7. Guerrrero v. PG&E

230 Cal. App. 4th 567; (October 10, 2014) 2014 Cal. App. LEXIS 909

The Court of Appeal (First District Division 3) affirmed a trial court decision dismissing a complaint against PG&E. The complaint sought restitution and disgorgement of some $100M in rates collected by PG&E over a 13 year period that, according to the plaintiffs, should have been expended on natural gas pipeline safety projects. The Court of Appeal held that Section 1759 precluded plaintiff’s claims since the suit would interfere with the Commission in ongoing matters related to PG&E. The plaintiff, having obviously reviewed Hartwell, pp. 55-57 supra, stressed that it only sought compensation for past acts and did not seek to affect in any fashion the Commission’s ongoing and forward and future actions with regard to PG&E. The Court disagreed concluding that
“upon a fair reading of the record of the administrative proceedings before the PUC, plaintiff’s actions seeking disgorgement, restitution and damages for misappropriation of PUC approved funds interferes with the PG&E’s ongoing authority over natural gas rates.”

This is a close call. Part of the Court’s analysis points to the fact that the Commission proceedings were also focusing on past actions but any conflict with regard to redress over past actions would not be barred by Section 1759 (at least as construed in Hartwell, supra). The Court also noted, however, that

“an order of the Superior Court directing restitution to PG&E consumers in this case will direct refunds of rates approved by the PUC, rates that are continuing to receive scrutiny in the wake of the San Bruno explosion. Such an order would, in effect, hold PG&E liable for charging rates expressly authorized by the PUC, and that remain under the PUC’s consideration.”

In this sense, Guerrero can be regarded as precluding the Superior Court from effectively reversing the effect of a Commission decision rather than interfering with the Commission in the ongoing exercise of its responsibilities. While portions of Hartwell (addressed at pp. 55-57, supra) arguably permit jury verdicts inconsistent with Commission decisions, the Guerrero Court obviously saw the disgorgement action as too intertwined with ongoing rate proceedings. As a very general rule, any action in Superior Court that can be characterized as affecting Commission ratesetting implicates Section 1759.

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