BILL ANALYSIS Ó
SB 421
Page 1
Date of Hearing: July 14, 2015
ASSEMBLY COMMITTEE ON JUDICIARY
Mark Stone, Chair
SB
421 (Hancock) - As Amended June 19, 2015
SENATE VOTE: 40-0
SUBJECT: REFINERIES: TURNAROUNDS
KEY ISSUES:
1)SHOULD THE LAW REGARDING PUBLIC DISCLOSURE OF INFORMATION
CONTAINED IN PETROLEUM REFINERY TURNAROUND REPORTS BE AMENDED
TO REMOVE A PROVISION REQUIRING THE AWARD OF ATTORNEY'S FEES
TO THE PREVAILING PARTY IN AN ACTION CHALLENGING DISCLOSURE OF
SUCH REPORTS OR THE INFORMATION CONTAINED WITHIN THEM?
2)SHOULD THE LAW REGARDING PUBLIC DISCLOSURE OF INFORMATION
CONTAINED IN PETROLEUM REFINERY TURNAROUND REPORTS BE AMENDED
TO ALLOW, RATHER THAN REQUIRE, A PARTY TO INTERVENE IN AN
ACTION INVOLVING THE RELEASE OF INFORMATION IN A REPORT THAT
WAS PREVIOUSLY IDENTIFIED BY THE REFINERY AS TRADE SECRET
INFORMATION?
SYNOPSIS
SB 421
Page 2
This bill responds to Governor Brown's signing message of SB
1300 (Hancock, Chapter 519, Statutes of 2014), legislation
introduced in response to the Chevron USA refinery explosion in
2012, regarding "petroleum refinery turn-around reports" that
petroleum refinery employers (Refineries) are required to issue
every year regarding planned, periodic shutdowns to perform
maintenance, overhaul, and repair operations at the facilities
and to inspect, test and replace process materials and
equipment. In his signing message, the governor relayed that
the author had agreed to introduce clean-up legislation this
year to ensure that SB 1300 "does not authorize petroleum
refineries to collect attorney's fees from individuals and
organizations" who seek to obtain turnaround reports from the
Division of Occupational Safety and Health (the Division). This
bill removes the requirement in existing law that a court must
award attorney's fees to the party who prevails in an action
challenging the disclosure of information contained in a
petroleum refinery turnaround report that contains information
which the court determines is exempt as trade secret information
from public disclosure (even when the prevailing party is a
Refinery and the other party is an individual or organization
seeking a turnaround report from the Division), but does not
prohibit the award of attorney's fees to the prevailing party in
such a case. This bill also clarifies that a Refinery that
seeks to prevent disclosure of information in a turnaround
report, or a party who seeks to obtain it, may intervene in an
action regarding the disclosure of such information, but the
intervener is not required to be named in the action as a party
in interest. This bill is supported by the California Newspaper
Publishers Association and the Natural Resources Defense
Council, and has no known opposition.
SUMMARY: Makes changes to existing law governing petroleum
refinery turnaround reports to ensure that the public has access
to public information contained in the reports, while protecting
the trade secret information within such reports. Specifically,
this bill:
SB 421
Page 3
1)Removes, in a case involving a motion to compel or prohibit
disclosure of a refinery report containing trade secret
information, the mandatory award of costs and attorney's fees
to the prevailing party.
2)Removes the requirement for a party in a suit to compel or
prohibit the disclosure of a refinery turnaround report
containing trade secret information, to name the other party
in the suit as a real party in interest, and instead allows
either party to intervene in an action filed by the other
party.
EXISTING LAW:
1)Provides that the California Public Records Act (PRA) governs
the disclosure of information collected and maintained by
public agencies. (Government Code Section 6250 et seq. All
subsequent citations refer to the Government Code, unless
otherwise indicated.)
2)Provides that all public records are accessible to the public
upon request, unless the requested is exempt from public
disclosure. (Section 6254.)
3)Provides exceptions to the general rule that all records are
public and subject to disclosure for specific records and
information contained within records that are otherwise public
records. (Section 6275.)
4)Provides exceptions from public disclosure for specified
records, including occupational safety and health
investigations, and confidential trade secrets. (Sections
6276.32, 6276.44.)
SB 421
Page 4
5)Provides that any person may institute proceedings for
injunctive or declarative relief or writ of mandate in any
court of competent jurisdiction to enforce his or her right to
inspect, or receive a copy of, any public record and
authorizes an award of court costs and reasonable attorney
fees to the plaintiff should the plaintiff prevail in
litigation, and those costs and fees are required to be paid
by the public agency, as specified. (Sections 6258, 6259(d).)
6)Requires, on September 15th of every year, a Refinery to
submit to the Division a full schedule of planned turnarounds
of all affected units in the next calendar year and requires a
Refinery, at the request of the Division and at least 60 days
prior to the shutdown of a process unit or plant as part of a
planned turnaround, to provide access onsite, and allow the
Division to review, specified documentation about the process
unit or plant scheduled to be shut down for that turnaround.
(Labor Code Section 7872(a), (c).)
7)Defines "turnaround" to mean a planned, periodic shutdown,
total or partial, of a refinery process unit or plant to
perform maintenance, overhaul, and repair operations and to
inspect, test, and replace process materials and equipment.
(Labor Code Section 7872(a).)
8)Requires a Refinery to submit turnaround information to the
Division, regardless of whether the employer believes the
information submitted may involve the release of a trade
secret; however, at the time of submission, the employer may
identify all or a portion of the information submitted to the
Division as a trade secret and, to the extent feasible,
segregate records that it designates as trade secret
information from the other records it provides. (Labor Code
Section 7873(b)(1).)
SB 421
Page 5
9)Prohibits the Division from releasing to the public any
information designated as a trade secret by the petroleum
refiner employer, subject to judicial review, as provided.
(Labor Code Section 7873(b)(2).)
10)Requires the Division, upon the receipt of a request by the
public for the release of information that includes
information the petroleum refinery has identified as trade
secret information, to notify the petroleum refinery in
writing of the request by certified mail, with return receipt
requested. (Labor Code Section 7873(c)(1).)
11)Requires the Division to release requested trade secret
information to the public, unless both of the following occur:
a) Within 30 days of receipt of the notice of the request
for information, the Refinery files an action in an
appropriate court for a declaratory judgment that the
information is subject to trade secret protection and
promptly notifies the Division of that action; and
b) Within 120 days of receipt of the notice of the request
for information, the refinery petroleum employer obtains an
order prohibiting disclosure of the information to the
public and promptly notifies the Division of that action.
(Labor Code Section 7873(c)(2).)
12)Provides that if the person requesting the release of trade
secret information or the Refinery files an action to order or
prohibit disclosure of trade secret information, the person
instituting the proceeding is required to name the person or
the Refinery as a real party in interest. (Labor Code Section
7873(d)(2).)
13)Requires a Refinery who files an action to challenge release
of trade secret information to provide notice of the action to
SB 421
Page 6
the person requesting the release of the information at the
same time that the defendant in the action is served. (Labor
Code Section 7873(d)(2)(A).)
14)Requires the person filing an action to compel the release of
information that includes information that the Refinery has
notified the Division is a trade secret to provide notice of
the action to the Refinery that submitted the information at
the same time that the defendant in the action is served.
(Labor Code Section 7873(d)(2)(B).)
15)Requires the court to award costs and reasonable attorney's
fees to the prevailing party in trade secret disclosure
litigation, but prohibits the public agency from bearing the
court costs for any party named in the litigation. (Labor
Code Section 7873(d)(3).)
FISCAL EFFECT: As currently in print this bill is keyed fiscal.
COMMENTS: The California Refinery and Chemical Plant Worker
Safety Act of 1990 (AB 3672 (Elder), Chap. 1632, Stats. 1990)
established specified safety management standards for refineries
that handle acutely hazardous material in order to prevent or
minimize the consequences of catastrophic releases of toxic,
flammable, or explosive chemicals and promote worker safety
through implementation of training and safety standards in
petroleum refineries.
Last year, in response to the catastrophic pipe rupture at the
Chevron USA Refinery in Richmond, California in 2012 that
released a flammable hydrocarbon vapor cloud, engulfed nineteen
Chevron employees, created a large plume of toxic gas over the
Richmond area, and caused approximately 15,000 people to seek
medical treatment, SB 1300 (Hancock, Chap. 519, Stats. 2014)
SB 421
Page 7
supplemented safety standards in then-existing law by
establishing disclosure requirements and mandating inspections
of petroleum refinery employers (Refineries) for planned
turnarounds (a planned, periodic shutdown of a refinery process
unit or plant) to perform maintenance, overhaul, and repair
operations and to inspect, test, and replace process materials
and equipment. SB 1300 prohibited the disclosure of trade
secret information contained in those turnaround reports and
provided a method for judicial review of a refinery's refusal to
disclose information contained in a turnaround report on the
basis that it included trade secret information. SB 1300 also
required the court to award attorney's fees and costs to the
prevailing party in a dispute about the disclosure of
information in a turnaround report. In his signing message for
SB 1300 Governor Brown stated:
The author has committed to introduce clean up
legislation next year and work with stakeholders to
clarify the public disclosure process to ensure that this
law does not authorize petroleum refineries to collect
attorney's fees from individuals or organizations seeking
those records. I fully support those efforts.
This bill makes a number of changes to the law enacted by SB
1300. According to the author:
In 2014, the Legislature passed and the Governor signed
into law SB 1300 [(Hancock, Chapter 519, Statutes of
2014)], Refinery Turnarounds. Specifically, [SB 1300]
requires refinery employers in California to report to [the
Division)] annually (by September 15 of the current year) a
schedule of "turnaround" maintenance periods planned for
the following calendar year. During a turnaround, a unit
is brought offline for maintenance and repair work.
SB 421
Page 8
It is reported that refineries often have over a thousand
workers (including refinery employees and contractors)
performing multiple work activities simultaneously in
limited spaces and on intensive work schedules, potentially
creating unsafe conditions and work practices. Some of the
most serious worker and process safety risks at refineries
occur during turnarounds, particularly during the process
of shutting down and restarting the unit.
In addition to the calendar of scheduled turnarounds, [SB
1300] requires refineries to submit specific documents and
reports detailing the current maintenance and structural
issues of the refinery unit where a turnaround will be
conducted.
SB 1300 defines trade secret to include the scheduling,
duration, layout, configuration and type of work to be
performed during the turnaround. It also provides for the
release of the schedule and duration of the turnaround
after the work is complete.
Refineries will also be required to flag any scheduled
maintenance and repairs of equipment being deferred to a
later turnaround period. Based on [the Division's]
experience, the rush to restart refinery units as soon as
possible after a turnaround shutdown has at times caused
necessary scheduled repair and maintenance work to be
postponed or abandoned, allowing unsafe equipment to be
restarted without repairs or replacement and resulting in
worker injuries and deaths.
As a result of the detailed reporting requirements of SB
1300, [the Division's] inspectors will be able to review
the refineries' plans for scheduled work and ask for
clarification when scheduled work is postponed or dropped.
SB 421
Page 9
. . . The ultimate goal of this increased oversight of
turnarounds is to lower the number of accidents,
explosions, and other unplanned events at refineries and to
provide greater safety protection for refinery employees
and their many contractors, as well as greater protection
of community residents.
Governor Brown's Concerns. Governor Brown indicated, in his
signing message of SB 1300, that the law regarding disclosure of
turnaround reports should be amended to "clarify the public
disclosure process to ensure that this law does not authorize
petroleum refineries to collect attorney's fees from individuals
or organizations seeking those records." The signing message
seems to indicate that the law should prohibit Refineries from
obtaining attorney's fees from individuals and organizations who
seek, but do not prevail, in efforts to seek information in
refinery turnaround reports. This bill does not prohibit the
award of attorney's fees to a Refinery. Instead, it eliminates
the mandatory award of attorney's fees and costs to a prevailing
party in litigation for the disclosure of such records.
Nevertheless, the bill does improve the law governing public
requests for records in turnaround reports because it eliminates
the requirement that attorney's fees are awarded to the
prevailing party in litigation seeking those records. The
current wording appears to be a carefully negotiated compromise
in light of the fact that it does not appear to be feasible to
advance a bill to the governor that does what the governor said
he thought it should do. Therefore, this bill seems to be a
modest step in helping individuals and organizations that seek
turnaround reports and bring PRA actions to obtain public
information that is in the custody of the Division. As this
bill is currently drafted, a court may elect to award attorney's
fees to individuals or organizations that prevail in seeking to
compel or disclose such records, but is not required to do so.
SB 421
Page 10
Proprietary Information/Trade Secret. The California Public
Records Act (PRA) governs the disclosure of information
collected and maintained by public agencies. (Section 6250 et
seq.) All public records are presumed to be open and available
to the public for viewing or copying upon request, unless the
record requested is exempt from public disclosure. (Section
6253.) The PRA specifically exempts dozens of types of records
and information from disclosure, essentially due to the
character of the records and information, many of which are
listed Section 6254, but some of which are listed in stand-alone
sections of the PRA. In addition, the PRA contains a
"catch-all" provision that prohibits disclosure of documents
where, based upon "the facts of the particular case, the public
interest served by nondisclosure clearly outweighs the public
interest served by disclosure of the record." (Section 6255.)
One specific exemption in the PRA is for "Occupational health
and safety investigations." (Section 6276.32.) Another
exception is for trade secret information. (Section 6276.44.)
In addition, Labor Code Section 7873(b)(2) prohibits the
Division from releasing any information designated as a trade
secret by the refinery to the public, subject to judicial
review. The exception at issue in this bill is for trade secret
information that a refinery identifies in the turnaround report
filed with the Division.
Because the Division is prohibited from releasing information
within those reports which is designated as trade secret
information, the Division is required to notify the refinery
when it receives a public records request for a record that
includes information the refinery has previously identified as
trade secret information. (Section 7873(c)(2).) The refinery
has 30 days, after receiving notification, to file an action
with the court to prohibit the release of the requested
information. The refinery has 120 days to obtain a court order
and notify the Division of the order. If the refinery fails to
obtain a court order prohibiting release of the requested
SB 421
Page 11
information, the Division must release the requested information
to the public. (Section 7873(c)(2).) Any person may initiate
proceedings to enforce his or her right to inspect, or to obtain
a copy, of any public record. (Section 6258.)
Allowing an Interested Party to Intervene. When a party brings
an action to either compel or prohibit the disclosure of trade
secret information in a refinery's turnaround report, current
law requires the moving party to add the opposing party to the
action as a party in interest. The opposing party may or may
not be interested in being involved in the action. This bill
allows, but does not require, the party to be included in the
action. This provision of the bill allows a party to consider
their level of interest in obtaining the requested information,
and the possible results of possible litigation, before
intervening in the action.
Prior Legislation: SB 438 (Hancock, 2013), among other things,
would have required a refinery to provide, upon the request of
the Division, specified documentation relating to a planned
turnaround of a refinery to the Division. SB 438 was held on
the Suspense file in the Assembly Appropriations Committee.
ARGUMENTS IN SUPPORT: This bill enjoys support from two
organizations that opposed SB 1300 last year. The California
Newspaper Publishers Association writes in support:
SB 421would delete the requirement in existing law that a
person requesting the release of information that might be
considered a trade secret, or a Refinery seeking to prevent
disclosure, name the other as a real party in interest in
an applicable action. The bill would allow a requester to
intervene in a ?declaratory relief action and would require
the court to permit that person to intervene.
SB 421
Page 12
The bill would also delete the requirement that the court
award attorney's fees to a prevailing party.
Another supporter, the Natural Resources Defense Council (NRDC)
writes:
NRDC opposed SB 1300? due to amendments late in the process
which would have allowed oil companies to sue individuals
or community groups for requesting public records regarding
refinery turnarounds. We were also concerned about
language that allowed refinery operators to determine what
information would be deemed a "trade secret."
We support SB 421 because it responds to Governor Brown's
signing message for SB 1300 in which he called for clean-up
legislation. SB 421 corrects the statute to clarify
provisions regarding access to information and the judicial
process.
SB 421
Page 13
REGISTERED SUPPORT / OPPOSITION:
Support
California Newspaper Publishers Association
Natural Resources Defense Council
Opposition
None on file
Analysis Prepared by:Khadijah Hargett / JUD. / (916) 319-2334
Alison Merrilees/JUD./(916) 319-2334