Sempra Energy CEO and boardmembers sued over Aliso methane leak

In federal court April 25, a Sempra Energy shareholder sued the company's chief executive, Debra Reed, along with officers and boardmembers, for breach of fiduciary duty over the Aliso Canyon methane leak, which the suit calls "the largest methane leak in U.S. history."

Sempra is the parent company of SDG&E.

This is shareholder derivative suit, or a complaint brought by a shareholder on behalf of a corporation. Thus, Sempra and its Southern California Gas unit are derivative plaintiffs as well as defendants.

The board is charged with breaches of fiduciary duties, gross mismanagement, abuse of control, and unjust enrichment. The board "knowingly" caused the company to underspend on safety measures, says the suit. Defying the law, the company waited several days to report the leak, according to the suit. Then the defendants issued a "false and misleading" statement that "the leak does not pose an imminent threat to public safety," according to the suit.

The leak was no surprise, says the suit. "The well has been slowly leaking for over 36 years," says the suit. "Further, five years ago, [Southern California Gas] requested and obtained regulatory permission to increase rates to replace the many leaking values at the Aliso Canyon storage field," says the suit. As of late February, 83 suits had been filed against the gas company, and several have also named Sempra. In addition, more than one government agency is investigating the incident.

As is usual with California shareholder-owned utilities, Wall Street is paying no attention. At the time the leak was revealed, Sempra stock sold for $99.96. Yesterday (April 29) it closed at $103.35. The investment community assumes — rightly — that the company will not suffer even if it is found liable.