Common_Torts_and_Risks

Sandy peterson University of Phoenix LAW 531: Business Law Group # MU09MBA05 Jason D. Fletcher October 26, 2009 There were many companies in the past that have been destroyed by negligence, greed, and or corruption. Today many laws have been developed to keep organizations on the straight and narrow, and provide a means of protection for its employees and consumers. Enron was a great example of a big corporation that eluded laws and regulations that was set up to protect the corporation. Many would argue that there should be a more pro-active approach to monitor these companies who wish to disobey the standards that are put in place. Laws are created and put into place to act pro-actively and provide business with a legal passage of compliance. In my writings I will define what a tort is and discuss different types of torts such as negligence and contract interference that can create several risks for a utility such as San Diego Gas and Electric. Also I will provide detective and preventive ways to handle these types of risks. In my writings I will also discuss two environmental torts such as The Clean Water Act and the Oil Pollution Act that are very important in SDG&E everyday operation. In order to understand business torts more fully, there must be a clear understanding or definition of the term Tort. A tort “is interference with someone or with someone’s property that results in injury to that person or to that person’s property” (Jennings). San Diego Gas and Electric is a utility company that provides electricity and natural gas to the San Diego county and southern Orange County in southwestern California. SDG&E have many similarities and responsibilities like the company Alumina in the simulation. Alumina was faced with many risks that could have destroyed the organization. In 2003 San Diego Gas and Electric was accused of starting the brush fires in the eastern San Diego that burned down many homes and destroyed structural property. The C.P.U.C, the California Public Utility Commission in which regulates private owned Electrical, natural gas, railroad and passenger companies stated that this fire was due to neglecting the maintenance of SDG&E structures. Negligence according to the text is “when the conduct of one party did not live up to a certain minimal standard of care” (Jennings). In order to be pro-active, detect and manage these risks of negligence SDG&E must put in place a corrective maintenance program. This program will provide yearly inspections on their structures including transformers, electrical power lines and its hardware. Through these inspections a log will be maintained and documentation stating the type of structure, and what work was completed on that structure. The inspections would be carried out internally, and also inspected by the CPUC. Alumina had to provide documentation and proof that they did not violate any rules by disclosing certain but not all documents to the EPA. SDG&E will provide maintenance followed by documentation to provide proof that the company is in compliance with the EPA and the CPUC. San Diego Gas andElectric will also provide a visual aid for the customers as a reminder that the structure was inspected and is in compliance. In Southern California dry wind sometimes blow in from the east and creates a risk for brush fires. SDG&E will provide a first response crew to stand by to ensure minimum structure damage and fires that may form from the electrical structures. According to SDG&E code of standards there will be no room for the negligence during operation. In the utility business there are several vendors that provide free tools to companies to catch their business. When a company is interested in a certain product a vendor may offer a deal with that particular company to lock them in a long contract to assure their business. By contract the company must maintain use of the product until the contract is over. To prevent a breach of contract or Contract interference, SDG&E will only sign a short term contract with vendors dealing with tools and a five to ten year contract dealing with fleet. Contract Interference can be defined as “when parties are not allowed the freedom to contract without interference from third parties” (Jennings). There must be frequent monitoring of the products and no negotiations with any other vendors until the contract is free and clear. According to the text “ Texaco violated the contract interference law by offering a competing bid with Pennzoil while Getty Oil had agreed to sell a substantial portion to Pennzoil”(Jennings). Breaching a contract is an easy way to destroy the company’s credibility and also ruin future negotiations. San Diego Gas and Electric maintain electrical structures inside man holes and or underground vaults. Within these structures water at times are full to the top. In the early years utility workers would pump the water from these structures into the street to drain the vaults. When the structures were drained completely the workers were able to complete their work. Inside these vaults there were underground transformers and also underground switches in which contained PCB oil. Many times these structures leaked oil from rust and corrosion and needed to be changed out. Today oil and water cannot and will not be pumped into the street. According to the Clean Water Act which is now controlled by the EPA states that all liquids will be tested on site and pumped into a container to be transported. Documentation will also be provided for the transfer and will provide detailed information about the liquid that is being transferred. There have been many claims filed against the company stating that certain spills have caused there vegetation to die or their animals to get sick because they drank the water. “The Oil Pollution Act was established in 1990 in response to large oil tanker spills” (Jennings). SDG&E transport transformers that are filled with mineral oil and at times PCB oil. Transformers will tend to leak oil because of corrosion and rust. To comply with standards SDG&E will provide transformers that are non-pub and will provide a program that will extract these structures from the system. The new transformers will have a sticker on the front stating that this transformer contains non-pcb oil. Customers will be compensated if there vegetation is destroyed because of the leaking structure. San Diego Gas and Electric will use The American Arbitration Association to settle all claims that are filed against the organization to settle disputes. AAA is a more cost effective way to handle a dispute and attempts to keep the organization out of litigation. When a company is faced with litigation as there only means of settling a dispute the decision is in the hands of a jury. According to Jennings a jury tends to side with the defendant in big corporation cases. Using arbitration as a first defense depending on the case and circumstance will keep the organization out of the public eye and will try to resolve the problem peacefully and respectfully. There have been many companies destroyed by disobeying regulatory laws that are put in action to keep organizations compliant. San Diego Gas and Electric is a utility company that provides Electricity and natural gas to San Diego and southern Orange County. SDG&E has demonstrated their plans to detect, manage, and comply with business torts as they arise. SDG&E will also identify and fully comply with all environmental laws that are present in their every day operation. References Jennings, Marianne M. (2006). Business: Its Legal, Ethical, and Global Environment (7th ed.). Mason, OH: Thomson. from http:www.sandiegoreader.com/news/2009/jan/28/city-light-2/