Grand Jury Returns Superseding Indictment Adding Obstruction Charges Following September 2010 Pipeline Explosion

A federal grand jury returned a superseding indictment charging a utility with obstruction of the National Transportation Safety Board’s (“NTSB”) investigation of a pipeline explosion in September 2010 that killed 8 people, injured 58 others, and damaged or destroyed more than 100 homes.  The superseding indictment also alleges additional violations of the Natural Gas Pipeline Safety Act of 1968

The obstruction count is based on the utility allegedly providing NTSB a policy outlining how the utility addressed threats to its pipelines, and then withdrawing that policy as an “unapproved draft,” when in fact the utility was operating under the policy from 2009 to April 2011.  The superseding indictment also alleges 27 counts of knowingly and willfully violating the Pipeline Safety Act and its regulations between 2003 and 2010, including by failing to identify and evaluate threats to its transmission pipelines, violating pipeline “integrity management” practices and failing to address recordkeeping deficiencies with its natural gas pipelines despite knowledge that their records were inaccurate or incomplete.

The maximum statutory penalty for each count of violating the Pipeline Safety Act is $500,000 or a fine based on twice the gross gain the utility made as a result of the violations (alleged to be $281 million) or twice the losses suffered by the victims (alleged to be $565 million).