Trusting Morgan Lewis Attys ‘A Mistake,’ Gas Leak Judge Says

Law360, Los Angeles (February 11, 2020, 10:01 PM EST) — A California judge overseeing thousands of suits over the 2015 Aliso Canyon gas leak told Morgan Lewis attorneys Tuesday she made “a mistake” in trusting them to produce documents for clients Southern California Gas and Sempra Energy, a process that’s been marred by privilege fights, document dumps and a sanctions motion.

Superior Court Judge Carolyn B. Kuhl said at a hearing she had trusted attorneys for SoCalGas and the energy infrastructure company to recheck and correct the log of documents legally protected under attorney-client privilege and to produce any unprotected documents. But after hearing from attorneys for residents and homeowners affected by the gas leak that they received an untimely dump of more than 100,000 documents, the judge said that trust was “a mistake.”

Jesse Creed of Panish Shea & Boyle LLP, an attorney for the homeowners and other private plaintiffs, urged Judge Kuhl to sanction SoCalGas, Sempra and their attorneys in a number of ways, including nearly $1 million in monetary sanctions and jury instructions telling jurors that the defendants had intentionally tried to conceal certain documents.

The leak at SoCalGas’ Aliso Canyon facility near Los Angeles was discovered in October 2015 and lasted until February 2016, ultimately releasing 109,000 metric tons of methane into the atmosphere, according to the California Air Resource Board. The incident displaced thousands.

SoCalGas has already agreed to shell out $119.5 million to California and the city of Los Angeles to settle a pair of civil suits over the leak, but the utility is also facing thousands of the consolidated civil suits by property owners and residents in the area of the leak.

SoCalGas in September 2016 agreed to pay $4 million to settle criminal charges brought by Los Angeles County over the alleged lack of proper notification about the leak and reached an $8.5 million settlement with the South Coast Air Quality Management District — the local air pollution control agency — over claims stemming from the leak.

On Tuesday, Creed said the plaintiffs have been deprived of tens of thousands of documents until just recently and with a June 2020 trial coming up, they are prejudiced because they’ll have to go through all of those new documents and potentially redepose dozens of witnesses, in addition to preparing for trial.

In addition to the monetary and jury instruction sanctions, the plaintiffs want the new documents to be deemed authenticated and admissible, and do not want the energy companies to be able to introduce or rely on any of the new documents at the time of trial. The plaintiffs also requested that the burden of disproving nuisance and negligence be shifted to the energy companies, according to their motion.

David L. Schrader of Morgan Lewis apologized to the court, saying there had been some missteps made, but that the firm and energy companies did not intentionally hold anything back from the plaintiffs. But he said the plaintiffs are not entitled to the sanctions they seek, saying there’s no evidence that the defendants hid any nonprivileged documents.

“Our efforts were not in bad faith,” Schrader told the court.

Schrader said there are still more than four months before the first case is set to go to trial and that no evidence has been destroyed or lost. While the production of the documents should have occurred sooner, he said there is still time for the plaintiffs to go through all of the documents.

At that point, Judge Kuhl interjected to say that the energy companies can spend that time preparing for trial, while the plaintiffs will have to spend part of the time reviewing the new documents.

“That’s a disadvantage to them,” the judge said. “That’s a concern.”

Schrader said it’s not enough that the plaintiffs show there are new documents, they have to show that there is new information in the documents. He said there’s no evidence that supports the plaintiffs’ claim of prejudice.

Brian Panish of Panish Shea & Boyle LLP, another attorney for the plaintiffs, said they had showed that the defendants willfully hid the documents and that there is new information to which they’ve never had access.

“Many of these documents are hot documents for the plaintiffs,” Panish said.

He said the prejudice was clear.

Judge Kuhl did not make a decision Tuesday and took the matter under submission.

Counsel for the plaintiffs declined to comment until after the judge makes a ruling. Counsel for the defendants did not immediately respond Tuesday to Law360’s request for comment.

Counsel for the residents and homeowners include Panish Shea & Boyle LLP, Morgan & Morgan and the PARRIS Law Firm.

SoCalGas is represented by David L. Schrader, Deanne L. Miller, Yardena R. Zwang-Weissman and James J. Dragna of Morgan Lewis & Bockius LLP.

The private plaintiffs’ case is Gandsey v. Southern California Gas Co. et al., case number BC601844, in the Superior Court for the State of California, County of Los Angeles.

The consolidated case is Southern California Gas Leak Cases, case number JCCP4861, in the Superior Court for the State of California, County of Los Angeles.

–Additional reporting by Hailey Konnath and RJ Vogt. Editing by Breda Lund.

Correction: A previous version of this story misstated the amount of requested monetary sanctions. The error has been corrected.