Anthony Gantner v. Pg&e Corporation ( 2022 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ANTHONY GANTNER, No. 21-15571
Appellant,
D.C. No.
v. 4:20-cv-02584-HSG
PG&E CORPORATION; ORDER CERTIFYING
PACIFIC GAS & ELECTRIC QUESTIONS TO THE
COMPANY, SUPREME COURT OF
Appellees. CALIFORNIA
Filed February 28, 2022
Before: Danny J. Boggs, * John B. Owens, and
Michelle T. Friedland, Circuit Judges.
Order
*
The Honorable Danny J. Boggs, United States Circuit Judge for
the U.S. Court of Appeals for the Sixth Circuit, sitting by designation.
2 GANTNER V. PG&E
SUMMARY **
Certification of Questions to Supreme Court of
California / Bankruptcy
The panel withdrew the case from submission and
certified to the Supreme Court of California the following
two questions of state law:
(1) Does California Public Utilities Code
§ 1759 preempt a plaintiff’s claim of
negligence brought against a utility if the
alleged negligent acts were not approved by
the California Public Utilities Commission,
but those acts foreseeably resulted in the
utility having to take subsequent action (here,
a Public Safety Power Shutoff), pursuant to
CPUC guidelines, and that subsequent action
caused the plaintiff’s alleged injury?
(2) Does PG&E’s Electric Rule Number 14
shield PG&E from liability for an
interruption in its services that PG&E
determines is necessary for the safety of the
public at large, even if the need for that
interruption arises from PG&E’s own
negligence?
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
GANTNER V. PG&E 3
ORDER
We respectfully ask the Supreme Court of California to
exercise its discretion to decide the certified questions set
forth in section II of this order.
I. Administrative Information
We provide the following information in accordance
with California Rule of Court 8.548(b)(1). The caption of
this case is:
No. 21-15571
ANTHONY GANTNER, Appellant,
v.
PG&E CORPORATION; PACIFIC GAS &
ELECTRIC COMPANY, Appellees.
The names and addresses of counsel for the parties are:
For Appellant Anthony Gantner: Nicholas A.
Carlin, Brian S. Conlon, and Leah Romm,
Phillips Erlewine, Given & Carlin, LLP,
39 Mesa Street, Suite 201, San Francisco, CA
94129; Bonny E. Sweeney, Hausfeld LLP,
44 Montgomery Street, Suite 3400, San
Francisco, CA 94104.
For Appellees PG&E Corporation and
Pacific Gas & Electric Company
(collectively, “PG&E”): Omid Nasab and
Kevin Orsini, Cravath, Swaine & Moore,
LLP, 825 8th Avenue, New York, NY 10019;
4 GANTNER V. PG&E
Peter J. Benvenutti and Thomas B. Rupp,
Keller Benvenutti Kim, LLP, 650 California
Street, Suite 1900, San Francisco, CA 94108;
Theodore Elias Tsekerides, Weil Gotshal &
Manges, LLP, 767 5th Avenue, New York,
NY 10153.
We designate Anthony Gantner as the petitioner if our
request for certification is granted. He is the appellant before
our court.
II. Certified Questions
We certify to the Supreme Court of California the
following two questions of state law:
(1) Does California Public Utilities Code
section 1759 preempt a plaintiff’s claim of
negligence brought against a utility if the
alleged negligent acts were not approved by
the California Public Utilities Commission
(“CPUC”), but those acts foreseeably
resulted in the utility having to take
subsequent action (here, a Public Safety
Power Shutoff), pursuant to CPUC
guidelines, and that subsequent action caused
the plaintiff’s alleged injury?
(2) Does PG&E’s Electric Rule Number 14
shield PG&E from liability for an
interruption in its services that PG&E
determines is necessary for the safety of the
public at large, even if the need for that
interruption arises from PG&E’s own
negligence?
GANTNER V. PG&E 5
We certify these questions pursuant to California Rule of
Court 8.548. The answers to these questions will determine
the outcome of the appeal currently pending in our court.
We will accept and follow the decision of the California
Supreme Court on these questions. Our phrasing of the
questions should not restrict the California Supreme Court’s
consideration of the issues involved.
III. Statement of Facts
Anthony Gantner (“Plaintiff”) is a resident of St. Helena,
California, and a PG&E customer. Plaintiff filed a Class
Action Complaint in December 2019 in the United States
Bankruptcy Court for the Northern District of California,
asserting a claim under California Public Utilities Code
section 2106 in an adversary proceeding in PG&E’s Chapter
11 proceedings. Plaintiff alleges negligence on the part of
PG&E, claiming that PG&E had a duty to maintain its grid
in a safe condition but failed to do so and that “PG&E’s
safety record is an abomination.” Specifically, Plaintiff
alleges, among other things, that “PG&E has 113,000 miles
of conductors, and over 60% of those conductors are and
were highly susceptible to failure”; that “PG&E repeatedly
delayed upgrading its oldest transmission lines”; and that,
“[i]n an investigation covering 1994 to 1998, CPUC staff
accused PG&E of more than 500,000 counts of violating
state laws requiring utilities to keep trees pruned a safe
distance from overhead electric lines.”
Plaintiff further alleges that, because of PG&E’s
negligence in maintaining its electrical equipment, PG&E
was forced to implement Public Safety Power Shutoffs
(“PSPSs”) on five occasions in the autumn of 2019 to
decrease the chance that its equipment would cause
wildfires. Since 2019, public electric utilities have been
required to have a PSPS protocol in place. See Cal. Pub.
6 GANTNER V. PG&E
Util. Code § 8386(c)(6). CPUC has adopted the policies that
a utility “has the burden of demonstrating that its decision to
shut off power is necessary to protect public safety,” Cal.
Pub. Utils. Comm’n, Resolution ESRB-8, at 1, 4 (2018), and
that a utility “must deploy de-energization as a measure of
last resort and must justify why de-energization was
deployed over other possible measures or actions,” Cal. Pub.
Utils. Comm’n, Decision 19-05-042 app. A at A1 (2019).
As a result of the 2019 PSPSs, Plaintiff alleges that he
and others were without power for “many days, in some
cases up to 17 days total and upwards of 10 days in a row.”
Those affected by the PSPSs allegedly suffered “loss of
habitability of their dwellings, loss of food items in their
refrigerators, expenses for alternative means of lighting and
power,” and other damages. Plaintiff seeks to certify a class
that includes “[a]ll California residents and business
owners” who had their power shut off by PG&E during the
2019 PSPSs or any subsequent PSPS during this litigation.
Plaintiff requests $2.5 billion in damages for the class.
PG&E moved in bankruptcy court to dismiss the
Complaint. PG&E argued that the court lacked subject
matter jurisdiction to hear the claim because it was
preempted by California Public Utilities Code section 1759.
PG&E argued, in the alternative, that the Complaint should
be dismissed because PG&E’s Electric Rule Number 14
shields PG&E from liability for an interruption in service
that PG&E believes is necessary for public safety. 1 CPUC
filed an amicus brief in the bankruptcy court, contending that
“litigation and adjudication of Plaintiff’s claim . . . would
1
PG&E also argued that the Complaint should be dismissed because
it failed to adequately plead that PG&E’s alleged negligence caused
Plaintiff’s damages.
GANTNER V. PG&E 7
hinder and interfere with enforcement of the Commission’s
guidelines concerning public safety power shutoffs.” The
bankruptcy court issued a ruling in March 2020 dismissing
the Complaint without leave to amend, holding that
Plaintiff’s claim was preempted by section 1759, and not
addressing PG&E’s Rule 14 argument. 2
In April 2020, Plaintiff appealed the bankruptcy court’s
dismissal of his Complaint to the United States District
Court for the Northern District of California. In March 2021,
the district court affirmed dismissal, ruling only on
preemption grounds, and denying Plaintiff leave to amend.
Plaintiff filed a timely notice of appeal of the district
court’s decision. Alice Stebbins, the former Executive
Director of CPUC, filed an amicus brief in support of
Plaintiff, arguing that imposing liability on PG&E under
Plaintiff’s theory would not be inconsistent with CPUC’s
policies or its “regulatory reach.” CPUC filed an amicus
brief, which nominally did not support either party but, like
the brief it had filed in the Bankruptcy Court, took the
position that section 1759 preempted Plaintiff’s claim. We
heard oral argument on January 12, 2022.
IV. Explanation of Certification Request
No controlling California precedent has answered the
certified question whether California Public Utilities Code
section 1759 preempts a negligence claim alleging that a
utility violated state-law duties and consequently needed to
take an action, with the permission of CPUC, that caused the
2
The bankruptcy court also concluded that Plaintiff’s claim failed
because PG&E’s alleged negligence would not have proximately caused
Plaintiff’s damages.
8 GANTNER V. PG&E
plaintiff to suffer damages. Similarly, no controlling
California precedent has interpreted Rule 14 or has
explained how a court should apply a utility’s tariff rule
when the text is susceptible to two reasonable
interpretations. These questions are dispositive in this case
and have significant public policy implications for
California residents and utilities.
A.
This case presents a novel question about the scope of
preemption under California Public Utilities Code section
1759. California law provides a private right of action
against any public utility that acts unlawfully or that “omits
to do any . . . thing required to be done.” Cal. Pub. Util.
Code § 2106. But section 1759 limits the jurisdiction of
courts to hear any suit that could interfere with CPUC “in the
performance of its official duties.” Id. § 1759. To the extent
there is conflict between sections 1759 and 2106, the
California Supreme Court has held that section 1759
preempts a claim brought under section 2106 if an award of
damages would “hinder or frustrate [CPUC’s] declared
supervisory and regulatory policies.” San Diego Gas &
Elec. Co. v. Superior Ct. (“Covalt”), 920 P.2d 669, 673 (Cal.
1996) (quoting Waters v. Pac. Tel. Co., 523 P.2d 1161, 1162
(Cal. 1974)). Plaintiff alleges that, because of PG&E’s
negligent maintenance of its grid, PG&E needed to
implement PSPSs, which caused his injury. In his filings
before the bankruptcy court, and throughout this litigation,
Plaintiff has made clear that “this case is not about whether
the shutoffs were appropriate or how PG&E handled them.”
Rather, Plaintiff contends, “it is about why they had to be
done in the first place.” PG&E responds that, regardless of
how Plaintiff frames his theory, any damages PSPSs cause
cannot be recovered in litigation because of section 1759
GANTNER V. PG&E 9
preemption. This case thus presents the question whether
adjudicating Plaintiff’s claim that PG&E negligently
maintained its grid would hinder or frustrate CPUC’s
regulatory authority with respect to PSPSs, when Plaintiff
does not challenge the manner in which the PSPSs were
executed but rather argues that they are a link in the causal
chain that connects PG&E’s alleged negligence to his
damages.
When the California Supreme Court has considered
whether a claim was preempted by section 1759, the Court
has examined whether the allegedly tortious conduct was
permitted by CPUC’s policies. For example, in Covalt, the
California Supreme Court held that section 1759 preempted
a private nuisance claim that alleged that a utility’s power
lines emitted “high and unreasonably dangerous levels of
electromagnetic radiation onto plaintiffs’ property.” Id.
at 678. CPUC had previously decided that “regulated
utilities need take no action to reduce [electromagnetic] field
levels from existing powerlines.” Id. at 697. The Court held
that plaintiffs’ claim was preempted because a determination
of liability “would be inconsistent with [CPUC’s]
conclusions” that the challenged conduct was lawful. Id. In
Hartwell Corp. v. Superior Ct., 38 P.3d 1098 (Cal. 2002),
the California Supreme Court considered an allegation that
public utilities provided unhealthy drinking water. Id.
at 1102. The Court held that that claim was preempted
insofar as the water was in compliance with federal and state
standards because “[a]n award of damages on the theory that
the public utilities provided unhealthy water, even if the
water met [applicable] standards, ‘would plainly undermine
[CPUC’s] policy.’” Id. at 1113 (quoting Covalt, 920 P.2d
at 704). But the Court also held that “damage claims based
on the theory that the water failed to meet federal and state
drinking water standards are not preempted by section
10 GANTNER V. PG&E
1759.” Id. (emphasis added). The Court reasoned that a
finding that “a public water utility violated [those] standards
would not interfere with the [C]PUC regulatory policy.” Id.
Existing California precedent does not address whether
Plaintiff’s claim is preempted. In Covalt and Hartwell, and
every other California Supreme Court case addressing
section 1759 preemption, the utility’s allegedly unlawful
conduct giving rise to the claim was the same conduct that
directly caused the plaintiffs’ alleged injuries. Determining
whether each claim was preempted required the Court to
decide only whether that challenged conduct was consistent
with CPUC’s policies. In this case, by contrast, there are two
separate sets of conduct at issue. Plaintiff alleges that, first,
PG&E negligently maintained its grid and, second, PG&E
consequently had to engage in PSPSs, which caused
Plaintiff’s damages. The challenged conduct—PG&E’s
allegedly negligent maintenance of its grid—would
undoubtedly contravene California law and CPUC’s policies
if Plaintiff’s allegations about that conduct were proven
true. 3 But the conduct that directly caused Plaintiff’s
injury—the 2019 PSPSs—were implemented with CPUC’s
permission. The caselaw does not answer whether section
1759 prevents Plaintiff from suing PG&E for its initial
negligence given that the PSPSs, which Plaintiff alleges
3
See, e.g., Pub. Util. § 8386(a) (“Each electrical corporation shall
construct, maintain, and operate its electrical lines and equipment in a
manner that will minimize the risk of catastrophic wildfire posed by
those electrical lines and equipment.”); id. § 451 (“Every public utility
shall furnish and maintain such adequate, efficient, just, and reasonable
service, instrumentalities, equipment, and facilities . . . as are necesary
[sic] to promote the safety, health, comfort, and convenience of its
patrons, employees, and the public.”).
GANTNER V. PG&E 11
were the foreseeable result of that negligence and caused his
injuries, were allowed under CPUC’s policies.
Cognizant of the burden that certifying a question adds
to a state court’s caseload, we have stated that “[t]he
certification procedure is reserved for state law questions
that present significant issues, including those with
important public policy ramifications, and that have not yet
been resolved by the state courts.” Kremen v. Cohen,
325 F.3d 1035, 1037 (9th Cir. 2003). This question meets
that high standard for certification. Wildfires are
increasingly an annual occurrence throughout California,
and at least some PSPSs may be necessary to minimize the
number of those fires. How California allocates the costs of
wildfires and PSPSs involves important policy
considerations. Given the significance of the policy issues
implicated by Plaintiff’s negligence claim, and the fact that
no caselaw from the California Supreme Court directly
addresses whether section 1759 preempts it, we certify that
question to the California Supreme Court.
B.
We also certify a question about the interpretation of
Rule 14, which would independently foreclose Plaintiff’s
theory of liability if it were resolved in PG&E’s favor. Rule
14 is a tariff rule that PG&E has filed with CPUC. California
law requires utilities to file with the CPUC “tariff schedules
containing rates, charges and classifications, ‘together with
all rules, contracts, privileges, and fa[c]ilities which in any
manner affect or relate to rates, tolls, rentals, classifications,
or service.’” Waters, 523 P.2d at 1163 (quoting Pub. Util.
§ 489(a)). A properly published and filed tariff rule “ha[s]
the force and effect of a statute.” Dyke Water Co. v. Pub.
Utils. Comm’n, 363 P.2d 326, 337 (Cal. 1961).
12 GANTNER V. PG&E
Rule 14 provides generally that “PG&E will exercise
reasonable diligence and care to furnish and deliver a
continuous and sufficient supply of electric energy to the
customer, but does not guarantee continuity or sufficiency of
supply.” PG&E argues that the fourth paragraph of Rule 14
absolves it from any liability for service interruptions,
including PSPSs. That paragraph provides:
PG&E specifically maintains the right to
interrupt its service deliveries, without
liability to the Customers or electric service
providers (ESPs) affected, when, in PG&E’s
sole opinion, such interruption is necessary
for reasons including, but not limited to, the
following:
1. Safety of a customer, a PG&E employee,
or the public at large.
(emphasis added). Plaintiff argues, however, that a sentence
in the first paragraph of Rule 14 contemplates that PG&E
remains liable for interruptions in service that result from its
own negligence. That sentence reads:
PG&E will not be liable for interruption or
shortage or insufficiency of supply, or any
loss or damage of any kind of character
occasioned thereby, if same is caused by
inevitable accident, act of God, fire, strikes,
riots, war, or any other cause except that
arising from its failure to exercise reasonable
diligence.
(emphasis added).
GANTNER V. PG&E 13
Both parties have put forward reasonable interpretations
of Rule 14. Under PG&E’s reading, the fourth paragraph
precludes liability for any interruption in service if, in
PG&E’s opinion, that interruption is necessary to protect the
public at large. Under Plaintiff’s reading, the first paragraph
of Rule 14 limits PG&E’s disclaimer of liability in the fourth
paragraph by stating that PG&E is still liable for an
interruption in service—even one that, in PG&E’s opinion,
is necessary to protect the public—if PG&E’s negligence
caused the interruption.
The California Supreme Court has never interpreted
Rule 14 or issued an opinion that squarely answers which
party’s reading is correct. The California Court of Appeal,
adopting a canon of construction from contract law, has held
that “if there is an ambiguity in a tariff any doubt in its
interpretation is to be resolved in favor of the [nondrafter and
against the utility].” Pink Dot, Inc. v. Teleport Commc’ns
Grp., 107 Cal. Rptr. 2d 392, 397 (Ct. App. 2001) (brackets
in original) (quoting Transmix Corp. v. S. Pac. Co., 9 Cal.
Rptr. 714, 721 (Ct. App. 1960)). Because tariff rules have
“the force and effect of a statute,” Dyke Water Co., 363 P.2d
at 337, it is unclear whether this contract-law approach to
resolving an ambiguity in Rule 14 is appropriate or whether
California law instead would require a court to apply
standard principles of statutory construction. The California
Supreme Court has never adopted the canon that ambiguities
in a tariff rule must be resolved against the utility, and we
are not certain whether the Supreme Court would choose to
do so. See, e.g., Waters, 523 P.2d at 1166 (“[G]eneral
principles which might govern disputes between private
parties are not necessarily applicable to disputes with
regulated utilities.”). Given that this question of Rule 14’s
interpretation implicates the same public policy interests
identified in section IV.A and likewise determines whether
14 GANTNER V. PG&E
a claim such as Plaintiff’s may proceed, we respectfully
certify this question as well.
V. Accompanying Materials
The clerk of this court is hereby directed to file in the
Supreme Court of California, under official seal of the
United States Court of Appeals for the Ninth Circuit, copies
of all relevant briefs and excerpts of the record, and an
original and ten copies of this order and request for
certification, along with a certification of service on the
parties, pursuant to California Rule of Court 8.548(c), (d).
This case is withdrawn from submission. Further
proceedings before us are stayed pending final action by the
Supreme Court of California. The clerk is directed to
administratively close this docket, pending further order
from this court. The parties shall notify the clerk of this court
within seven days after the Supreme Court of California
accepts or rejects certification, and again within seven days
if that Court accepts certification and subsequently renders
an opinion. The panel retains jurisdiction over further
proceedings.
IT IS SO ORDERED.