Legal Report: Oregon Power Utility Found Liable for Deadly 2020 Wildfires
Judicial Decisions
United States
Wildfire liability. A jury in Portland, Oregon, determined that the utility PacifiCorp is liable for four wildfires that ravaged regions in the state in 2020.
The jury awarded plaintiffs more than $73 million in compensatory damages to the 17 named plaintiffs. The plaintiffs alleged that, despite ample advance warnings in the forecast about severe winds, the power utility was negligent in failing to repair damaged equipment or shut down power lines during a windstorm. There were reports of power lines emitting sparks or starting fires.
The wildfires the arose during this time in 2020 resulted in fire damage and burned throughout approximately 1,900 square miles, ruined at least 5,000 buildings, and killed at least nine people.
Along with the primary plaintiffs, thousands more plaintiffs joined the class action lawsuit in claiming that the fires damaged roughly 2,400 properties. The jury has not yet determined punitive damages for all plaintiffs.
In a press statement, PacifiCorp, a subsidiary of Berkshire Hathaway Energy, said it would appeal the decision. (Jeanyne James, et al., v. PacifiCorp, Multnomah County Circuit Court, No. 20-cv-33885, 2023)
Hostile work environment. Fox News agreed to a $12 million settlement paid to former producer Abby Grossberg, who was suing the media giant over allegations of a hostile workplace.
In exchange for the payout, Grossberg voluntarily dismissed her suit, with prejudice, in the U.S. District Court for the Southern District of New York. In the lawsuit, she alleged that there was significant workplace sexism at the network, especially from staff for former network host Tucker Carlson.
Grossberg also withdrew her second suit, filed in a Delaware state court, where she claimed that she was coerced into providing false testimony during the defamation lawsuit with Dominion Voting Systems. This withdrawal was initiated after Fox settled with Dominion. (Abby Grossberg v. Fox Corporation, et al., U.S. District Court for the Southern District of New York, No. 23-cv-02368-JMF, 2023)
Retaliation. A federal court awarded $25.6 million to a former regional manager for Starbucks in a case where the plaintiff claimed that she and other employees were unjustly punished after the 2018 arrests of two Black men at a café in Philadelphia.
In 2018, a Philadelphia Starbucks store manager called the police due to two Black men—Rashon Nelson and Donte Robinson—who were sitting in the café but did not order anything. The men were ultimately released without charges. Starbucks later issued an apology and reached a settlement with the men for an undisclosed amount plus an offer of a free college education. The men reached a separate settlement with the city for $1 each and promises of the creation of a public high school program for young entrepreneurs.
Shannon Phillips, who at the time was a Starbucks regional manager in the city, said she was ordered to suspend a white manager who was not involved in the arrests. Phillips claimed that the reasons for the suspension were “completely false,” according to the suit. Less than a month after refusing to suspend the other manager, Phillips was fired.
The suit alleged that the company was punishing white employees in the area to try to assuage the community and prove it had responded to concerns of racism.
Starbucks denied the claims, countering that Phillips’ dismissal was in response to the need for a regional manager with greater experience in crisis resolution.
Jurors ultimately sided with Phillips. The presiding judge is also considering awarding Phillips back pay and future pay. (Shannon Phillips v. Starbucks Corporation, U.S. District Court of New Jersey, No. 19-19432, 2023)
Workplace intimidation. A federal judge ordered California restaurant owners and operators to pay $140,000 in back wages and damages to 35 employees after the employers tried to convince workers to confess any workplace “sins” to a supposed priest, according to the U.S. Department of Labor (DOL).
Taqueria Garibaldi was under investigation for violating the U.S. Fair Labor Standards Act, including by denying overtime pay and threatening staff with retaliation if a worker was found to be cooperating with the DOL. During the investigation, one employee testified that the restaurant tried to use a fake priest to trick staff into confessing to sins committed during work hours, according to a DOL press release.
The judge’s order resulted in the recovery of $70,000 in back wages for employees and another $70,000 in liquidated damages. The order also had the restaurant and the owners pay $5,000 to the DOL for civil penalties due to the violations uncovered during the investigation. (Julie A. Su, et al., v. Che Garibaldi, et al., U.S. District Court for the Eastern District of California, No. 2:22-cv-00756-wbs-kjn, 2023)
Legislation
European Union
Artificial intelligence. European Union legislators are working on approving the region’s first set of rules for artificial intelligence (AI). A June vote among members of the European Parliament resulted in the adoption of its negotiating position on the Artificial Intelligence Act (2021/0106 (COD)) as the parliament is about to enter into talks with member states on the final form of the law.
Parliament hopes to reach an agreement on the law’s final language by the end of 2023.
The AI Act proposes governing over any product or service that relies on an AI system, and it would classify systems into four risk categories, including limited risk, generative AI, high risk, and unacceptable risk. Systems that present an unacceptable risk—including ones that manipulate people or vulnerable groups—will be banned, although there may be some exceptions based on court approval.
The act, which was first proposed two years ago, could offer a template for other legislative bodies creating similar rules.
United States
Healthcare security. Georgia’s governor, Brian Kemp, enacted the Safer Hospitals Act (HB 383) in May. The law increases penalties for anyone committing violence—including aggravated assault and aggravated battery—against healthcare professionals on a hospital campus.
The new law also allows campuses to create law enforcement offices, similar to ones on university or college campuses. Officers for hospital campuses must be certified by the Georgia Peace Officer Standards and Training Council, and the offices will be required to maintain publicly available law enforcement records.
Regulations
United States
Fraud. In a June report, the Small Business Administration (SBA) estimated that tens of billions of dollars from pandemic loan programs meant to assist small businesses were instead paid to potential fraudsters.
The white paper, issued by the administration’s Office of Inspector General (OIG), said more than $136 billion in COVID-19 Economic Injury Disaster Loan and $64 billion in Paycheck Protection Program funds were issued to “potentially fraudulent actors.”
The OIG concluded that fraudulent access to the funds—estimated to amount to 17 percent of the COVID relief funds distributed by the SBA—were possible due to either a lack of or weakened up-front SBA internal controls.
Cybersecurity liability. The U.S. Securities and Exchange Commission (SEC) notified certain current and former SolarWinds employees, including the CISO, that the commission believes they may have violated federal securities laws.
The SEC sent targeted people Wells Notices, according to news reports from Zero Day. These notifications are issued to people SEC investigators think might have violated laws, and the notification informs the targeted individual that the SEC is considering levying civil enforcement action against him or her.
The notices were issued more than three years after Russian cyber actors compromised the company and planted a backdoor in its flagship software product, granting the hackers access to various government agencies and private companies that used the product.
Also of Interest
Security Management also tracks instances where security incidents and interests intersect with judicial, legislative, and regulatory agencies. The following are developing stories of potential significance.
Breach of contract. A New York university is suing a cleaning company after a janitor shut off power to a freezer, which resulted in the loss of decades of research materials. The Rensselaer Polytechnic Institute alleges that Daigle Cleaning Systems was negligent in how it trained staff, including the janitor who cut power to the freezer in response to the alarms the unit was emitting, ignoring the sign on the freezer that instructed that the freezer remain on. The school is seeking at least $1 million in damages.
Classified documents. In June, the U.S. Air National guardsman accused of leaking classified documents online pled not guilty to charges of sharing classified military documents about the Russia-Ukraine war on a social media website. Jack Teixeira faces six charges of willful retention and transmission of national defense information.
Data protection. United Kingdom legislators are considering the UK Data Protection and Digital Information (No. 2) Bill, which if passed would govern the processing of personal data in the nation and would introduce additional frameworks that could ease adherence to data protections.
Employee support. Former content moderators in Kenya are suing Facebook and a local contractor over working conditions while they were tasked with reviewing horrific posts, videos, messages, and other content on the social media platform and determining whether they violated community standards or terms of service. Roughly 200 former employees joined in the suit, seeking $1.6 billion in compensation for insufficient mental health support and low pay.
Event security. A grand jury for Harris County, Texas, determined that rapper Travis Scott and five other defendants were not criminally responsible for a crowd crush during a 2021 music festival that resulted in the deaths of 10 people and injuries to thousands more. The ruling has no impact on pending civil suits.
Fraud. A California man was sentenced to six years and nine months in federal prison after he was found guilty for defrauding investors of $8.75 million with a stinky Ponzi scheme. Ray Brewer claimed he was turning cow manure into methane that could be used as a green energy source, when in reality the investors’ money was spent on himself. Some investors realized the scheme and sued Brewer, who then moved to Montana and changed his identity. He was later arrested in Montana.
Misuse of government resources. The Conflicts of Interest Board for New York City issued a record fine for former mayor Bill de Blasio over misuse of government resources during a 2019 attempt to run for the U.S. presidency. The local watchdog ordered de Blasio to pay a $155,000 fine and $320,000 reimbursement for using the city police officers as a security detail.
Retaliation. A U.S. federal judge in Georgia ordered an auto repair shop owner to pay nine workers for unpaid overtime and damages. The DOL determined that it was a form of retaliation when the owner, Miles Walker, paid a former employee who had complained about an outstanding final paycheck by delivering the payment in the form of 91,500 oil-covered pennies. The DOL also found that Walker violated overtime provisions of the U.S. Fair Standards and Labor Act.
School safety. A Florida jury acquitted Scot Peterson—the school resource officer on duty during the 2018 shooting at Marjory Stoneman Douglas High School—of child neglect and culpable negligence. For more information on this case, check out our Today in Security post, “Florida Jury Acquits Former Parkland SRO of All Charges.”
In a closely watched trial, a Florida jury acquitted former Parkland SRO Scot Peterson of all charges. https://t.co/Rxfddpb8R6
— Security Management (@SecMgmtMag) July 2, 2023
Sex trafficking. After a U.S. federal jury indicted Rita Martinez, a Mexican national, and Genaro Fuentes for forcing 10 victims into commercial sex work out of a restaurant owned by Martinez in Texas, both defendants pled guilty to the charge of sex trafficking a minor as part of plea agreement. Martinez faces a mandatory minimum prison sentence of 10 years, according to the Department of Justice.
Workplace violence. Gabriel Fortin—who killed three women in France and tried to kill a man in retaliation for his belief that the victims were responsible for his unemployment—was sentenced to life in prison. In France, this means Fortin will spend up to 22 years imprisoned, the limit on the maximum sentence for his crimes.
Wrongful arrest. A federal appeals court ruled that Xiaoxing Xi can proceed with a suit against the U.S. government and members of the FBI, U.S. Department of Justice, and National Security Agency for arresting him for espionage in 2015, which Xi claims was motivated by bias over his ethnicity. The charged against Xi were dismissed after approximately four months; however, Xi claims that the accusations damaged his career as a professor at Temple University.
