Safety and OSHA News

Jury says company criminally guilty of violating safety laws: Possible $3M fine

Pacific Gas and Electric Co. in California faces up to $3 million in criminal fines after a jury found it guilty of five felony counts of knowingly failing to inspect and test its gas lines for potential hazards. 

Jurors said PG&E failed to:

  • identify and evaluate potential risks
  • use the most accurate assessment methods, and
  • give the highest priority to the most serious hazards.

The jury also found the utility guilty of an additional felony count of obstruction of justice. The jurors found company officials tried to derail an investigation into the Sept. 9, 2010, pipeline blast in San Bruno, CA, that killed 8 people, injured 58 and destroyed 38 homes.

PG&E was acquitted of six charges of deliberately failing to maintain proper records of pipeline tests and repairs.

Sentencing hasn’t been scheduled. The potential maximum penalty is $500,000 for each of the felony counts.

Lawyers for PG&E say they will ask the judge to overturn the convictions and dismiss the charges.

“We have made unprecedented progress in nearly six years since the tragic San Bruno accident and we are committed to maintaining our focus on safety,” PG&E said in a statement.

Company officials weren’t charged in the case.

The explosion sent flames 1,000 feet into the air. The cause was a defective seam weld in a transmission pipeline from the 1950s that PG&E documents said was seamless.

California’s Public Utilities Commission fined the company a record $1.6 billion for the explosion. Prosecutors originally sought up to $562 million for the criminal convictions, but the judge ruled prosecutors couldn’t seek that amount.

“A paltry maximum fine of $3 million or 0.3 percent of PG&E’s $888 million profits in 2015 is not a strong message to industry that safety must take priority over profits,” said California State Representative Jackie Speier whose district includes the area of the explosion.

“The motive was profit over safety,” said Assistant U.S. Attorney Jeffrey Schenk in closing arguments. PG&E denied engaging in unsafe cost-cutting.

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