The Georgia Public Service Commission (“PSC”) is charged with enforcement of the Georgia Utility Facility Protection Act (“GUFPA”) also known as the Georgia “call before you dig” law. In such capacity, the PSC continues to pursue a practice of charging violations of GUFPA and issuing Notices of Probable Violations (“NOPVs”) against corporate officers of a company suspected of the violation without regard to whether the officer had any control of or involvement in the actions of others leading to the charge. This practice of charging uninvolved corporate officers individually as named respondents is unwarranted and should be resisted, as it otherwise may lead to such officers being adjudicated as violators personally subject to liabilities and sanctions, not to mention tarnishing their personal record as a GUFPA violator.
GUFPA imposes a number of responsibilities upon the “persons” involved in excavation or blasting processes performed in areas in which underground or concealed utility lines and facilities may be situated. The express purpose of the Act is to require persons involved in such activities to observe “proper precautions” with respect to such utility facilities and lines. The primary vehicle afforded under the Act for enforcement of these requirements is the imposition of civil sanctions and penalties on “persons” responsible for violations leading to damage of the existing utility lines and facilities. Additionally, such “persons” found to have violated the Act “shall be strictly liable” for costs incurred by the facility owner or operator and any injury or damage to persons or property resulting from damaging the utility facilities and lines. Finally, such a violator shall also obligated to indemnify the affected facility owner or operator against all claims or costs incurred, if any, for personal injury, property damage, or service interruptions resulting from damaging the utility facilities and lines.
This enforcement procedure is generally initiated by the PSC, through its investigative staff, by issuance of a “Notice of Probable Violation” (“NOPV”) naming the “person” or “persons” charged with the particular violation. Such charges are often predicated upon solely information and allegations presented by the utility owner or operator to the PSC with little or no independent investigation by PSC staff of the alleged charges. Such NOPVs are procedurally only allegations and not actual findings and final determinations of violation and liability. However, they are presented in a form suggesting that the PSC has already adjudicated the claims and found the named respondents guilty. The NOPV forms typically threaten civil penalties of up to $10,000 per violation before offering up essentially a plea bargain setting forth a “staff recommendation” usually including a specific lesser civil penalty amount often coupled with specified mitigating action. This charging procedure employed by PSC essentially proceeds on the assumption that the named respondents are guilty unless they can prove their innocence – an interesting twist on the fundamental principle of American jurisprudence that one is “presumed innocent until proven guilty as charged” by the prosecutors. It seems the burden of proof has been reversed under this process and this is particularly onerous where such charges are often so lacking in facts, details and “substantiation” that it is difficult to even muster an appropriate fully documented response and defense.
The NOPV then purports to afford the named respondents only two options, which must be elected and presented by “affirmative written response” submitted within 30 days, namely (1) accept the penalties and sanctions recommended by PSC staff, essentially admitting commission of the violations charged or (2) disagree with the charges made and elect to request appearance before the GUFPA Advisory Committee or directly challenge the PSC charges by submission of “a detailed, written response along with all supporting evidence (pictures, witness statements and any other documentation).” The path for challenging such charges ultimately follows a long road through the formal administrative hearings and ultimate appeal though the judicial process. While such a charge can be rather easily brought by the PSC staff in almost total reliance upon an often sketchy complaint telephoned in by the utility or operator, once brought, the charge embroils the named respondent(s) – including the uninvolved corporate officer named individually – in a cumbersome, time consuming, and expensive process of defending against contested charges.
Putting aside for purposes of this discussion the several deficiencies in this process from the perspective of the contractors improperly charged with violations, the focal point here is the apparent practice of the PSC staff, upon issuance of a NOPV directed at a corporate entity, of routinely including also as a named party “respondent” to such charge the chief executive or other corporate officer of such corporation or limited liability company based solely upon such individual’s officer status. As a matter of course, therefore, the PSC’s practice appears to be to typically name the “respondents” as “John J. Doe individually and John J. Doe Construction Co., Inc.,” with the corporate officer charged personally, together with the named corporate entity itself, for such violation. This charge leveled against the individual is generally made in the NOPV without any evidence, or even articulated claim or basis, of direct involvement of such individual officer in the alleged violation. Further, not only is such uninvolved corporate officer routinely so charged personally, but it has also apparently become the practice of the PSC to impose sanctions upon such individual officer in instances in which the corporation is sanctioned for a violation, again irrespective of whether the officer is demonstrated to have had any direct participation or involvement in the wrongful act.
Indeed, in response to an informal challenge of these practices by several contractor trade associations, the PSC staff has recently confirmed that its “policy remains in place that for cases involving corporate entities both an individual officer and the corporate entity will be named as respondents in NOPV charges.” Interestingly, the reaffirmation of this “policy” was followed immediately by a puzzling statement that “[s]taff is willing to negotiate on this issue on a case by case basis with any respondent who will take the time to contact [PSC investigator] Will Culbreath, our GUFPA Program Manager . . . at 404-463-9784.” Nowhere else in the published rules or regulations or in the documents provided relative to such an NOPV is this “policy” set forth. Likewise, the availability of this alternative “negotiation” option for response to unfounded charges against corporate officer is not made publicly known.
This practice is simply wrong and legally unsupportable. There is no legal or statutory basis for this practice of joining as respondents to such charges uninvolved corporate officers. Of course, inclusion of a corporate officer as an individual respondent to any such charge may be justified and appropriate where there is some demonstrable direct fault or culpability of that individual relative to the violation. However, imposition of vicarious liability upon a corporate officer having nothing to do with the offending conduct is patently improper. There should be no need to “negotiate” on this issue on a case-by-case basis as there was no basis in the first place to include a corporate officer as a named individual respondent to charges really brought against the corporate entity.
Nevertheless, in a case of joinder as a named respondent in a NOPV of an individual corporate officer who had no involvement in the circumstances underlying the charge, the door is now apparently open to immediate response and objection to such joinder presented to the PSC investigator issuing the NOPV – or to Mr. Culbreath – seeking dismissal of the charge as against the corporate officer joined without any discernible basis for contending that the officer is personally liable. So:
ACTION ITEM: Indeed, it would seem prudent to “take the time” to advance this argument at the earliest opportunity in order to avoid becoming embroiled any further in the formal enforcement process and being caught in the flow through final hearing and disposition of the unrelated charge. This can start with a telephonic communication, as noted above, followed by email or written submission setting forth the facts demonstrating that the corporate officer named had no direct personal responsibility or involvement over the activities of the company leading to the alleged violation. BE PROACTIVE!
Since the PSC precipitates this situation by joinder of an officer individually without any discernible basis for contending that the officer is personally responsible and now invites case-by-case negotiation on this issue as the only avenue afforded for prompt relief, then that avenue should be actively and promptly pursued where appropriate.
Corporations can only act by and through their individual employees and representatives in performing excavation or blasting work covered by GUFPA. However, when a cooperate entity performs such work, any liability for violation of GUFPA or of its related regulations should be limited to the corporation or LLC itself and to only any employee(s) or representative(s) acting on its behalf directly involved in the wrongful action or omission. It is not sufficient justification for naming a corporate officer as an individual respondent, simply by virtue of his/her official position, that it may be easier to pursue and enforce sanctions against such an individual than against the artificial corporate entity even where no direct involvement in the offense by such individual is demonstrated. Moreover, there is generally no basis to “pierce the veil” of an otherwise proper and functioning corporate entity in order to subject its officers and members to individual liability for the wrongful acts of the corporation.
GUFPA empowers the PSC to investigate and sanction conduct of any “person” found to have violated the requirements of the Act. The term “person” is very broadly defined to include “an individual, firm, joint venture, partnership, association, local governing authority, state, or other governmental unit, authority, department, agency, or a corporation” including any “employee, agent, or personal representative thereof.” This definition does not directly, or indirectly, encompass officers or directors of a corporate entity who are not themselves actively involved in the conduct that violates the Act and does not subject individuals to personal liability for any and every act of the corporation if such individuals are not directly involved in the actions in questions. While a “person” subject to the authority and sanction of GUFPA can include an “employee [or] agent,” including an officer, of a corporate entity it clearly applies only to those by and through whom the “corporate” entity involved was acting. The broad definition of “person” does not automatically allow piercing the corporate veil every time the Commission alleges a GUFPA violation by a corporate entity. Otherwise, every employee and agent, let alone “officer,” could be charged and held liable for the wrongdoing of the corporation or LLC in which they were not involved.
Regarding performance of excavation or blasting work the power to sanction is limited to any “person who violates the requirements” of the Act and such liabilities are limited to only such “person” whose actions violated the Act. Ultimately, the PSC is empowered to impose by judgment a civil penalty if it is proved that “the person” violated any of the provisions of this chapter due to failure to exercise specified additional care or reasonable care. Of course, as defined, such a “person” chargeable with and sanctionable for such violation may be the individual person actually committing the violation and/or the corporation, as an artificial “person,” on whose behalf the individual person was acting as an agent, employee or representative. However, nowhere in this Act is it provided or even suggested that an officer of a corporate entity charged with a violation due to the actions or omissions of other employees, agents or representatives may be held personally and individually liable on a vicarious basis merely by virtue of the officer’s official title and position in the charged corporate entity.
The PSC has previously sought to support this policy claiming that such “vicarious” liability of corporate officers was permitted and authorized by language drawn from another Title of the Georgia totally apart from that containing GUFPA. However, that other statute has no application to such and enforcement process under GUFPA but rather clearly provides enforcement mechanisms are explicitly and expressly only applicable to “utilities,” and indeed only those acting “willfully,” and not to contractors performing utility related work. This other Title upon which PSC relies is simply not a basis to permit naming such individuals as respondents to GUFPA contractor violations or imposing sanctions under GUFPA against them since it is directed at utilities and not contractors charged with violations under an entirely separate statute which makes no cross reference to this provision.
Article written for Georgia Utility Contractors Association by David Hendrick, Esq., General Counsel, Hendrick, Phillips, Salzman & Flatt, P.C.