5. Discussion

CSD and SoCalGas are signatories to the settlement agreement. Paragraph 3 of the settlement agreement clearly requires the prior landowners to execute a general release in order to rescind SoCalGas' acquisition of the mineral rights under the settlement. The issue presented by this petition is whether D.00-09-034 modified the settlement so that these landowners are not required to sign a general release before obtaining rescission under the settlement.

We clarify that D.00-09-034 did not modify the settlement as now suggested by CSD. In D.00-09-034, the Commission stated that it conditionally approved the settlement with two changes, both of which are not applicable to the current controversy. The Commission also clarified its understanding of the settlement, adopted certain clarifications made by the settling parties, and required SoCalGas to conform with certain procedural reporting requirements. However, it did not eliminate the requirement set forth in the settlement agreement (to which both CSD and SoCalGas agreed) for a prior landowner to sign an appropriate general release before obtaining rescission according to the settlement terms.

In discussing why the settlement is in the public interest, the Commission made clear that it interpreted the settlement to require a general release in order for a prior landowner to obtain rescission under the settlement, but that nothing in the settlement precluded these landowners from any other remedies they might elect to pursue in the Superior Court or otherwise, should they not wish to obtain rescission under the settlement's terms.

"The settlement is in the public interest because it offers certain affected landowners the opportunity to obtain rescission of SoCalGas' acquisition of the landowners' mineral interests. This portion of the settlement addresses another major contention of the OII, namely, that SoCalGas may have paid less than fair market value for the mineral interests. The settlement avoids the complexity of the jurisdiction issues because the settlement provides that SoCalGas will take action to initiate rescission (assuming the landowners agree), and it is relatively clear that it is within this Commission's jurisdiction to order utilities to take appropriate action with respect to their regulated assets. The settlement does not preclude any of these persons from seeking relief in state court should they conclude that a civil action is warranted. The settlement's resolution of this issue appears reasonable, especially since it gives landowners the option to accept rescission and does not preclude any other remedies these landowners might elect to pursue in Superior Court or otherwise, should they not wish to obtain rescission under the settlement's terms." (D.00-09-034 at 23-24, citations omitted, emphasis added.)

In other words, the Commission understood the settlement as requiring prior landowners electing rescission under the terms of the settlement to also sign an appropriate general release with respect to the mineral interests rescinded under the terms of the settlement. However, prior landowners who do not elect rescission under the settlement's terms are free to pursue all other remedies against SoCalGas.

Finding of Fact 10 does not require a different interpretation. In this finding, the Commission specifically stated its understanding of the settlement, namely, that the agreement did not preclude individual landowners from litigating against SoCalGas should they believe that rescission is not an adequate remedy. In other words, landowners could elect rescission and sign a general release, or pursue their claims against SoCalGas elsewhere.

Finding of Fact 10 goes on to state that nothing in the settlement or decision can be used against these owners by SoCalGas in any such litigation, in order to preclude litigation of these issues or otherwise. Thus, with respect to the Montebello mineral interests, should a landowner elect to pursue remedies in lieu of the rescission provided for in the settlement, SoCalGas cannot use the Commission's approval of the settlement to somehow preclude litigation of these issues or to demonstrate SoCalGas' lack of liability.

D.00-09-034 expressed a desire that landowners receiving a rescission offer from SoCalGas should have sufficient information to make an informed choice and required SoCalGas in its rescission offer to make a full disclosure of the condition of the property. In addition, in its notice, SoCalGas has stated that the recipient landowners are free to consult their own lawyer about SoCalGas' offer of rescission and the legal consequences of signing the Election to Rescind and Release Agreement (release agreement). We have not been asked to, nor do we approve the release agreement. We do note, however, that it is a general release of all of the recipient's claims, etc., arising from and related to SoCalGas' acquisition of mineral rights from the landowner and appropriately does not include a release of any other potential causes of action these landowners may have with respect to SoCalGas (i.e., concerning SoCalGas' acquisition of the storage rights from the landowners or otherwise.)