The bankrupt utility of California’s Pacific Gas & Electric Corp. (PG&E) must face a state court and potentially a jury trial for victims of the 2017 Tubbs fire, the deadly inferno that scorched parts of Sonoma and Napa counties, a judge ruled last Friday.
In January the California Department of Forestry and Fire Protection, aka CalFire, concluded that PG&E facilities had not caused the Tubbs fire. Specifically the Sonoma County fire “was caused by a private electrical system adjacent to a residential structure,” and investigators “did not identify any violations of state law…related to the cause of this fire.” The fire eventually engulfed part of Sonoma County, roared through Santa Rosa and killed 22 people.
However, attorneys for victims of the Tubbs fire claim they can present evidence that could shift the blame to PG&E.
U.S. Bankruptcy Judge Dennis Montali, who is supervising PG&E’s Chapter 11 filing, ruled a state court rather than bankruptcy court would be the appropriate venue to determine potential liability in connection with the deadly blaze. PG&E had asked the court to make the determination as part of its bankruptcy proceeding.
“Regardless of the next legal steps, CalFire has already determined that the cause of the 2017 Tubbs Fire was not related to PG&E equipment,” a PG&E spokesperson told NGI. “We intend to cooperate with the state court in order to help achieve the June 30, 2020 deadline to participate in the new state wildfire fund established by Assembly Bill 1054.”
Moving the venue to a state court would provide “a just resolution,” Montali said, for the victims’ claims for wildfires that have “ravaged Northern California in recent years…”
San Francisco-based PG&E has noted that the CalFire official written report regarding the Tubbs Fire concluded that PG&E facilities didn’t cause the inferno.
“The debtors (PG&E and Pacific Gas and Electric) are correct when they state that resolution of the Tubbs fire proceedings is central to this case,” Montali stated in his ruling regarding the bankruptcy filing. However, the Tubbs fire litigation, “while connected to the bankruptcy, will not interfere with the bankruptcy case. The state court trial may proceed on a parallel track to the proceedings in this court.”
Montali also separately ruled that PG&E is allowed to retain exclusive rights to provide a detailed plan to reorganize to emerge from bankruptcy. The plan is expected to be filed with the court by Sept. 9.
The ruling turned down requests from two groups of creditors that wanted to propose a Chapter 11 exit plan.
“Most important to the court, the parties, the fire victims, and all other concerned citizens of Northern California, is to find a clear path to reach the goal of compensation for the fire victims who are involuntary creditors of PG&E and Pacific Gas and Electric, as well as for the contractual claims of their voluntary creditors,” Montali ruled.
“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,” the PG&E spokesperson said. “This progress includes the work PG&E has done to resolve major, complex issues that must be addressed before the company can emerge from bankruptcy, including reaching a $1 billion settlement with 18 cities, counties and other public entities affected by wildfires.”
The utility remains on schedule to file its reorganization plan by Sept. 9, “and we can assure our customers and communities that we are looking at all options in working with the governor, the California Public Utility Commission and all stakeholders.”
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