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San Bruno Mediator Out on Conflict Concerns

October 29, 2012
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Former Sen. George Mitchell will not mediate talks to resolve enforcement cases against Pacific Gas and Electric Co. (PG&E) regarding the natural gas pipeline explosion in San Bruno, CA, in September 2010, as had been previously announced by the California Public Utilities Commission (CPUC), the regulator said last Friday.

The appointment of Mitchell was announced in mid-October (see NGI, Oct. 22) and was supported by CPUC enforcement staff but was protested by the city and consumer watchdog groups. San Bruno and San Francisco officials, as well as advocates for PG&E customers opposed the way in which Mitchell's law firm, DLA Piper, was selected to aid the mediation. The opposition said DLA Piper represents a PG&E insurer and called it a conflict of interest.

San Bruno Mayor Jim Ruane said before Mitchell withdrew as mediator that DLA Piper's conflict and its receipt of confidential information related to the case "automatically eliminates them as an unbiased party in mediating a settlement fair to the people and City of San Bruno.

"Representation of a client whose financial interests will be impacted by the outcome of the mediation is incompatible with DLA Piper's duty of impartiality," Ruane said. "Because DLA Piper represents a large insurance carrier that may end up paying costs incurred by PG&E related to the San Bruno explosion, there is an obvious conflict that prevents DLA Piper and Sen. Mitchell from serving."

The CPUC said that while it would like to see talks occur, it is clear that the parties must be supportive of the mediation and the mediator.

"...[I]it is regrettable that some of the parties did not appreciate the opportunity we afforded them to work with a man who is a true peacemaker," said CPUC President Michael Peevey. "The San Bruno investigation and regulatory proceedings have gone on for more than two years. Unless a stipulation can be reached, I am worried it might take until mid-next year before these cases can be concluded in the normal litigation manner. We want justice and remedies much sooner than that, to get closure and true justice for the people of San Bruno."

Commissioner Mike Florio said that none of the parties opposed Mitchell himself, or questioned his integrity or his abilities as a mediator. "What seemed to prompt the concern was simply the way we decided to appoint him, without prior consultation with the parties," Florio said.

Peevey and Florio urged the parties to continue negotiations designed to bring a stipulation before the CPUC. If a stipulation is reached, CPUC rules require that it be publicly filed with the commission and then considered by its five-members.

PG&E CEO Anthony Earley has said he expects a "global settlement" with the CPUC before the end of this year (see NGI, Aug. 13).

CPUC's safety staff alleges that PG&E committed significant violations of pipeline safety rules, which staff claims contributed to the blast (see NGI, Sept. 13, 2010). Earlier this year PG&E criticized a CPUC staff assessment of its pipeline safety practices, although it did not dispute its liability for the San Bruno pipeline rupture and explosion (see NGI, July 2).

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