fire. This was PG&E’s first opportunity, legally speaking, to publicly account for itself in court.

PG&E owned up to nothing.  Instead, the document lists the 32 reasons why PG&E says it is not responsible for the fire and the harm that resulted from it.  Some of the most interesting:

State of the Art. PG&E says it is not responsible because the pipe that exploded was “state of the art.” (Paragraph 20.)

Does PG&E really believe that a high pressure pipe with missing welds and welds that go only halfway through is "state of the art"?

Looks like PG&E is taking issue with the NTSB, which found that the pipe that exploded failed to meet the minimum standards in effect in 1956.

Comparative Negligence. PG&E says plaintiffs’ injuries may have been caused by persons other than defendants “who may have been legally responsible under the doctrine of comparative negligence [or] contributory negligence.” (Paragraph 9.)

What does this mean? In plain English, PG&E is saying that plaintiffs themselves are to some extent responsible for their own injuries. 

Statute of Limitations. PG&E says that plaintiffs claims are barred by the statute of limitations. (Paragraph 3.)  But heck, it hasn’t even been a year yet.

In sum, PG&E admits nothing, denies everything, and blames others, including its victims.  

PG&E ends with a request to the court that plaintiffs be required to pay it “for costs of suit [and] that plaintiffs take nothing.”

That’s kind of harsh. Does PG&E really believe that plaintiffs should walk away without any compensation at all?

We hear a lot about frivolous lawsuits. But once in a while you run across a frivolous defense.
 

PG&E's Answer to San Bruno Fire Complaints
 

PG&E Criminal Investigation Could Slow Victims' Lawsuits

The Blue Ribbon panel appointed by the CPUC has blasted PG&E, suggesting that PG&E knew about the weaknesses in its system for years before the explosion but did essentially nothing.  According to Steve Johnson, writing for the San Mateo Times, the panel noted:

that an internal PG&E review three years before the San Bruno explosion had listed the company's gas system as among several catastrophic risks facing the utility. . .Yet, when the expert panel checked to see how PG&E responded to the red flags, it was dismayed.

The panel's finding really isn't much of a surprise.  Weeks after the explosion, I wrote here that PG&E knew about a potential catastrophe, but failed to warn its customers.  Martin Ricard published that story way back on September 23.

Now the Department of Justice and the San Mateo County District Attorney's office are launching a criminal investigation.  What does that mean for the victims?  Generally, criminal investigations mean delay for civil lawsuits.  Management representatives, when questioned under oath, tend to assert their 5th amendment rights against self-incrimination and refuse to testify until the criminal proceedings are concluded.

We'll see what PG&E management does here.

The panel's full report is here.

Surprises from Judge Dylina at the First Hearing on the San Bruno Fire Cases

Judge Dylina started out today by explaining that he believes he was selected to be the judge for the San Bruno Fire cases because of his experience with complex cases and also his experience as a settlement judge.  No surprise there.  But then he made clear that the San Bruno Fire cases are the court's first priority. That's unusual. In general, judges say that all cases are equally important, and that every plaintiff must wait his turn. But the judge stated repeatedly that the San Bruno residents have suffered horrific losses, and that the cases are of special importance to the community and to people of San Mateo County generally. For that reason, they are Courtroomto be given priority over other cases.  The judge says he intends to get the cases resolved as quickly as possible.

Included in the coordinated lawsuits is one brought by PG&E shareholders against PG&E management. The shareholders claim that management knew about the pipeline problems and did nothing to stop the explosion from happening. By allowing the explosion, the lawsuit claims, management hurt the price of PG&E's stock. Judge Dylina "stayed" -- or froze -- that lawsuit. He ruled that the priority was the San Bruno residents, not the shareholders. Allowing the stockholder lawsuit to proceed would take away time he could better spend on the cases involving the residents. So he will turn to the shareholders actions down the road, only after the residents' cases have been "substantially resolved."

There are two class actions included in the cases. Judge Dylina indicated that he did not think the class actions were appropriate. It is highly unlikely they will be proceeding to trial. Each victim suffered unique harm. Thus, each needs his or her own lawyer, and each lawsuit needs to be separately brought.  

All this is good news for victims.  At long last, the cases are finally on the right track. Judge Dylina set the next hearing for June 30. At that time, a more detailed schedule will be set. Until then, plaintiffs are not allowed to force PG&E to turn documents over or have witnesses appear for depositon. But after June 30th, according to the judge, "the floodgates will open."

The Dangers of PG&E's Underground Utility Vaults Back in Public Eye

In July 2009 -- more than a year before the San Bruno explosion -- we warned about the dangers to the public posed by PG&E's aging underground infrastructure.  Back then, we were focusing on the utility vaults hidden beneath the streets and sidewalks of San Francisco and other urban areas.  They have a long history of exploding without warning. We called them "timebombs beneath the streets" because, frankly, that's what they are.

 

When the newscast aired, PG&E pledged it was doing all it could to fix the problem of its aging infrastructure.  We didn't believe them. 

And then the San Bruno fire happened.

Now, almost two years after the newscast first aired, Steve Johnson of the San Jose Mercury News has begun to investigate the hazards posed by PG&E's underground vaults.  Perhaps the most astounding part of his front page article  is that PG&E appears to have no idea of exactly how many of its underground vaults have exploded over the past few years.

While this newspaper counted 78 Bay Area underground mishaps since 2005 PG&E said before Wednesday's incident that it knew of just 35 throughout its entire service territory, which covers 70,000 square miles from Eureka to Bakersfield. The California Public Utilities Commission -- which only tracks the worst accidents -- said it is aware of 11 PG&E incidents during that period, six for Southern California Edison and none for San Diego Gas & Electric.

That doesn't exactly instill us with confidence that PG&E -- or the CPUC for the matter -- is on top of the situation.  Who, then, is protecting public safety?

PG&E Says Its Rights Are Being Violated

Without a judge to preside over their claims, the San Bruno fire victims' lawsuits have, up until now, been in limbo. That will soon change, as Judge Steven Dylina has just been assigned to hear all the suits arising from the PG&E fire, wherever those suits may have been filed. The first hearing in the cases should be scheduled within the next two weeks. The order assigning Judge Dylina is here.

Meanwhile, the California Public Utilities Commision continues to investigate PG&E's management and maintenance practices. But PG&E is already crying foul. According to Steve Johnson's latest article in the San Jose Mercury News, PG&E objects to the CPUC's "tone":

In a testy response to the commission's order that by Monday it answer questions about its record-keeping practices, PG&E's attorneys said the agency seems to be starting "with a presumption of guilt" that is "contrary to American precepts of due process."

It's a bit ironic to hear PG&E complain that it has not been afforded "due process," given that its victims have been waiting for months for their chance to be heard at all. 

Judge Orders San Bruno Fire Cases Coordinated

Where will the San Bruno fire cases be heard? This morning, Judge Forcum ruled that all of the cases should be heard by one judge, and that judge should be in San Mateo County. That was no surprise. Now, it’s up to the Chief Justice of the California Supreme Court to approve Judge Forcum’s ruling. When she does that (and there’s little question that she will), a judge will be selected from the San Mateo bench to handle all the cases. We’re expecting a judge to be picked within the next three weeks.  Until then, the PG&E cases remain at a standstill.

One of the lawsuits that Judge Forcum ordered coordinated with all the others was a lawsuit brought by PG&E shareholders against PG&E management. The shareholders claim that management knew about the problems with the pipeline and did nothing to stop the explosion from happening. By allowing the explosion, the lawsuit claims, management hurt the price of PG&E’s stock.

The only argument at today’s hearing centered around that case. PG&E argued that that the shareholder lawsuit should not be coordinated with the others because the questions in that case have little to do with those in the personal injury suits. Therefore, PG&E argued, they should not be all lumped together. Judge Forcum disagreed. The shareholder suit is all about what PG&E management knew about the dangers and when they knew it. But that question is also important in the personal injury lawsuits because it may determine whether PG&E should be liable to the San Bruno residents for punitive damages.

 

PG&E Still Dodging Responsibility

As reported by the San Jose Mercury News, the "mystery" as to why the pipe ruptured appears to be solved. The NTSB found that the pipe was not properly welded, even by 1956 standards.  The welds were supposed to go through the whole pipe but didn't.

In the area of pipe identified as the spot where the rupture occurred, the weld penetrated only about 50 percent of the pipe wall.

In other words, the pipe was at less than half strength. Though it's not clear whether it was a PG&E employee or one of PG&E's favorite contractors who did the defective work, it makes no difference.  If PG&E hired the work out, PG&E still should have had an inspector on site approving the welds. In short, whoever actually did the welding, the integrity of the final product was PG&E's responsibility.Defective PG&E Welds

Right after their pipe exploded, PG&E promised:

If it is ultimately determined that we were responsible for the cause of the incident, we will take accountability.

So, is PG&E stepping up and taking accountability?  Not exactly.  PG&E has removed the old pledge from its website.  Now it is singing a different tune. While expressing "appreciation" to the NTSB for the "meticulous and painstaking work by its experts," PG&E nonetheless insists

  it’s premature for PG&E or anyone to speculate on what caused this accident. 

Huh? The NTSB's "meticulous and painstaking work" found that PG&E's welds were bad.  PG&E is responsible for those welds.  What more does PG&E need before owing up to its responsibility?

San Bruno Fire Victims Struggle with Paperwork

Though more than 30 homes were destroyed by the PG&E gas explosion, many more suffered damage that is not visible from the street.  Getting cracked chimneys, leaky roofs, and broken windows repaired has been, for many homeowners, an overwhelming battle of paperwork, engineering reports, claims forms, and phone calls.  Some homeowners have given up trying.  As a result of the emotional trauma they have suffered, the task is just too much for them to handle.

Early on PG&E promised that it would establish a $100 million fund to those affected by the fire - no strings attached.  But so far, only $17.5 million of that has been distributed.  Shaun Bishop of the San Francisco Examiner wrote about the victims' struggle in an article published this morning.

As I explained to Shaun, residents should not expect PG&E to compensate them fully unless they obtain a court judgment against PG&E. 

Danko said he reminds his clients that PG&E is not obligated to pay them anything unless they obtain a court judgment.

Until that happens, PG&E is free to offer as little to the victims as it likes.

NTSB Warns that PG&E may be Operating Pipelines at Pressures that are Too High

PG&E documents said that Line 132 was of seamless construction.  As it turns out, it was not.  It was of weaker, welded construction.  As I wrote here, welded seam pipes have long been known to be dangerous.  To run them safely, the utility company should pressure-test them with water to make sure that they will not give way.  PG&E didn't do that.

A utility must determine the "Maximum Allowable Operating Pressure," or MAOP, that a pipeline can be safely subjected to.  To set a safe MAOP, the utility must know how the pipe is constructed.  The weaker the pipe, the lower the MAOP.  Because PG&E doesn't seem to know how its pipes are constructed -- for example, whether they are of seamless or welded construction -- the NTSB is concerned that PG&E may have set maximum pressures too high and that its pipelines are thus unsafe.

It is critical to know all the characteristics of a pipeline in order to establish a valid MAOP below which the pipeline can be safely operated.  The NTSB is concerned that [PG&E's] inaccurate records may lead to incorrect MAOPs.

To prevent another San Bruno explosion, the NTSB is urgently recommending that, unless PG&E has actually water-tested a particular line, that it come up with "traceable, verifiable, and complete records" that describe the type of pipeline buried beneath the streets of populated neighborhoods.  The NTSB wants PG&E to use those records to confirm that the MAOP assigned to the pipeline is appropriate.

If PG&E can't find reliable records for a particular pipeline, then the NTSB suggests that PG&E water-test the line to ensure that the assigned MAOP is safe.

Water tests are a last resort because customers' gas will need to be turned off during the tests. But we already know that PG&E's records can't be trusted. If you ask me, there really is no other way.     

 

NTSB Urgent Safety Recommendation

 

San Bruno Fire: PG&E Was Supposed To Test Welded Seam Pipe

PG&E didn't document the fact that Line 132 had welded seams.  So really, what's the big deal? Aside from proving that PG&E is sloppy on its paperwork, what difference does make?

Plenty.

Back in 1998, the Department of Transportation sent out to all utilities, including PG&E, a Safety Alert (see below).  The Alert explained that pipes with welded seams (known as "ERW" pipes) are dangerous.  Special precautions need to be taken to make sure they don't explode. For example, the pipes should be periodically tested to make sure they are sound.

Because PG&E's paperwork said that the pipe was not ERW pipe, PG&E took none of the recommended safety precautions.

One of the problems with ERW pipe is that the welds are subject to a type of corrosion that is hard to detect.   According to the Alert:

ERW seams have been involved in 145 service failures . . .since 1970, and . . .all but 2 occurred on pipe manufactured prior to 1970. . .selective seam corrosion appears to  be a contributing cause of failure in a significant number of these incidents. . .

If the welded seam pipe was installed before 1970 (as was Line 132) the Alert called upon the utility to not just review the pipe's history, but to fill it with water and pressure test it to make sure it is sound.

All operators who have pre-1970 ERW pipe in their systems should carefully review their leak, failure, and test history as well as their corrosion control records. . .operators should consider hydrostatically testing to ensure the integrity of the pipeline.

It appears that PG&E neither conducted nor even considered hydrostatically testing Line 132, despite the fact that Line 132 was suspect pre-1970 ERW pipe. 

Did PG&E fail to properly document the type of pipe running through San Bruno due to a mere oversight?  Or did PG&E deliberately fail to document the pipe so that it wouldn't have to conduct the expensive and time consuming hydrostatic tests? 

Safety Alert re Welded Pipe

 

Continue Reading...

San Bruno Fire Cases Update

More than 30 lawsuits have been filed in San Mateo County. Judge Steven Dylina was assigned to preside over the cases. Pursuant to his order, all the lawyers working on the cases met on December 2 to discuss amongst themselves how the cases should be handled. After that meeting, Judge Dylina set a first court date of December 21. 

A few lawsuits have also been filed in San Francisco County. PG&E asked that those cases be combined with the ones in San Mateo so that all the cases could be heard by the same judge. Judge Forcum of San Mateo County has been appointed to decide whether the San Francisco cases should be grouped with the San Mateo County cases and, if so, which judge should hear them.

Because Judge Forcum has not yet made his decision (that won’t come until January, at the earliest), on Thursday Judge Dylina cancelled the hearing set for December 21. Judge Dylina will set a new hearing date after Judge Forcum makes his ruling.

On Tuesday, the National Transportation Board said thatSan Bruno Pipe Welds the pipe that failed was welded together instead of being of seamless construction. This is important because PG&E’s documents said that the pipe was a seamless pipe, which is stronger than one that is welded. Furthermore, it looks as though at least one weld was missing. A missing weld, of course, would make the pipe even weaker. 

PG&E has yet to offer an explanation for why the pipe was welded when its documentation said that it was a stronger, seamless pipe.

Why Is PG&E Moving Pipe from Crestmoor?

PG&E has finally agreed to move the pipeline from the Crestmoor neighborhood. PG&E would have us believe the decision was made out of concern for residents.  According to PG&E president Christopher Johns:

PG&E understands that no one wants the damaged section of Line 132 rebuilt at its current location.  We know residents in the neighborhood have suffered a terrible trauma and the pipe is a horrible reminder.

Is that the reason?  Or did PG&E simply figure out that moving it was in its financial best interests.  After all, the law makes PG&E liable for any diminution in the value of the neighborhood homes. As long as the pipe runs under the neighborhood, the homes are worth very little. Remove the pipe and values will rebound. In the end, it's cheaper for PG&E to move the pipe than it is for it to leave it there. 

Isn't it as simple as that?

PG&E to Move Pipe

Six Lawsuits Filed Against PG&E

Martin Ricard reported on the lawsuits against PG&E that we filed today on behalf of some of the San Bruno fire victims. Ricard summed up the allegations in the six lawsuits, filed on behalf of nine different victims, succinctly:

According to the lawsuits, the residents' injuries were a direct result of PG&E's operation of the pipeline, which, the firm says, has been [marked by] a "run-to-failure" attitude toward replacing old pipes and maintenance practices known to cause risk.

What's a "run-to-failure" attitude?

That's the strategy of running old equipment until it fails and then dealing with the damage inflicted instead of investing the money necessary to prevent the failure from happening in the first place," Danko said. "The practice appears to be part of PG&E's long-standing corporate culture of placing profits over people."

More on the lawsuits here.  More on PG&E's run-to-failure mentality here.

NTSB's Preliminary Report: Investigators Not Asking The Right Questions?

The NTSB's preliminary report on the San Bruno Fire has led some politicians to ask why it took PG&E so long to turn the gas off.

Jackie Speier. . . expressed bewilderment that PG&E failed to send anyone to turn off the ruptured pipe until "33 minutes after 100-foot-high flames . . .were clearly visible from (Highway) 101, more than 10 miles away.

Not a bad question.  But that’s not really the issue on which we should focus. Just for the moment, forget about where PG&E was after the fire erupted. Where was PG&E before?San Bruno Fire and Explosion

The Gas Line Was Leaking Before the Events of September 9

It’s unlikely that the pipe was just fine on September 8, and suddenly and without warning ripped apart on September 9.  Rather, in the days leading to September 9, the pipe likely had a small leak, sometimes called a “pencil leak.”  The pencil leak allowed gas to permeate the neighborhood. Gas found its way into the wall spaces of the nearby houses.  The gas met with an ignition source – perhaps a small spark from someone turning on a light switch. A flash fire began in the house.  The fire traveled back to the source of the gas – the pipe in the street. Only then did the pipe explode.

How do we know that?  Two reasons: Basic fire chemistry and residents’ reports of the smell of gas well before the explosion.

Fire Chemistry

Pure gas does not burn. Rather, for gas to ignite, it has to be mixed with air. Only when the gas-to-air mixture is 5-15 percent gas and 95-85% air will it burn. The gas-to-air mixture at the site of a high pressure pipe rupture is almost pure gas and so is generally too "rich" to burn.  A combustible mixture usually can be found only at some distance from the source of the leak.

Not only must the gas-to-air mixture be just right for it to be combustible, but that mixture needs to meet up with an ignition source.  Seldom is there an ignition source right at the site of the rupture. That’s another reason gas fires typically begin some distance away from the rupture and then work their way back to the leaking pipe.

The NTSB should quit hoping to find some flaw in the pipe that made it all come apart at once. It won’t find one. It should instead look for some small flaw that allowed a slow “pencil leak.”

Neighbors Smelled Gas

Next, we know that residents smelled gas in the days leading to the fire. Those residents include Chris Torres who lived at the epicenter, and others as reported here and here. The smell of gas in the days before the fire support the “pencil leak” theory.  But the preliminary report doesn't talk about that at all. How can the NTSB ignore what the residents have to say?  

So, where exactly was PG&E in the days leading to the fire?  Unfortunately, the NTSB doesn't seem to be interested in that part of the story.  Neither are the politicians.

Regulators Ignored PG&E's Long History of Safety Violations

Safety regulations were supposed to prevent the San Bruno fire.  But they didn’t.  One reason is that the California Public Utilities Commission (CPUC president pictured) didn't do its job.  Instead of enforcing the CPUC Commissioner Peeveyregulations, when the CPUC caught PG&E in a violation, it let PG&E slide.  Not just once. But more than 400 times in the past 6 years.  That’s according to the CPUC’s own records. 

PG&E is the worst safety violator of all the utilities in the state of California. According to the San Francisco Chronicle, 410 “probable” violations since 2005. Yet, in not one case did the CPUC fine PG&E. Instead, it let PG&E off with a warning.  Every time.

Why?  The CPUC says that it goes easy on PG&E for two reasons. First, it “assumes” PG&E has an interest in safety. According to the Chairman of the CPUC’s consumer safety division:

We operate under the assumption they are interested in having a safely operated system.

But given PG&E’s history of running its equipment to failure, why would the CPUC “assume” that PG&E is interested in safety? The fact of the matter is that PG&E is not interested in safety.  It is interested in profits.  Anyone who doubts that need only read PG&E’s somewhat indifferent warning to shareholders about the problems with its gas operations. Though PG&E showed great concern that an explosion might be a drain on profits, it expressed no concern for what an explosion might do to its customers.  PG&E gave the CPUC no real reason to believe it was interested in safety.

Next, the CPUC says it let PG&E slide because the CPUC didn’t see a disturbing 'trend".

If we saw a trend that gave us concerns in terms of what we are finding out there, we would take enforcement action. 

A trend? How about 410 violations in the past 6 years? Does that not constitute a "trend"? Exactly how many violations does the CPUC need?

Glenview Homeowners Should Be Compensated for Diminution in Their Homes' Value

The fact of the matter is that Glenview homes aren't worth today what they were on September 8.  That’s because some house hunters who might have considered buying in the Glenview neighborhood before the fire will now fear that the neigborhood is unsafe. Others, in light of all the pain the neighborhood has experienced, will simply prefer to buy elsewhere. 

In real estate terms, the explosion and fire has "stigmatized" the neighborhood. Stigma always depresses home values. Values will drop even more when some Glenview residents, unable to become once again comfortable in their homes, are forced to move out and to sell almost regardless of the price they get.  

The homes' diminution in value represents a significant economic loss to Glenview residents.  The loss may be difficult to quantify, but it doesn't make it any less real.  Even those homeowners who decide not to sell will be affected when, for example, they try to refinance or borrow against their properties.  

A home need not have burned to be “damaged” by the fire.  Whether Glenview residents decide to keep their homes or to sell, they have all suffered a loss. They are all deserving of compensation.   

Does a Glenview Homeowner Need a Lawyer to File an Insurance Claim?

Not necessarily.  If the claim process is proceeding smoothly with open and productive communication between the claimant and the insurer, then the claimant may stay the course. But a qualified attorney can help when the claimant feels:

  • frustrated;
  • deadlocked with the insurer;
  • unfairly treated by the insurer; or
  • concerned about time passing and possibly losing her rights.

To assist the homeowner with the claim, the attorney will need a complete copy of the homeowner’s policy, including the "Declarations Page", and all "Endorsements" and "Riders".  Generally, the Declarations Page is the first or second page of the policy which states the dollar limits for each category of coverage and lists the "extras" known as endorsements and riders. The endorsements and riders will be listed by a code number or letter, or combination thereof. 

The attorney will also need a complete copy of the homeowner’s personal claim file, including all communications the homeowner has had with the insurer and any of its representatives. 

If you're not sure that you are being treated fairly and would like an attorney's input, give us a call or send us an email.

The San Bruno Explosion and the Contingency Fee Agreement

Most victims of the Glenview explosion can't afford to pay attorneys an hourly rate to investigate the cause of the accident or to take a potential lawsuit to trial.  For these people, the doors of the courthouse would be essentially closed were it not for the contingency fee agreement.  The contingency fee agreement places the victim on a level playing field with PG&E and any others who may responsible for the explosion.  Under a contingency fee agreement, the client pays nothing to the attorney for his work unless the attorney obtains for the client monetary compensation.  All consultations with the attorney are free. The contingency fee agreement allows any victim access to the legal system, regardless of the victim's financial circumstances.

Selecting an Attorney

Corporations such as PG&E seldom pay a fair settlement to a victim with an attorney who has not proven he can win against them at trial. The lack of a trial record is a weakness that a corporation such as PG&E or its insurance company will always exploit. Ask the attorney you are considering what results he has obtained for his clients against PG&E in cases like this.

Next, ask the the attorney if they are prepared to fund the case.  Can the attorney afford to invest up to a million dollars for such costs as expert fees?  Has he or she ever done so in the past? Or is the attorney likely to fold as trial approaches because he has run out of money or can’t afford to risk his “investment” at trial?  

Your rights as a client

You have a right to be represented by the lawyer of your choosing, one with a proven track record against PG&E.  You have a right to negotiate the terms of your agreement with your attorney.  You have a right to fire your lawyer at any time for any reason.   The State Bar of California provides more helpful tips here.

Finding a Lawyer

2009 Interview Warns of PG&E Time Bombs Beneath the Street

NBC in San Francisco interviewed me in July Time Bombs2009 about PG&E's underground systems. I warned then that PG&E's whole underground infrastructure was collapsing and that, unless PG&E did something right away, people would be hurt.

They're just time bombs under the street and PG&E has done nothing, nothing that makes a difference, to stop them from exploding.

I urged PG&E to begin monitoring its systems in some meaningful way.  But PG&E just didn't do anything.

When another accident happens, well perhaps they'll say 'We feel bad' . . .[but] they should be doing something right now before someone gets hurt or killed.

That interview was 14 months ago. After it aired, PG&E spent almost $50 million pushing prop 16 in a failed attempt to protect its monopoly.  Perhaps it would have been better if PG&E spent some of that money on safety. The San Bruno gas explosion might have been avoided.

The video is no longer on the internet. But you can read the transcript of the piece, "PG&E's Aging Underground Problem," here

San Bruno Residents' Right to Compensation for Emotional Distress

Many of the San Bruno residents evacuated on September 9th may be categorized as “survivors,” having escaped the Glenview fire without being burned.  But even though they suffer no physical injuries, the gas explosion will leave dozens with emotional injuries that will persist for a long time to come.

Generally the law does not require a wrongdoer to compensate the victim for the emotional distress it has caused a victim unless it has also caused the victim to suffer some sort of physical injury.  And certainly PG&E will argue that the general rule should apply here -- that unless a victim suffered physical injury, PG&E shouldn't be required to compensate him for any emotional injury that it may have inflicted.

But in a special situation like this one, everyone who suffered serious emotional injuries should be entitled to compensation, regardless of whether they suffered any physical injuries.   That's because PG&E knew that if its negligence led to a gas line explosion, people would fear for their lives and for those of their loved ones.   PG&E's behavior was morally wrong and the laws are designed to hold wrongdoers accountable for all the harm they cause, even if that harm is "only" emotional distress.

Seeking compensation for emotional distress (or "post traumatic stress disorder") does not mean you are weak or can't handle a stressful situation. Nor does it mean you are piling on or taking advantage of the system.   People who suffer from emotional distress suffer real losses.   Often because they can't concentrate, they lose their jobs or do poorly in school.  Their family situations may deteriorate because they begin to snap at those they love.  They suffer from anxiety – feel constantly "on edge" -- and that can lead to depression.  

Lawyers experienced in PG&E explosion cases can assist the San Bruno residents who are suffering emotionally from this haunting catastrophe.

PG&E's 2009 Annual Report Warns its Shareholders of Explosion Hazard

PG&E warned its shareholders that deficiencies in its leak detection procedures could rPG&E 2009 Annual Report, page 45esult in a major catastrophe.  It further warned that the economic cost of the catastrophe could jeopardize the utility's financial condition. But it didn't warn its customers.

According to its 2009 Annual Report, PG&E reviewed its own gas leak survey practices in 2008 and found that "improvements needed to be made." 

It further acknowledged that its practices were under investigation by outside agencies and that, in the event of a "hazard or liability" (corporate speak for "explosion"),

the Utility's insurance may not be sufficient or effective to provide recovery.

Neither PG&E nor its shareholders can say the situation leading to the San Bruno explosion caught them by surprise.

Not so for the people of San Bruno.

Thanks to a reader for sending this along.

PG&E 2009 Annual Report (pdf 124 pages)

Blast Result of a Run-to-failure Mentality

TV reporter Jean Elle interviewed me in my office, noting that the San Bruno blast is "eerily similar" to the Santa Rosa explosion and fire that I handled some years ago.  She then put some hard questions to PG&E and got nothing back but double-talk.

 

View more news videos at: http://www.nbcbayarea.com/video.

Calls for Automatic Shut-off Valves in the Wake of the San Bruno Fire (Deja Vu All Over Again)

Political leaders are calling for PG&E to install on its gas lines automatic shut-off valves to prevent or mitigate future gas line disasters. 

Sounds like a good idea. Here's an interesting snippet from a report of the NTSB, the agency that is investigating the San Bruno gas explosion:

The Safety Board believes that had an EFV been installed . . .  the valve would have promptly closed . . . . This closure would have likely prevented the release of gas sufficient to form an explosive mixture . . .. Additionally, an EFV would have prevented the continued release of gas during the emergency response activities and endangerment to firefighters and other emergency personnel.

The NTSB's recommendation makes good sense.  What's most interesting, however. is that the NTSB's recommendation wasn't issued as a result of the San Bruno Fire.  Rather, it was issued after the Santa Rosa fire.  In 1992.  

Why hasn't NTSB's recommendation been implemented in the 18 years since the last fatal gas explosion?

As I wrote here, the NTSB has no power to require PG&E to do anything.  It can only recommend.  And, of course, PG&E is free to ignore those recommendations. 

Santa Rosa Gas Explosion Safety Recommendation

 

The Sewer Work that Preceeded San Bruno Blast

The google map below shows the spot where the pipeline exploded.  It also shows the asphalt patches placed on the street surface by a San Francisco firm (D'Arcy and Harty) after it completed sewer work in May 2008.

Before a contractor digs in the street, PG&E is supposed to mark on the street with spray paint the location of its gas lines so that the contractor can avoid them. Interestingly, those paint marks aren't visible. Maybe they were worn away, or perhaps the contractor just paved over them after it finished the work.  Maybe the photo just isn't of high enough resolution.  But certainly the situation brings back memories of the last underground gas explosion in the bay area --  the one on Spencer Avenue in Santa Rosa.

In the Santa Rosa explosion, PG&E failed to properly mark the location of its gas line. A contractor hit the line with a backhoe and damaged it. The line leaked months later. Residents smelled gas in the days leading to the blast, but nothing was done to find or repair the leak.  

One thing might be different here.  The contractor may have damaged the gas line not with a backhoe, as in Santa Rosa, but with the vibration resulting from its unique method of sewer line replacement.  According to the San Jose Mercury News

To avoid the disruption of digging trenches in the street, the contractor used a method called "pipe bursting." Crews pulled a large, cone-shaped device through the aging, 6-inch sewer pipes, shattering them, and replaced them by pulling a new, 10-inch, polyethylene sewer pipe in behind them. The technique can cause ground shaking and disruption of adjacent soil and rock.

Local residents report that there was certainly lots of shaking and pounding in connection with the D'Arcy and Harty project.

Of course, to a large extent, how the damage to the gas line was done isn't nearly as relevant as why PG&E didn't find and fix it.

San Bruno Excavation

Insurance Claims and the San Bruno Explosion Homeowners

Insurance companies are businesses.  Their goal is to increase profits.  Sometimes they view settling an insurance claim with the victim of a disaster as a business negotiation.  Following a disaster, homeowners may face the following problems:

  • Not having enough insurance to cover their losses (also known as “underinsurance”.)
  • Delays in getting responses to phone calls, letters or other inquiries.
  • Confusion over what’s covered and what’s not
  • “Lowball” estimates and settlement offers
  • "Hardball" negotiating tactics by insurance company employees

Not every victim encounters all of these problems.   Many claims go relatively smoothly and the process works as it is supposed to. But every large loss insurance claim is time-consuming.  In California the insurers must comply with “Fair Claim Handling Regulations”, and other laws that tell insurers what they must, can, and cannot do. These laws are in an “Insurance Code” (a fancy name for the book of laws governing insurance). There are also laws in published decisions by Judges. Judicial decisions create laws, in addition to the “code” laws and regulations. Insurance companies are supposed to comply with all three: regulations, statutory law, and case law.

The California’s Fair Claim Handling Regulations are very useful and provide specific rules relating to--

  • Deadlines for responding to letters and phone calls 
  • Deadlines for proofs of loss
  • What information your insurance company must give you

You can read and print out these regulations and laws here at the California Department of Insurance website.

Remember:  your insurance adjuster may be friendly -- but he is not your friend.  He is a businessman.  If you feel you need to level the playing field, you should contact a lawyer.  Many victims are concerned that if they consult a lawyer the insurance company won't talk to them.  Your insurance company has a legal duty to process your claim.  That duty persists even if you have a lawyer helping you and even after you sue them.  Sure, the adjuster may be reluctant to speak with you if you've retained a lawyer. But if you want to maintain communication with your insurer and your lawyer agrees, she can notify your insurer that they're permitted to continue talking with you directly.

The National Transportation Safety Board's Role in the Investigation of the San Bruno Gas Explosion

Questions and answers about the NTSB's role in investigating the PG&E gas explosion and fire in San Bruno:

Why is the National Transportation Safety Board investigating?

Pipelines are considered modes of transportation because a product (natural gas) travels through them.  Therefore, the NTSB investigates pipeline accidents that involve a fatality. 

Will the NTSB hold the wrongdoer accountable?

No.  The NTSB has no power to punish or fine anyone, or to hold anyone accountable.  In fact, the NTSB has no enforcement power at all.  Furthermore, its conclusion about who was at fault for the explosion will be inadmissible in any subsequent lawsuit or other legal proceeding. 

If the NTSB has no power to hold wrongdoers accountable, and its conclusions are inadmissible, then what's the point?

The only reason the NTSB exists is to study accidents and make safety recommendations like this one.  The hope is that industry will adopt the recommendation and that future accidents will thereby be avoided.  But the NTSB cannot require anyone to implement the recommendations.  It can only make the suggestion.

How reliable are the NTSB's conclusions about the cause of an accident?

Unfortunately, they are not reliable at all. Generally, the full facts about the cause of an accident come out only during the litigation process.

I write here about the problems with the NTSB's findings in the context of the NTSB's specialty, aviation accidents. The NTSB's findings are not any better in the pipeline context.   For example, here is the NTSB's report concerning the fatal PG&E gas explosion in Santa Rosa. The NTSB cleared PG&E, blaming a contractor for striking and damaging an underground gas line that later leaked and caused an explosion and fire.  Five years later a jury came to a different conclusion.  It held PG&E liable for the deaths for failing to properly mark on the street the location of the gas line so that the contractor could avoid striking it in the first place.

San Bruno PG&E Gas Explosion: Shadows of Santa Rosa

Hearing about the San Bruno explosion brought back memories of another PG&E explosion that killed two, injured three others, and destroyed an apartment building in Santa Rosa.  In fact, the Wall Street Journal even mentioned that explosion in its article discussing the San Bruno blaze.

I spent 4 years prosecuting the case against PG&E on behalf of the families of those killed. Some of the lessons I learned from that case seem applicable here:

  • Gas leaking from the street will follow the path of least resistance. The path is typically through the airspace that exists around the pipes that lead into or under the nearby houses.
  • Natural gas has no odor. PG&E adds to the gas an odorant (called mercaptan) before distributing it. The sole purpose of the odorant is to help in detection of leaks.
  • The odorant is stripped from the gas when the gas passes through or along dirt. That means the odorant is effective of alerting people of a leak from an appliance such as a stove, but is much less effective at alerting people of a leak from the street.

If even one person reports to PG&E the smell of gas, or rotten eggs, or a smell like rotten food -- however faint -- PG&E must chase it down.  If the smell cannot be traced to an appliance, it's potentially big trouble. A faint smell of gas can mean either a very small leak from an appliance or a huge leak that has passed through soil, been stripped of its odorant, and is permeating the neighborhood homes. 

In any case, locating and controlling leaks is PG&E's responsibility.

Bar Warns Victims of San Bruno PG&E Gas Explosion About Unethical Lawyers

The California Bar's Chief Lawyer is warning victims of the San Bruno explosion about unethical lawyers, and about the best way to select an attorney.  The full text of the warning letter is set forth below.  The highlights:

  • It is unethical and illegal for an attorney, or someone acting on the attorney's behalf, to contact a victim in person or by phone for the purpose of offering services unless the victim has asked to be contacted. Victims should not deal with attorneys who contact them in this fashion. (Contact by letter, as long as the letter says "advertisement," is allowed.)
  • A victim should consult with several attorneys before selecting one to represent him or her.  The victim should not feel rushed to complete the selection process.  There is time.
  • A victim should ask the attorney he is speaking to about the the attorney's "experience and background to handle the particular matter."

The last point is probably the most important.  Some useful questions to ask the attorney:

The least useful question to ask is for an attorney's opinion of the value of the case.  Unethical attorneys will often offer an inflated opinion in an attempt to win the client over. 

I represented all the victims of the PG&E gas explosion in Santa Rosa except for one, who selected a different attorney.  That attorney, though a charming person, simply didn't have the experience necessary to handle the case, and ended up settling the young woman's case for much less than was appropriate.  The young woman later asked my firm to sue her former attorney for settling the case for less than was fair.  We proved that the lawyer, in convincing the woman to settle for the amount she did, committed malpractice.  But the attorney's own insurance was not sufficient to fully compensate the woman for the harm he caused her.  Needless to say, it would have been better had the young woman selected the right attorney at the outset.

San Bruno Explosion

Controlling Leaks is PG&E's Responsibility

Underground gas lines can leak because of corrosion, because they were improperly installed, or because they were damaged by a contractor’s backhoe during a street repair project.

A leak may be PG&E’s fault.  Or it may not be.

But it's always PG&E's job to find leaks in its equipment.  It is supposed to do this in at least three ways:

  1. By checking to be sure more gas is not being pumped through the system than going through the meters serving the houses;
  2. By performing “leak surveys,” which entails driving through neighborhoods looking for dead vegetation -- one sign of a gas leak
  3. By taking reports of "funny gas smells" from customers seriously.  Unfortunately, sometimes PG&E doesn't.  If a serviceman can't find a leak coming from an appliance, he may chalk the smell up to poor housekeeping.  Sadly, some PG&E engineers feel that not all gas leaks are dangerous enough to be treated as real emergencies.

PG&E: Gas Leaks Not Dangerous?

I've listened to PG&E engineers on the "gas side of the house" try to convince me that natural gas leaks are not really that dangerous. They have argued that you need more than just a leak to end up with a fire or explosion. 

First, they say, you need the proper mixture of gas and air. That mixture is 5 to 15% gas, and the rest air. If the gas content is less than that, the mixture is too lean to ignite. If it is more than that, it is too rich. To ignite, the mixture must be just right. 

Second, before a combustible mixture can explode it must come in contact with an ignition source. Say, for example, an open flame. 

Everything has to coincide just right, they say, for an explosion to occur.  So leaks shouldn't always be considered that dangerous.  Leaks are not always an emergency.

Some of what they say is true. But only to a point.

Yes, only a combustible mixture of natural gas and air can ignite. At the source of the leak, the "mixture" is almost 100% gas. That's too rich to combust. Far from the leak, the mixture is almost pure air. That's too lean. However, there is always an area between the source of the leak and the air far from the leak where the mixture will be just right.  And that combustible mixture will move as the leak continues and the gas cloud grows.

Sooner or later, the combustible mixture will encounter an ignition source. An open flame is not required. A car cranking over its engine, someone flipping on a light switch, or someone answering a cell phone is enough to trigger an explosion.

PG&E Avoids Responsibility for San Bruno Explosion

A friend heard that PG&E was accepting responsibility for the San Bruno gas explosion. Wrong. They aren’t.  PG&E’s statement is cleverly worded to avoid accepting responsibility until the case against it is proven.  Read it carefully:

If it is ultimately determined that we were responsible for the cause of the incident, we will take accountability.

Once it is ultimately proven that PG&E is responsible, how could it not? 

Resources for San Bruno Explosion Victims

 

Red Cross Shelters:

  • Veterans Memorial Recreation Center, 251 City Park Way at Crystal Springs Road, San Bruno
  • San Bruno Senior Center, 1555 Crystal Springs Road, San Bruno
  • Red Cross Receiving Center: Church of the Highlands, 1900 Monterey Drive, San Bruno

San Bruno Emergency Hotline: (650) 616-7180

Legal:

If you have been affected by the fire and would like to know your legal rights, call or email us or contact the San Francisco Mass Tort and Class Action Law Firm Girard Gibbs at 415.981.4800.