handcuffsIt is rare, but it does happen. Every once in awhile, a company faces criminal charges rather than civil litigation. This rare trial could result in fines of up to $2.5 million as well as having its future activities undergo strict supervision.

The case in question involved multiple fatalities — Donald Dejaynes, 43, Dupree Holt, 37, James St. Peters, 52, Gary Foster, 48, and Anthony Aguirre, 18, who died from smoke inhalation during the October 2007 fire inside a water tunnel at the Cabin Creek hydroelectric plant. The plant itself was about 40 miles west of Denver, near Georgetown, Colorado. The smoke was generated by an industrial solvent they were using that caught fire, leaving the men trapped in the tunnel in which they were working.

Now Xcel Energy and a subsidiary, Public Service Company of Colorado, are being charged in federal court with five counts each of violating Occupational Safety and Health Administration (OSHA) regulations.

The federal prosecutor stated in court that several bids for the tunnel work had been submitted, and the company eventually used, RPI Coatings Inc., was the lowest bidder. He then went on to delineate the safety deficiencies in RPI, noting that it was not up to the standard safety rating expectations of Xcel, but it had received the job anyway (with a few addenda) because of cost concerns.

Sheila V. Kumar, a reporter for BussinessWeek, notes some disquieting allegations being made in the case:

[Defense attorney Clifford] Stricklin challenged [federal prosecutor Jaime] Pena’s allegations that RPI got the contract because they had the lowest budget, saying the other bidder considered for the job had proposed dangerous equipment and had had a recent employee death.

Stricklin went on to assert that RPI has destroyed evidence, such as cell phones, cameras, and daily safety briefing sheets that would prove the innocence of the defendants.

‘RPI has deprived the (Public Service Company of Colorado) of the ability to prove … their innocence,’ Stricklin said.

Board investigators have stated that the workers did not have a fire extinguisher in or near the work area. The initial flash fire that started the incident had calmed down before the other five-gallon and two-gallon buckets of solvent began to burning.

P. Solomon Banda, a reporter for TwinCities.com, gives us some insight on why criminal charges are being levied in this case:

Cliff Stricklin, an attorney for Xcel, said in August that the company would have stopped RPI from taking 15 gallons of flammable solvent into the tunnel had it known what was going to happen. In March 2008, OSHA proposed $845,100 in penalties against RPI and $189,900 against Xcel, saying the ‘catastrophe could have been avoided.’

‘The problem, and why a grand jury decided that criminal charges were warranted, is that the money (OSHA fines) is so low,’said Kevin O’Brien, a business law professor at the University of Denver Daniels College of Business. ‘There’s no way that Xcel intended for these people to die, but we do make provisions for violating standards normally expected of a usually prudent company to protect their workers.’

We’ll continue to follow this case and keep an eye out for interesting updates.

Image by Vectorportal, used under its Creative Commons license.