San Bruno Gas Explosion

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.

 

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.
 

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.

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 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.

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.

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 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.

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.

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."