Delay in reporting Porter Ranch gas leak justifies hearing, panel rules

The 2nd District Court of Appeal ruled Tuesday that victims claiming they were illegally shut out of restitution as part of a criminal plea deal between Los Angeles County and Southern California Gas Company over the 2015 Aliso Canyon gas leak deserve a new hearing regarding the reporting delay.

The panel said the trial court did not err when it refused to order restitution to Porter Ranch residents for losses caused by the gas leak, but said residents deserved a new hearing on the narrow issue of the three-day reporting delay to which the utility pleaded no contest. The rest of the petition of writ of mandate was denied.

"Because the scope of the restitution hearing was not settled in advance, we believe it fair (and within the spirit of Marsy's Law) to remand for a further hearing to determine what, if any, damages were caused only by the three-day delay in reporting the leak to the proper authorities," wrote Justice Elizabeth A. Grimes. Justices Marie E. Stratton and Laurence D. Rubin concurred.

A new trial date has not yet been set for that portion of the case, but the first series of civil lawsuits to go to trial over the leak are set for June 2020, nearly five years after a ruptured gas well spawned a litany of claims against the gas company and its parent, Sempra Energy Inc.

Plaintiffs argued in the appellate court victims were entitled to restitution because the charge of failure to report, of which the gas company was convicted, was transactionally related to the charge of discharging contaminants. The latter charge wasropped as part of the plea deal. The panel disagreed, saying the California Constitution doesn't authorize a direct appeal by a victim from a judgment or order in a criminal case.

"Defendant pleaded no contest only to the failure to report violation, and this court cannot interfere, in the absence of any illegality, with the prosecutor's discretion to accept that plea. There was no illegality," the panel ruled.

But the court said victims at least had a right to present evidence of any damages with regard to the reporting delay.

"There was enough confusion about the scope of the sentencing hearing to warrant a new hearing on the issue of restitution only for damages occasioned by the three-day delay in reporting the leak," ruled the panel.

"SoCalGas pleaded no contest to failing to report the gas leak. It is only right that victims receive restitution to the crime SoCalGas is guilty of committing," said attorney R. Rex Parris of Parris Law Firm, in a statement.

Another plaintiffs' attorney, Brian Panish of Panish Shea & Boyle LLP, said in a statement, "This is a very important victory for our clients as it allows them to present their losses to the trial court."

In a statement, SoCalGas said: "Because the scope of the original hearing in the trial court was unclear, the appellate court remanded for the trial court to consider solely 'what, if any damages were caused only by the three-day delay in reporting the leak?' We are confident the trial court will find, as it did before, that petitioners are not entitled to restitution based on a three-day reporting delay."

Meanwhile, Los Angeles County Superior Court Judge Carolyn Kuhl has set a June 24, 2020 date in her complex court as both sides continue to fight over discovery, and the utility is preparing a motion for summary judgment. Southern California Gas Leak Cases, JCCP4861 (L.A. Super Ct., filed Feb. 2, 2016).

More than 40,000 plaintiffs have claimed the leak caused health issues, from rashes and coughs to cancer, according to allegations in 400 lawsuits.

Plaintiffs have sought damages for causes of action including negligence, private and pubic nuisance, inverse condemnation and fraudulent concealment.

Most recently, parties have been fighting over a report by third-party Blade Energy Partners, which found well casing corrosion was responsible for the gas leak. Plaintiffs said the report showed the well in question, SS-25, was not tested every five years as required. Utility defense attorneys at Morgan, Lewis & Bockius LLP, said the utility complied with gas storage regulations.