They Thought That The Law Would Save Them, But…

09 August 2018

Public Justice is working on a critical new case, and the facts will alarm you.

Over the course of four months in late 2015 and early 2016, a natural gas well in California released thousands of tons of methane and other chemicals into the air. To put the seriousness of this event into context, consider that the leak resulted in 220 times more methane escaping than in the 2010 Deepwater Horizon disaster.

The well blowout went on for months, causing Governor Jerry Brown to declare a State of Emergency and resulting in 15,000 area residents being forced to evacuate their homes over the course of six months. In fact, the situation was so severe that the Federal Aviation Administration restricted flights over the area out of a fear that planes could ignite fumes from the leak.

There’s no doubt the incident – which single-handedly increased California’s greenhouse gas emission by an astounding 25% – had a major impact on the climate and the residents who were forced to leave their homes for months as the Southern California Gas Company tried – no fewer than 8 times – to “kill” the blowout. But it also had a significant and dire impact on another community, too: The small business owners whose livelihoods were jeopardized by the Gas Company’s irresponsible behavior and inability to fix the crisis they created.

It gets worse:

[M]ore than 400 small businesses (including a daycare center and various non-profits) – allege that negligence by Southern California Gas led to the collapse of the local economy, which naturally impacted our clients significantly. (It turns out that the company actually removed the well’s safety valve and then lied to regulators about having done so for more than three decades.)

So the businesses sued.

Guess what? They lost.

Despite the alarming evidence that this was a disaster that could have been prevented – and despite the economic impact it has had on local businesses – a California appeals court threw out the lawsuit, saying the claims were barred by the economic loss rule, a doctrine that has been colorfully likened to the 1958 B-movie classic The Blob and called an “ever-expanding, all-consuming alien life form” that could “consume much of tort law if left unchecked.”

That doesn’t seem right? Why did they lose?

The court’s decision held that these local small businesses only (yes, only) incurred economic damages – meaning, lost business because residents didn’t want to frequent a neighborhood where the air could literally be lit on fire because of the chemicals floating around – and not property damage or personal injury and, therefore, weren’t owed one penny from Southern California Gas. It didn’t matter, the court held, if their economic losses were a direct, foreseeable result of the company’s gross negligence. It also didn’t matter if the company knew darn well that its negligence could result in the worst methane gas leak in U.S. history.

That still doesn’t seem right. Or fair.

It’s not. That is why Public Justice has taken the case on, in an appeal to the California Supreme Court. The reason is clear, and good. “When a company’s gross negligence seriously injures local businesses relying on a thriving community for their livelihood, the company should compensate the business owners for their losses.”

You can learn more, and read this article on the Public Justice website, They are a great outfit, fighting for justice against unfair laws, unjust corporate acts, and wrongdoing that injures real people.

The article, “Public Justice Fights “The Blob” In The California Supreme Court,” can be found here: