going after PG&E
. . .again
David Lazarus SF Chronicle 13jan02
The utility is bankrupt. Its parent company is being sued by the state for alleged fraud. A legal battle is looming over regulatory oversight.
Could it get any worse for PG&E?
Two words: Erin Brockovich.
"They did what they did, and they're going to pay for it," she told me the other day.
What Brockovich was referring to is a pending case against San Francisco's Pacific Gas and Electric Co. that essentially picks up where the case in the movie about her leaves off.
A federal judge ruled last week that PG&E's bankruptcy proceedings do not supersede lawsuits alleging that the utility poisoned hundreds of Californians.
The case, which was supposed to go to trial last July, is now expected to be heard later this year.
"Erin Brockovich," starring Julia Roberts, focused on a $333 million settlement stemming from claims that a toxic chemical, chromium 6, leaked from PG&E facilities and contaminated groundwater in and around the San Bernardino County town of Hinkley.
Since then, more than 1,200 plaintiffs have filed a new suit alleging that they too have illnesses related to chromium contamination not just in Hinkley but also near PG&E's Kettleman Hills plant in Kings County, which pumps natural gas shipped from Texas to San Francisco.
At both Hinkley and Kettleman, chromium 6 was used by PG&E in cooling systems to prevent pipes from rusting. Runoff seeped into the ground and contaminated local water supplies.
"The chromium claims didn't cause this bankruptcy," wrote U.S. Bankruptcy Judge Dennis Montali in a 22-page decision. "Trial in state court should proceed as expeditiously as possible."
PG&E spokesman Jon Tremayne declined to discuss details of the Kettleman case but said the utility is ready for a fight. "We will definitely defend ourselves in court," he said.
Tremayne suggested that part of the utility's defense will be to question the links between the chromium contamination and the illnesses of plant workers and local residents.
Brockovich, whose investigative work on behalf of the Los Angeles law firm Masry & Vititoe brought the chromium cases to light, laughed off this tactic.
"They're responsible for what they did," she said, adding that the case against PG&E this time around looks even stronger than the 1996 case that resulted in the whopping $333 million settlement.
In the earlier case, Brockovich had a difficult time connecting PG&E's actions in the field to the utility's headquarters -- a pivotal moment in the movie version.
This time, she said, the document trail is much clearer. Among the paperwork to be presented as evidence is reportedly a 1964 letter from the U.S.
Interior Department alerting PG&E to the presence of unhealthy levels of chromium in Kettleman's water.
"With Kettleman, we can see a lot more involvement by the San Francisco company in the contamination," Brockovich said.
Her boss, Ed Masry, played to the hilt by Albert Finney in the movie, said he's just itching to haul PG&E back into court. "We're finally going to have a day of reckoning," he said.
While reluctant to talk about potential damages, he said it would not be surprising if a jury were to award the Kettleman plaintiffs considerably more than the bundle handed over in the Hinkley case. Some reports have speculated that Masry will seek no less than $500 million.
"We have clients who are literally dying," he said. "We will prevail in the end."
To date, he added, there has been "no realistic settlement discussion of any kind" with PG&E. "They've consistently tried to avoid this."
An extensive trial will not be easy for Masry. Quite apart from his recent election as mayor of the Southern California town of Thousand Oaks, he now undergoes regular kidney dialysis treatments.
"Is it an inconvenience? Yes," Masry said. "Has it slowed me down? No."
Both he and Brockovich have a full plate of pending litigation. One of their other cases resulted from a Chronicle story in March 2000 (by yours truly) about chromium contamination in the Mendocino County city of Willits.
This one doesn't involve PG&E. Rather, the culprit is a now-bankrupt hydraulics plant that was cited for decades of illegal chemical dumping. Local residents say a host of ailments, ranging from tumors to birth defects, are directly related to the contamination.
A Chicago firm called Whitman Corp., the holding company for Pepsi-Cola General Bottlers, is legally accountable for the plant's toxic legacy but has insisted to date that there's no link between local illnesses and the contaminated plant.
"We absolutely believe there is no health threat whatsoever," Barbara Guibord, an attorney representing Whitman, told me.
Brockovich disagrees. She's met with Willits residents and taken groundwater samples and is sure a jury will conclude that chromium in the water is responsible for the illnesses that seem so prevalent in the area.
"There's a mentality in corporate America that you can dump things and try to hide it," Brockovich said, her voice taking on a steely edge. "That's what we're fighting."
As for PG&E, she and Masry know that their clout has been enhanced by the movie, and they plan to take full advantage of the changed circumstances. This time, they're not a couple of feisty nobodies taking on one of the country's biggest utilities.
"I'm 100 percent confident that we're going to knock PG&E silly," Masry said.
It's happened before, after all.
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