Federal Judge Reduces PG&E's Maximum Penalty For San Bruno Blast
SAN BRUNO (CBS SF) – A federal judge in San Francisco has reduced the maximum possible fine that PG&E faces in a criminal case over the deadly San Bruno blast in 2010.
The order by U.S. District Judge Thelton Henderson on Tuesday reduced the maximum fine PG&E could face to $562 million from $1.13 billion for the pipeline explosion that killed eight people, injured 66 others and damaged or destroyed dozens of homes in San Bruno on Sept. 9, 2010.
Federal criminal charges -- 27 counts of violating the Pipeline Safety Act and a count of obstructing a National Transportation Safety Board investigation into the blast—were lodged in July 2014 in a superseding U.S. grand jury indictment.
Henderson granted a motion by PG&E's attorneys to dismiss an aspect of the sentencing guidelines for the case that would have allowed federal prosecutors to seek a fine of double the amount that the utility has paid to claimants for civil damages related to the explosion.
PG&E argued that allowing that guideline would "unduly complicate" the case and require "500 different mini-trials" to litigate losses suffered by the victims.
Henderson agreed, noting that prosecutors "would need to prove that each victim's losses were proximately caused by the charged offenses, not by the explosion en masse."
However, the judge upheld the sentencing guidelines that could allow a maximum fine of $562 million, double the $281 million that prosecutors allege PG&E gained by not keeping their pipelines in compliance with federal regulations.
PG&E has cited $281 million as the amount needed to get its pipeline system into compliance with the federal regulations, prosecutors said.
Prosecutors must notify the judge by Jan. 11 of the evidence and witnesses they intend to present to the jury to prove the $562 million fine is warranted.
Following Henderson's ruling Tuesday, PG&E spokesman Greg Snapper said in a statement, "Regardless of this decision or the next legal steps, we will remain steadfastly focused on our mission of becoming the safest, most reliable gas company in the nation."
The jury trial in the case is scheduled to start March 9, with a pre-trial hearing scheduled on Feb. 22.
In a separate state administrative case, the California Public Utilities Commission in April levied a record $1.6 billion penalty on PG&E for violations related to the explosion, record-keeping practices and pipeline operations.
According to the NTSB, the cause of the deadly blast was a defective seam weld in a pipeline segment that was incorrectly listed in PG&E records as seamless.
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