A judge is threatening to prevent PG&E from resuming dividend payments to shareholders until it reduces its role in sparking California wildfires, an action with little precedent
Judge William Alsup, giving a lecture at Mississippi State University. Photo: Megan Bean/Mississippi State University By Katherine Blunt March 31, 2019 12:28 p.m. ET A federal judge is threatening to prevent PG&E Corp. PCG 3.19% from resuming dividend payments to shareholders until it reduces its role in sparking California wildfires, an action with little precedent that could have big repercussions for other companies put on probation.
The judge has broad authority to take serious steps against PG&E, legal experts say, after a federal sentencing commission issued new guidelines in the 1990s that enable federal authorities to go beyond collecting fines and craft measures to improve compliance from companies on probation. But his requirements would be largely unprecedented, and could redefine the boundaries of federal authority in sanctioning repeat corporate offenders.
PG&E workers repaired damage last November caused by the Camp Fire in Paradise, Calif. Photo: elijah nouvelage/Reuters In a March order, Judge Alsup wrote that PG&E paid shareholders nearly $2 billion in dividends over 2016 and 2017, while maintaining a dismal record on pruning or removing trees that could fall onto its power lines.
But Judge Alsup’s proposal is significant, because by forcing the company to focus on safety spending, the court would assume control of a function usually left to the board of directors. In 2017, the judge overseeing the case, Thelton Henderson, set a five-year probation term that required PG&E to pay a $3 million fine, complete 10,000 hours of community service, improve its gas operations and submit to a federal monitor. He retired that summer, leaving the case to Judge Alsup, who was nominated to the bench by President Bill Clinton in 1999.
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