SAN FRANCISCO (CN) - The United States can seek extra fines against Pacific Gas & Electric for profits it made by failing to maintain pipelines before an explosion leveled a San Bruno neighborhood in 2010, a federal judge ruled Tuesday.
Late last year, U.S. District Judge Thelton Henderson partially dismissed claims against PG&E based on the Alternative Fines Act, which allows the government to fine an entity no more than twice what it gained or caused others to lose by breaking federal law.
Henderson agreed with PG&E that calculating the losses suffered by more than 500 victims of the explosion would "unduly complicate" the trial.
The Sept. 9, 2010 explosion killed eight people, injured at least 66, destroyed 38 homes and damaged many more.
But Henderson refused to dismiss Alternative Fines Act claims based on money PG&E gained by neglecting to bring its pipelines up to federal safety standards.
Henderson asked the U.S. government in December to explain what kind of evidence it planned to present at trial to prove PG&E profited from neglecting the pipelines.
The government unveiled details on Jan. 11, saying it would introduce pipeline replacement and safety plans that PG&E submitted to the state, and expert testimony from two financial experts and an FBI agent.
PG&E replied that the government's attempt to pursue AFA claims will create "exceedingly difficult questions" and "unduly complicate the trial."
Henderson disagreed.
"The Court is not convinced the government's plan to prove PG&E's gross pecuniary gains would be as complex as PG&E would have the court believe," Henderson wrote in his Feb. 2 bifurcation order .
The judge said he would separate the trial into two phases and that AFA charges would be determined in the second phase only if PG&E is found guilty of breaking federal law.
Henderson in December dismissed more than half of the 28 charges filed against PG&E for the explosion, finding 15 of them duplicative.
PG&E still faces 12 counts of violating the U.S. Pipeline Safety Act.
The California Public Utilities Commission last year fined PG&E $1.6 billion for the blast - the largest penalty ever assessed against a utility in the state.
A jury trial is set for March 22 in San Francisco.
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