In re PG&E Corporation and Pacific Gas and Electric Company
- James Donato
- 3:19-cv-05257
- U.S. District Court · Northern District of California
- 4
In re PG&E Corporation: Judge Donato terminated estimation proceedings because a settlement liquidated the claims.
PG&E Corporation, Pacific Gas and Electric Company, the fire victims whose claims were included in the settlement, and other parties with claims potentially subject to estimation.
What happened
In In re PG&E Corporation and Pacific Gas and Electric Company, the court was estimating the value of claims arising from wildfires in Northern California in 2015, 2017, and 2018. The claims included wrongful death, personal injury, property damage, emotional distress, and punitive damages.
PG&E and the Official Committee of Tort Claimants agreed to create a $13.5 billion trust for the claims and assign certain legal claims to the trust. Because the settlement gave the claims a concrete value, the parties agreed that the estimation proceedings were no longer needed. PG&E later asked the court to adopt the $13.5 billion amount for all purposes, but withdrew that request after the court questioned whether the estimation process was the proper place to review the settlement amount.
Judge Donato concluded that the settlement had liquidated the claims submitted for estimation, terminated the estimation proceedings, and closed the proceeding. The order did not itself review or approve the settlement amount; the court stated that responsibility belonged to the bankruptcy court, which had approved the settlement.
The detailed version
- In re PG&E Corporation and Pacific Gas and Electric Company · No. 3:19-cv-05257
- James Donato
- June 9, 2020
Background
The court had been asked to estimate unliquidated claims against PG&E under 11 U.S.C. § 502(c). That provision allows a bankruptcy court or district court to estimate the probable value of uncertain claims when determining them through ordinary litigation and trial would unduly delay the bankruptcy case. The claims arose from Northern California wildfires in 2015, 2017, and 2018, and included claims for wrongful death, personal injury, property damage, emotional distress, and punitive damages.
The court had planned an expedited estimation process and held a two-week evidentiary hearing in February 2020. During the proceedings, the parties discussed using PG&E's settlements from earlier fires and other disasters as benchmarks for valuing the current claims.
Settlement and Subsequent Motion
In December 2019, PG&E and the Official Committee of Tort Claimants, which represented the fire victims in the bankruptcy proceedings, jointly reported that they had reached a settlement resolving all individual fire claims at issue. The agreement provided for a $13.5 billion trust and the assignment of certain causes of action to the trust. The bankruptcy court approved the settlement on December 19, 2019.
Because the settlement supplied a specific valuation for the claims, PG&E and the committee agreed that the estimation proceedings should end. The court adjourned the scheduled hearing. In March 2020, however, PG&E moved for an order adopting $13.5 billion as the estimated amount of the fire-victim claims for all purposes in the bankruptcy. The motion drew responses concerning, among other things, the trust's proposed stock funding and claims that some parties believed fell outside the settlement. PG&E later withdrew the motion.
Court's Ruling
The court concluded that the settlement had effectively liquidated the claims withdrawn for estimation, eliminating the need for further estimation work. It explained that the estimation proceeding was not a forum to review or approve the settlement amount; that task was reserved for the bankruptcy court. The court had also asked the parties to identify any contingent or unliquidated claims still requiring estimation, and no party indicated that additional estimation was needed.
Judge James Donato therefore terminated the estimation proceedings and stated that the proceeding was closed. The order did not make a separate valuation determination under the estimation statute and did not alter the bankruptcy court's approval of the settlement.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.