Government Wildfire Claims Against PG&E Won’t Be Estimated

Flames consume a Kentucky Fried Chicken as the Camp Fire tears through Paradise, Calif., on Nov. 8, 2018. Tens of thousands of people fled the fast-moving wildfire in Northern California, some clutching babies and pets as they abandoned vehicles and struck out on foot ahead of the flames that destroyed much of the town. (AP Photo/Noah Berger)

SAN FRANCISCO (CN) – Demands that Pacific Gas and Electric pay government agencies for emergency response and other wildfire-related costs won’t be lumped into the same estimation process required for other wildfire claims, a federal judge said in court Tuesday.

U.S. Bankruptcy Judge Dennis Montali rejected PG&E’s assertions that state and federal agencies’ claims are “unliquidated” and therefore subject to estimation under bankruptcy court rules.

“You can say you owe them nothing, but that’s disputed, not liquidated,” Montali said.

Earlier this month, Montali granted PG&E’s motion to use an estimation process to gauge its total liability for 19 separate wildfires allegedly caused by the company’s negligence.

Lawyers representing California and the United States urged Montali to exclude their claims from that process, arguing that because they can calculate their costs no estimation is needed.

A PG&E lawyer said following that logic would enable any person with a claim for damages to sidestep the estimation process.

“That means any wildfire victim could come in and say you owe me $4 billion and that’s liquidated,” PG&E lawyer Stephen Karotkin argued.

Montali disagreed, noting that if the agencies can calculate their wildfire-related costs “down to the penny,” then the claims are liquidated.

Six state agencies demand payments from PG&E for property damage and emergency response costs: the Department of Forestry and Fire Prevention, or Cal Fire; the Department of Toxic Substances Control; the Governor’s Office of Emergency Services; the Department of Veterans Affairs; California State University; and the Department of Parks and Recreation.

Federal agencies seeking to recoup costs from PG&E include the U.S. Department of Agriculture, Department of the Interior and Federal Emergency Management Agency.

The state and federal agencies did not specify how much money they want from PG&E. The deadline to file wildfire-related claims is Oct. 24.

PG&E lawyers also said Tuesday they are cooperating to ensure a state court jury trial on the company’s liability for the 2017 Tubbs Fire will start by mid-January. PG&E wants the trial to be held in Sonoma County instead of San Francisco, a move opposed by fire victims.

A hearing in the state court case is scheduled for Sept. 16 in San Francisco, according to fire victims’ attorney Frank Pitre.

Additionally, PG&E lawyers told Montali the company is on track to submit its Chapter 11 reorganization plan by Sept. 9. Montali scheduled a Sept. 24 hearing to discuss the plan.

PG&E declared bankruptcy this past January as it faced a potential $30 billion in liability for wildfires allegedly caused by its equipment and failure to maintain vegetation around power lines.

Last week, the U.S. District Court for the Northern District of California accepted Montali’s recommendation that a federal judge handles the estimation process for wildfire victims’ claims. The case was assigned to U.S. District Judge James Donato, who must also decide if personal injury and wrongful death claims can include damages due to emotional distress.

 

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