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A federal judge has put a hold on litigation regarding an old gas manufacturing plant in San Francisco so that the parties can possibly discuss a settlement.

The litigation involves environmental contamination from a gas manufacturing plant next to Aquatic Park. The case stems from the early 1900s, when gas used for heating, lighting and cooking was manufactured from coal in private manufacturing plants throughout the city.

One of those plants — the Cannery Manufactured Gas Plant — was located at the northern end of Columbus Avenue on a block today bounded by Leavenworth, Hyde, Jefferson, and Beach Streets. At the time, the plant was on the shoreline and a pier used in the plant’s operations jutted into the Bay.

A manufactured gas plant (MGP) in Oakland is shown in a 1930 file image. Such plants were commonplace around the Bay Area a century ago, and PG&E inherited them from their former owners. (Photo courtesy of PG&E)

Because of fill, the site is now about 250 feet uphill from the water’s edge and is included within the boundaries of the San Francisco Maritime National Historical Park. The 252-room Argonaut Hotel, multiple restaurants, and the park’s Visitor Center are on the site.

Manufactured Gas Plants or MGPs like the Cannery are frequently sites of environmental contamination.

Dan Clarke, a retired engineer and former resident of San Francisco’s Marina District, got involved in litigation involving several other gas manufacturing plants on the Bay that were once owned or operated by PG&E or its predecessors.

Based on his research and involvement with that litigation, Clarke concluded that the Cannery MGP Site was likely contaminated and was a source of contaminants “being transported by groundwater that passes through the Cannery MGP Site down gradient into the Bay, including into the waters of Aquatic Park.”

Denying responsibility

Even though PG&E had accepted responsibility for contamination from other MGPs on the waterfront, including Gas House Cove in the Marina, it denied it had any responsibility for the Cannery facility.

Accordingly, in July 2020, 113 years after the Cannery facility was destroyed in the Great San Francisco Earthquake, Clarke brought suit against PG&E, claiming that the utility was liable for any potential environmental contamination from the Cannery site.

Both parties filed motions seeking to determine whether PG&E was liable.

PG&E argued that even though the original owner of the site had transferred it to PG&E’s predecessor, that company had not actively operated the plant, and accordingly, PG&E could not be held responsible.

“All [MGP] operators disposed of waste in the manner that people disposed of waste in the 19th century, which was find somewhere close by and dump it.”

Stuart Gross, attorney

Clarke argued that PG&E’s predecessor had in fact operated the plant and PGE was therefore responsible for any contamination.

Given the years that had passed since the plant’s destruction, many documents were no longer available, but on Jan. 11, U.S. District Judge William Orrick ruled against PG&E.

Orrick found that under the particular environmental statutes involved, PG&E had liability for any contamination from the plant, both because of its predecessor’s operation of the plant and also by reason of its predecessor’s control over the facilities’ original owner.

While the judge’s ruling resolved the liability issue, the decision did not determine whether the site and nearby areas are in fact contaminated and, if so, the scope of the problem.

Buried contamination

In court filings, Clarke’s lawyer, Stuart Gross, contended that it is likely that an examination will reveal extensive contamination, both of the site itself and of the area down gradient from the site and into the Bay.

According to Gross, all MGPs produced toxic waste and, under the disposal practices of the day, such waste was buried on or near the facility or dumped into the nearest body of water. Gross said, “All [MGP] operators disposed of waste in the manner that people disposed of waste in the 19th century, which was find somewhere close by and dump it.”

In its filings, PG&E said that Gross’ statements were just conjecture: “Other than a set of tests from 1985-86 at a single location under a warehouse, there is no evidence, only sheer speculation, that any alleged MGP Residue exists buried in soil in and around the former Cannery MGP.”

At the conference Tuesday, Judge Orrick quickly announced that he would put all proceedings on hold and send the parties to Chief Magistrate Judge Joseph Spero to conduct settlement discussions. Both sides expressed agreement with that approach. Orrick declined to direct how those discussions would proceed, and left that to Spero.

If settlement fails, it is expected that the parties will return to Orrick’s court for further proceedings.