Press Release – December 7, 2020

Former Executive Director Alice Stebbins Files Lawsuit Against CPUC

Former California Public Utilities Commission Executive Director Alice Stebbins filed a lawsuit
on Friday against the CPUC for whistleblower retaliation.

Ms. Stebbins’s complaint, filed in San Francisco Superior Court, alleges that she was ousted
from her position as Executive Director of the CPUC following efforts she and her team took to
enforce fiscal discipline and accountability on an unwieldy state agency plagued by budgetary
issues and historical coziness with the corporate entities it was charged with regulating, such as
PG&E. The complaint says the CPUC Commissioners, particularly the controversial former
casino executive President Marybel Batjer, were resistant to such fiscal reforms and scrutiny,
and that they manufactured a “firing offense” out of a dubious State Personnel Board report,
thereby giving themselves a pretextual justification to get rid of Ms. Stebbins and her team.

“It’s plain and simple. Ms. Stebbins was fired because she had the courage to blow the whistle,
insist on collecting money due to the CPUC, and try to hold public utilities like the convicted
felon PG&E accountable,” said one of her lawyers, Karl Olson. “PG&E contributes to virtually
every politician in California, and when you try to hold them accountable you make enemies in
high places.”

Ms. Stebbins, who has had a sterling 33-year career in state government and who has held
various leadership positions throughout that time, seeks damages, including lost wages and her
attorneys’ fees. The CPUC has 30 days to respond to Stebbins’s complaint.

Stebbins Was Fired in Retaliation for Whistleblowing

Former Executive Director Stebbins promoted policies and procedures at the CPUC to ensure
fiscal integrity and effective management of programs overseen by the CPUC. Stebbins and
her staff discovered $200 million in uncollected revenue from the private companies regulated
by the CPUC. The CPUC has essentially set up a line of credit, with no interest and no penalty,
for these companies. Moreover, the CPUC’s failure to account for and collect this money
violates state laws and regulations. When Stebbins reported this to President Marybel Batjer
and other CPUC Commissioners as an issue requiring urgent attention and a complete
investigation, they decided to fire her along with the deputy director who was leading the
further investigation of this massive sum of uncollected fees.

Because Stebbins’s job performance as Executive Director of the CPUC was exemplary,
President Batjer decided to personally engineer what she called a “firing offense,” relying on
help from people she formerly supervised at the State Personnel Board (SPB). In its report, the
SPB inaccurately concluded that Stebbins had engaged in alleged improper hiring practices as to
a few of the 800 employees who joined the CPUC during Stebbins’s tenure as Executive
Director. The SPB report objectively lacked credibility and was riddled with inaccuracies, to
cover up the true basis for Plaintiff’s termination: Plaintiff’s efforts to uncover and fix the
serious problems at the CPUC, including the CPUC’s failure to pursue recovery of about $200
million from Utilities that it was supposed to be regulating. The report was a false pretext for
Plaintiff’s termination.

Indeed, every issue of “concern” by the SBP could have been fully rebutted based on the actual
records relating to these employees. But President Batjer and the other Commissioners
showed no interest in setting the record straight, and instead chose to utilize the report as a
pretext for terminating Stebbins in order to drown out the noise that she and her team were
making regarding the serious fiscal misconduct and unaccountability at the CPUC.

Stebbins spent over three decades serving the people of California as a hard-working and
dedicated state employee. She respected taxpayer funds, had a reverence for agency
accountability and efficiency, and made a positive difference in every agency that she worked
at over the years. She was praised by members of the public and her state-agency colleagues
alike. The CPUC Commissioners disregarded this praise and the good work that she and her
team had started in beginning to reform the CPUC and to hold investor-owned utilities like
PG&E accountable, instead opting to get rid of Stebbins through a manufactured controversy
and to adopt a “business-as-usual” approach. President Batjer decided that the only way to
stop the audits and fiscal reform at the CPUC was to stop Stebbins.

Batjer’s career includes a stint at Harrah’s Casino in which she engineered an attempt to
strongarm the casino’s employees into voting for a particular politician.

###

NOTE TO EDITORS: Attached to this press release is Alice Stebbin’s Complaint

CONTACT:
Karl Olson: 415-602-0841 (kolson@cofolaw.com)
Therese Cannata: 925-890-9897 (tcannata@cofolaw.com)
 1 3. Marybel Batjer (President of the CPUC), Liane M. Randolph, Martha Guzman-
2 Aceves, Clifford Rechtschaffen, and Genevieve Shiroma were, at all relevant times,
3
Commissioners of the CPUC.
4
4. Defendants Does 1 through 20 are sued herein under fictitious names pursuant to
5
California Code of Civil Procedure section 474; these defendants are in some way liable for the
6

7 damages sustained, but Plaintiff does not at this time know the true names or capacities of said

8 defendants, but prays that the same may be inserted herein when ascertained.

9 5. Plaintiff is informed and believes and thereon alleges that at all times herein
10
mentioned, defendants, including the DOE defendants, and each of them, were agents, servants,
CANNATA, O’TOOLE, FICKES & OLSON LLP

11
alter egos and/or employees of their co-defendants and co-conspirators, and in doing the things
12
hereinafter alleged, were acting within the scope of their authority as agents, servants, and
100 Pine Street, Suite 350
San Francisco, CA 94111

13
employees, and with the permission and consent of their co-defendants and co-conspirators.
14

15 JURISDICTION AND VENUE

16 6. This case is subject to the unlimited jurisdiction of the Superior Court in that the

17 amount in controversy exceeds $50,000.

18
7. Venue is proper in the Superior Court of California, City and County of San
19
Francisco, because the acts complained of herein occurred there, and because under Code of Civil
20
Procedure section 401 the CPUC is a state agency and may be sued wherever the Attorney
21
General has an office, including San Francisco.
22

23 FACTS COMMON TO ALL CAUSES OF ACTION

24 Plaintiff’s Exemplary Work as Executive Director of the CPUC

25 8. Plaintiff was brought into the CPUC in 2018 to create policies and procedures,
26
breakdown silos that had existed for decades, ensure consistency across the organization, and
27
decentralize the organization with a larger staff presence in Sacramento.
28
2
COMPLAINT FOR DAMAGES
 1 9. As the Executive Director, Plaintiff took pro-active steps to fix a CPUC system
2 that was broken when she was hired and has been broken since at least as far back as 2012.
3
10. Coming into the job as Executive Director, Ms. Stebbins was informed and
4
believed, based on an audit report issued in December 2012, that the Department of Finance
5
found ineffective management over budgeting functions, that budget forecasting methodologies
6

7 need improvement, budget monitoring needs improvement, fiscal monitoring needs improvement,

8 fiscal management practices need improvement, appropriation adjustments may not be equitably

9 allocated among funds, and non-compliance with statutory requirements specific to the Division
10
of Ratepayer Advocates. The Department of Finance audit included findings that “CPUC’s fund
CANNATA, O’TOOLE, FICKES & OLSON LLP

11
condition statement reconciliation process for the seven funds with $1 million or greater variances
12
as of June 30, 2011, lacked sufficient instructions from CPUC management resulting in
100 Pine Street, Suite 350
San Francisco, CA 94111

13
inconsistent and inadequately prepared reconciliations for five of the seven funds.” On April 1,
14

15 2014, the Department of Finance echoed its earlier findings and directed the CPUC to take

16 remedial actions. In 2015, a Controller’s Office audit found that the CPUC had not approved and

17 formalized its policies and procedures to address the internal control weaknesses found in earlier
18
reports. These serious problems persisted at the CPUC as of the time Plaintiff was hired in 2018.
19
Realizing the continuing risks in the Accounting Unit, Plaintiff approved the Administrative
20
Services Director’s request for an independent contractor to perform a review. The findings of
21
that review play a large part in the unfolding of events to follow.
22

23 11. As an initial step, Plaintiff had to realign the organization, while concurrently

24 assuring CPUC staff that the process of realignment would be open and transparent. True to her
25 word, Plaintiff personally led staff meetings in order to directly respond to staff questions,
26
concerns, and complaints. The Commissioners at the time were President Michael Picker, and
27
Commissioners Carla Peterman, Liane Randolph, Cliff Rechtschaffen, and Martha Guzman-
28
3
COMPLAINT FOR DAMAGES
 1 Aceves. Plaintiff is informed and believes that all of them supported this effort. Plaintiff
2 assessed each division, including the skills and expertise of directors and staff, and she worked
3
with division directors to move personnel into Divisions who could benefit the most from their
4
respective expertise. Divisions that were previously dysfunctional or ineffective were brought
5
back into productive service to the CPUC. Plaintiff continued to realign the CPUC and created a
6

7 row of Deputy Executive Directors. This realignment had gone through many iterations with

8 CPUC Human Resources (HR) as well as the California Department of Human Resources (Cal

9 HR), and the changes were reviewed and approved by the Governor’s Office. Plaintiff kept the
10
Commissioners apprised of the process, and they approved the outcome. Plaintiff reduced the
CANNATA, O’TOOLE, FICKES & OLSON LLP

11
direct high-level reports from seventeen (17) to approximately seven (7). Working with one of
12
her Deputy Executive Directors, Plaintiff worked on realigning workload in preparation for
100 Pine Street, Suite 350
San Francisco, CA 94111

13
creating the Wildfire Safety Division under Assembly Bill (AB) 1054. Together, they organized
14

15 the first ever Wildfire Technology Innovation Summit – the first of its kind, with attendance from

16 all over the world. It was unique in that it brought Information Technology, engineers, fire

17 experts, and academia in one room to discuss fire prevention. Until her termination, Plaintiff
18
worked tirelessly with her senior staff to ensure that the Wildfire Safety Division had all the
19
support and resources needed to move forward in their efforts (e.g., create the Wildfire Mitigation
20
Plans, establish an audit unit to go out into the field to oversee the utilities, and ensure that the
21
private utility companies were in compliance with the Wildfire Mitigation Plans). In addition, the
22

23 CPUC has a critical obligation to ensure that relief, which has already been authorized and funded

24 for distribution through the Self-Generation Incentive Program, promptly and effectively reaches
25 those in need (e.g., the energy storage technology, such as battery storage systems that can
26
function during a power outage). This is a life and death issue for vulnerable populations in
27
California. Plaintiff has worked with the private utility companies and access and functional-
28
4
COMPLAINT FOR DAMAGES
 1 needs communities to bridge the gaps in communication and to ensure that these vulnerable
2 populations get the battery storage systems they need to survive when public safety shutoffs are
3
initiated by the utilities.
4
12. Plaintiff focused on fiscal review and program accountability by identifying and
5
eliminating government program waste, ineffective management of personnel, and accounting
6

7 malfeasance. When Plaintiff assumed the job of Executive Director, it was well known that the

8 CPUC, as an agency, struggled to manage itself and to provide meaningful oversight of the

9 Utilities. Plaintiff is informed and believes that as far back as 2012, auditors from the state
10
Controller’s Office had been critical of the CPUC’s non-compliance with the State
CANNATA, O’TOOLE, FICKES & OLSON LLP

11
Administrative Manual. Starting in 2018, Plaintiff focused on a fiscal review of the CPUC to
12
determine how the CPUC was spending an annual budget of $1.6 billion and literally giving away
100 Pine Street, Suite 350
San Francisco, CA 94111

13
hundreds of millions of dollars each year for programs. The goal was to have a complete and
14

15 ongoing accounting for the flow of dollars in and out of the CPUC, including where the money

16 was going and whether it was achieving program objectives.

17 13. Plaintiff pressed the CPUC Commissioners, and especially President Batjer, to
18
focus on pending proceedings that would identify specific deficiencies in the delivery of energy
19
to ratepayers and fully integrate reforms needed to force PG&E and other utilities to prevent and
20
properly respond to California’s wildfires. Under Plaintiff’s leadership, the Safety and
21
Enforcement Division assessed the largest penalty in the history of the CPUC on PG&E for its
22

23 criminal responsibility for the deaths of 85 individuals in the fire that destroyed Paradise and

24 other towns in northern California. Plaintiff was particularly insistent on ensuring that the
25 Wildfire Safety Division, a division that she helped design and establish at the CPUC, act
26
decisively to ensure that resources, programs, and relief were targeted to those who most need it
27
during past, present, and future wildfires.
28
5
COMPLAINT FOR DAMAGES
 1 14. Plaintiff directed her staff to prepare various audits and reports focusing on fiscal
2 accountability, clear and effective oversight of the Utilities, and getting the job done at the CPUC.
3
The completed reports are:
4
 Assessment of Accounting Processes and Services (Final Report June 2020)
5 Disclosing the CPUC’s non-compliance with the State Administrative Manual;
significant risk in CPUC’s oversight and management of Federal funds; and the
6
CPUC’s handling of unpaid accounts receivable, including approximately $200
7 million reported to the State Controller that was due to the CPUC from private utility
companies as of June 30, 2019 (with a significant portion of these accounts receivable
8 dating back many years).

9  Consulting Services and Compliance Review of the Deaf and Disabled

10 Telecommunications Program (July 2020)
Disclosing CPUC mismanagement and disproportionate advantage to businesses
CANNATA, O’TOOLE, FICKES & OLSON LLP

11 rather than consumers.

12  Consulting Services and Compliance Review of the Water Division (August

2020)
100 Pine Street, Suite 350
San Francisco, CA 94111

13 Revealing tremendous inefficiencies in the Water Division (WD). WD had not

14 established processes to formally monitor and enforce utility compliance or a records
retention policy that would ensure preservation of records during staff turnover. The
15 result is that millions of dollars from water districts and utilities were not (and are not
now being) collected, which is both a violation of law and a failure of the CPUC’s
16 responsibility to the State of California.
17
Plaintiff was also in the process of working on several further assessments and audits, which
18
focused on the CPUC’s financial mismanagement and operational deficiencies, including: (1)
19
audit of the electric program investment charge, (2) audits and assessments of the Lifeline
20
Program, (3) audits of balancing accounts, and (4) an assessment of the IT infrastructure
21

22 conducted by the California Department of Technology (CDT). Plaintiff is informed and believes

23 that President Batjer and Commissioners Randolph, Guzman-Aceves, Rechtschaffen, and

24 Shiroma knew of all reports and audits.
25
15. The Deputy Executive Directors, Directors, Program Managers, and staff were
26
essential to effectuate these long-overdue improvements and changes at the CPUC. All of these
27
reviews and audits were top priorities and areas that Plaintiff suspected were being mismanaged
28
6
COMPLAINT FOR DAMAGES
 1 and/or had ineffective policies and procedures in place. Executive staff who worked for Plaintiff
2 assisted in numerous process improvements, which allowed the CPUC staff to continue to focus
3
on their program and administrative work.
4
Plaintiff Blows the Whistle on the CPUC’s Failure to Collect Millions of Dollars from
5 the Companies It Was Charged with Regulating, and the CPUC Begins Its Retaliation
Against Plaintiff for Her Protected Activities as a Whistleblower
6
16. Under the leadership of President Michael Picker, Plaintiff was given full authority
7
to clean up the CPUC – to improve administrative processes, fiscal discipline, and program
8

9 accountability at all levels. With the arrival of President Batjer in August 2019, Plaintiff was

10 initially told by all of the Commissioners that she had their full support for the assessments,
CANNATA, O’TOOLE, FICKES & OLSON LLP

11 audits, and reforms then in progress at the CPUC. One of the most significant projects underway
12
was the Sjoberg and Evashenk report, Assessment of Accounting Processes and Services, which
100 Pine Street, Suite 350
San Francisco, CA 94111

13
was available in draft by July 2019 and the final report issued in June 2020.
14
17. At the outset, Plaintiff provided President Batjer with an update on pending audits
15
relating to fiscal integrity issues. She advised President Batjer that the Sjoberg and Evanshenk
16

17 draft report, which had been issued in July 2019, found that “significant risks” exist in CPUC’s

18 handling of accounts receivables. President Batjer showed no interest in that work. Rather,

19 Plaintiff is informed and believes that President Batjer was fixated on increasing her own
20
administrative powers over key departments. President Batjer fundamentally resisted reform,
21
preferring to support, for example, three audits for which there was no need: (1) Travel Advance,
22
(2) Expense Reimbursement and (3) Contracts. The Accounting Office was already underway
23
with an assessment, which negated the need for the Travel Advance and Expense Reimbursement
24

25 audits. And the Contracts Office was going to begin an audit with the Department of General

26 Services (DGS) covering Contracts and Procurement. Plaintiff is informed and believes that DGS
27 was a department that President Batjer had previously overseen as Government Operations
28
7
COMPLAINT FOR DAMAGES
 1 Secretary. All of these audits were unnecessary and did not focus on any of the areas that needed
2 focus. In fact, the internal auditor, who reported to President Batjer, refused the opportunity to
3
review the Accounting Assessment, which would have highlighted many more important issues to
4
evaluate, like the Accounts Receivables.
5
18. Plaintiff continued to focus on fixing the CPUC, and especially overseeing staff
6

7 projects that would root out the lack of process and procedures in each division. She was also

8 working hard to address concerns about the CPUC’s responsiveness to wildfire safety issues as

9 well as working with staff to complete the more urgent and necessary pending fiscal integrity and
10
accounting audits. Related to that, she and her staff continued their investigation, which led to the
CANNATA, O’TOOLE, FICKES & OLSON LLP

11
discovery of over $200 million in uncollected accounts receivables from the Utilities
12
(Telecommunication Companies, Water Utilities, Investor-Owned Utilities, and Transportation
100 Pine Street, Suite 350
San Francisco, CA 94111

13
Companies). Further investigation disclosed over $50 million in accounts receivables, some
14

15 accountable to the Water Division that dated back over 19 years and were never collected, and

16 $66 million of uncollected fees in the Lifeline Program and accountable to the Communications

17 Division. The internal processes for tracking these fees were truly shocking. The CPUC operated
18
on an honor system with the Utilities to pay what they owed. For example, for the Lifeline
19
Program, these fees were self-reported by and not invoiced to the Utilities or disclosed in aging
20
reports. This program has funding of over $400 million per year and appears to be rolling over
21
from year to year about $60 million in receivables (i.e., money owed to the CPUC). And this
22

23 problem becomes worse every year. The CPUC reported to the State Controller at the close of

24 fiscal year 2018/2019 the following:

25  At the close of fiscal year 2017/2018, the total accounts receivable balance was $173
26 million.
 The accounts receivable balance increased that year by $52 million.
27
 The Utilities only paid $21 million that year.
28
8
COMPLAINT FOR DAMAGES
 1  As result, the total for these uncollected fees for close of 2018/2019 increased to $200
million.
2

3 19. The aging on some of these accounts receivable was significant. Plaintiff is

4 informed and believes that this represented money already paid by the ratepayers, and that this
5 fund of uncollected, rolling accounts receivable operated like an interest-free line of credit for the
6
private utility companies.
7
20. Starting in or about December 2019, Plaintiff and the Director of Administrative
8
Services Division (“ASD”), Bernard Azevedo, made repeated efforts to get the attention of
9

10 President Batjer and the other Commissioners to discuss taking immediate steps to conduct a
CANNATA, O’TOOLE, FICKES & OLSON LLP

11 deeper investigation into large uncollected receivables as well as address the flawed internal

12 division processes that made it possible for such a large amount of uncollected receivables to go
100 Pine Street, Suite 350
San Francisco, CA 94111

13
unnoticed by the CPUC. Plaintiff also met separately with President Batjer, Commissioners
14
Rechtschaffen and Randolph in or about February 2020, about the further findings of
15
approximately $200 million in uncollected accounts receivable (i.e., the number was growing
16
exponentially as Ms. Stebbins and her senior staff continued their work). President Batjer’s
17

18 response was indifference, hostility, and disinterest. The other two Commissioners likewise

19 demonstrated little interest in the missing money. Still, Plaintiff continued with her plan of action
20 to address this matter, which was to complete the internal assessments and take corrective action
21
at the administrative level (e.g., develop a plan for collection of unpaid accounts and implement
22
structural changes to prevent this from happening in the future).
23
21. Plaintiff is informed and believes that the CPUC’s massive $200 million in
24

25 uncollected accounts receivable was not just a routine bookkeeping carryover from one year to

26 the next and a couple of bad debts, all of which the CPUC can account for and nothing adding up

27 to substantial uncollected fees (just a few million, at most). The carryover of $141 million from
28
9
COMPLAINT FOR DAMAGES
 1 one fiscal year to the next does not mean that the fees were incurred in the immediately preceding
2 year and set to be resolved in the current year. Rather, as Plaintiff and Mr. Azevedo disclosed
3
back in February 2020, portions of the uncollected fees (in some instances over 19 years) are
4
carried over from year to year on the books without accompanying reconciliation or aging reports,
5
in violation of State regulations. Also, the CPUC collected only $21 million in the 2018-19 fiscal
6

7 year, thus beginning that fiscal year with $173 million in accounts receivable and ending it with

8 $200 million in accounts receivable.

9 22. The Sjoberg and Evanshenk draft report issued in July 2019, and the final report
10
released in June 2020, found that “significant risks” exist in CPUC’s handling of accounts
CANNATA, O’TOOLE, FICKES & OLSON LLP

11
receivables. This information aligns with the State Controller’s required annual report of CPUC
12
accounts receivables, which shows a total of approximately $200 million due as of June 30, 2019.
100 Pine Street, Suite 350
San Francisco, CA 94111

13
Of this, $50 million has been past due and outstanding since 2017, with portions dating back as
14

15 far as the 1990s. The $50 million is a material amount that triggers a violation of State

16 regulations. The collection of this $50 million should have been actively pursued by President

17 Batjer and Commissioner Shiroma for the CPUC to remain in compliance with State
18
Administrative Manual sections 8776 and 8776.6.
19
23. Plaintiff is informed and believes that President Batjer concluded that the only way
20
to stop the financial audits and fiscal reform at the CPUC was to stop Plaintiff. In this same time
21
period, through a series of misdirected and unnecessary internal audits, President Batjer and the
22

23 other Commissioners tried to divert staff resources away from the fiscal integrity reviews and

24 audits initiated by Plaintiff, and take the spotlight off of the $200 million in uncollected fees from
25 the Utilities, which Plaintiff and her ASD Director, Bernard Azevedo, repeatedly urged President
26
Batjer and other Commissioners to address. Plaintiff was a career California government
27
employee, who understood that no matter where the political winds were blowing within an
28
10
COMPLAINT FOR DAMAGES
 1 agency, her duty was to the citizens of the State of California. Plaintiff believed that evidence of
2 fiscal irresponsibility and waste at the CPUC was vast and could not be swept under a rug without
3
violating what she knew to be her paramount duties as the Executive Director of the CPUC.
4
24. In April 2020, just two months after Plaintiff first reported the $200 million of
5
uncollected receivables, Plaintiff received a cursory interview call from a representative at the
6

7 State Personnel Board (“SPB”) about what Plaintiff assumed was a routine audit that takes place

8 every three years.

9 25. In May 2020, President Batjer and her fellow Commissioners decided to waive a
10
$200 million fine against PG&E, which had been recommended by CPUC staff for PG&E’s
CANNATA, O’TOOLE, FICKES & OLSON LLP

11
criminally negligent conduct that had been determined as the cause of deadly California wildfires.
12
Plaintiff, as the Executive Director, had to assure distressed CPUC staff, who could not fathom
100 Pine Street, Suite 350
San Francisco, CA 94111

13
how the CPUC could let such a thing happen, that positive change was still possible at the CPUC
14

15 and that she would not waiver in her commitment to make that happen. She encouraged her

16 senior staff to continue working on the financial audits and investigation of the $200 million

17 dollars of uncollected receivables. Two of those reports were still on track for release in July and
18
August 2020.
19
26. In late June 2020, Plaintiff learned that her involvement in the vetting and hiring of
20
five (5) CPUC employees – including several who were overseeing the aforementioned fiscal
21
integrity audits – was the focus of a draft SPB report. Within days thereafter, Plaintiff was
22

23 informed that her job was in jeopardy due to the findings in the draft SPB Report. One month

24 later, on or about July 30, 2020, Plaintiff was informed that the SPB Report was a “firing
25 offense.” Plaintiff was informed that she should immediately resign before the final SPB Report
26
was issued, and that if she did not resign, she would be fired.
27
27. The Consulting Services and Compliance Review of the Deaf and Disabled
28
11
COMPLAINT FOR DAMAGES
 1 Telecommunications Program was issued on or about July 24, 2020, and disclosed CPUC’s
2 mismanagement and disproportionate advantage to businesses rather than consumers.
3
28. Plaintiff was placed on administrative time off which began on August 4, 2020 and
4
told to cease all work at the CPUC. President Batjer also indicated that she was going to
5
terminate each of the five CPUC staff called out in the SPB report, despite zero evidence that they
6

7 did anything wrong or demonstrated any job performance issues while at the CPUC.

8 29. The final report entitled “Consulting Services and Compliance Review of the

9 Water Division” was released on or about August 6, 2020, disclosing significant record keeping
10
and fiscal problems in the CPUC’s Water Division (WD). WD had not established processes to
CANNATA, O’TOOLE, FICKES & OLSON LLP

11
formally monitor and enforce utility compliance or a records retention policy that would ensure
12
preservation of records during staff turnover. The result is that millions of dollars from water
100 Pine Street, Suite 350
San Francisco, CA 94111

13
districts and utilities were not (and are not now being) collected, which is both a violation of law
14

15 and a failure of the CPUC’s responsibility to the State of California.

16 30. On August 10, 2020, President Batjer sent an email attaching the final SPB Report

17 to the entire CPUC (over 1,400 employees). Plaintiff is informed and believes that President
18
Batjer intended, by issuing the SPB Report, which objectively lacked credibility and was riddled
19
with inaccuracies, to cover up the true basis for Plaintiff’s termination: Plaintiff’s efforts to
20
uncover and fix the serious problems at the CPUC set forth above, including the CPUC’s failure
21
to pursue recovery of about $200 million from Utilities that it was supposed to be regulating. The
22

23 report was a false pretext for Plaintiff’s termination.

24 31. On September 2, 2020, Plaintiff received a notice that she was terminated effective
25 September 4, 2020. In the weeks that followed, President Batjer carried out her promise to
26
terminate from the CPUC the senior staff members referenced in the SPB Report.
27
32. Plaintiff is informed and believes that she was terminated from the CPUC in
28
12
COMPLAINT FOR DAMAGES
 1 retaliation for her refusal to close down (or slow down) ongoing investigations and reviews of the
2 CPUC’s financial and record keeping practices; for her insistence on completing reports that
3
called out the CPUC’s lack of fiscal integrity as well as its failure to collect significant
4
outstanding accounts receivable; and for her unwavering support of senior staff who were leading
5
audit processes that disclosed still further problems and presented real solutions (instead of lofty
6

7 resolutions that served as convenient press releases but accomplished no genuine reform at the

8 CPUC). The SPB Report was a pretext intended to cover up President Batjer’s decision,

9 supported by the other Commissioners, to stop Plaintiff from doing her job – to fix the broken
10
CPUC.
CANNATA, O’TOOLE, FICKES & OLSON LLP

11
33. On August 31, 2020, Plaintiff received her final check for wages. That final
12
check, however, did not include the payment for all accrued wages. On October 23, 2020,
100 Pine Street, Suite 350
San Francisco, CA 94111

13
Plaintiff, through counsel, sent Defendant a letter demanding that all unpaid wages be paid. To
14

15 date, Defendant has failed to respond to such demand, and therefore, the failure to pay wages

16 timely under Labor Code Section 203 is willful.

17 Plaintiff Exhausted Her Administrative Remedies, Leading to the Present Action

18
34. Within the time provided by law, on September 4, 2020, Plaintiff filed a
19
government tort claim pursuant to Government Code section 810, et seq. with the Department of
20
General Services, which was denied on October 13, 2020.
21
35. Within the time provided by law, on October 23, 2020, Plaintiff filed a California
22

23 Whistleblower Protection Act complaint with the California State Personnel Board. The claim

24 was denied effective December 7, 2020, and all administrative remedies deemed exhausted on
25 that date.
26
//
27
//
28
13
COMPLAINT FOR DAMAGES
 1 FIRST CAUSE OF ACTION
(Violation of the California Whistleblower Protection Act, Government Code Section 8547,
2 et seq. )
3
36. The allegations set forth in Paragraphs 1 through 35 are re-alleged and
4
incorporated herein by reference.
5
37. At all times herein mentioned, the California Whistleblower Protection Act,
6

7 including Government Code section 8547.8, was in full force and effect and was binding upon the

8 Defendant. This section required Defendant to refrain from retaliating against an employee, such

9 as Plaintiff, for having exercised her rights under the statute.

10
38. The conduct uncovered and reported to the CPUC by Plaintiff violates California
CANNATA, O’TOOLE, FICKES & OLSON LLP

11
law and the laws and regulations of the Public Utilities Code, and is grossly negligent,
12
incompetent and wasteful. Defendant retaliated against Plaintiff by terminating her employment
100 Pine Street, Suite 350
San Francisco, CA 94111

13
in violation of California Government Code section 8547.3.
14

15 39. Plaintiff’s protected disclosure was in good faith that evidenced, or may have

16 evidenced, improper state agency activity or a condition that may significantly threaten the health

17 or safety of employees or the public as the disclosure was made for the purpose of remedying that
18
condition.
19
40. Defendant terminated Plaintiff’s employment with the CPUC effective September
20
4, 2020, and Plaintiff’s protected disclosure was a contributing factor and the proximate cause for
21
Defendant’s termination of Plaintiff’s employment, which has caused Plaintiff significant harm.
22

23 41. Defendant’s conduct was a substantial factor in causing Plaintiff’s harm.

24 42. As a proximate result of Defendant’s conduct, Plaintiff has sustained and

25 continues to sustain losses in earnings and other employment benefits. Also, as a proximate result
26
of Defendant’s conduct, Plaintiff has suffered and continues to suffer humiliation, emotional
27
distress, and mental and physical pain and anguish, all to her damage in a sum according to proof.
28
14
COMPLAINT FOR DAMAGES
 1 43. In doing such acts as set forth herein, Defendant acted with oppression, fraud, and
2 malice, and Plaintiff is entitled to punitive damages in an amount to be determined at trial.
3
44. Plaintiff has incurred and continues to incur legal expenses and attorney’s fees.
4
Plaintiff is presently unaware of the precise amount of said expenses and fees and prays leave of
5
court to amend this complaint when said amounts are more fully known.
6

7 45. WHEREFORE, Plaintiff prays for judgment against Defendant as set forth below.

8 SECOND CAUSE OF ACTION

(Violation of Labor Code Section 1102.5 )
9
46. The allegations set forth in Paragraphs 1 through 45 are re-alleged and
10
CANNATA, O’TOOLE, FICKES & OLSON LLP

11 incorporated herein by reference.

12 47. At all times herein mentioned, Labor Code section 1102.5, the California
100 Pine Street, Suite 350
San Francisco, CA 94111

13 Whistleblower Act, was in full force and effect and was binding upon Defendant. This section
14
required Defendant to refrain from retaliating against an employee, such as Plaintiff, for having
15
exercised her rights under the statute.
16
48. The conduct uncovered and reported to the CPUC by Plaintiff violates California
17
law and the laws and regulations of the Public Utilities Code, and Plaintiff had reasonable cause
18

19 to believe that the information provided to the CPUC disclosed a violation of state laws and/or

20 regulations. Defendant retaliated against Plaintiff by terminating her employment with the CPUC
21 effective September 4, 2020 in violation of California Labor Code section 1102.5. Plaintiff’s
22
protected disclosure was a contributing factor and the proximate cause for Defendant’s
23
termination of Plaintiff’s employment, which has caused Plaintiff significant harm.
24
49. Defendant’s conduct was a substantial factor in causing Plaintiff’s harm.
25

26 50. As a proximate result of Defendant’s conduct, Plaintiff has sustained and

27 continues to sustain losses in earnings and other employment benefits. As a proximate result of

28
15
COMPLAINT FOR DAMAGES
 1 Defendant’s conduct, Plaintiff has suffered and continues to suffer humiliation, emotional
2 distress, and mental and physical pain and anguish, all to her damage in a sum according to proof.
3
51. In doing such acts as set forth herein, Defendant acted with oppression, fraud, and
4
malice, and Plaintiff is entitled to punitive and/or exemplary damages in an amount to be
5
determined at trial.
6

7 52. Plaintiff has incurred and continues to incur legal expenses and attorney’s fees.

8 Plaintiff is presently unaware of the precise amount of said expenses and fees and prays leave of

9 court to amend this complaint when said amounts are more fully known.
10
53. WHEREFORE, Plaintiff prays for judgment against Defendant as set forth below.
CANNATA, O’TOOLE, FICKES & OLSON LLP

11
THIRD CAUSE OF ACTION
12 (Waiting Time Penalties Under Labor Code Section 203)
100 Pine Street, Suite 350
San Francisco, CA 94111

13 54. The allegations set forth in Paragraphs 1 through 53 are re-alleged and
14
incorporated herein by reference.
15
55. Plaintiff’s employment with Defendant was terminated effective September 4,
16
2020.
17
56. Defendant willfully refused and continues to refuse to pay Plaintiff unpaid wages
18

19 as required by Labor Code section 203. Defendant knows the pay is due and refuses to pay it.

20 57. Plaintiff requests damages and penalties as provided by Labor Code section 203,
21 subject to proof at time of trial.
22
58. WHEREFORE, Plaintiff prays for judgment against Defendant as set forth below.
23
FOURTH CAUSE OF ACTION
24 (Violations of California Business and Professions Code Section 17200)
25 59. The allegations set forth in Paragraphs 1 through 58 are re-alleged and
26
incorporated herein by reference.
27

28
16
COMPLAINT FOR DAMAGES
 1 60. By failing to pay wages, Defendant’s acts constitute unfair and unlawful business
2 practices under Business and Professional Code section 17200, et seq.
3
61. Plaintiff prays for restitution under this Cause of Action in an amount subject to
4
proof at time of trial.
5
62. WHEREFORE, Plaintiff prays for judgment against Defendant as set forth below.
6

7 PRAYER FOR RELIEF

8 WHEREFORE, Plaintiff prays for judgment against Defendant as follows:

9 1. For compensatory damages, including lost wages and employee benefits, and other
10
such damages according to proof on all causes of action;
CANNATA, O’TOOLE, FICKES & OLSON LLP

11
2. For general damages for emotional distress, humiliation, mental anguish, and other
12
such damages according to proof on all causes of action;
100 Pine Street, Suite 350
San Francisco, CA 94111

13
3. For double damages for back pay per Government Code section 12653;
14

15 4. For penalties and damages pursuant to Labor Code section 203 subject to proof at

16 trial;

17 5. For punitive and/or exemplary damages;

18
6. For interest, including prejudgment interest at the legal rate;
19
7. For costs of suit incurred herein;
20
8. For reasonable attorney’s fees; and
21
9. For such other and further relief as this Court deems just and proper.
22

23 Dated: December 4, 2020 CANNATA, O’TOOLE, FICKES & OLSON LLP

24
_________________________________
25 THERESE Y. CANNATA
26 KARL OLSON
MICHAEL M. CHING
27 ZACHARY E. COLBETH
Attorneys for Plaintiff Alice Stebbins
28
17
COMPLAINT FOR DAMAGES