Judge who has blasted PG&E is possible candidate to help oversee bankruptcy

The federal judge handling the Pacific Gas & Electric Co.'s criminal probation may enter the fray to help oversee the utility's bankruptcy.

All the major parties agreed Wednesday that the total value of wildfire claims must be determined for PG&E to come up with a viable plan for the utility to emerge from bankruptcy but they jostled over the procedure.

PG&E argued U.S. Bankruptcy Judge Dennis Montali, together with a district judge, should manage the estimation proceedings, which would also determine liability. A district judge has to be involved to estimate the value of personal injury claims, according to bankruptcy code.

But that may mean U.S. District Judge William Alsup of San Francisco having the final say in a variety of matters with billions of dollars on the line.

"Dear God, let it be Judge Alsup," said Amanda L. Riddle, representing two of the lead plaintiffs in the Tubbs fire trial, which is currently paused in San Francisco County Superior Court.

Alsup oversees PG&E's criminal probation stemming from the 2010 San Bruno pipeline explosion. He has taken a keen interest in exercising his powers to prepare the utility for the upcoming wildfire season, criticizing the utility at several points.

"I just don't think PG&E has put safety first," Alsup said at a May hearing. "The ads all say it does, but if you look at the record, PG&E has allowed things to slide on the safety front, particularly on the fire part and cutting and trimming those trees."

Montali has not yet decided how to approach the estimation proceedings. While PG&E wants him to team up with a district judge, the committee representing wildfire victims prefers a San Francisco County Superior Court jury to determine liability and damages over the Tubbs Fire.

If PG&E gets its way, Alsup may be the most reasonable choice to assist, according to some legal experts.

USC Gould School of Law bankruptcy professor Robert Rasmussen said Alsup may be the most reasonable choice.

"Usually, when a case is related, it's often given to the judge who has the related case," he said.

While it depends on how the Northern District typically handles case referrals, Rasmussen added that is "normally how it happens."

New York University School of Law professor Arthur R. Miller, who specializes in federal civil procedure, agreed. "That's a fairly standard procedure," he said.

"I don't see what the problem would be, particularly because it would be efficient for him to handle a bankruptcy claim in conjunction with an ongoing possible criminal matter relating to the bankruptcy," Miller added.

While PG&E could argue that Alsup should recuse himself because he is biased due to his handling of the utility's probation, Miller said it would be a "high bar to satisfy" because the decision is largely "discretionary."

"The fact that he has been critical doesn't rise to that," he said.

Relating to PG&E's alleged negligence over its equipment involving multiple fires, Mark Filip, the court-appointed monitor in PG&E's probation, reported Wednesday that the utility has failed in identifying and trimming thousands of trees near power lines that pose a wildfire risk.

The monitor also described shortcomings in training and record-keeping.

"Thus, not only is PG&E falling short of its [vegetation management goals] for the year, but the quality of the completed work is questionable."

Alsup ordered PG&E to respond to the report by Sept. 3 and set a hearing for Sept. 17.