PG&E wildfire victims sue former management for neglect

A trust representing more than 80,000 victims of deadly wildfires ignited by Pacific Gas & Electric’s rickety electrical grid is suing nearly two dozen of the utility’s former executives and board members for alleged dereliction of their duty to ensure the equipment wouldn’t kill people.

The complaint filed Wednesday in San Francisco County Superior Court is an offshoot of a $13.5-billion settlement that PG&E reached with the wildfire victims while the utility was mired in bankruptcy from January 2019 through June 2020.

As part of that deal, PG&E granted the victims the right to go after the utility’s hierarchy leading up to and during a series of wind-driven wildfires that killed more than 100 people and destroyed more than 25,000 homes and businesses in Northern California in 2017 and 2018.

John Trotter, the trustee overseeing the settlement, is now following through with an action that targets a litany of former executives and board members.

The list includes two of PG&E’s former chief executives, Anthony F. Earley Jr. and Geisha Williams, who were paid millions of dollars during their reigns. The company is now being run by a former Michigan utility executive, Patricia K. Poppe, with a board of directors that was overhauled during PG&E’s bankruptcy case.

PG&E acknowledged the lawsuit without commenting directly on the allegations. “We remain focused on reducing wildfire risk across our service area and making our electric system more resilient to the climate-driven challenges we all face in California,” the company said in a statement.

The wildfire victims’ lawsuit is seeking to tap into the $200 million to $400 million in liability insurance that PG&E secured for the former executives and board members, said Frank Pitre, the lawyer handling the case. He told the Associated Press that he hopes to resolve the lawsuit within the next year to help wildfire victims still struggling to rebuild their lives.

If the lawsuit is successful, it could help make up for a roughly $1-billion shortfall that the wildfire victims’ trust faces because half of the promised settlement consisted of PG&E stock that is worth less than hoped for when the deal was struck toward the end of 2019.

Trotter acknowledged the problem in a Jan. 26 letter to the wildfire victims — many of whom had balked at a settlement that required half of the promised $13.5 billion to come in stock in a company with a history of negligence.

But none of the PG&E shares have been been sold by the trust so far, leaving time for the stock to rebound.

PG&E’s stock price rose 18 cents, or 1.6%, to $11.41 on Wednesday. The shares have ranged from a low of $3.55 to $25.19 during the last two tumultuous years.

The complaint against PG&E’s former executives and board members seeks to tie them to acts for which the utility has already accepted responsibility.

That includes the company pleading guilty to 84 felony counts of involuntary manslaughter for causing a 2018 wildfire that wiped out the town of Paradise, Calif., along with the surrounding area. PG&E was fined $4 million in that case, the maximum penalty allowed.

“If there was ever a corporation that deserved to go to prison, it’s PG&E,” Butte County Judge Michael Deems said at the time of the utility’s sentencing eight months ago.

Deems’ condemnation is included in the wildfire victims’ lawsuit as well as scorching criticism from U.S. District Judge William Alsup, who is overseeing PG&E’s probation in another criminal case stemming from the utility’s neglect of natural gas lines that blew up an entire neighborhood in a San Francisco Bay Area suburb in 2010.

Alsup has repeatedly ripped PG&E for not doing more to maintain its power lines in recent years, including during a court hearing this month cited in the victims’ lawsuit.

“PG&E has been a terror, T-E-R-R-O-R, to the people of California,” Alsup said during the Feb. 3 hearing.

Pitre said it’s time to hold people hired to manage and oversee the company responsible for PG&E’s recklessness. “We are talking about a massive dereliction of duty.”