A securities fraud lawsuit has been filed in federal court in San Diego against Edison International, parent of Southern California Edison. The suit alleges that Southern California Edison made false and misleading statements about the company's business, operational, and compliance policies — thus endangering the utility-favoring settlement on dividing up the costs of the San Onofre nuclear plant decommissioning.
The suit by a Wilmington, Delaware law firm, Andrews & Springer, zeroes in on the recent finding by a California Public Utilities Commission administrative law judge that Southern California Edison must show why it should not be held in contempt of the regulatory commission for telling untruths about how the San Onofre settlement plan was secretly worked out.
Andrews & Springer says that Edison's meetings with commission decision-makers were more extensive than the company reported; that the belated admission of secret sessions jeopardizes the settlement that is extremely favorable to utilities, and as a result of these disingenuous actions, the company's financial statements were materially false and misleading.
The suit also cites a report by the law firm of Strumwasser & Woocher, arranged by the regulatory commission, describing how the clandestine meetings between Edison and regulators were frequent, pervasive, and sometimes outcome-determinative.
A securities lawsuit may well prove to be important. Thus far, those following the secret trail of Edison and the commission have seen that Edison's case is quite flimsy, but there are legal barriers to getting justice against utilties and the regulatory commission. Edison might not be able to dodge a putative class action securities suit, which may be followed by other similar ones.