SoCalGas must face punitive damages over gas leak, judge rules

Southern California Gas Co. must face punitive damages if it is found after a trial to have engaged in bad conduct in addressing a gas leak that affected a suburban neighborhood in San Fernando Valley, a superior court judge ruled.

In a tentative decision Tuesday, Los Angeles County Judge Daniel J. Buckley wrote that the "evidence -- viewed in a light most favorable to plaintiffs -- indicates despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others."

Buckley issued a final ruling Wednesday that closely followed the tentative. No trial has begun yet and the company has denied all allegations of malice, fraud, intentional damage or attempts to mislead.

Sempra Energy and its subsidiary Southern California Gas face thousands of lawsuits filed by more than 200 law firms. Claimants say that continual chemical emissions following the October 2015 well blowout at its Aliso Canyon storage facility near the Porter Ranch neighborhood caused residents to fall ill and diminished their property values. The facility belongs to SoCalGas. Southern California Gas leak cases JCCP 4861.

Buckley took over the consolidated mass tort action from Judge Carolyn B. Kuhl last year.

SoCalGas, represented by Morgan Lewis & Bockius LLP, moved for summary adjudication on the punitive damages issue last spring, contending the plaintiffs' claims failed as a matter of law. The company denied any of its officials engaged in malice, oppression or fraud. Officials did everything they could to address the issues after the incident, defense counsel argued. SoCalGas said the leak wasn't the result of any intentional or despicable conduct, nor did its officials ever mislead the public. The company took steps to help residents relocate to temporary housing after the leak, defense lawyers said. The leak was an unfortunate accident that occurred despite its regular safety and inspection protocols, the company said.

Buckley, in his tentative decision, wrote that "plaintiffs have presented a proverbial laundry list of evidence demonstrating defendants' inexcusably cavalier approach to the management and operation SS-25 at Aliso Canyon."

"This evidence runs gamut and demonstrates defendants' 1. Willful failure to undertake meaningful safeguards in a conscious disregard of their safety obligations under the Public Utility Code, 2. Blase attitude toward well containment after the blowout, and 3. Misrepresentations aimed at securing its own financial and reputational interests to the detriment of plaintiffs' health and well-being," Buckley wrote.

A representative for the company could not be reached for comment Wednesday.

Buckley wrote that the evidence showed the company decided to hire inexperienced managers to deal with the aftermath, which included at least two dangerous well kill efforts. Furthermore, Buckley said two storage managers went to a party the night of the leak. Another manager who had no experience in emergency well kills supervised the third attempt via text and phone and never actually went to the facility, the judge said.

The first kill attempt "formed a hydrate in the well, preventing later kill attempts by the professionals," the judge wrote. A second unapproved kill attempt worsened the gas volume coming to the surface, which caused a crack in the earth, the judge wrote. The gas blew so hard that a well kill contractor's hard hat blew off.

The plaintiffs have long argued the company conducted a malicious misinformation campaign after the leak and downplayed its impacts. They have said that the company hid the leak, failed to adopt safety programs for its wells, and wanted to avoid relocating residents because it was costing too much money.

Jesse M. Creed of Panish Shea & Boyle LLP, which is serving as lead trial counsel for plaintiffs, said the plaintiffs' teams look forward to taking the punitive damages claims to trial as they predict more evidence will show the company's "evil motive before and after the blowout that went all the way up to the very top echelons of their leadership."

"We have hundreds of triable facts showing despicable conduct, which includes years of neglect at the facility, and by neglect we mean intentional decisions made by SoCalGas and Sempra to ignore the condition of these incredibly dangerous storage wells," Creed said.