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Aug 15 2016

Companies Face Criminal Convictions for Mistakes in Data Gathering and Record Keeping

August 15, 2016 (Houston)

James SmithBy James Smith – “Environmental Alert” (Schirrmeister, Diaz-Arrastia, Brem LLP)

On August 9, 2016, a jury in a California federal court convicted Pacific Gas & Electric (“PG&E”) of six criminal counts.  PG&E’s conviction was not related to the cause of the San Bruno explosion in 2010, where eight people died, although PG&E was convicted of one count of obstructing the National Transportation Safety Board’s investigation into that explosion.

The jury convicted PG&E on five other counts, all related to deficiencies in data gathering and record keeping.  To obtain the convictions, the government did not need to prove that any deficiency led to any incident, or even to any unsafe condition.

Complimentary Presentation to Explain More Fully

To assist Houston area companies, I offer, without charge, a presentation on this case, which will discuss how failures in reporting and data evaluation can lead to serious, even criminal consequences.  I give practical suggestions for minimizing enforcement risks.

The presentation is designed for non-lawyers, although law department members will benefit from it, also.  It will last about an hour, including time for questions and comments, and will work in a “lunch and learn” or comparable setting.

If you are interested in scheduling the presentation or more information, provide your contact information to jsmith@sdablaw.com.

Convicted for an Incomplete Baseline Assessment Plan

As just one example from the case, the jury convicted PG&E of violating 49 CFR § 192.919, by failing to create a complete Baseline Assessment Plan for one or more of three pipelines.  The judge’s instructions indicated that the government needed to prove, beyond a reasonable doubt, that PG&E knowingly and willfully failed to create a complete Plan.  The judge’s instructions did not require the jury:

  • to agree as to which of the three pipelines provided the basis of the conviction;
  • to identify or agree on a specific employee of PG&E who had the willful intent to avoid creating a complete Plan;
  • to identify or agree on any specific piece of information that PG&E knew was required to be in a Plan and was willfully not put in the Plan; or
  • to determine that any Plan’s deficiencies had any actual safety consequences.

Convictions for Data Gathering and Record Keeping Mistakes

These convictions show the government’s willingness to use data gathering and record keeping regulations as the basis for criminal convictions.  Managers, along with environmental, safety and health professionals, must appreciate that deficient record keeping can lead to criminal convictions, and the government does not need to show that the record keeping deficiencies actually created a significant environmental or safety concern.

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