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United States v. Pacific Gas and Electric Co.

United States District Court, N.D. California

July 14, 2016

UNITED STATES OF AMERICA, Plaintiff,
v.
PACIFIC GAS AND ELECTRIC COMPANY, Defendant.

          ORDER REGARDING DEFENDANT’S OBJECTIONS TO DAUBY EXHIBITS

          THELTON E. HENDERSON United States District Judge

         Yesterday morning Defendant Pacific Gas and Electric Company (“PG&E”) lodged objections to eight exhibits the Government intends to introduce through witness Frank Dauby. The Court now OVERRULES IN PART and SUSTAINS IN PART those objections.

         BACKGROUND

         PG&E makes only three objections to the eight contested exhibits. First, PG&E again “object[s] as to financial matters not tied to charged conduct for Exhibits 287 and 374 . . . through [Federal Rule of Evidence (‘Rule’)] 401 and 403.” Trial Tr., Vol. 20 at 2738:23-2739:4.[1] Second, PG&E “object[s] to Exhibits 267, 280, 592 and 666, as . . . not related to the charged conduct . . . under [Rules] 401, 403 and 404(b).” Id. at 2738:25-2739:2. And third, PG&E objects to Exhibits 608 and 614 because “[t]hey both reference the San Bruno incident, ” because their admission “would violate the Court’s prior orders, ” and because they are “highly prejudicial . . . [and not] probative of anything that hasn’t already been established.” Id. at 2739:8-20.

         GOVERNMENT’S EXHIBITS 287 and 374

         Exhibit 287 is an email chain regarding “2008 Metrics and Key Indicators” and discussing the comparative costs of various assessment technologies, including Direct Assessment (“DA”) and In-Line Inspection (“ILI”). Exhibit 374 is an email chain regarding “2009 [Integrity Management (‘IM’)] forecast - further reductions necessary” and discussing which IM projects can be “reduced to make ends meet.”

         PG&E’s objection to these exhibits is identical to one PG&E has made, and the Court has rejected, many times before. The exhibits are relevant for the reasons stated in the Government’s response to PG&E’s objections, which are in keeping with the relevance of prior exhibits objected to on the same basis. See Dkt. No. 753 (“Opp’n”) at 2-3. The exhibits are not improper financial evidence for the reasons stated in the Court’s prior Orders on this same objection. See, e.g., Order on Hogenson Exs. at 6-7. The exhibits’ probative value is not substantially outweighed under Rule 403, and the Court sees no reason to redact any financial figures from either exhibit.

         The Court therefore OVERRULES PG&E’s objection that these exhibits involve irrelevant or unduly prejudicial financial evidence.

         GOVERNMENT’S EXHIBIT 267

         This exhibit is an email chain regarding PG&E’s “tool selection process.” PG&E objects that this exhibit is inadmissible under Rules 401, 403 and 404(b) because it is not related to the charged conduct. Not so. The exhibit discusses PG&E’s procedure for selecting pipeline assessment tools, which meets the relevance threshold for several of the charged regulations. See e.g., 49 C.F.R. § 192.917(e)(4) (“[When certain conditions exist] an operator must select an assessment technology or technologies with a proven application capable of assessing seam integrity and seam corrosion anomalies.”); 49 C.F.R. § 192.919 (“An operator must include . . . the following elements in its written baseline assessment plan . . . [t]he methods selected to assess the integrity of the line pipe, including an explanation of why the assessment method was selected to address the identified threats to each covered segment.”). Meanwhile, PG&E has offered absolutely no explanation why the probative value of this evidence is substantially outweighed under Rule 403, and the Court sees none. Finally, this evidence is not excludable under Rule 404(b) because it concerns PG&E’s Integrity Management practices (as relevant to charged regulations) during a period just before or overlapping with the indicted conduct.[2]See United States v. Vizcarra-Martinez, 66 F.3d 1006, 1012-13 (9th Cir. 1995) (discussing the parameters of Rule 404(b)).

         The Court therefore OVERRULES PG&E’s objection that this exhibit is irrelevant, unduly prejudicial, or excludable “other act” evidence.

         GOVERNMENT’S EXHIBIT 280

         This exhibit is an email chain discussing PG&E’s DA costs as well as the feasibility and costs of performing ILI on two pipelines: Lines 109 and 132. In other words, this exhibit concerns two possible assessment technologies on two charged pipelines.

         PG&E objects that this exhibit is inadmissible under Rules 401, 403 and 404(b) because it is not related to the charged conduct. Not so. The exhibit is relevant and survives PG&E’s Rule 403 and Rule 404(b) ...


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