Wildfire victims, insurers ask PG&E bankruptcy judge for a trial on disputed cause of the Tubbs fire

Lawyers representing wildfire victims and insurance companies in the PG&E bankruptcy case have asked a federal judge to allow a trial over the cause of the Tubbs fire, the most destructive blaze of 2017 and one of the few catastrophic infernos from October of that year that investigators said wasn’t caused by the utility’s electrical equipment.

In court filings this week, lawyers called the Cal Fire investigation “flawed” and requested the bankruptcy judge overseeing PG&E’s reorganization allow a California jury to decide whether the utility is responsible for the Tubbs fire. The fire ignited near Calistoga and burned west across the Mayacamas Mountains, killing 22 people and destroying more than 5,600 structures, including 4,651 homes, most of them in Santa Rosa’s Fountaingrove and Coffey Park neighborhoods.

The legal maneuver is aimed at ensuring homeowners, insurers and others with losses from the Tubbs fire don’t get short shrift when it comes to payouts. The filings signaled a trial would focus on allegations PG&E failed to take safety precautions during times of high fire danger and advance an opposing theory about how the Tubbs fire started.

“PG&E has denied liability and denies that it was responsible for the Tubbs fire,” Robert Julian, an attorney representing a committee of wildfire victims in the bankruptcy case, said in an interview. “In our view, there should be a jury trial to determine whether PG&E caused or contributed to the fire in order to permit the parties to create a plan of reorganization in the case.”

The motion would require U.S. Bankruptcy Judge Dennis Montali to lift a stay, issued after PG&E filed for bankruptcy protection in January, that put all civil cases against the utility on hold. The motions are scheduled to be discussed July 24 in U.S. Bankruptcy Court in San Francisco.

A PG&E spokesman said the company is reviewing the motion “and will respond before the due date set by the court.”

“We remain focused on supporting our customers and communities impacted by wildfires and helping them recover and rebuild,” PG&E spokesman Paul Doherty said. “The Chapter 11 process will support the orderly, fair and expeditious resolution of PG&E’s potential liabilities resulting from wildfires. There is a stay against all pending lawsuits and the institution of new lawsuits.”

The request comes as negotiations over compensation for those with losses from wildfires sparked by PG&E electricity are gaining momentum. The process is under added pressure from Gov. Gavin Newsom, who proposed a plan to create a fund to pay for future wildfire costs that hinges on the investor-owned utility’s ability to exit bankruptcy protection by the middle of next year.

PG&E is facing about $30 billion in claims from victims of wildfires in 2018 and 2017, by some estimates. Lawyers representing wildfire victims have suggested the amount might be nearly double that figure after calculating uninsured losses, court documents state.

Last month, PG&E reached a tentative agreement to pay $415 million to about dozen North Bay governments and public agencies with wildfire losses from 2017, including costs incurred in Sonoma County from the Tubbs fire. That agreement, which must be approved by the bankruptcy judge, was part of a larger $1 billion proposal to settle local government claims against PG&E from the past two years of wildfires and help compensate for costs to taxpayers from the disasters.

Other groups, including people who lost homes and property insurance companies, have not yet reached agreements with PG&E. According to the motion seeking a trial on the Tubbs fire cause, those negotiations cannot be resolved for any of the fires until the debate over the utility’s degree of responsibility for the fire is resolved.

“PG&E intends to pay nothing to the Tubbs fire victims unless ‘PG&E were to be found liable’ by an adverse jury trial verdict,” according to court files.

Cal Fire investigators determined PG&E electrical equipment started the majority of nearly two dozen major wildfires that burned in 2017 and 2018 - including last year’s Camp fire in Butte County that killed 85 people and destroyed most of Paradise and other communities in the Sierra foothills east of Chico.

Cal Fire’s investigation into the cause of the Tubbs fire took 16 months, yielding an 80-page summary report released in January that focused as much on what didn’t cause the fire as what did. Officials noted the fire destroyed key pieces of electrical equipment at the fire’s suspected origin on a 10-acre property off Bennett Lane north of Calistoga.

The lead investigator concluded in his report that he had “eliminated all other causes for the Tubbs fire, with the exception of an electrical caused fire originating from an unknown event affecting privately owned conductor or equipment.”

The privately owned and maintained electric equipment sat on a 10-acre property off Bennett Lane north of Calistoga. The landowner, Ann Zink, who is in her 90s, has relocated to Riverside and has said previously that the property was unoccupied at the time of the fire.

Cal Fire’s report has been hotly criticized, mainly by local wildfire victims and their lawyers. Roy Miller, an attorney who lost his Wikiup home in the Tubbs fire, called the Cal Fire report “garbage” and said he believes they can prove investigators failed to vet all of the evidence about what might have started the fire.

Miller said he believes PG&E intends to offer discounted compensation to Tubbs fire victims and that is what they are trying to avoid.

“The Cal Fire report is meaningless,” Miller said. “We want that evidentiary hearing to prove the Tubbs fire is just as much the fault of PG&E as any other fire. We’re asking the judge to allow us to be able to do that.”

Cal Fire’s investigative report cannot be introduced as evidence in a federal or state court case, although lawyers can call fire investigators to testify about their investigation and findings.

Insurers said they would present evidence that Cal Fire’s investigators missed and ignored key evidence that contradicts their conclusion.

One alternative theory about how the Tubbs fire started focuses on surveillance video from a Bennett Lane winery that shows a flash of light in a different direction from the private property Cal Fire identified as the origin site and at an earlier time, according to court filings from homeowner insurance companies.

The bright flash of light, filmed about 9:20 p.m. on Oct. 8, 2017, “could only have been caused by a high-voltage electrical event on PG&E’s distribution system - precisely the kind of electrical event that is known to start fires,” the filings state.

“As will be shown at trial, however, Cal Fire got it wrong,” the filing states. “There is substantial evidence establishing that PG&E equipment caused the Tubbs fire, which the Cal Fire report inexplicably ignored.”

You can reach Staff Writer Julie Johnson at 707-521-5220 or julie.johnson@pressdemocrat.com. On Twitter @jjpressdem.