San Francisco Complaint Against PG&E

8/9/2019 San Francisco Complaint Against PG&E

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1 FIRST AMENDED COMPLAINT

CASE NO. CGC-13-529310

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DENNIS J. HERRERA, State Bar #139669 City AttorneyTHERESA L. MUELLER, State Bar #172681 Chief Energy and Telecommunications DeputyDONALD P. MARGOLIS, State Bar # 116588

WILLIAM K. SANDERS, State Bar #154156 Deputy City AttorneysCity Hall, Room 2341 Dr. Carlton B. Goodlett PlaceSan Francisco, California 94102-4682Telephone: (415) 554-6771Facsimile: (415) 554-4763E-Mail: [email protected]

Attorneys for PlaintiffCITY AND COUNTY OF SAN FRANCISCO

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SAN FRANCISCO

UNLIMITED JURISDICTION

CITY AND COUNTY OF SANFRANCISCO, a municipal corporation,

Plaintiff,

vs.

PACIFIC GAS AND ELECTRICCOMPANY, a California corporation,

Defendant.

Case No. CGC-13-529310

FIRST AMENDED COMPLAINT FORDECLARATORY JUDGMENT; BREACHOF CONTRACT; NEGLIGENCE; ANDTRESPASS

Plaintiff the City and County of San Francisco (“City”) for its First Amended Complaint

against Defendant Pacific Gas and Electric Company (“PG&E”) alleges as follows:

THE PARTIES

1. The City is a municipal corporation organized and existing under the laws of the State of

California.


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2. The City is informed and believes, and thereon alleges, that PG&E is a corporation

organized and existing under the laws of the State of California with its principal place of business in

San Francisco, California.

FACTUAL ALLEGATIONS

A. The Agreements between the City and PG&E

1. The 1939 Franchise Agreements

3. In December 1939, the City’s Board of Supervisors (“Board”) approved Ordinance No.

413, which granted to PG&E a “franchise to introduce into, transmit, distribute and supply to the City

. . . and its inhabitants gas for every use and purpose to which it may be put” (“Gas Franchise”). (Gas

Franchise § 2 [a copy of the Gas Franchise is attached hereto as Exhibit A].)

4.

Also in December 1939, the Board approved Ordinance No. 414, which granted to PG&E

a “franchise to introduce into, transmit, distribute and supply to the City . . . and its inhabitants

electricity for every use and purpose to which it may be put” (“Electric Franchise”) (the Gas and

Electric Franchises are referred to collectively herein as “Franchises”). (Electric Franchise § 2 [a copy

of the Electric Franchise is attached hereto as Exhibit B].)

5. The Franchises are binding contracts in perpetuity between the City and PG&E.

6.

In the more than 70 years since the City granted the Franchises to PG&E, PG&E has

received billions of dollars from San Francisco customers for providing gas and electric service in San

Francisco.

7. PG&E had gross receipts of over $1.766 billion from providing electric and gas service in

San Francisco between January 1, 2009 and December 31, 2010.

8. In order to provide gas and electric services in San Francisco, and earn billions of dollars

of revenues from those services, PG&E must install different types of utility facilities in the public

rights-of-way.

9. In the Franchises, the City granted PG&E the authority to “construct, install and maintain

all pipes, poles, wires, conduits and appurtenances” in the public rights-of-way that are necessary for

PG&E to provide gas and electric service, provided such construction, installation and maintenance “is


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in conformity with all lawful ordinances, rules and regulations heretofore or hereafter adopted by the

Board of Supervisors . . . in the exercise of the police powers of the city.” (Franchises § 7.)

10. Pursuant to the Franchises, PG&E has constructed, installed, and maintains in the public

rights-of-way in San Francisco many miles of underground utility facilities and thousands of above-

ground utility poles. PG&E uses those facilities to transmit and distribute gas and electricity to the

City’s residents and businesses. PG&E also owns and maintains certain streetlights, for which PG&E

bills the City for the electricity usage.

11. Under Section 7 of the Franchises, PG&E must: (a) “remove or relocate without expense

to the city any facilities installed, used and maintained under the franchise hereby granted, if and when

made necessary by any lawful change of grade, alignment or width of any street, or by any work to be

performed under the governmental authority of the city;” and (b) “pay to the City on demand the cost

of all repairs to public property made necessary by any of the operations of the grantee.”

2. The 1970 and 1974 Support and Work-Around Agreements (“SWAP”)

12. In 1970, the Board recognized that significant delays are experienced in the progress of

City contract work while arrangements are made by PG&E and other utility companies to remove or

relocate their facilities.

13. Having determined that such delays are not in the public interest, the Board approved

Resolution No. 176-70, which authorized the Director of the Department of Public Works to enter into

an agreement with PG&E and other utility companies to facilitate early identification of utility facility

conflicts and a process for supporting those utility facilities and working-around such conflicts

whenever possible.

14. In 1970, pursuant to Resolution No. 176-70, the City, PG&E and other utility companies

entered into a Support and Work-Around Agreement (“1970 SWAP”), which obligated PG&E and the

other utility companies to: (a) identify all underground utility facility conflicts at least 90 days in

advance of the City’s advertisement for bids on construction work; (b) provide estimates of the cost to

support and work-around such conflicts at least 50 days in advance of the City’s advertisement for


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bids; and (c) pay to the City the cost of all associated work performed by the City’s contractor. (A

copy of the SWAP is attached hereto as Exhibit C.)

15. In 1974, the City modified the SWAP to establish a process that would be more efficient

for the City, PG&E, and other utility companies that might have to relocate their facilities to

accommodate a City project. (A copy of the 1974 SWAP is attached hereto as Exhibit D.)

16. The 1974 SWAP agreement required PG&E and other utility companies to: (a) identify all

underground utility conflicts at least 120 days in advance of the City’s advertisement for bids on

construction work; (b) provide estimates, plans, and specifications at least 30 days in advance of the

City’s advertisement; (c) contract directly with the City’s contractors for payment of support and

work-around activities; and (d) indemnify and hold the City harmless for any loss or damage sustained

by the City by reason of any delays after the City awards a contract arising out of the failure of the

utility company to perform any provision of the SWAP.

17.

Because compliance with the SWAP would resolve a conflict between a City project and

PG&E’s facilities on a temporary basis, the SWAP provided PG&E with an alternate means to satisfy

its obligations under Section 7 of the Franchise.

B. PG&E’s Failure to Remove and Relocate its Facilities that Conflict with a Number

of City Projects

18. On occasion, the City will determine that PG&E’s existing facilities in the City “conflict”

with a project being undertaken by the City pursuant to the City’s “governmental authority.” The City

will then notify PG&E of the conflict and instruct PG&E under Section 7 of the Franchises that these

conflicting facilities must be removed or relocated at PG&E’s expense so that the City’s project can be

timely commenced and completed.

19. In the last few years, on several occasions when the City notified PG&E under Section 7

of the Franchises of a conflict between a City project and PG&E’s facilities that required PG&E to

remove or relocate those facilities PG&E has failed to meet its obligations under the Franchises.

20. On each of those occasions, PG&E acknowledged that its facilities were in conflict with a

City project.


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21. On each of those occasions, PG&E has refused to remove or relocate those facilities at

PG&E’s expense despite the clear and unambiguous requirement of the Franchises.

22. In order to ensure the timely start and completion of those projects, the City has either

paid PG&E to remove, relocate, support, or alter PG&E’s facilities, or has otherwise incurred

additional costs to remove, relocate, support or alter those facilities. The City has generally made

those payments, or incurred those costs, under protest and/or pursuant to a reservation of all rights.

1. The San Francisco Public Utilities Commission Office Building

23. The San Francisco Public Utilities Commission (“SFPUC”) is a City department

established under the San Francisco Charter and is responsible for providing water, wastewater, and

electric service.

24. The City recently completed the construction of the SFPUC’s new office building at 525

Golden Gate Avenue.

25.

In 2009, to accommodate the City’s construction at 525 Golden Gate Avenue, the City

requested under Section 7 of the Franchises that PG&E, at PG&E’s expense, remove or relocate an

underground network transformer vault that PG&E had installed on Golden Gate Avenue.

26. PG&E not only refused to remove or relocate the vault, PG&E required the City to pay

PG&E $181,999.47 for the temporary removal of network transformer that PG&E had installed in the

vault.

27. In September 2011, the City paid this amount to PG&E under protest and pursuant to a

reservation of rights.

28. In addition to paying those costs, the City incurred costs of $8,255 to allow PG&E’s vault

to remain in place during construction.

2.

The Chinese Recreation Center

29. The Chinese Recreation Center is a facility operated by the City’s Recreation and Park

Department that is located at 1199 Mason Street. The Chinese Recreation Center has been serving

Chinatown youths since 1951.

30. The City recently completed a $21 million renovation of the Chinese Recreation Center.


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31. During construction of the Chinese Recreation Center, the City determined that certain

utility poles PG&E had installed on Washington Street would conflict with the project because, when

the project was completed, the electric lines attached to the poles would be too close to the building, in

violation of certain State of California utility safety standards.

32. In or around February 2011, the City requested under Section 7 of the Franchises that

PG&E, at PG&E’s expense, remove or relocate those utility poles to provide the legally required

separation from the new building.

33. PG&E not only refused to remove or relocate the poles, PG&E required the City to pay

PG&E $16,767 for a “rearrangement” of the poles.

34.

The City made this payment under protest and pursuant to a reservation of rights.

35. Also at the Chinese Recreation Center, in or around July 2011 the City requested under

Section 7 of the Franchises that PG&E, at PG&E’s expense, brace an existing PG&E utility pole to

accommodate the installation of a plumbing system in the sidewalk near a PG&E guy wire.

36. PG&E not only refused to brace the pole, PG&E required the City to pay PG&E $4,434 to

perform that work.

37. The City made this payment pursuant to a reservation of rights.

3. The Union Square/Market Street Central Subway Station

38. The San Francisco Municipal Transportation Agency (“MTA”) is another City department

established by the San Francisco Charter. Among the MTA’s responsibilities are to construct, operate,

and maintain all of the City’s public transportation facilities.

39. The MTA is expanding the City’s transit system by building the Central Subway Project,

a 1.7-mile light rail line to the Chinatown area. One of the new stations for the Central Subway will

be the Union Square/Market Street Light Rail Station.

40. PG&E owns certain streetlights that are located on Post Street near Union Square.

41. In order to accommodate construction of the new Union Square/Market Street Light Rail

Station, on August 30, 2011 the City requested under Section 7 of the Franchises that PG&E, at

PG&E’s expense, temporarily remove its streetlights on Post Street. The City also requested that


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PG&E, at PG&E’s expense, safely store the streetlights during the construction and reinstall the

streetlights at their original location when the site is ready.

42. The City needed the streetlights to be temporarily removed and stored, because they were

situated above the location of the new light rail station. The City’s work on the station could not

proceed unless the streetlights were removed.

43. PG&E not only refused to remove, store, and reinstall the streetlights, PG&E required the

City to pay for a “rearrangement” of the streetlights.

44. Rather than pay PG&E, the MTA will incur a cost of in excess of $100,000 to remove,

store, and reinstall PG&E’s streetlights. The City notified PG&E that the City would seek to hold

PG&E responsible for these costs.4. The North Beach Branch Library and Joe DiMaggio/North Beach

Playground

45. The City recently began construction of the North Beach Branch Library and Joe

DiMaggio/North Beach Playground Project, which is a joint project of the San Francisco Public

Library and Recreation and Park Department (“North Beach Project”). When the North Beach Project

is completed, there will be a new branch library and an expanded playground to serve the North Beach

neighborhood.

46. As part of the North Beach Project, the Board in Ordinance No. 101-11 vacated a portion

of Mason Street between Lombard Street and Columbus Avenue in order to unite the library and park

into one continuous park space and to expand the library onto what is now part of Mason Street.

47. PG&E owned and maintained utility poles on the vacated portion of Mason Street.

48. In June 2011, the City requested under Section 7 of the Franchises that PG&E, at PG&E’s

expense, remove its utility poles from the vacated portion of Mason Street so that the City could begin

construction of the new North Beach Library.

49. The timely removal of PG&E’s poles was necessary in order to avoid construction delays

at the new North Beach Library. Two of the poles were within the footprint of the new library.

50. PG&E initially agreed to be responsible for the cost of removing its utility poles and

relocating its facilities underground.


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51. Subsequently, PG&E notified the City that it would not accept responsibility for these

costs.

52. When PG&E and the City could not resolve their dispute over which party was

responsible for the cost of removing the existing utility poles, PG&E offered to split the cost of

removing the poles and installing new facilities underground within the vacated portion of Mason

Street.

53. The City agreed to pay PG&E $181,640 to perform this work, which was half of the total

cost, in order to avoid the expenses the City would have incurred if the construction of the new North

Beach Library had been delayed. The City informed PG&E that it was reserving its rights to claim

that PG&E violated the Franchises.C. PG&E’s Failure to Comply with the Terms and Conditions of the Franchises and

SWAP

54. At times, particularly when the City is installing or replacing water or sewer pipes, the

conflict between a City project and PG&E’s facilities is only temporary in nature. Rather than

requiring PG&E to permanently remove or relocate its facilities to resolve a temporary conflict, as

would be required under Section 7 of the Franchises, the City has determined that it is more

convenient and expeditious for both PG&E and the City, and less costly to PG&E, for PG&E to pay

the City or the City’s contractors to support and work-around PG&E’s facilities during construction of

the City project through the SWAP.

55. In the last few years, PG&E has failed to comply with the Franchises and the SWAP by

failing to timely and accurately identify conflicts between its facilities and the City’s project and

accepting responsibility for the applicable support and work-around costs, or relocating its facilities on

a timely basis so the City’s projects could proceed.

56.

As a result, the City has had to terminate two construction contracts, make emergency

repairs to its facilities, redesign parts of certain projects, and incur additional costs due to the delay in

the completion of its projects.


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1. North Shore Improvement Project – A&B Construction

57. The North Shore Force Main provides sewer services to the northeastern region of San

Francisco, which includes the Financial District and the Port of San Francisco.

58.

In 2008, a portion of the North Shore Force Main failed, requiring emergency repairs. At

that time, the City determined that the North Shore Force Main could be subject to further failures and

needed to be replaced. For this reason, the City proceeded to design and award contracts for the North

Shore to Channel Force Main Improvement Project (“North Shore Improvement Project”).

59. During the design phase of the North Shore Improvement Project, and before the original

contract award, the City fully complied with the notification process, construction document exchange,

and utility identification procedures required in the SWAP.

60.

On July 9, 2008, the City provided PG&E with an initial Notice of Intent (“NOI”) under

the SWAP for the North Shore Improvement Project. The NOI called for responses by July 16, 2008.

61. PG&E did not timely respond to the NOI as required by the SWAP.

62. On November 3, 2008, the City provided PG&E with a revised initial NOI for the North

Shore Improvement Project. The revised NOI outlined the selected alignment for the City’s utility

facilities.

63.

Under the SWAP, PG&E was required to identify conflicts between the facilities the City

would construct as part of the North Shore Improvement Project and PG&E’s existing utility facilities

by December 3, 2008. PG&E failed to respond to this second initial NOI.

64. On February 27, 2009, the City provided PG&E with a final NOI. The final NOI called

for PG&E to submit a response that identified all conflicts with its facilities by March 20, 2009, and to

relocate of any those conflicting utilities before the anticipated August 2009 start of project work.

65.

On March 31, 2009, PG&E responded to the final NOI by providing a tabulation of

PG&E’s Utilities Support and Work-Around Costs for Gas Facilities, but PG&E did not include any

drawings that would have enabled the City to identify conflicts.


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66. On April 14, 2009, PG&E further responded to the final NOI by providing a tabulation of

PG&E’s Utilities Support and Work-Around Costs for Electric Facilities, but PG&E failed to identify

any conflicts that required removal or relocation of PG&E’s facilities.

67.

On December 18, 2009, the City awarded the North Shore Improvement Project contract

to A&B Construction (“A&B”). The City established February 10, 2010, as the official date for

commencement of work on the North Shore Improvement Project.

68. In April 2010, A&B began potholing along the North Shore Force Main alignment in

preparation for the excavation that was required for installation of the new sewer pipe. During the

potholing, A&B identified PG&E utility facilities that were in direct conflict with the force main

alignment, which utility facilities prevented A&B from continuing with its work on the project.

69. Had PG&E complied with the Franchises and SWAP, the City and A&B would have

known of the conflict before commencing any work on the North Shore Improvement Project and the

City would have worked with PG&E to remedy the conflict in advance of beginning construction.

70. After the City notified PG&E of the conflict, PG&E agreed to remove the conflicting

utility facilities from the alignment. PG&E advised the City and A&B, however, that PG&E could not

complete this work within the time required to avoid a substantial delay in A&B’s completion of the

North Shore Improvement Project.

71. As a result, and to mitigate further harm to the City, the City terminated A&B’s contract.

72. At the time of the termination, A&B had incurred costs of $1,457,343, which the City was

required to pay under its agreement with A&B. The City received no benefit whatsoever from over

$1,000,000 of the amount the City was required to pay A&B.

73. This work stoppage would not have occurred, and the City would not have incurred these

unnecessary costs, had PG&E complied with the Franchises and SWAP by providing the City with

timely notice of the location of its conflicting facilities.

74. In March 2012, the North Shore Force Main failed and needed immediate repairs. The

City responded to that failure using both the City’s own employees and by issuing an emergency

contract.


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75. The City incurred costs of $713,000 for this emergency repair.

76. This failure would not have occurred, and the City would not have incurred these

emergency repair costs, had A&B been able to proceed with the original contract for the North Shore

Improvement Project.

77. In July 2012, the North Shore Force Main failed again at a different location and needed

immediate repairs. The City responded to that failure by issuing an emergency contract in the amount

of $4.1 million.

78. To date, the City has incurred costs of over $2.7 million for those repairs, which are still

underway.

79.

The City expects that the total costs of those repairs could reach the total contract price of

$4.1 million.

80. These failures would not have occurred, and the City would not have incurred these

emergency repair costs, had A&B been able to proceed with the original contract for the North Shore


2. North Shore Improvement Project – NTK Construction

81. On February 15, 2011, the City notified PG&E under the SWAP that the City intended to

expedite a portion of the North Shore Improvement Project in the pedestrian plaza at the intersection

of California and Drumm Streets. The City needed to expedite this construction to accommodate the

MTA’s scheduling needs related to its cable car shutdown.

82.

The City directed PG&E to identify and remove utility conflicts, if any, within that

portion of work.

83. PG&E failed to identify any utility conflicts that would require removal.

84.

The City then proceeded with this portion of the North Shore Improvement Project and

selected NTK Construction, Inc. (“NTK”) to perform the work.

85. During the course of potholing to prepare for the excavation, NTK determined that a

PG&E 12 kilovolt duct bank conflicted with this segment of the North Shore Improvement Project and

prevented NTK from proceeding with its work.


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86. As a result, and to mitigate further harm to the City, the City terminated NTK’s contract.

87. Had PG&E complied with the Franchises and SWAP, the City and NTK would have

known of the conflict before commencing any work on this portion of the North Shore Improvement

Project.

88. At the time of the termination, NTK had incurred costs of $118,478, which the City was

required to pay under its agreement with NTK. The City received no benefit from the amount the

City was required to pay NTK.

89. This work stoppage would not have occurred, and the City would not have incurred

these costs, had PG&E complied with the Franchises and SWAP by providing the City with timely

notice of the location of its conflicting facilities.3. North Shore Improvement Project – KJ Woods Construction

90. To avoid any further delays and associated costs, the City redesigned portions of the

North Shore Improvement Project and repeated the NOI process in its entirety.

91. The City met with PG&E and other utilities during the redesign process.

92. The City directed PG&E to identify and remove utility conflicts, if any, within that

portion of work.

93. PG&E informed the City that, rather than pay for support and work-around under the

SWAP, PG&E would incur the cost to remove the conflicting facilities in time for the City to proceed

with the planned construction of the North Shore Improvement Project.

94.

PG&E initially informed the City that it would complete the removal of its facilities by

November 2011. PG&E subsequently informed the City that it would take until March 2012.

95. On April 24, 2012, the City awarded a new contract for the North Shore Improvement

Project contract to KJ Woods Construction (“KJ Woods”).

96. On August 8, 2012 KJ, Woods commenced construction of the North Shore



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97. On October 16, 2012, PG&E confirmed that a live PG&E 12 kilovolt line was located

directly in the path of the Spear Street pipe alignment, which is part of the North Shore Improvement

Project.

98.

The conflict between the City’s project and a live PG&E 12 kilovolt line prevented KJ

Woods from proceeding with its work on the Spear Street segment of the North Shore Improvement

Project.

99. Had PG&E complied with the Franchises and SWAP, the City and KJ Woods would

have known of the conflict before commencing any work on the Spear Street segment of the North

Shore Improvement Project.

100.

As a result, the City expects to incur additional costs to redesign the Spear Street

segment of the North Shore Improvement Project. The City could also incur additional costs if

completion of the North Shore Improvement Project is delayed.

101.

This work stoppage would not have occurred, and the City would not have incurred

these costs, had PG&E complied with the Franchises and SWAP by providing the City with timely

notice of the location of its conflicting facilities.

D. PG&E’s Failure to Reimburse the City for Past Repair Costs and Future Costs of

Gas Pipe/Sewer Lateral dbore Investigation and Repairs

102. The City provides sewer service to all homes and business in San Francisco. To do so,

the City installs both mainline sewers and sewer laterals. The City’s mainline sewer is the large sewer

pipe generally installed underneath the street. A sewer lateral is the sewer pipe that connects a home

or business to the City’s mainline sewer.

103. A gas pipe/sewer lateral crossbore occurs when PG&E puts a gas pipeline through a City

sewer lateral damaging the sewer lateral.

104.

PG&E often uses trenchless directional boring when installing new gas pipelines,

because that method is quicker and less expensive than trenching.

105. Trenchless directional boring involves digging a hole at the start of the new gas pipe

alignment and another hole at the end. A directional boring machine then drills underground between

the two holes and pulls the entire pipe segment through the trench.


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106. Trenchless directional boring often causes gas pipe/sewer lateral crossbores, because

PG&E does not know where any of the City’s sewer laterals are located.

107. Before performing trenchless directional boring, PG&E engages the services of a third

party (generally Underground Service Alert) to locate and mark all main and trunk line utilities that

will be crossed by the new gas pipe, so as to avoid damaging those facilities.

108. But PG&E does not call on Underground Service Alert or any other third party to locate

or mark the existence of sewer laterals. Furthermore, and because it uses trenchless directional boring,

PG&E’s crews cannot determine during construction whether PG&E’s pipe installation has damaged

any City sewer laterals.

109.

While gas pipe/sewer lateral crossbores are not an immediate safety hazard, all such

crossbores ultimately must be repaired. The normal waste water passing through a sewer lateral will

not harm a gas pipe, but the crossbore may cause a sewer lateral blockage that needs to be cleared.

110.

Gas pipe/sewer lateral crossbores can become dangerous if mechanical cleaning

equipment such as augers are used to attempt to clear the blockage in a sewer lateral. These types of

cleaning equipment can sever a gas pipe and cause a natural gas leak, which could became a serious

safety hazard.

111. To date, the City has incurred more than $1,200,000 for repairs to sewer laterals

damaged by PG&E crossbores.

112. In letter sent in March 2013, the City demanded that PG&E reimburse the City for all of

the costs the City has incurred to investigate and repair sewer laterals damaged by PG&E crossbores,

but PG&E has refused.

113. In addition, the City has identified nearly 100 additional locations where City sewer

laterals have been damaged by PG&E crossbores. The City is in the process of making repairs to these

sewer laterals. The City has incurred and will continue to incur additional costs to repair these sewer

laterals damaged by PG&E crossbores.


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114. Furthermore, PG&E has identified thousands of additional locations where PG&E’s

crossbores might have caused damage to City sewer laterals. Potential repairs might be needed in

these locations too, which will cause the City to incur additional costs.

FIRST CAUSE OF ACTION

DECLARATORY RELIEF – FRANCHISES

(CODE.CIV.PRO., § 1060)

115. The City repeats and realleges all of the allegations contained in paragraphs 1 through

114 as though fully set forth herein.

116. An actual and present controversy exists between the City and PG&E concerning

PG&E’s obligations under the Franchises.

117. The Franchises are contracts between the City and PG&E that are enforceable under

California law.

118. Section 7 of the Franchises requires PG&E to remove or relocate at its own expense any

PG&E facilities installed in the public rights-of-way that conflict with a City project.

119. Despite its obligations to the City under Section 7 of the Franchises, PG&E has

repeatedly failed and refused to pay the cost of removing or relocating its utility facilities when the

City has notified PG&E that those facilities conflict with a City project.

120. Rather than complying with Section 7 of the Franchises, in some instances PG&E has

required the City to pay to remove, relocate, support, or alter PG&E’s facilities to accommodate the

City’s projects.

121. In other instances, and to reduce its overall costs for a particular project, the City has

been required to incur additional costs in order to avoid having to pay PG&E to remove, relocate,

support, or alter PG&E’s facilities that were in conflict with a City project.

122.

The City has paid PG&E, or incurred those additional expenses, in order to avoid

additional costs that could have accrued due to delays in the City’s completion of those projects

caused by PG&E’s failure to timely remove, relocate, support, or alter its conflicting facilities as

required under Section 7 of the Franchises.


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123. The City is entitled to a declaratory judgment that, under Section 7 of the Franchises,

PG&E should have removed, relocated, supported or altered, at PG&E’s sole cost the following PG&E

facilities that conflict with a City project: (a) a network transformer vault near 525 Golden Gate

Avenue; (b) utility poles near the Chinese Recreation Center; (c) streetlights near the Union

Square/Market Street Light Rail Station; and (d) utility poles on the vacated portion of Mason Street.

124. The City is entitled to a declaratory judgment that, under Section 7 of the Franchises,

PG&E is solely responsible for all the costs the City incurred to: (a) relocate and rearrange PG&E’s

network transformer located near 525 Golden Gate Avenue; (b) install alley arms on utility poles

located near the Chinese Recreation Center; (c) brace a utility pole located near the Chinese

Recreation Center; (d) remove, store, and reinstall PG&E’s streetlights near the Union Square/Market

Street Light Rail Station; and (e) underground PG&E’s utility facilities on the vacated portion of

Mason Street.

SECOND CAUSE OF ACTION

DECLARATORY RELIEF – FRANCHISES AND SWAP

(CODE.CIV.PRO., § 1060)



126. An actual and present controversy exists between the City and PG&E concerning

PG&E’s obligations under the SWAP.



128. One of the ways the City enforces PG&E’s obligations under Section 7 of the Franchises

is through the SWAP.

129.

When PG&E agreed to the provisions of the SWAP, contracts were established between

the City and PG&E that are enforceable under California law.

130. Among other things, upon notice from the City of a City construction project the SWAP

requires PG&E to: (a) identify all underground utility conflicts in advance of the City’s advertisement

for bids on construction work; and (b) indemnify and hold the City harmless for any loss or damage


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sustained by the City by reason of any delays after the City awards a contract arising out of PG&E’s

failure to perform any provision of the SWAP.

131. Despite its obligations to the City under the Franchises and SWAP, PG&E has failed

and refused to timely identify utility facility conflicts at the North Shore Improvement Project.

132. Due to PG&E’s failure to comply with the Franchises and SWAP, the City: (a) had to

terminate two construction contracts at the North Shore Improvement Project after incurring

substantial costs; (b) has incurred millions of dollars of costs for emergency repairs of the North Shore

Force Main; (c) has incurred costs to redesign the North Shore Improvement Project or parts thereof;

and (d) may have to incur additional costs resulting from delays in completion of the North Shore


133. The City is entitled to a declaratory judgment that: (a) PG&E failed and refused to

timely identify utility facility conflicts at the North Shore Improvement Project as required by the

Franchises and the SWAP; and (b) PG&E must indemnify and hold the City harmless for all costs the

City incurred due to PG&E’s failure to comply with the requirements of the Franchises and the

SWAP.

THIRD CAUSE OF ACTION

BREACH OF CONTRACT – FRANCHISES




California law.


PG&E facilities installed in the public rights-of-way that conflict with a City project. Section 7 further

requires that PG&E “pay to the City on demand the cost of all repairs to public property made

necessary by any of the operations of the grantee.”

137.

The City has performed all of its obligations under the Franchises.


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138. PG&E breached Section 7 of the Franchises by refusing a number of the City’s requests

to remove, relocate, support, or alter, at PG&E’s expense, certain PG&E facilities that conflict with

City projects.

139.

PG&E further breached Section 7 of the Franchises by failing to pay the City on demand

the cost of all repairs to public property made necessary by PG&E’s operations, including crossbore

damage to the City’s sewer laterals.

140. PG&E’s breaches of the Franchises have proximately caused injuries and damages to the

City including, but not limited to, the costs to: (a) relocate and rearrange PG&E’s network transformer

located near 525 Golden Gate Avenue; (b) install alley arms on utility poles located near the Chinese

Recreation Center; (c) brace a utility pole located near the Chinese Recreation Center; (d) remove,

store, and reinstall PG&E’s streetlights near the Union Square/Market Street Light Rail Station;

(e) underground the utility facilities on the vacated portion of Mason Street; and (f) investigate and

repair gas pipe/sewer lateral crossbores in various locations throughout the City.

FOURTH CAUSE OF ACTION

BREACH OF CONTRACT – FRANCHISES AND SWAP




California law.



144. One of the ways the City enforces PG&E’s obligations under Section 7 of the Franchises

is through the SWAP.

145. When PG&E agreed to the provisions of the SWAP, contracts were established between

the City and PG&E that are enforceable under California law.

146.

The City has performed all of its obligations under the Franchises and SWAP.


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147. Among other things, upon notice from the City the SWAP establishes an obligation on

the part of PG&E to: (a) identify all underground utility conflicts in advance of the City’s

advertisement for bids on construction work; and (b) indemnify and hold the City harmless for any

loss or damage sustained by the City by reason of any delays after the City awards a contract arising

out of PG&E’s failure to perform any provision of the SWAP.

148. The City has performed all of its obligations under the Franchises and the SWAP.

149. PG&E breached the Franchises and the SWAP by failing and refusing to timely identify

utility facility conflicts at the North Shore Improvement Project.

150. PG&E’s breaches of the Franchises and SWAP have proximately caused injuries and

damages to the City including, but not limited to: (a) certain of the costs incurred for A&B’s contract

for the North Shore Improvement Project; (b) the costs incurred for NTK’s contract for the North

Shore Improvement Project; (c) the costs for emergency repairs of the North Shore Force Main; (d) the

costs to redesign the North Shore Improvement Project or parts thereof; and (e) the costs resulting

from delays in completion of the North Shore Improvement Project.

FIFTH CAUSE OF ACTION

NEGLIGENCE

151.

The City repeats and realleges all of the allegations contained in paragraphs 1 through


152. PG&E knew or should have known of the presence of existing City sewer laterals in

areas where PG&E has been installing gas pipes.

153. Under Government Code § 4215, PG&E was required to infer the existence of the City’s

sewer laterals from the presence of other visible facilities, such as buildings, meters, and junction

boxes on or adjacent to PG&E’s construction sites.

154. PG&E had a duty to the City to engineer, design, construct, maintain, and manage the

installation of its gas pipes in the area of the City’s sewer laterals in order to avoid causing gas

pipe/sewer lateral crossbores or otherwise damaging the City’s sewer laterals.


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155. Had PG&E exercised reasonable care, PG&E would have discovered the City’s sewer

laterals and taken measures during the installation of its gas pipes in order to avoid causing gas

pipe/sewer lateral crossbores or otherwise damaging the sewer laterals.

156.

PG&E breached its duty to the City by negligently, carelessly, unlawfully or recklessly

engineering, designing, constructing, installing, or managing the design, construction, and/or

installation of its gas pipes in such a manner as to cause gas pipe/sewer lateral crossbores and to

otherwise damage the City’s sewer laterals.

157. As a direct and proximate result of PG&E’s negligence, the City has suffered injuries

and damages.

SIXTH CAUSE OF ACTIONTRESPASS



159. The City is and at all times relevant was the owner and/or in possession of the sewer

laterals damaged by PG&E gas pipe crossbores.

160. Without the City’s consent, and in wanton disregard of the City’s property rights,

PG&E’s gas pipe installation caused gas pipe/sewer lateral crossbore and otherwise damaged the

City’s sewer laterals.

161. As a direct and proximate result of PG&E’s conduct, the City suffered injuries and

damages in an amount to be proved at trial.

PRAYER FOR RELIEF

WHEREFORE, the City prays for judgment against PG&E as follows:

1.

For a declaration that PG&E failed to comply with Section 7 of the Franchises by

failing to remove, relocate, support, or alter, at PG&E’s expense, all of PG&E’s utility facilities

identified in the complaint;


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2. For a declaration under Section 7 of the Franchises that PG&E must reimburse the City

for the costs the City incurred due to PG&E’s failure to remove, relocate, support, or alter, at PG&E’s

expense, all of PG&E’s utility facilities identified in the complaint, according to the proof at trial;

3.

For a declaration under Section 7 of the Franchises that PG&E must reimburse the City

for the costs the City incurred to investigate and repair the damage caused by PG&E’s gas pipe/sewer

lateral crossbores, according to the proof at trial;

4. For a declaration that PG&E failed to comply with Section 7 of the Franchises and the

SWAP by failing to timely identify utility facility conflicts at the North Shore Improvement Project;

5. For a declaration under Section 7 of the Franchises and SWAP that PG&E must

indemnify and hold the City harmless for all costs the City incurred due to PG&E’s failure to timely

identify utility facility conflicts at the North Shore Improvement Project, according to the proof at

trial;

6.

For compensatory damages for breach of contract, according to the proof at trial, for

PG&E’s failure to remove, relocate, support, or alter all of PG&E’s utility facilities indentified in the

complaint, in breach of Section 7 of the Franchises;

7. For compensatory damages for breach of contract, according to the proof at trial, for

PG&E’s failure to timely identify utility facility conflicts at the North Shore Improvement Project, in

further breach of Section 7 of the Franchises and breach of the SWAP;

8. For compensatory damages for PG&E’s negligence, according to the proof at trial, for

PG&E’s gas pipe/sewer lateral crossbore damage to the City’s sewer laterals;

9. For compensatory damages for PG&E’s trespass on the City’s property, according to

the proof at trial, for PG&E’s gas pipe/sewer lateral crossbore damage to the City’s sewer laterals;

10.

For punitive and exemplary damages, according to the proof at trial, for PG&E’s

trespass on the City’s property in wanton disregard of the City’s property rights;

11. For costs of suit herein;

12. For pre- and post-judgment interest at the legal rate;

13. For such other, further, and different relief as the Court deems just and proper; and


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14. For reasonable attorney’s fees in an amount to be proven, under Code of Civil

Procedure section 1021.5, or any other applicable statute; and

15. For trial by jury of all issues so triable.

Dated: June 6, 2013 DENNIS J. HERRERACity AttorneyTHERESA L. MUELLERChief Energy and Telecommunications DeputyDONALD P. MARGOLISWILLIAM K. SANDERSDeputy City Attorneys

By:

WILLIAM K. SANDERS

Attorneys for PlaintiffCITY AND COUNTY OF SAN FRANCISCO

San Francisco Complaint Against PG&E

Documents

Transcript of San Francisco Complaint Against PG&E