Pacific Gas and Electric Company

237 Cal. App. 4th, 812 (June 16, 2015); 2015 Cal. App. LEXIS 512

In a decision replete with holdings favorable to the Commission, the Court of Appeal (First District, Division 2) affirmed the Commission’s imposition of a $14.35 Million fine on PG&E.  The fine was imposed on PG&E for filing an “Errata” modifying a prior submission to the Commission regarding the allowable operating pressure of a particular pipeline.  PG&E made the filing in one of the dockets opened by the Commission after the tragic explosion of the PG&E pipeline in San Bruno.  In terms of the Commission’s enforcement program, the Court’s decision is perhaps even as consequential as the Fourth District’s 2006 decision in Pacific Bell Wireless (“Cingular”) affirming the Commission’s jurisdiction to directly impose fines.  (See, Para. 20, infra.)  The Court here held that (1) the Commission may lawfully conclude that an entity has violated Rule 1.1 without finding that the entity has done so intentionally (or even negligently),  (2) the Commission properly concluded that PG&E’s error in filing the “Errata” was a continuing violation within the meaning of Section 2108 and that “the statutory scheme clearly accepts that the PUC will be able to identify when a violation amounts to a continuing one”, (3) the Order to Show Cause issued with respect to the “Errata” provided PG&E with constitutionally adequate notice of the potential $14.35 Million fine and (4) the $14.35 Million fine did not violate the excessive fines clause of either the state or federal constitutions.  The decision is exceedingly deferential to the Commission on virtually every point, even in instances (as was the case with respect to the question of a scienter requirement for Rule 1.1) where the Commission’s own case law varied greatly with respect the point at issue.  Most of the case law cited in the decision is from the middle of the 20th Century and one could question whether many of the holdings with regard to deference survive the enactment of SB779 in 1998.  Any skepticism, however, would have to be tempered by the growing body of 21st Century case law displaying broad judicial deference to the Commission.  (See Para. 6, supra, and Paras. 8 and 11, infra.)  If Edison is the high water mark of Greyhound deference (see Para. 71), PG&E is the high water mark of the presumption of correctness of a Commission order.  New Cingular Wireless I and II (Paras. 3 and 4 supra) provide the only recent evidence of a contrary view.  However, one evaluates the merits of the decision, it unquestionably reflects a growing (and welcome) judicial willingness to grant a Petition for Writ of Review and affirm the Commission decision in a reasoned opinion rather than simply denying the petition and leaving the parties guessing.

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