As wildfires rage, PG&E bankruptcy inches toward end

SAN FRANCISCO -- The federal judge overseeing proceedings to estimate the Pacific Gas & Electric Corp.'s liability for historically destructive wildfires the last two years suggested Monday that both sides abandon finalizing a questionnaire designed to inform his damages calculation.

As the deadline for PG&E to emerge from bankruptcy creeps closer, U.S. District Judge James Donato said he would prefer a "simpler" alternative because the form will be too "intimidating and confusing" to wildfire victims.

PG&E should instead provide damages alleged by wildfire victims in proof of claims forms for estimation determinations, he continued.

In a process unique to bankruptcy court, Donato will estimate the value of allegations for property, personal injury, wrongful death and punitive damages caused by PG&E.

After Donato scolded PG&E last week for failing to provide sufficient notice and avenues for people to file claims, the utility agreed to extend the bar date to submit claims for wildfire damages from Oct. 21 to Dec. 21. The forms have information from victims on how much money they are owed and why.

Kevin Orsini, representing the utility, said the response rate increased to roughly 70% after initially indicating it was 40% to 50%. Donato said "it's realistic in a case like this" to "be able to do 90% or better."

While the committee representing wildfire victims agreed with Donato's proposal, PG&E attorney Timothy Cameron urged the judge to give both sides 24 hours to submit a workable questionnaire.

The proof of claims form is not sufficient because it does not indicate the types of damages alleged, according to Cameron. Several claimants did not elaborate or justify claims for emotional distress, he continued.

"We're trying to understand what's behind those numbers," he said. "It's a chance for claimants to give us more information on what happened to them in these wildfires that will help us estimate losses."

Kimberly Morris, representing wildfire claimants, agreed with Donato that both sides should drop the questionnaire given they are "miles apart on portions of the process." She noted PG&E's position that the form can be used as a basis of subsequent litigation that compromise is untenable.

Donato said consideration of the questionnaires will be limited to estimation proceedings.

"It isn't not going to be used as a sword against people filling it out," he said. "This isn't a confession."

With an eye toward the June 2020 deadline for PG&E to confirm a plan of reorganization, Donato said he urgently needs data on how to extrapolate total wildfire damages from representative samples.

"I need a statistically significant number of people to respond," he said. "The way the form currently stands, you're going to get zero."

Donato continued both sides should stop wasting time by squabbling over issues that can be reconsidered later.

"We're all moving together in a fast car," he said. "You have to make a call."

Estimation proceedings are scheduled to begin Feb. 18. In re PG&E Corporation and Pacific Gas and Electric Company, 19-CV05257 (N.D. Cal., filed Aug. 22, 2019).

Responding to questions over how the Kincade fire may impact estimation, both sides said they were not prepared to assert their positions. Morris said she has already received claims over damages caused by the blaze while Orsini argued its cause is still being investigated.

The fire has scorched 66,000 acres and destroyed 96 structures, including 49 homes, and threatens 80,000 more, according to state officials.

PG&E reported to state regulators that a broken jumper cable of a transmission line malfunctioned near the Kincade's fire origin point.

A finding the utility caused the wildfire would be a devastating blow to a utility entrenched in chapter 11 reorganization proceedings and criminal probation. The judges handling both matters have the power to appoint a trustee to run PG&E if it is found liable for another blaze, according to USC School of Law Professor Robert Rasmussen.