SAN BRUNO — A state appeals court on Tuesday upheld a state agency’s decision to fine PG&E $14.35 million for blunders linked to its pipeline operations in San Carlos while, at the same time, the utility is laying the groundwork to avoid being held criminally responsible for the fatal San Bruno blast.
PG&E’s efforts in the criminal case suggest that a lengthy battle looms before the start of the trial, now scheduled for March 2016. PG&E has pleaded not guilty to a 28-count indictment, including 27 charges of violations of pipeline safety regulations and one count of obstruction of justice.
In a flurry of papers filed in recent days with the U.S. District Court in San Francisco, PG&E argued that its knowledge of pipeline rules before the San Bruno explosion, as well as its intentions regarding pipeline operations and safety, don’t rise to the level of a criminal action.
“Criminal liability requires both objectively unreasonable conduct and subjective knowledge of wrongdoing,” according to a brief submitted to the federal criminal court by PG&E’s defense team, including Steven Bauer, an attorney with Latham & Watkins.
San Francisco-based PG&E also said that because other pipeline companies were running their pipe operations with an approach similar to PG&E, that PG&E should escape criminal liability.
Federal prosecutors disagreed in papers they filed in response to PG&E’s discussion.
“Other operators’ interpretations of pipeline safety regulations say nothing about PG&E’s own state of mind,” the U.S. Attorney’s Office stated in one of its filings.
Several observers criticized PG&E’s latest gambit.
“PG&E may be trying to avoid the kindergarten defense, but that’s basically what they are arguing,” said Peter Henning, a professor with Detroit-based Wayne State University Law School. “PG&E is saying that everyone else did it.”
That argument was met with skepticism by state Sen. Jerry Hill, whose San Mateo County district includes San Bruno.
“We all knew in kindergarten that we couldn’t get away with saying that everyone else is doing it,” Sen. Hill said. “The whole utility industry knew it could get away with this kind of behavior, because nobody was going to catch them. We all wish we could make that argument with the CHP when they pull us over for speeding.”
Hill and others say PG&E’s latest maneuvers in its criminal case suggest the utility has yet to learn many of the lessons that stemmed from the San Bruno disaster.
“It’s outrageous what PG&E is doing here,” said Loretta Lynch, a former commissioner with the state Public Utilities Commission, PG&E’s principal regulator in California. “This has always been PG&E’s M.O. They will fight to the death over a dime. PG&E knows it will be in trouble once the gig is up and everyone can see how dangerously they operate.”
In a separate ruling, a state appeals court panel of judges ruled 3-0 Tuesday to uphold a state PUC decision, originally issued in December 2013, that imposed a $14.35 million fine for mistakes the utility made in connection with the operation of Line 147 beneath San Carlos.
The PUC slapped the fine on PG&E because the utility failed to properly notify the PUC about how it was operating the pipeline. San Carlos officials are uncertain about the safety of the pipeline.
“Although the amount of the fine is large, so is the real and potential harm caused by PG&E’s inaction,” the state appeals court panel wrote in its ruling.
Contact George Avalos at 408-859-5167. Follow him at Twitter.com/georgeavalos.
