PG&E to go to trial over role in wildfire

Bankruptcy judge allows Tubbs Fire suit to proceed

A jury will decide whether Pacific Gas and Electric Co. is responsible for a 2017 Wine Country wildfire that leveled neighborhoods and killed about two dozen people in the Santa Rosa area.

The judge presiding over PG&E’s bankruptcy case decided Friday to allow a state court trial regarding the company’s role in the Tubbs Fire, which state investigators said was started by someone else’s equipment.

U.S. Bankruptcy Judge Dennis Montali’s decision is a major victory for people affected by that inferno, the secondmost destructive wildfire in state history, and a setback to PG&E’s efforts to contain its liabilities as much as possible. If victims’ lawyers prevail in the trial, it could make the company’s path out of bankruptcy protection billions of dollars more expensive than it would be other

wise.

Frank Pitre, one of the lawyers for Tubbs Fire victims, said the ruling “means everything” to his clients.

“It means that they have a chance to be able to prove their case in a court with transparency and in a form that allows 12 reasonable people in their community to decide the facts,” he said. “That is what we have always wanted: Give us the chance to present our case to ordinary citizens who can decide this disputed issue.”

PG&E had argued that the bankruptcy process should determine whether it was responsible for the Tubbs Fire and owes those victims money.

“Regardless of the next legal steps, Cal Fire has already determined that the cause of the 2017 Tubbs Fire was not related to PG&E equipment,” said company spokeswoman Lynsey Paulo.

She said PG&E plans to work with the state court to make sure the company resolves its bankruptcy protection by June 30, 2020 — a deadline that a new state law set in order for the company to be eligible for a fund designed to protect utilities from future fire costs.

California investigators announced in January that PG&E was not responsible for the Tubbs Fire, instead blaming it on privately owned equipment. The state had previously found PG&E responsible for a series of other wildfires that ignited around Wine Country on the same day. But victims’ attorneys never agreed with the state’s official Tubbs Fire conclusion, so they asked Montali to let them try several plaintiffs’ cases before a jury in San Francisco Superior Court.

After considering arguments about the matter he heard on Wednesday, Montali sided with the victims’ lawyers and insurance companies, which also wanted a trial.

“Although a handful of plaintiffs proceeding to trial does not resolve many claims in this case, it advances the goals of this bankruptcy far better than stayed, stagnant proceedings,” Montali wrote. “All arguments to the contrary ignore the urgent need for resolution, the inherent suitability of the state court to bring about that resolution, and the importance of that resolution to the future conduct of these bankruptcy cases.”

Montali said the trial can advance “on a parallel track” to proceedings in the bankruptcy case, which must also estimate PG&E’s liabilities for many other fires — including the 2018 Camp Fire, the deadliest and most destructive wildfire in California history.

Pitre said a jury trial provides victims with more tools to “challenge somebody’s presentation of the case” and a better ability to “focus in on the most complex issues.” The trial could be resolved in time for a jury to reach a verdict in January or early February, he said.

Victims’ attorneys believe the California Department of Forestry and Fire Protection’s report on the cause of the Tubbs Fire, released more than 15 months after the blaze ignited, is erroneous. According to Pitre, they have found physical evidence suggesting the fire started at equipment owned by PG&E and can argue that the property at the fire’s origin point did not have power when the conflagration began.

“There are so many inconsistencies with the conclusion of the Cal Fire report, when you put it in context of other physical evidence,” he said. “The report was seriously flawed.”

Cal Fire spokesman Scott McLean said the agency was not wavering in its conclusion about the Tubbs Fire cause.

“We stand by our report,” he said.

Santa Rosa resident Will Abrams, whose home was destroyed by the Tubbs Fire, said he always found it hard to believe that PG&E power lines could have sparked so many fires around the same time — just not the worst one.

“I’m glad they’re taking a moment to take another look at it,” Abrams said.

Separately, Montali on Friday shot down attempts from two creditor groups to shape the outcome of the bankruptcy case. He denied motions from PG&E bond debt owners and insurance companies which each wanted to terminate the company’s exclusive right to propose a reorganization plan so they could file their own.

This means the embattled company will retain the sole right to formally propose a plan outlining how it intends to resolve billions of dollars in claims from wildfire victims and emerge from bankruptcy protection. PG&E’s socalled exclusive period is set to end late next month, though the company now says it plans to file its plan by Sept. 9.

“PG&E has made significant progress in further refining a viable, fair, and comprehensive plan of reorganization that will compensate wildfire victims, protect customer rates, and put PG&E on a path to be the energy company our customers need and deserve,” Paulo said.

She said the company is “looking at all options” as it works with state officials and other parties in the bankruptcy case.