PD Editorial: Wildfire victims left waiting as years pass by

The 2017 firestorm started on the night of Oct. 8. That’s 1,309 days ago.

Pacific Gas and Electric Co., whose equipment was identified as the cause of a dozen fires scattered across Northern California that night, settled with individual victims on Dec. 9, 2019 — 517 days ago.

The $13.5 billion settlement also covered from the 2015 Butte fire in Amador County (2,069 days ago) and the 2018 Camp fire in Butte County (913 days ago).

Here in Sonoma County, most of the 5,300 homes burned in the Tubbs and Nuns fires have been rebuilt and families have moved back in. Yet as the days since the disaster keep adding up, most of the victims have yet to see a dime of the settlement money, which is supposed to cover their uninsured losses and losses that exceeded insurance caps.

Survivors from the other fires are waiting, too.

And those who were paid in the first round got 30% of what they were owed.

Meanwhile, the people managing the settlement money are collecting fees of as much as $1,500 an hour. What’s wrong with this picture? What isn’t wrong with this picture?

“It’s very disconcerting, it’s very disappointing,” said Jeff Okrepkie, who lost his Coffey Park home in the Tubbs fire. “A lot of us lost everything.”

KQED reported last week that the 67,000 victims of the various fires received a combined $7 million in 2020, the first year following the settlement.

Meanwhile, a special Fire Victims Trust formed to manage the settlement money collected $51 million for overhead costs and fees. That is, as the KQED report noted, 90% of the money distributed in 2020.

The biggest chunk — $16.3 million — went to fees and expenses for claims processors. The next largest category was “start up costs,” a catchall totaling $12.7 million. Additional seven-figure sums went to fees and expenses for lawyers, financial professional and claims administration.

A federal bankruptcy judge handling PG&E’s reorganization raised concerns about overhead expenses from the trust account a year ago, but lawyers representing some of the fire victims said the amounts, though large, aren’t unreasonable.

Roy Miller, a Santa Rosa attorney representing victims, says payouts to victims have accelerated in 2021, with $195 million distributed to 9,000 people during the first four months of the year. However, that’s still less than 2% of the $13.5 billion settlement.

There are legitimate upfront and administrative costs to distributing the settlement money. Among other things, thousands of claims must be verified and valued. The chief administrator of the effort — a retired judge who is getting paid $1,500 an hour for his work — says his goal is to keep the total administration costs at or below 1% of the settlement.

But victims are left waiting, in some cases for years, to collect pennies on the dollar, while administrators are paid right away and in full. It isn’t easy for victims to keep track of those costs; KQED sifted through federal bankruptcy court filings, court transcripts and correspondence between trust staff and victims for its report.

Perhaps the clock would run faster in mega-lawsuits like this one if the administrators’ fees were held in an escrow account until after the victims got paid.

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