United States v. Pacific Gas & Electric Co.

153 F. Supp. 3d 1128, 2015 U.S. Dist. LEXIS 171574, 2015 WL 9460308
Procedural entryThis page is a short order in United States v. Pacific Gas & Electric Co.. Read the opinion of the Court — 178 F. Supp. 3d 927
District Court, N.D. California·Decided December 23, 2015·No. Case No. 14-cr-00175-TEH·Published

Opinion

ORDER DENYING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE AN OFFENSE: COUNTS 2-28

THELTON E. HENDERSON, United States District Judge

This matter came before the Court on October 19, 2015 for a hearing on Defendant Pacific Gas & Electric (“PG&E”)’s Motion to Dismiss for Failure to State an Offense: Counts 2-28. After carefully considering the parties’ written and oral arguments, the Court now DENIES PG&E’s motion, for the reasons set forth below.

BACKGROUND

On September 9, 2010, a gas line owned and operated by PG&E ruptured, causing a fire that killed 8 people and injured 58 others. Superseding Indictment (“SI”) ¶ 5 (Docket No. 22). The fire damaged 108 homes, 38 of which were completely destroyed. Id. On July 30, 2014, a grand jury returned a superseding indictment (“Indictment”) charging PG&E with 27 counts of violating the minimum federal safety standards for the transportation of natural gas by pipeline (“Pipeline Safety Act”), as set forth in 49 C.F.R. § 192 (“Section 192”). SI ¶¶ 62-75. “Knowing and willful” violations of these standards are criminalized under 49 U.S.C. § 60123 (“Section 60123”).

LEGAL STANDARD

Under Rule 12(b) of the Federal Rules of Criminal Procedure, a defendant may “raise by pretrial motion any defense, objection, or request that the court can determine without a trial on the merits,” including a motion to dismiss an indictment for “failure to state an offense.” Fed. R. Crim. P. 12(b)(1), 12(b)(3)(B)(v).

An indictment must contain “the statute, rule, regulation, or other provision of law that the defendant is alleged to have violated,” and “a plain, concise, and definite written statement of the essential facts constituting the offense.” Fed. R. Crim. P. 7(c)(1).

DISCUSSION

PG&E now moves to dismiss all 27 Pipeline Safety Act counts of the Indictment for failure to state an offense. In this particular motion, PG&E does not challenge the sufficiency of the facts or legal theories underpinning these counts. Rather, PG&E argues that the Indictmént should be dismissed because the alleged [1130]*1130conduct does not state a federal offense where, as- here, the federal government has no direct regulatory power.

I. The State Certification Scheme

Through 49 U.S.C. § 60105 (“Section 60105”), Congress granted all states the option to assume exclusive responsibility for regulating intrastate pipelines, in lieu of federal regulation under the. Pipeline Safety Act. Under Section 60105, states can obtain exclusive regulatory and enforcement authority by certifying to the Secretary of Transportation that they have adopted their own safety standards. Specifically, Section 60105(a) provides:

Except as provided in this section and sections 60114 and 60121 of this title, the Secretary of Transportation may not prescribe or enforce safety standards and practices for an intrastate pipeline facility or intrastate pipeline transportation to the extent that the safety standards and practices are regulated by a State authority., .that submits to the Secretary annually a certification for the facilities and transportation that.complies with subsections (b) and (c) of this section.

Subsections (b) and (c) go on to detail the certification process and requirements.

Of. particular relevance are subsections (b)(2) and (b)(7). Section (b)(2) requires each participating state to certify that it “has adopted.. .each applicable standard prescribed under this chapter.” As confirmed elsewhere in the Pipeline Safety Act,1 subsection (b)(2) mandates that state regulations be at least as stringent as the federal regulations, but allows that they may be more stringent. With respect to enforcement, subsection (b)(7) requires each participating state to certify that it “may enforce safety standards of the authority under a law of the State by injunc-tive relief and civil penalties substantially the same as provided under sections 60120 and 60122(a)(1) and (b)-(f) of this title.” Section 60105 is silent as to criminal penalties.

The parties agree that California is a certified state, and that the Secretary of Transportation therefore cannot prescribe regulations or otherwise enforce Section 192 as against intrastate pipelines in California. Def.’s Mot. to Dismiss Counts 2-28 (“Mot”) at 6-7 (Docket No. 123); Opp’n to Def.’s Mot. to Dismiss Counts 2-28 (“Opp’n”) at 2 (Docket No. 148).

II. Summary of Parties’ Arguments

The parties disagree about whether Section 60105 likewise limits the Attorney General’s authority to prosecute intrastate pipelines in California for violations of Section 192, pursuant to Section 60123. PG&E argues that because Section 60123 criminalizes only violations of federal regulations, which PG&E cannot violate by virtue of not being subject to federal regulation, “there can be no federal criminal violations of those regulations,” and all 27 regulatory counts should be dismissed for failure to state a federal crime. Reply in Supp. of Def.’s Mot. to Dismiss Counts 2-28 (“Reply”) at 8 (Docket No. 176); Mot. at 7-8. To support these arguments, PG&E relies heavily on a Ninth Circuit case that recently noted “the federalism structure of the Pipeline Safety Act favors state assumption of jurisdiction.” City & Cty. of S.F. v. U.S. Dep’t of Transp., 796 F.3d 993, 1002 (9th Cir.2015).

The Government argues that Section 60105 plainly limits only the Secretary of Transportation’s enforcement authority, leaving untouched the Attorney General’s [1131]*1131power to prosecute under Section 60123. Opp’n at 3-7.

III. The Boundaries of Section 60105

PG&E’s motion turns on an interpretation of Section 60105. The “first step in interpreting a statute is- to determine whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case.” Robinson v. Shell Oil Co., 519 U.S. 337, 340, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997). Plainness “is determined by reference to the language itself, the specific context in which that language is used, and the broader context of the statute as a whole.” Id. at 341, 117 S.Ct. 843. If “the statutory language is unambiguous and ’the statutory scheme is coherent and consistent,’ ” then the inquiry is complete. Id. at 340, 117 S.Ct. 843. Only if any ambiguity remains should the Court look to the statute’s legislative history for further clues as to its meaning. Blum v. Stenson, 465 U.S.

United States v. Pacific Gas & Electric Co., 153 F. Supp. 3d 1128, 2015 U.S. Dist. LEXIS 171574, 2015 WL 9460308 (N.D. Cal. 2015).

153 F. Supp. 3d 1128 (United States v. Pacific Gas & Electric Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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