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In the Courts
Utility Company Convicted for Regulatory Violations Based on Corporate Collective Knowledge
On Aug. 9, 2016, Pacific Gas & Electric Co. (PG&E), a California corporation that provides natural gas and electric services, was convicted of five counts of violating the federal Pipeline Safety Act (PSA), along with one count of obstructing an investigation by the National Transportation Safety Board (NTSB), in connection with a high-profile 2010 pipe explosion near San Francisco. United States v. Pac. Gas & Elec. Co., 2016 BL 240175, No. 3:14-cr-00175 (N.D. Cal., Aug. 9, 2016) (Jury Verdict) (PG&E). The conviction is significant because the government relied on a “collective knowledge” theory to pursue corporate criminal liability for “willful” violations of federal regulations, without establishing the “guilty mind” of any particular employee.
The case stemmed from the deadly explosion of a natural gas pipeline owned and operated by PG&E on Sept. 9, 2010, in San Bruno, CA. In 2014, PG&E was charged in a federal court with 28 criminal counts, including 27 counts of violating the minimum federal safety standards for the transportation of natural gas by pipeline under the PSA, as set forth in 49 C.F.R. ' 192. “Knowing and willful” violations of these standards are criminalized under 49 U.S.C. ' 60123. PG&E (Dec. 23, 2015) (Order Denying Defendant's Motion to Dismiss for Erroneous Legal Instructions) (the Order). Notably, a criminal violation under section 60123 requires both the defendant's knowledge and culpable mental state, i.e., “willfulness.”
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