San Bruno Breaking news: Resident suing PG&E

After the devastating pipeline explosion that left a neighborhood in ruin and lives lost, it was only a matter of time before residents starting filing lawsuits against the corporate giant. Friday, a lawsuit was filed against PG&E by Steve Dare in San Mateo County Superior Court. In his lawsuit, Dare stated that the utility company should take $100 million and have it held in trust or escrow, as a fund for the victims of last Thursday’s deadly explosion.

According to the lawsuit, PG&E could withhold funding for victims or go back on their promise to help the survivors of the San Bruno explosion if the funds are not transferred into a court appointed or supervised account. Paul Moreno, a PG&E spokesperson, told the San Mateo Daily Journal that he hadn’t been notified of PG&E being served the appropriate legal papers, so he was unable to comment on the case. In the wake of mounting criticism over the utility’s handling of the shutdown of the ruptured gas main and past pipeline problems, residents are worried that PG&E may not come through on their promise of financial aid.

The massive explosion, due to a ruptured gas line, destroyed nearly 40 homes and cost four residents their lives on September 9th, 2010. While Dare rents a home in the immediate area, it was not damaged by the subsequent fire. However, he was evacuated for three days and, according to Dare’s attorney, William Audet, he is representative of many of the area’s residents whose lives were literally torn apart when the pipeline ruptured. Audet expects to have a large number of San Bruno residents join in the lawsuit. “Basically, the way I look at it is, all residents of San Bruno potentially have some impact,” Audet said.

On September 13th, PG&E announced the creation of a $100 million “Rebuild San Bruno” fund. The profitable company released $3 million to the city of San Bruno who, in turn, gave residents checks in increments of $!5,000, $25,000 and $50,000 to cover necessary expenses such as housing, food and insurance deductibles. While the $3 million was a start, Dare and others are concerned about the other $97 million. Given the utility company’s record of money management, would PG&E release the additional money in a timely manner?

Dare’s concern has to do with the financial uncertainty that awaits PG&E as the costs of cleaning up the devastated area mount, growing greater by the hour. While the utility company has insurance coverage, it may not be enough when all is said and done. Adding to the concerns has been similar situations with companies at the center of major catastrophes. Many of these companies go under, declaring bankruptcy, which leaves victim caught in financial void. There’s also the concern that without a court supervised trust or escrow account, PG&E could use the remaining funds to pay off litigation costs, which would cause a reduction in pending legal claims. The very laws that protect victims could leave them without financial help unless the remaining $97 million is held by a third party.

Of course, if PG&E does go back on their word, it’s going to make the offer look like a public relations play, adding to the quickly mounting public image problems the company is facing. “The best thing they can do right now for people is to say yes, we committed to this, put it into an account and immediately start reimbursing people,” Audet said. As of Friday, PG&E had distributed 500 $1,000 prepaid debit cards in addition to the city payment, as well as handing out checks to those in need. The questions remains; will the utility company see their financial commitment through to the end, something Dare and his attorney doubt.

While not every resident has had significant financial damage leading to legal claims, Audet feels the financial damage goes beyond those whose property was destroyed. It should be noted that residents that took the initial money from PG&E don’t have to waive future claims.