Judge asks state AG about PG&E’s legal exposure over Camp Fire

SAN FRANCISCO -- The federal judge overseeing Pacific Gas & Electric Co.'s probation following a 2017 criminal conviction asked the state attorney general to advise the court on the standard to which the utility should be held if it committed a crime in failing to maintain its infrastructure before the Camp Fire.

The state's largest utility might be subject to additional oversight and restrictions if it violated its probation by negligently managing its equipment, legal observers said. One lawyer even suggested that corporate restructuring could be ordered.

U.S. District Judge William Alsup of the Northern District asked state Attorney General Xavier Becerra to submit an amicus brief on "the extent to which, if at all, the reckless operation or maintenance of PG&E power lines would constitute a crime under California law."

Last week, Alsup also ordered PG&E to account for any role it played in any fires since probation was imposed. He specifically requested an "accurate and complete statement" of any connection between PG&E and the cause and reporting of the Camp Fire, which destroyed nearly 18,000 structures, including 14,000 homes, and killed at least 88 people with dozens still missing in Butte County.

The state attorney general and the utility have until Dec. 31 to respond to the inquiry.

PG&E is now "on the hot seat, as they should be," and is wading further into "criminal jeopardy," according to Michael Danko, who represented victims of the 2010 San Bruno pipeline explosion that led to the utility's probation and is representing Camp Fire survivors against PG&E.

While he was not a part of the criminal prosecution of PG&E by the U.S. attorney's and state attorney general's offices, Danko suggested the judge might reconsider "putting in someone as a keeper to run the utility," which prosecutors wanted from the outset.

"We can basically get the court to oversee its operations and direct them," he said.

Plaintiffs' attorney Angela Jae Chun of Casey Gerry LLP was more skeptical the court could mandate a restructuring of corporate governance but said the utility should be held criminally liable for choosing to run to the Legislature instead of addressing issues that led to the blazes.

In September, Gov. Jerry Brown signed SB 901, which allows the California Public Utilities Commission to determine whether a utility behaved responsibly and split costs between ratepayers and utility shareholders accordingly based on its findings, in a move that critics called a bailout.

PG&E faces claims of up to $15 billion in damages for last year's North Bay fires.

"My impression is that [Alsup] is fed up, just like the people...," Chun said. "I would hope this is raising red flags."

Sen. Jerry Hill, D-San Mateo, also said he would be "encouraged by greater oversight and a requirement of a change in leadership" if the utility is found to have violated its probation.

"We continue to focus on assessing infrastructure, safely restoring power where possible, and helping our customers recover and rebuild," said PG&E spokesperson Lynsey Paulo, who said the utility is aware of Alsup's notice to Becerra.

In the latest lawsuit against PG&E claiming it had a role in the Camp Fire, Elizabeth Cabraser of Lieff Cabraser Heimann & Bernstein LLP filed a complaint Wednesday seeking class status. She is lead counsel for the class plaintiffs in the 2017 North Bay fire cases.

Plaintiffs alleged negligence, inverse condemnation and negligent interference with prospective economic advantage, among other claims. Burnet v. Pacific Gas & Electric Company et al., 18-CGC-571849 (S.F. Super. Ct., filed Dec. 5, 2018).

"PG&E's failing infrastructure and its inadequate efforts to maintain its equipment and mitigate risk have caused tragedy before, and PG&E has been sanctioned a number of times for virtually identical misconduct," Cabraser wrote.

While the cause of the Camp Fire is being investigated, PG&E told state regulators that a transmission line near the fire's origin had a problem shortly before the blaze was reported, according to a communication between the utility and the California Public Utilities Commission the day after the blaze started.

Tara Gallegos, a spokesperson for the state attorney general, said Thursday, "The California Department of Justice is closely following investigations into the cause of the fire. We are aware of and are reviewing the invitation from the United States District Court in San Francisco."