Plaintiffs’ 5th Amendment rights claim can’t stay civil case

Companies that accused Pacific Gas & Electric Co. of failing to pay them for cleanup work after the 2018 Camp Fire, which decimated the town of Paradise, cannot halt trial proceedings even though they now are the subject of a criminal investigation by a federal grand jury, a judge ruled.

"A defendant has no absolute right not to be forced to choose between testifying in a civil matter and asserting his Fifth Amendment privilege" and "any burden on the cross-defendants from a denial of stay is undercut by the fact that three of them ... are also plaintiffs in the civil action," Superior Court Judge Richard B. Ulmer wrote.

"The interests of justice do not require a stay of proceedings," Ulmer concluded. Bay Area Concrete LLC vs. PG&E Corporation et al., CGC20587568, (S.F. Super. Ct., filed Oct. 28, 2020).

Bay Area Concrete LLC, PMK Contractors LLC and Bay Area Hydrovac LLC, which are solely controlled by Preet Johal, Kevin Olivero and Yadwinder Singh, were PG&E contractors. They accused the utility in a lawsuit of failing to pay for their cleanup work after the Camp Fire. The companies claimed PG&E had a habit of promising to issue master service agreements and contract work authorizations but acted with a "hurry up and do the work and deal with paperwork later" attitude.

They alleged in their lawsuit that PG&E did not issue an agreement or contract for the Camp Fire cleanup because negotiations would take too much time for a matter that required an emergency response, and then refused to pay for over $5 million worth of work after abruptly terminating contracts following months of delayed payments. They accused PG&E of trade libel and trade slander for contacting the media and their clients with false claims about fraud and bribery, causing them to lose business.

Amy M. Gallegos of Jenner & Block LLP represents PG&E. She filed a counterclaim that accused Johal and Singh, who are husband and wife, and Olivero, who is the couple's alleged right-hand man, of coordinating to defraud PG&E. The utility claims the contractors bribed two of their employees, Ryan Kooistra, a supervisor in PG&E's construction waste management group, and Ronald Huggins, the superintendent of the group and Kooistra's superior. Huggins and Kooistra were accused of approving fraudulent invoices and hiding payments from PG&E using methods such as approving invoices below the cost threshold that would require director-level approval.

"During PG&E's investigation, both Huggins and Kooistra were interviewed. When Huggins was questioned by PG&E corporate security personnel and confronted with evidence of his misconduct, he told obvious lies and then retired four days later," the cross-complaint stated. "When Kooistra was questioned, he likewise told obvious lies. ... Two days after his interview, Kooistra quit his job and left the state."

In asking for a state of the civil proceedings, the contractors argued that since they now face a criminal grand jury in the Eastern District Court of California, which has issued over 70 subpoenas for records related to the case in San Francisco, they face a "Hobson's choice of either asserting their Fifth Amendment privilege against self-incrimination or actively responding to all aspects of discovery."

Information given out in San Francisco could be used against them by the grand jury and asserting Fifth Amendment rights would limit the scope of their defense in San Francisco, they said.

Gallegos countered in a court filing that if the contractors "were concerned that providing discovery about whether they paid bribes and kickbacks would cause them to incriminate themselves, then they should not have sued PG&E alleging that PG&E falsely accused them of engaging in a kickback scheme and defamed them by telling others about the kickback scheme."

"California courts do not stay cases to accommodate parties who cannot respond to discovery on issues tendered by their own complaint without incriminating themselves," Gallegos wrote. "Rather, it is settled law in California that a party who files a civil action waives the Fifth Amendment as to facts he put in issue."

Dawn C. Sweatt of Berliner Cohen LLP in San Jose represents the contractors. She did not respond to calls or emails requesting comment. Representatives and attorneys for PG&E declined to provide comment.