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WEIL, GOTSHAL & MANGES LLP

Stephen Karotkin (pro hac vice) 

(stephen.karotkin@weil.com) 

Ray C. Schrock, P.C. (pro hac vice) 

(ray.schrock@weil.com) 

Jessica Liou (pro hac vice) 

(jessica.liou@weil.com) 

767 Fifth Avenue 

New York, NY 10153-0119 

Tel: 212 310 8000 

Fax: 212 310 8007 

KELLER & BENVENUTTI LLP 

Tobias S. Keller (#151445) 

(tkeller@kellerbenvenutti.com) 

Peter J. Benvenutti (#60566) 

(pbenvenutti@kellerbenvenutti.com) 

Jane Kim (#298192) 

(jkim@kellerbenvenutti.com) 

650 California Street, Suite 1900 

San Francisco, CA 94108 

Tel: 415 496 6723 

Fax: 650 636 9251 

Attorneys for Debtors and Debtors in Possession

CRAVATH, SWAINE & MOORE LLP

Paul H. Zumbro (pro hac vice) 

(pzumbro@cravath.com) 

Kevin J. Orsini (pro hac vice) 

(korsini@cravath.com) 

Omid H. Nasab (pro hac vice) 

(onasab@cravath.com) 

825 Eighth Avenue 

New York, NY 10019

Tel: 212 474 1000 

Fax: 212 474 3700 

UNITED STATES BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

In re: 

PG&E CORPORATION,

 - and - 

PACIFIC GAS AND ELECTRIC 

COMPANY,

Case No. 19-30088 (DM)

Chapter 11 

(Lead Case) (Jointly Administered) 

DEBTORS’ OBJECTION TO THE AMENDED 

MOTION OF THE OFFICIAL COMMITTEE 

OF TORT CLAIMANTS FOR RELIEF FROM 

AUTOMATIC STAY TO PERMIT STATE 

COURT JURY TRIAL OF 2017 TUBBS 

WILDFIRE CLAIMS AND THE MOTION OF 

THE AD HOC GROUP OF SUBROGATION 

CLAIM HOLDERS FOR RELIEF FROM THE 

AUTOMATIC STAY 

Related to Dkt. Nos. 2904 and 2863 

Date: July 24, 2019 

Time: 9:30 a.m. 

Place: United States Bankruptcy Court 

 Courtroom 17, 16th Floor 

 San Francisco, CA 94102 

Judge: Hon. Dennis Montali 

Debtors.

 Affects PG&E Corporation 

 Affects Pacific Gas and Electric Company 

 Affects both Debtors 

* All papers shall be filed in the Lead Case, 

No. 19-30088 (DM). 

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PG&E Corporation (“PG&E Corp.”) and Pacific Gas and Electric Company (the “Utility”) 

as debtors and debtors in possession (collectively, the “Debtors”) in the above-captioned chapter 11 

cases (the “Chapter 11 Cases”), hereby submit this objection (the “Objection”) to the Official 

Committee of Tort Claimants’ (the “TCC”) Amended Motion of the Official Committee of Tort 

Claimants for Relief from Automatic Stay to Permit State Court Jury Trial of 2017 Tubbs Wildfire 

Claims, Dkt. No. 2904 (the “TCC Motion”); to the Ad Hoc Group of Subrogation Claim Holders’ 

(the “Subro Group,” and collectively with the TCC, the “Movants”) Motion of the Ad Hoc Group of 

Subrogation Claim Holders for Relief from the Automatic Stay, Dkt. No. 2863 (the “Subro Motion,” 

and collectively with the TCC Motion, the “Lift Stay Motions”); and to joinders in the TCC’s Motion 

from Barbara Thompson and Raymond Breitenstein, Dkt. No. 2861; Michael A. Kelly, as co-lead 

counsel in the Judicial Council Coordination Proceeding, Dkt. No. 2908; John Caslin and Phyllis 

Lowe, Dkt. No. 2929; William Edelen, Burton Fohrman, and the heirs of decedent Monte Kirven, Dkt. 

No. 2930; Don Louis Kamprath, Elizabeth Fourkas, and Greg and Christina Wilson, Dkt. No. 2942; 

Armando A. Berriz, the heirs of Carmen Caldentey Berriz, and the estate of Carmen Caldentey Berriz, 

Dkt. No. 2943; the Joining Subrogation Claim Holders, Dkt. No. 2959; State Farm, Dkt. No. 2983; 

and the SLF Claimants, Dkt. No. 3067. 

Filed contemporaneously herewith in support of the Debtors’ Objection is the Declaration of 

Kevin J. Orsini in Support of Debtors’ Objection to the Amended Motion of the Official Committee of 

Tort Claimants for Relief from Automatic Stay to Permit State Court Jury Trial of 2017 Tubbs Wildfire 

Claims and the Motion of the Ad Hoc Group of Subrogation Claim Holders for Relief from Automatic 

Stay (the “Orsini Declaration”). 

 

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TABLE OF CONTENTS 

Memorandum of Points and Authorities ................................................................................................1 

I. Preliminary Statement ................................................................................................................1 

II. Background ................................................................................................................................3 

III. The Movants Fail to Show Cause to Lift the Automatic Stay ...................................................5 

A. The Tubbs Fire Claims Are Central to These Cases (Factor 2) .....................................7 

B. Lifting the Stay Will Not Result in Complete—or Even Partial—Resolution of 

the “Gating” Tubbs Fire Issue (Factor 1) .......................................................................9 

C. Lifting the Stay Will Result in Significant Prejudice and Will Delay 

Resolution of These Cases (Factors 7, 10, 11 & 12) ...................................................12 

1. Congress Has Already Decided that Bankruptcy Courts Are Best 

Positioned to Oversee Estimation in Cases Involving Thousands of 

Unliquidated Claims ........................................................................................12 

2. Lifting the Stay and Awaiting the Outcome of a State Court Trial 

Significantly Increases the Risk that the Debtors Miss the June 30, 

2020, Deadline .................................................................................................15 

3. The Movants Will Not Be Prejudiced by Remaining Before This Court 

and Participating in the Mandatory Estimation Process ..................................18 

IV. The Movants’ Arguments About Estimation and Personal Injury Claims Are Red 

Herrings and Do Not Provide Cause to Lift the Stay ...............................................................21 

V. Conclusion ...............................................................................................................................23 

 

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TABLE OF AUTHORITIES 

 Page(s) 

Cases 

In re Adelphia Commc’ns Corp., 

368 B.R. 140 (Bankr. S.D.N.Y. 2007) ...........................................................................................19 

In re Aquaslide ‘N’ Dive Corp., 

85 B.R. 545 (B.A.P. 9th Cir. 1987)................................................................................................13 

In re Armstrong World Indus., Inc., 

348 B.R. 111 (D. Del. 2006) ..........................................................................................................22 

In re Associated Vintage Grp., Inc., 

283 B.R. 549 (B.A.P. 9th Cir. 2002)..............................................................................................11 

In re Atron Inc. of Michigan, 

172 B.R. 541 (Bankr. W.D. Mich. 1994) .......................................................................................22 

Bertholet v. Harman, 

26 B.R. 413 (Bankr. D.N.H. 1991) ................................................................................................22 

In re Bicoastal Corp., 

122 B.R. 771 (Bankr. M.D. Fla. 1990) ..........................................................................................21 

Bittner v. Borne Chem. Co., 

691 F.2d 134 (3d Cir. 1982).....................................................................................................18, 19 

In re Brotman Med. Ctr., Inc., 

No. BAP.CC-08-1056-DKMO, 2008 WL 8444797 (B.A.P. 9th Cir. Aug. 15, 2008).....5, 6, 16, 20 

Celotex Corp. v. Edwards, 

514 U.S. 300 (1995) .........................................................................................................................2 

In re Chateaugay Corp., 

111 B.R. 67 (Bankr. S.D.N.Y. 1990) .............................................................................................13 

Collins v. D.R. Horton, Inc., 

505 F.3d 874 (9th Cir. 2007) ...........................................................................................................9 

In re Conejo Enterprises, Inc., 

96 F.3d 346 (9th Cir. 1996) .................................................................................................5, 11, 20 

In re Curtis, 

40 B.R. 795 (Bankr. D. Utah 1984) ....................................................................................... passim

In re Dow Corning Corp., 

211 B.R. 545 (Bankr. E.D. Mich. 1997) ................................................................................ passim

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In re Eagle-Picher Indus., 

189 B.R 681 (S.D. Ohio 1995). .....................................................................................................22 

In re Fed.-Mogul Glob., Inc., 

330 B.R. 133 (D. Del. 2005) ..............................................................................................12, 21, 22 

Matter of Ford, 

967 F.2d 1047 (5th Cir. 1992) .......................................................................................................12 

In re G-I Holdings, Inc., 

323 B.R. 583 (Bankr. D.N.J. 2005) .........................................................................................13, 22 

In re Garlock Sealing Techs., 

504 B.R 71 (W.D. North Carolina 2014). ......................................................................................22 

In re Gasprom, Inc., 

500 B.R. 598 (B.A.P. 9th Cir. 2013)................................................................................................1 

In re Gawker Media LLC, 

571 B.R. 612 (Bankr. S.D.N.Y. 2017) ...........................................................................................22 

Matter of Interco, Inc., 

135 B.R. 359 (Bankr. E.D. Mo. 1991) ...........................................................................................23 

In re Ionosphere Clubs, Inc., 

922 F.2d 984 (2d Cir. 1990).............................................................................................................2 

In re Mac Donald, 

755 F.2d 715 (9th Cir. 1985) ...........................................................................................................5 

Mackey v. Montrym, 

443 U.S. 1 (1979) ...........................................................................................................................18 

Midlantic Nat. Bank v. New Jersey Dep’t of Envtl. Prot., 

474 U.S. 494 (1986) .........................................................................................................................5 

Morris v. McCauley’s Quality Transmission Serv., 

60 Cal. App. 3d 964 (1976) ...........................................................................................................10 

In re N. Am. Health Care, Inc., 

544 B.R. 684 (Bankr. C.D. Cal. 2016) .................................................................................2, 12, 13 

Owens Corning v. Credit Suisse First Bos., 

322 B.R. 719 (D. Del. 2005) ..............................................................................................13, 19, 21 

In re Pacific Gas & Electric Co., 

279 B.R. 561 (Bankr. N.D. Cal. 2002) ............................................................................................8 

Pacor, Inc. v. Higgins, 

743 F.2d 984 (3d Cir. 1984).............................................................................................................2 

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Parklane Hosiery Co. v. Shore, 

439 U.S. 322 (1979) .........................................................................................................................9 

In re Plumberex Specialty Products, Inc., 

311 B.R. 551 (Bankr. C.D. Cal. 2004) .............................................................................................6 

In re Roman Catholic Archbishop of Portland in Oregon, 

338 B.R. 414 (Bankr. D. Or. 2006) ................................................................................................14 

In re Roman Catholic Bishop of San Diego, 

374 B.R. 756 (Bankr. S.D. Cal. 2007) ...........................................................................................14 

Siewert v. Christy (In re Finley, Kumble, Wagner, Heine, Underberg, Manley, Myerson, & Casey), 

194 B.R. 728 (S.D.N.Y. 1995) .......................................................................................................22 

In re Specialty Prod. Holding Corp., 

No. BR 10-11779-JKF, 2013 WL 2177694 (Bankr. D. Del. May 20, 2013) ................................13 

United States v. Whiting Pools, Inc., 

462 U.S. 198 (1983) .........................................................................................................................2 

Statutes 

11 U.S.C. § 105 ................................................................................................................................5, 19 

11 U.S.C. § 362 ......................................................................................................................................6 

11 U.S.C. § 363 ....................................................................................................................................19 

11 U.S.C. § 502 ..........................................................................................................................2, 13, 18 

11 U.S.C. § 503 ....................................................................................................................................19 

11 U.S.C. § 522 ......................................................................................................................................6 

11 U.S.C. § 1109 ....................................................................................................................2, 8, 19, 22 

11 U.S.C. § 1121 ..................................................................................................................................20 

28 U.S.C. § 157 ..............................................................................................................................12, 22 

Public Utility Code § 2106 ....................................................................................................................4 

Health and Safety Code § 13007 ...........................................................................................................4 

Other Authorities 

U.S. Const. amend. VII ........................................................................................................................21 

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MEMORANDUM OF POINTS AND AUTHORITIES 

I. PRELIMINARY STATEMENT 

As the Court knows, the determination of the value of the wildfire claims asserted against the 

Debtors goes to the core of the Debtors’ reorganization and chapter 11 plan process and is vital to the 

Debtors’ successful emergence from chapter 11. On this core issue, the Tubbs Fire was the largest of 

the 2017 wildfires, destroying over 5,000 homes and resulting in insurance payouts estimated to 

exceed $5 billion. In fact, the damages attributable to the Tubbs Fire could exceed 2/3 of the total 

damages for the 2017 wildfires. Notably, the evidence demonstrates that the Debtors did not cause 

the Tubbs Fire: two separate investigatory teams from the California Department of Forestry and Fire 

Protection (“Cal Fire”) have ruled out PG&E equipment as a potential cause. 

Given the significance of the Tubbs Fire claims, both the TCC and the Subro Group concede 

that addressing the issue of Tubbs Fire causation is a “gating issue.” For its part, the TCC describes 

the question of Tubbs causation as an issue that needs to be addressed “to negotiate or confirm a plan.” 

See TCC Mot. at 15. The Subro Group similarly describes the Tubbs Fire as a “central issue in 

structuring a plan of reorganization.” See Subro Mot. at 2. The Debtors, of course, agree with a simple 

point: there is no single issue that is more central to the resolution of these cases and the Debtors’ 

ability to emerge by June 30, 2020, than estimating the potential liability the Debtors might have for 

the thousands of unliquidated Tubbs Fire claims. Where the Debtors cannot agree with the TCC and 

the Subro Group is with respect to their suggestion that this Court should send this “gating issue,” 

which is critical to the ability of all stakeholders to “negotiate and confirm” a plan of reorganization, 

back to the prepetition landscape of state court litigation, thereby relegating this Court to the status of 

a mere spectator to the central issue in these Chapter 11 Cases. Taking control of this key issue away 

from this Court would cause severe prejudice both to the Debtors and to the interests of other creditors, 

and should not be countenanced by this Court. 

Congress designed the automatic stay to effectuate the twin goals of providing a debtor “respite 

from any creditor efforts to enforce rights against the debtor and its property” while “protect[ing] the 

creditors from each other” by “prevent[ing] the creditors from racing to be the first to claim the 

debtor’s limited assets.” In re Gasprom, Inc., 500 B.R. 598, 606 (B.A.P. 9th Cir. 2013). Racing back 

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to the state court (if the state court would even allow what the TCC proposes), as the TCC requests 

this Court to allow, would be directly contrary to this core Bankruptcy Code principle. Just as the 

automatic stay puts an end to the scrum of litigation preceding a debtor’s descent into bankruptcy, the 

Bankruptcy Code’s comprehensive process for the administration and equitable resolution of claims 

is designed to impose order on what was once chaos. And when there are so many unliquidated claims 

pending against a debtor that no court could possibly address them within a time frame that allows the 

debtor to timely emerge from chapter 11 so it can continue “to provide jobs, to satisfy creditors’ claims, 

and to produce a return for its owners,” United States v. Whiting Pools, Inc., 462 U.S. 198, 203 (1983), 

Congress has also decided to emphasize “the overarching goal of avoiding undue delay in a case’s 

administration.” In re N. Am. Health Care, Inc., 544 B.R. 684, 689 (Bankr. C.D. Cal. 2016). 

Efficiency—and procedural fairness to all parties in interest through the ability to participate—is key, 

and section 502(c) of the Bankruptcy Code embodies that policy by providing that such claims “shall” 

be estimated if doing otherwise would “unduly delay the administration of the case.” 11 U.S.C. 

§ 502(c). Estimation procedures such as those that have now been proposed by the Debtors (Dkt. No. 

3091) are the answer here, not lifting the stay. 

Estimation of the value of unliquidated tort claims—including through a determination by the 

Bankruptcy Court of the claimants’ likelihood of success—is a common feature of mass tort 

bankruptcies. The potential uncertainties of estimation are mitigated by the Bankruptcy Code’s broad 

inclusivity, under which anyone with a claim against, or an interest in, the estate has a right to be heard. 

See 11 U.S.C. § 1109. The Bankruptcy Code “centralize[s] all disputes concerning property of the 

debtor’s estate in the bankruptcy court so that reorganization can proceed efficiently, unimpeded by 

uncoordinated proceedings in other arenas.” In re Ionosphere Clubs, Inc., 922 F.2d 984, 989 (2d Cir. 

1990). And at the heart of this centralized activity is the Bankruptcy Court, with “comprehensive 

jurisdiction” to “deal efficiently and expeditiously with all matters connected with the bankruptcy 

estate.” Celotex Corp. v. Edwards, 514 U.S. 300, 308 (1995) (quoting Pacor, Inc. v. Higgins, 743 F.2d 

984, 994 (3d Cir. 1984)). The system designed by Congress is predictable, it is efficient, and, most 

importantly, it works. 

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The TCC dedicates most of its motion to setting up an estimation strawman and knocking it 

down, arguing for pages that there are certain purposes for which estimation is not appropriate. As set 

forth briefly below and in more detail in the Debtors’ Estimation Motion, estimation is not only 

permissible in these cases, it is necessary. The only question presented to the Court on the Lift Stay 

Motions is whether the Court should simultaneously lift the stay and allow a cherry-picked, 

unrepresentative set of claimants to liquidate their own claims in state court. The Debtors submit that 

the answer to this question is no. The approach advocated by the TCC and Subro Group would lead 

to a jury trial on an uncertain timeline, necessarily exclude entire categories of stakeholders in these 

cases from proceedings concerning this core valuation issue, and lead to a result that would only be 

binding on any parties after years of appeals. It would also require the resolution of critical legal issues 

concerning claims relating to the Tubbs Fire that are unambiguously—and appropriately—within this 

Court’s core jurisdiction. At the end of all this, estimation would still be necessary and there would 

remain thousands of other unliquidated Tubbs Fire claims. 

II. BACKGROUND 

Beginning on October 8 and 9, 2017, multiple wildfires spread through Northern California, 

including the counties of Napa, Sonoma, Butte, Humboldt, Mendocino, Lake, Nevada, and Yuba 

(collectively the “North Bay Fires”). According to a report issued by Cal Fire on October 30, 2017, 

the North Bay Fires consisted of 21 major fires that burned over 245,000 acres, destroyed an estimated 

8,900 structures, and resulted in 44 fatalities.1 See Am. Decl. of Jason P. Wells in Support of the First 

Day Motions and Related Relief, at 13–14, Dkt. No. 263 (the “Wells Declaration”). 

The most destructive of the North Bay Fires was the Tubbs Fire, which began in the area of 

Highway 128 and Bennett Lane in Calistoga. The Tubbs Fire accounts for the largest number of 

potential claims against the Debtors stemming from the North Bay Fires, including the majority of 

structures destroyed or damaged in the North Bay Fires. According to a report issued by Cal Fire on 

January 20, 2019, the Tubbs Fire burned 36,807 acres in both Napa and Sonoma Counties, destroyed 

5,636 structures, damaged an additional 317 structures, and resulted in 22 fatalities. See Orsini Decl. 

 

1

 An additional fire, the Maacama fire, was not initially separately reported by Cal Fire. 

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¶ 3, Dkt. No. 3092. By contrast, all of the other North Bay Fires combined resulted in the same number 

of fatalities, destroyed 2,597 structures, and damaged an additional 1,026 structures. Id. On January 

20, 2019, Cal Fire issued an investigative report that ruled out PG&E equipment as the cause of the 

Tubbs Fire.2 This is the only significant North Bay Fire that Cal Fire concluded was started by 

someone other than PG&E, and it is also the only fire for which Cal Fire assigned two separate 

investigative teams before releasing its investigative report. 

As of January 29, 2019 (the “Petition Date”), PG&E was aware of approximately 700 

complaints on behalf of at least 3,600 plaintiffs related to the North Bay Fires, five of which sought to 

be certified as class actions. See Wells Decl. at 15. Plaintiffs brought claims against PG&E with 

respect to 22 separate fires: (1) Adobe; (2) Atlas; (3) Blue; (4) Cascade; (5) Cherokee; (6) Highway 

37; (7) Honey; (8) La Porte; (9) Lobo; (10) Maacama; (11) McCourtney; (12) Norrbom; (13) Nuns; 

(14) Oakmont/Pythian; (15) Partrick; (16) Pocket; (17) Point; (18) Potter/Redwood; (19) Pressley; 

(20) Sullivan; (21) Sulphur; and (22) Tubbs.3 The cases arising from the North Bay Fires were 

coordinated for pre-trial purposes (the “Coordinated Proceeding”) in the San Francisco County 

Superior Court (the “Superior Court”). Id. For each of these fires, claimants allege causes of action 

that include inverse condemnation, negligence (causing bodily harm, loss of profits or income, and 

property damage), private nuisance, public nuisance, premises liability, trespass, violation of Public 

Utility Code § 2106, violation of Health and Safety Code § 13007, negligent interference with 

prospective economic advantage, wrongful death, survival actions, and negligent infliction of 

emotional distress. 

The Movants propose that thirteen claimants with injuries stemming from the Tubbs Fire (the 

“Tubbs Preference Plaintiffs”) proceed to trial. The Tubbs Preference Plaintiffs’ claims in the 

Coordinated Proceeding are currently stayed as a result of the automatic stay under the Bankruptcy 

Code, along with the other claims arising from each of the 2017 North Bay Fires. At the Petition Date, 

 

2

 See Cal Fire Report, dated January 20, 2019, https://calfire.app.box.com/s/tpml34qwpy7inbr096f

xfglg7broqep4/file/449219240904. 

3

 The Adobe, Norrbom, Nuns, Pressley, Partrick and Oakmont/Pythian fires involved overlapping 

terrain and are often grouped together as the Nuns Complex fires. 

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fact discovery had not yet been completed as to any of the 2017 North Bay Fires, including the Tubbs 

Fire. Among the outstanding issues that remained open in the state court proceedings were extensive 

fact witness depositions, expert discovery, all damages discovery, likely dozens of motions in limine, 

jury instruction conferences, and perhaps dispositive motions. See Am. Kelly Decl. Ex. B, ¶ 3, Dkt. 

No. 2907. The only trial that had been scheduled was a trial on the Atlas Fire; the very plaintiffs’ 

attorneys who now advocate for a Tubbs Fire preference trial had successfully opposed scheduling 

any trial on Tubbs. 

Yesterday, the Debtors filed their Motion Pursuant to 11 U.S.C. §§ 105(a) and 502(c) for the 

Establishment of Wildfire Claims Estimation Procedures, Dkt. No. 3091 (the “Estimation Motion”). 

The Estimation Motion seeks to initiate a three-phased approach to estimating the Debtors’ aggregate 

liability for all wildfire claims, with an evidentiary hearing on whether the Debtors caused the Tubbs 

Fire to be held in this Court as early as October 7, 2019. The Debtors are requesting that the hearing 

on the TCC and Subro Group’s Motions for stay relief be adjourned so that the matter can be heard at 

the same time as the hearing on the Debtors’ Estimation Motion. 

III. THE MOVANTS FAIL TO SHOW CAUSE TO LIFT THE AUTOMATIC STAY 

The Movants seek to renew litigation in state court, but to do so they must show that the 

Debtors should lose one of the fundamental protections afforded to them by the Bankruptcy Code. See 

Midlantic Nat. Bank v. New Jersey Dep’t of Envtl. Prot., 474 U.S. 494, 503 (1986). “For the debtor, 

the stay provides a ‘breathing spell’ from creditors, allowing the debtor to focus its efforts on 

reorganization.” In re Brotman Med. Ctr., Inc., No. BAP.CC-08-1056-DKMO, 2008 WL 8444797, at 

*2 (B.A.P. 9th Cir. Aug. 15, 2008) (citing In re Conejo Enterprises, Inc., 96 F.3d 346, 351 (9th Cir. 

1996)). “For the creditors, the stay facilitates an orderly liquidation process under which all like 

situated creditors receive equal treatment.” Id. Indeed, the Bankruptcy Code’s foremost protection 

benefits all parties, as the “automatic stay gives the bankruptcy court an opportunity to harmonize the 

interests of both debtor and creditors while preserving the debtor’s assets for repayment and 

reorganization of his or her obligations.” In re Mac Donald, 755 F.2d 715, 717 (9th Cir. 1985). 

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The Movants bear the burden to demonstrate “cause” to dispel these fundamental protections 

and proceed with what they claim will be an accelerated jury trial in state court. See 11 U.S.C. 

§ 362(d)(1); In re Plumberex Specialty Prod., Inc., 311 B.R. 551, 557 (Bankr. C.D. Cal. 2004) (“To 

obtain relief from the automatic stay, the party seeking relief must first establish a prima facie case. . . . 

If the movant fails to meet its initial burden to demonstrate cause, relief from the automatic stay should 

be denied.”). Because “cause” is not defined in the Bankruptcy Code, courts “consider the totality of 

the circumstances in each case,” Brotman, 2008 WL 8444797, at *5 (citations omitted), often turning 

to the twelve factors enumerated in In re Curtis, 40 B.R. 795, 799–800 (Bankr. D. Utah 1984). These 

factors ask the Court to consider: 

(1) Whether the relief will result in a partial or complete resolution of the issues; 

(2) The lack of any connection with or interference with the bankruptcy case; 

(3) Whether the foreign proceeding involves the debtor as a fiduciary; 

(4) Whether a specialized tribunal has been established to hear the particular cause of 

action and whether that tribunal has the expertise to hear such cases; 

(5) Whether the debtor’s insurance carrier has assumed full financial responsibility for 

defending the litigation; 

(6) Whether the action essentially involves third parties, and the debtor functions only as 

a bailee or conduit for the goods or proceeds in question; 

(7) Whether the litigation in another forum would prejudice the interests of other 

creditors, the creditor’s committee and other interested parties; 

(8) Whether the judgment claim arising from the foreign action is subject to equitable 

subordination; 

(9) Whether movant’s success in the foreign proceeding would result in a judicial lien 

avoidable by the debtor under section 522(f) of the Bankruptcy Code; 

(10) The interests of judicial economy and the expeditious and economical determination 

of litigation for the parties; 

(11) Whether the foreign proceedings have progressed to the point where the parties are 

prepared for trial; and 

(12) The impact of the stay and the balance of hurt. 

Curtis, 40 B.R. at 799–800. 

Only in passing do the Movants address the applicable test for lifting the stay and whether the 

applicable twelve Curtis factors support their requested relief. See 40 B.R. at 799–800. That is 

because they cannot carry their burden when the applicable test is considered. Even a quick review of 

the factors demonstrates that many that would weigh in favor of lifting a stay are absent: the debtors 

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are not parties in the state court proceedings as a fiduciary (factor 3); no specialized tribunal has been 

established to hear the Tubbs Fire cases (factor 4)4; the costs of defending the litigation will not be 

covered by the debtors insurance given the exhaustion of the coverage as a result of the other wildfires 

(factor 5); and state court action does not primarily involve third parties (factor 6). Two other factors 

that would weigh in favor of granting stay relief are simply irrelevant on these facts (factors 8 and 9). 

The application of the remaining Curtis factors all weigh strongly against lifting the stay; the Movants’ 

extensive discussion of estimation for the alleged purposes of distribution cannot overcome that 

conclusion.5

A. The Tubbs Fire Claims Are Central to These Cases (Factor 2) 

The centrality of the Tubbs Fire to these Chapter 11 Cases, and the Court’s continued 

supervision of it, provides a critical reason why this Court should deny the Movants’ request to lift the 

stay and proceed to estimation. As the Subro Group has put it, “common issues of law and fact, such 

as exist here, should be heard together to avoid piecemeal litigation, further judicial efficiency, and 

mitigate the risk of inconsistent adjudication of identical issues.” Subro. Mot. at 5. And though they 

advanced this argument in favor of the Coordinated Proceeding in state court, with both Movants 

repeatedly invoking the assertions of the Debtors’ trial counsel that resolving the Tubbs Fire “has the 

highest probability of getting all the others tied up in a global resolution,” Am. Kelly Decl., at ¶ 9, the 

effect of the Debtors’ chapter 11 filing was to give those claimants—as well as all other stakeholders—

 

4

 The Subro Group argues that “judicial efficiency” dictates that Tubbs Fire litigation recommence 

because “the judge in the Coordination Proceeding had been overseeing the litigation for months 

prior to PG&E’s bankruptcy.” Subro. Mot. at 15. That assertion is simply false. The reality is 

that the Coordinated Proceeding, and the Tubbs Fire with it, was reassigned to a new state court 

judge just weeks before the automatic stay went into effect. See Orsini Decl., Ex. E. The new 

judge—while no doubt capable of presiding over these issues—never held a single hearing and 

has no experience whatsoever with these litigations. More to the point, regardless of the presiding 

judge, the state court is not the type of specialized tribunal contemplated by Curtis factor 4. See 

40 B.R. at 800.

5

 If the Court were to grant the TCC’s Motion, and were also inclined to permit the subrogation 

plaintiffs to participate in the state court trial, the stay should only be lifted with respect to the 

subrogation insurers only with respect to, and only to the extent of, any insurance claims associated 

with the specific preference plaintiffs proposed by the TCC. 

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access to the protection and tools of the Bankruptcy Code. Though the Coordinated Proceeding was 

once the most effective—indeed, only—means of addressing thousands of wildfire claims, it was only 

the most effective in a pre-petition world. Post-petition, the path leading to the greatest likelihood of 

a global resolution is and should remain this Court, hopefully through a consensual resolution reached 

by all parties in interest under this Court’s supervision. Given the centrality of the wildfire claims in 

this restructuring, going back to the Coordinated Proceeding would be a monumental step backward 

for both creditors and the Debtors alike. 

This is also why the TCC’s reliance on the Debtors’ first bankruptcy is misplaced. In In re 

Pacific Gas & Electric Co., 279 B.R. 561, 571 (Bankr. N.D. Cal. 2002), this Court abstained from 

hearing a series of cases relating to the Debtors’ liabilities for hexavalent chromium. Those claims 

were at the peripheries of the Debtors’ prior chapter 11 cases, having neither precipitated the 

bankruptcy nor materially affected the reorganization plan, and did not figure prominently in the 

restructuring. Here, by contrast, the opposite is true. 

Perhaps most importantly, the Tubbs Fire is so important to these Chapter 11 Cases that it is 

essential that all interested parties get an opportunity to participate in these proceedings. The 

Bankruptcy Code’s broad inclusivity ensures that all interested parties “may raise and may appear and 

be heard on any issue in a case under this chapter.” 11 U.S.C. § 1109(b). Because all parties in interest 

agree that “a central issue in structuring a plan of reorganization will be whether the Debtors are liable 

for the Tubbs Fire,” Subro. Mot. at 2, allowing the Movants to reopen litigation in state proceedings 

would be entirely inappropriate. Doing so would immediately shift the center of gravity of these 

Chapter 11 Cases, prejudicing all other interested parties, who would be unable to participate in the 

state proceedings. The Court should accordingly deny the Movants’ request and should instead retain 

control over these proceedings. This is especially true now that the Debtors have filed their Estimation 

Motion, which would establish the threshold question of the likelihood of liability for the Tubbs Fire 

as phase 1 of the estimation proceedings. 

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B. Lifting the Stay Will Not Result in Complete—or Even Partial—Resolution of 

the “Gating” Tubbs Fire Issue (Factor 1) 

The TCC’s proposal is that the Court should permit a dozen or so out of the thousands of Tubbs 

Fire claims to proceed to a jury trial. The Subro Group asks that it be allowed to join at least with 

respect to a few of its claims. Doing so would not result in any meaningful legal resolution of the 

Tubbs Fire issue on any schedule remotely approaching emergence from Chapter 11 by the critical 

June 30, 2020 date. 

On the one hand, if the Debtors were to win the TCC’s proposed trial, it is certain that no other 

fire claimant would acknowledge that such a result was binding on them and would undoubtedly argue 

strenuously that such a result from a single trial would do little to help this Court estimate the value of 

his or her claims. Indeed, such an argument might even have merit, as the United States Supreme 

Court has held that “[i]t is a violation of due process for a judgment to be binding on a litigant who 

was not a party or a privy” to the prior action. Parklane Hosiery Co. v. Shore, 439 U.S. 322, 327 n.7 

(1979); see also Collins v. D.R. Horton, Inc., 505 F.3d 874, 880 n.6 (9th Cir. 2007) (same). Thus, 

because any individual who was not a party would potentially not be bound by a judgment of 

no-causation, and because the automatic stay and practical realities of a state court trial would bar any 

but a handful of plaintiffs from actively participating in a separate state court action, there would not 

be anything close to the full resolution contemplated by Curtis factor 1. The result, then, would be 

that even if the Debtors win the proposed trial, they still lose: every other Tubbs Fire victim would 

still have an argument that the Debtors must liquidate their claims too and the TCC would undoubtedly 

continue to argue, as it does here, that those claims could still not be estimated without violating the 

rights of those other absent claimants. The alleged uncertainty on causation of the Tubbs Fire—which 

all parties agree is a “gating issue” to resolving these Chapter 11 Cases—would remain as unresolved 

as before. 

On the other hand, if the Debtors were to lose the TCC’s proposed trial, the law of collateral 

estoppel would mean that the result would be binding upon the Debtors only after all appeals could be 

exhausted; appeals that are certain in the event of an adverse jury verdict on what are likely many 

issues, including issues specific to jury trials. See Collins v. D.R. Horton, Inc., 505 F.3d 874, 876 n.1 

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(9th Cir. 2007) (“Offensive non-mutual collateral estoppel is a version of the doctrine [of collateral 

estoppel] that arises when a plaintiff seeks to estop a defendant from relitigating an issue which the 

defendant previously litigated and lost against another plaintiff.”) (alteration in original) (internal 

quotations omitted); see also Morris v. McCauley’s Quality Transmission Serv., 60 Cal. App. 3d 964, 

973 (1976) (stating, within the context of issue preclusion specifically, “[t]he doctrine of res judicata 

applies only to final judgments, that is, to judgments which are free from attack on appeal.”). 

Moreover, the Movants ignore the limited impact that any jury trial result involving their 

cherry-picked set of plaintiffs would actually have on the ability of the stakeholders to meaningfully 

assess the value of the thousands of other Tubbs Fire claims. Stated differently, a verdict in a trial 

involving the specific plaintiffs picked by the TCC would do little to further the answer to the question 

that actually matters: the likelihood of success of all Tubbs Fire claimants. This concern about the 

limited value of an unrepresentative trial is not something the Debtors have come up with to oppose 

this motion; it is something that the very lawyers who represent the Tubbs Preference Plaintiffs 

stipulated to in the prepetition state court proceedings. 

Prior to the consummation of these Chapter 11 Cases, the question of what types of plaintiffs 

would be included in any initial bellwether trial was a hotly contested issue in state court. Considering 

competing proposals about how to select the plaintiffs in the first trial such that they would present a 

representative cross-section of claims, the court directed the parties in the Coordinated Proceeding to 

confer and “select about 15 plaintiffs for the trial” and “fix the dates and steps in this process.” See

Orsini Decl. Ex. B, at 4–5. Following extensive negotiations, the parties agreed upon a process for 

selecting plaintiffs for the first trial. See Orsini Decl. Ex. C, at 8–9. Specifically, the parties agreed to 

ten separate categories of claimants “representing the majority of types of claims that will be presented 

by average or typical plaintiffs in the litigation as a whole,” an agreement predicated on the parties’ 

stipulated understanding that bellwether trials of unrepresentative plaintiffs would provide little insight 

into how the vast mass of cases would ultimately be resolved.6 Id. at 8. The Movants now repudiate 

 

6

 These ten categories include holders of the following claims: (1) wrongful death; (2) personal 

injury; (3) total loss of home on property larger than 5 acres; (4) total loss of home on property 

smaller than 5 acres; (5) partial loss/non-total damage to home; (6) commercial loss to non-winery; 

(7) commercial loss to winery/vineyard; (8) loss/displacement of renter/tenant with destruction of 

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this prior stipulated approach and urge this Court to allow a limited subset of claims to proceed to trial 

in contravention of this existing state court order. 

The Movants fail to address, nevermind grapple with, these complex issues. Instead, they 

argue that the Court and the other stakeholders need not worry about this since the claims are certain 

to settle before any trial. See, e.g., TCC Mot. at 3 (“relief from stay would result in settlement of the 

Chapter 11 Cases, because PG&E’s three year track record in the fire litigation establishes that PG&E 

settles every single fire claim before the jury trial”); id. at 19 (“relief from stay . . . would result in 

settlement”); id. at 21 (“the trial setting would result in settlement”). In other words, the argument is 

that the stay should be lifted not to actually try the claims, but instead to force a settlement. Whether 

it is true or not that lifting the stay would increase settlement pressure on the Debtors—a doubtful 

proposition given the fact that two independent sets of Cal Fire experts have concluded that the Debtors 

did not cause the fire and the fact that the fire claimants otherwise claim Cal Fire has an accuracy rate 

of 100% with respect to all other fires—that is a very large assumption to serve as the basis for sending 

the most significant issues in these cases back to state court. 

If the goal—as the Movants candidly admit—is to tee up the Tubbs Fire issue so that there is 

a date certain on the calendar that can encourage settlement discussions, that same goal is better 

achieved by granting the Debtors’ Estimation Motion and setting a date certain—controlled 

exclusively by this Court—to address the likelihood of responsibility for the Tubbs Fire. See In re 

Associated Vintage Grp., Inc., 283 B.R. 549, 560 (B.A.P. 9th Cir. 2002) (noting that a primary function 

of chapter 11 is to provide “structured negotiation conducted under rules prescribed by the Bankruptcy 

Code.”). This is exactly what the Debtors propose to do in phase 1 of the estimation proceedings, in 

which all parties in interest will be able to participate. Moreover, any argument that the threat of a 

jury trial is more likely to extract a settlement is an inappropriate justification for lifting the stay on its 

face. See Conejo, 95 F.3d at 352 (denying stay relief to a movant “seeking relief from the stay to 

strengthen its position against [the debtor]” because of the importance of “preserving a level playing 

field for negotiation”). And, of course, if settlement negotiations in advance of an estimation hearing 

 

personal property; (9) damage/destruction to raw land without loss of home; and (10) smoke and 

soot. See Orsini Decl. Ex. C, at 8. 

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fail, at least the Court’s assessment of the cause of the Tubbs Fire will meaningfully and rapidly 

advance the formulation, voting, and confirmation of a plan of reorganization. See, e.g., In re Fed.-

Mogul Glob., Inc., 330 B.R. 133, 154–55 (D. Del. 2005) (finding that “an estimation of asbestos 

liability for the limited purposes of plan formulation is a fruitful endeavor because it promotes the 

speed and efficiency goals of the Bankruptcy Code, while not implicating the procedural rights of the 

individual claimants.”). None of that would be true under the path proposed in the Lift Stay Motions. 

C. Lifting the Stay Will Result in Significant Prejudice and Will Delay Resolution 

of These Cases (Factors 7, 10, 11 & 12) 

As the Court is aware, the recently enacted wildfire fund legislation has set what is effectively 

a June 30, 2020, deadline for the Debtors to emerge from chapter 11. If that deadline is not met, the 

Debtors cannot participate in a new wildfire fund to address potential future wildfire lability. As a 

result, the Debtors are driven by two fundamental goals: (1) fairly compensating those wildfire victims 

who are entitled to compensation; and (2) successfully exiting reorganization by June 30, 2020. That 

is precisely why the Debtors have filed the Estimation Motion. And it is precisely why these Lift Stay 

Motions should be denied. Sending the critical issue at the core of formulating a plan of reorganization 

to state court in order to liquidate the claims of a select few will put that deadline at serious risk and 

would prejudice the Debtors and numerous other stakeholders. 

1. Congress Has Already Decided that Bankruptcy Courts Are Best 

Positioned to Oversee Estimation in Cases Involving Thousands of 

Unliquidated Claims 

As set forth in the Estimation Motion, the very point of estimation is to “avoid the need to 

await the resolution of outside lawsuits to determine issues of liability or amount owed by means of 

anticipating and estimating the likely outcome of these actions.” Matter of Ford, 967 F.2d 1047, 1053 

(5th Cir. 1992). Congress provided the Bankruptcy Court with core jurisdiction over the aggregate 

estimation of claims, 28 U.S.C. § 157(b)(2)(B), including personal injury and wrongful death claims. 

See, e.g., N. Am. Health Care, 544 B.R. at 690 (“The Court’s aggregate estimation of the tort claims 

for voting and plan confirmation purposes only is a core matter under 28 U.S.C. § 157(b)(2)(B).”). 

“Indeed, it is beyond dispute that this Court does have jurisdiction to ‘allow,’ ‘disallow,’ ‘liquidate,’ or 

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‘estimate’ certain aspects of the Claims which assert causes of action . . . based on contract law,” and 

“[t]he same is true with respect to Claims for property damage.” Chateaugay, 111 B.R. at 71. 

In exercising its jurisdiction, the Bankruptcy Court “shall” make an estimation of aggregate 

liability for “any contingent or unliquidated claim, the fixing or liquidation of which, as the case may 

be, would unduly delay the administration of the case.” 11 U.S.C. § 502(c). Section 502(c)’s language 

“is mandatory and places upon the court an affirmative duty to estimate unliquidated claims when 

appropriate.” 4 Collier on Bankruptcy ¶ 502.04 (16th 2019). It should be obvious that liquidation of 

the Debtors’ potential liabilities—tens of thousands of claims with potential valuations ranging in the 

billions—would create exactly the type of “undue delay” that makes estimation mandatory in this case. 

Even if narrowed to a comparatively more discrete issue, such as the Tubbs Fire, proceeding with state 

court trial is completely untenable. 

Some form of estimation proceeding is required here, as in virtually all bankruptcies involving 

mass torts, and is a standard feature of such mass tort bankruptcies, including those that involve large 

numbers of personal injury tort claims. See, e.g., In re Aquaslide ‘N’ Dive Corp., 85 B.R. 545, 547 

(B.A.P. 9th Cir. 1987); N. Am. Health Care, 544 B.R. at 688; In re Specialty Prod. Holding Corp., No. 

BR 10-11779-JKF, 2013 WL 2177694, at *1 (Bankr. D. Del. May 20, 2013); Owens Corning v. Credit 

Suisse First Bos., 322 B.R. 719, 721–24 (D. Del. 2005); In re G-I Holdings, Inc., 323 B.R. 583, 623–

25 (Bankr. D.N.J. 2005); Chateaugay, 111 B.R. at 76. This case is not exceptional in that regard. The 

plain language of the Bankruptcy Code and the clear advantages of having central issues of the 

Debtors’ Chapter 11 Cases unfold within the Bankruptcy Court, where all stakeholders can participate, 

are circumstances that mandate estimation. 

Notwithstanding estimation’s ubiquity in bankruptcy proceedings, the Movants assert that 

estimation will yield profound inequities if allowed to proceed at this time and that the Court must lift 

the stay so that certain Tubbs Fire claimants and their subrogated insurers may temporarily shift the 

center of gravity of these Chapter 11 Cases to state proceedings until the question of causation of the 

Tubbs Fire is presumably resolved. In support of this argument, the TCC primarily relies on In re Dow 

Corning Corp., 211 B.R. 545 (Bankr. E.D. Mich. 1997). In that case, litigation had raged for nearly 

two decades over the question of whether silicone was a toxic substance causing connective tissue 

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disorders, and as litigation expenses mounted Dow Corning became unable to address the “crippling 

effect” of an explosion in products liability suits. Id. at 551–53. As Dow Corning’s bankruptcy 

dragged on, key stakeholders could not reach a consensual resolution because no one could agree 

whether silicone was a “bio-inert” substance that harms, or does not harm, the human body, a dispute 

that continues to this very day.7 Id. at 570. Ultimately, the debtor and the torts’ claimants committee 

filed competing motions to estimate the total aggregate liability of the silicone suits for purposes of 

confirmation of a plan. Id. at 554–601. The Court, denying both motions, found under the 

circumstances of that case that there was no “undue delay” in postponing estimation until liquidation 

trials at the district court could provide some degree of clarity on the matter. Id. at 566. 

Dow Corning thus stands for the proposition that estimation is not immediately mandatory 

when trials may add clarity where none was there before and where the ultimate resolution of the 

chapter 11 case may be aided by first allowing the liquidation of certain claims outside of bankruptcy. 

But while that may have been true in Dow Corning, where the question of silicone toxicity was central 

to virtually all of the tort claimants, the facts here are quite different, where dozens of fires have raised 

distinct issues of liability and created classes of claimants whose interests in a rapid resolution diverge 

from one another. Delaying estimation for the (possible) benefit of the Tubbs Fire victims will 

prejudice the Debtors and other creditor constituencies, including other wildfire victims. With many 

other classes of creditors in these Chapter 11 Cases, the delay created by placing liquidation before 

confirmation is essentially a delay in distribution to all other creditors, and an unjustified one at that.8 

 

7

 See, e.g., U.S. Food and Drug Administration, FDA Update on the Safety of Silicone Gel-Filled 

Breast Implants (June 2011), at 3, https://www.fda.gov/media/80685/download (last visited July 

18, 2019) (“The post-approval studies to date do not show evidence that silicone gel-filled breast 

implants cause connective tissue disease, reproductive problems, or breast cancer.”). 

8

 Nor are the sex abuse cases cited by the TCC, In re Roman Catholic Bishop of San Diego, 374 

B.R. 756 (Bankr. S.D. Cal. 2007), and In re Roman Catholic Archbishop of Portland in Oregon, 

338 B.R. 414 (Bankr. D. Or. 2006), applicable here. San Diego is a remand decision concerning 

a matter at the apex of a “compelling state interest”—the “protection of children from sexual 

predators”—dealing with far fewer claims than here, all involving highly individualized fact 

patterns. 374 B.R. at 764. And Portland involved a debtor that had persistently argued for 18 

months that no claims should proceed to trial until the plan was confirmed, a situation that had 

become simply untenable given the total failure of settlement discussions. 338 B.R. at 418. Here, 

by contrast, the Debtors have diligently pursued consensual resolutions with key stakeholders and 

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A number of other factors readily distinguish Dow Corning. First and foremost, Dow Corning 

solely involved personal injury and wrongful death cases, whereas the largest potential liabilities 

arising from the Tubbs Fire relate to property damage. Second, the TCC submits that this Court should 

lift the stay here on the theory that, as in Dow Corning, “proceeding directly to liquidation would have 

the salutary effect of saving time, money and eliminating potential negative side effects that could 

easily result from the estimation process.” Id. at 566. But what the TCC ignores in its request is that 

outsourcing one of the most contentious issues of these Chapter 11 Cases—an issue that affects 

thousands of similarly-situated claimants who would not be able to participate in a state court 

proceeding—would destroy the collective forum framework that is fundamental to chapter 11. Third, 

there is no evidence that there was any particular urgency to the resolution of the chapter 11 

proceedings in Dow Corning. The court there made a judgment, in its discretion and based on the 

facts of that case, that all stakeholders would have benefitted from any delay that might come from 

first litigating certain issues in foreign courts. The same is most certainly not the case here. June 30, 

2020, will arrive quickly. There are tens of thousands of Tubbs and non-Tubbs Fire claimants for 

whom estimation is necessary, and all of the other creditors’ interests will be impaired if the deadline 

is missed and the fund protections evaporate. And such delay in the state court system is exactly the 

likely result for the reasons discussed in the following section. 

2. Lifting the Stay and Awaiting the Outcome of a State Court Trial 

Significantly Increases the Risk that the Debtors Miss the June 30, 2020, 

Deadline 

The Movants’ proposal, as contrasted to the Debtors’ Estimation Motion, introduces substantial 

uncertainty about timing and multiple opportunities for delay. 

First, it is not at all clear that the state court would agree to proceed with the preference claims 

hand-selected by the Movants, even if those claims are determined by the state court to qualify for 

statutory preference. To be clear, the Movants have hand-selected a subset of claimants for their 

preferred trial in state court. But these very same movants successfully opposed an effort by a different 

 

this Court’s estimation relating to the Tubbs Fire would also have a substantial impact in settlement 

negotiations. 

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set of plaintiffs to jump to the front of the line in the Coordinated Proceeding. Indeed, Plaintiffs’ 

Leadership in the state court proceedings—led by a partner of Mr. Kelly, the TCC’s declarant—argued 

that “enabling a preference motion to proceed in the absence of a broader coordination process is going 

to make it very difficult if not impossible for us to continue in that coordination process.” See Orsini 

Decl. Ex. D, Tr. 35:16–20. In particular, they asserted that allowing preference claims to proceed 

unabated would result in a group of “wild mavericks all going out and doing what they want to do 

because they say, well, it’s my decision on behalf of my client that needs this discovery to go first.” 

Id. at 55:7–21. 

The Superior Court found these arguments compelling: it denied the preference request, 

reasoning, among other things, that even if only 5% of claimants were elderly or infirm within the 

meaning of section 36, that would still result in “about 250 cases” arguably eligible for a preference 

motion. See Orsini Decl. Ex. F, at 2–3. “If hundreds of plaintiffs opted for preference trials across a 

variety of the fires, coordinating these cases would be impossible.” Id. The preference motion was 

accordingly denied and the Superior Court entered a case management order specifying how 

preference claims would be dealt with. See Orsini Decl. Ex. G. The Superior Court’s protocol was 

specifically designed to prevent any subset of lawyers from favoring their own clients by pursuing an 

unrepresentative trial that could disturb the entire Coordinated Proceeding. 

If creditors trying to jump the line was inefficient and inappropriate in the prepetition world, it 

is even more so in a postpetition world. If this Court granted stay relief, the Movants would have to 

return to the Coordinated Proceeding and attempt to comply with the preference protocols or else ask 

the Superior Court to disregard or amend its own protocols. Neither approach is promising, and both 

show that the Movants’ insistence on moving their cases forward in the Coordinated Proceeding will 

be no simple task. Indeed, there is no evidence that the protocol has been followed here, and there is 

every reason to believe that a request to allow only a subset of Tubbs Fire cases to go to trial will 

engender a wave of requests for relief from stay from other similarly situated litigants seeking to have 

their cases tried too. See Brotman, 2008 WL 8444797, at *6 (“[I]f the bankruptcy court granted relief 

from the stay to [the movant] at that time, it logically would have to grant relief from the stay to other 

creditors with similar actions pending against the debtor.”). Given the number of Tubbs Fire claimants, 

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the balance of the hurt if the Lift Stay Motions were granted would clearly fall on the Debtors, their 

other creditors (including other wildfire victims), and other parties in interest. 

Second, before any trial could be scheduled in state court, the court would first have to assess 

whether the proposed plaintiffs satisfy the preference statute and then resolve the likely disputed issue 

about which court should try the case: San Francisco or Sonoma County. The latter issue—the proper 

forum—was hotly contested prior to the filing of the Chapter 11 Cases and resolved only in the context 

of a completely different fire (the Atlas fire) based primarily upon facts relevant to Napa County 

(whereas Tubbs primarily impacted Sonoma County). See Orsini Decl. Ex. B. If this Court grants 

relief from stay, the issue of forum will also have to be litigated and decided, causing yet further delay 

for no practical purpose. 

Third, even if these procedural hurdles were somehow cleared, trying the actual cases will 

consume enormous amounts of time. A host of pre-trial issues will unavoidably need to be resolved 

before any trial could occur in state court. The parties will unavoidably engage in expert discovery, 

motions to qualify experts, motions in limine, and the empaneling of juries. With $18 billion in 

damages allegedly on the line, all parties involved have every incentive to litigate every conceivable 

issue, with the result that setting trial is the costliest way imaginable to proceed. It stands to do 

substantial and needless harm to the estates’ resources. And although discovery would be needed in 

the estimation proceedings contemplated by the Debtors’ Estimation Motion, it would be much more 

limited because it would only address causation, not actual individual damages. Moreover, this Court 

would be best positioned to oversee such discovery and set its timing and scope in light of the overall 

interests of the Debtors and all stakeholders in these Chapter 11 Cases. 

Fourth, a jury trial, as contrasted to an estimation hearing, will also yield its own delays. The 

Tubbs Preference Plaintiffs’ proposal to try the claims of 13 plaintiffs in 120 days would take longer 

than the Debtors’ proposed estimation. The preference statute requires that trial be set within 120 days 

of the granting of a preference motion, but the unique circumstances of the Coordinated Proceeding 

call into question whether that will happen at all. Even if the trial started on schedule, though, it 

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promises to be time consuming. The parties will inevitably dispute liability,9 as well as the appropriate 

way to calculate any such damages. Months before the Debtors initiated these Chapter 11 Cases, the 

parties to the Coordinated Proceeding litigated which fires would be tried first and how long any such 

trial would take. In that context, the Debtors proposed that a Tubbs Fire trial would take as long as 5 

to 7 weeks, or 35 to 42 days. By contrast, an estimation hearing, given this Court’s ability to limit 

such a hearing to the likelihood of success on causation, could be held in under 3 weeks—and it would 

occur only once. 

Fifth, there remains the pressing legal question of whether PG&E could be held liable for 

failing to de-energize its system where the resulting alleged harm was the failure of customer 

equipment, not PG&E equipment. This legal issue raises serious questions about legal duty, proximate 

cause, and intervening actors, all of which will be addressed and intensely contested. This Court is 

best positioned to resolve these issues as to all victims of the Tubbs Fire, as well as all wildfire victims 

more broadly and it is within the Court’s core jurisdiction to do so. 

3. The Movants Will Not Be Prejudiced by Remaining Before This Court 

and Participating in the Mandatory Estimation Process 

For all of the reasons noted above, numerous stakeholders—including the Debtors, nonwildfire creditors and non-Tubbs wildfire creditors—will be prejudiced by pursuing the liquidation of 

a subset of claims in state court. By contrast, estimation will not prejudice the Movants’ ability to 

protect their rights in the chapter 11 proceedings. 

As noted, Bankruptcy Courts make aggregate estimations all the time; that is the entire purpose 

of section 502(c), which reflects Congress’s considered judgment. “One cannot overemphasize the 

advantages of speed and simplicity to both creditors and debtors.” Bittner v. Borne Chem. Co., 691 

F.2d 134, 136 (3d Cir. 1982) (quoting 124 Cong. Rec. H 11101-H 11102 (daily ed. Sept. 28, 1978) 

(statement of Rep. D. Edwards of California, floor manager for bankruptcy legislation in the House of 

Representatives)); see also Mackey v. Montrym, 443 U.S. 1, 13 (1979) (“[T]he Due Process Clause 

 

9

 The issue of inverse condemnation would be covered in phase 2 of the estimation proceedings 

contemplated by the Debtors’ Estimation Motion. 

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has never been construed to require that the procedures used to guard against an erroneous deprivation 

of a protectible [sic] ‘property’ or ‘liberty’ interest be so comprehensive as to preclude any possibility 

of error.”); Owens Corning, 322 B.R. at 725 (“[S]ince mathematical precision cannot be achieved in 

the prediction being undertaken, it is important that we not pretend to have achieved mathematical 

accuracy.”). 

In estimation, the TCC, or any other interested party, may put on evidence, including expert 

testimony. It may raise legal arguments and it may refute legal arguments. The Court may use 

“whatever method is best suited to the contingencies of the case, so long as the procedure is consistent 

with the fundamental policy of Chapter 11 that a reorganization ‘must be accomplished quickly and 

efficiently.’” In re Adelphia Commc’ns Corp., 368 B.R. 140, 278 (Bankr. S.D.N.Y. 2007) (citing 

Bittner, 691 F.2d at 135–37). Because “Congress intended the procedure [for estimation] to be 

undertaken initially by the bankruptcy judges, using whatever method is best suited to the particular 

contingencies at issue,” Bittner, 691 F.2d at 135, this Court can attend to the particular contingencies 

of the case and the Tubbs Fire victims’ voices will be heard. And should that process leave the Movants 

or any other party in interest unsatisfied, they may subsequently object to the Debtors’ plan at 

confirmation, 11 U.S.C. § 1109(b), or may even seek reconsideration of whether their claims should 

have been allowed. Id. § 502(j). 

To be sure, the TCC argues strenuously that the question of what caused the Tubbs Fire is a 

complicated issue. It is adamant that Cal Fire’s conclusions that PG&E did not cause the Tubbs Fire 

are of no evidentiary value and must be taken before a jury for trial. But the Movants’ insistence on 

this point here is betrayed by the fact that the TCC has repeatedly invoked Cal Fire’s conclusions 

throughout these Chapter 11 Cases and will surely do so again when it once more suits its purposes. 

See, e.g., Opposition of the Official Committee of Tort Claimants to Corrected Motion of Debtors 

Pursuant to 11 U.S.C. §§ 105(a), 363, and 503(c) for Entry of an order (I) Approving Short-Term 

Incentive Plan and (II) Granting Related Relief (Dkt. No. 806), at 28, Dkt. No. 1109 (“CalFire’s 

investigations found that the company’s equipment caused the majority of the fires and the company’s 

maintenance violated state law.”); Official Committee of Tort Claimants’ Limited Joinder, Objection 

and Counter Motion to Debtors’ Wildfire Assistance Program Motion, at 4–5, Dkt. No. 2013 (arguing 

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that Cal Fire’s findings establish that the Debtors started the Butte Fire); Objection of the Official 

Committee of Tort Claimants to Corrected Motion of Debtors Pursuant to 11 U.S.C. § 1121(d) to 

Extend Exclusivity Periods, at 5, Dkt. No. 2017 (“Cal Fire issued a News Release stating that the 

Debtors caused the Camp Fire.”). Just because Cal Fire’s conclusions are inconvenient to the Movants 

in this instance—but are presumably viewed as admissible evidence for all the other unliquidated 

claims relating to wildfire, not one of which has gone to judgment—does not mean that this Court 

cannot properly estimate claims relating to the Tubbs Fire. 

Finally, the Movants’ invocation of abstention doctrine is inapplicable here. Simply put, there 

are currently no Tubbs Fire proceedings from which this Court can abstain, a point the Subro Group 

recognizes when it concedes that “there is no pending matter before this Court that requires it to 

determine that abstention is appropriate.” Subro Mot. at 17. Since there is no independent “cause” to 

warrant relief from stay, the principles of abstention do not move the needle either. 

* * * 

 As detailed above, a holistic view of the circumstances here shows that not only is there no 

cause to lift the stay, but also that lifting the stay here and now would unduly harm the Debtors and 

their restructuring efforts. If the stay were lifted, the Debtors would be forced to litigate on two fronts. 

The Tubbs Preference Plaintiffs, on the other hand, would suffer little, if any, hardship by continuing 

in this Court, where they could make meaningful progress on their claims through discovery in the 

context of estimation proceedings. See Brotman, 8444797, at *7 (finding cause to lift the stay lacking 

where creditor could still obtain discovery on her wrongful death claim). Moreover, discovery in the 

context of estimation proceedings will promote judicial economy because it would also prepare the 

Tubbs Preference Plaintiffs for trial, should that need eventually arise, thereby “minimizing the 

duplication of litigation in two separate forums.” Conejo, 96 F.3d at 353. Estimation would also 

protect the interests of other creditors because, unlike in state court, all interested parties could 

participate in both fact and expert discovery, thus “preserving a level playing field for negotiation of 

a consensual reorganization plan.” Conejo, 96 F.3d at 353; see also Brotman, 2008 WL 8444797, at 

*5 (“The stay protects not only the debtor, but its creditors as well.”). It would also help move toward 

the goal of reaching a negotiated resolution. 

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IV. THE MOVANTS’ ARGUMENTS ABOUT ESTIMATION AND PERSONAL INJURY 

CLAIMS ARE RED HERRINGS AND DO NOT PROVIDE CAUSE TO LIFT THE 

STAY 

Reduced to its fundamentals, the Movants’ argument that the stay should be lifted rests on the 

following set of suppositions: (1) because the Court may reach an inadequate estimation, the 

estimation will effectively determine the distribution of claims by creating a trust that is insufficiently 

funded; and, (2) because estimation here is supposedly tantamount to distribution, estimation would 

violate the Tubbs Claimants’ Seventh Amendment rights to a jury trial. Thus, the Movants argue, 

estimation is effectively unconstitutional in these circumstances and the Court must grant relief from 

stay. These arguments fail for a variety of reasons. 

First, estimation for purposes of plan confirmation is mandatory in these circumstances. 

“There is no question that the estimation of claims in bankruptcy does not establish a binding legal 

determination of the ultimate validity of a claim nor a binding determination of any issues.” In re 

Bicoastal Corp., 122 B.R. 771, 775 (Bankr. M.D. Fla. 1990). When a court estimates the aggregate 

amount to which claimants are entitled, it is not “deciding how much each claimant will actually be 

entitled to receive, but the total amount which the claimants, as a group, could legitimately have 

claimed as compensation, as of the petition date.” Owens Corning, 322 B.R. at 722. Instead, “[t]he 

object of [an estimation] proceeding is to establish the estimated value of a creditor’s claim for 

purposes of formulating a reorganization plan.” Federal-Mogul, 330 B.R. at 154. And importantly, 

the Debtors are not asking this Court to liquidate any individual personal injury claim. The Movants 

therefore cannot complain that estimation will prejudice any Tubbs Fire victims. The simple 

application of the relevant factors, as discussed above, is more than sufficient to deny the requested 

relief. 

Second, even if the estimation sought here served to limit or cap liabilities as a part of a 

confirmed plan, such an estimation would still not amount to a de facto claim liquidation. The TCC’s 

contention that, “[u]nless the Court estimates the Tubbs Fire Claims at 100% of the amount requested 

by the TCC, any plan that uses an estimated number would result in the Tubbs Fire Claims being 

capped or somehow limited in the ultimate plan of reorganization” (TCC Motion at 15) is wrong. 

Bankruptcy courts have estimated personal injury liabilities in countless cases, many of which 

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involved debtors with insufficient funds to pay all general unsecured claims in full. None of those 

cases required that the debtor fund a trust in the full amount sought by the tort claimants. See, e.g., In 

re Armstrong World Indus., Inc., 348 B.R. 111, 115 (D. Del. 2006); In re G-I Holdings, Inc., 323 B.R. 

at 623; Federal Mogul, 330 B.R. at 136–37; In re Garlock Sealing Techs., 504 B.R 71, 74 (W.D.N.C. 

2014); In re Eagle-Picher Indus., Inc., 189 B.R. 681, 682 (Bankr. S.D. Ohio 1995). Rather, estimation 

of the total aggregate value of claims has consistently been acknowledged as an efficient way to aid 

the parties to reach a consensual plan of reorganization and expedite the Chapter 11 plan process. 

Moreover, the Movants’ complaints about de facto liquidation are made without any evidence and with 

every opportunity to have their voices heard. As explicitly recognized by the Bankruptcy Code, the 

Movants, and any other party in interest, will be able to present their arguments at an estimation 

hearing or even object to plan confirmation. See 11 U.S.C. § 1109(b). The Bankruptcy Code’s 

protections, and any other that the Court may decide to adopt in the future, remove any possibility of 

prejudice against the Movants. Furthermore, the risks of over- and under-estimation fall equally on 

the Debtors, creditors, and other interested parties alike, providing every stakeholder in the Debtors’ 

estates with a strong incentive to guide the Court to the correct decision. 

Third, the Movants’ concerns about jury rights are similarly attenuated and hypothetical. They 

will only arise, if ever, for a minority of claimholders, because the overwhelming majority of claims 

arising from the Tubbs Fire are property damage claims and do not implicate jury rights at the 

liquidation stage. See 28 U.S.C. § 157(b)(2). For those claims that are not property claims, the vast 

majority are emotional distress claims incidental to property damage claims and do not involve any 

bodily injury. Analyzing similar claims, courts have held that “incidental claims of emotional injury 

do not suffice to transform a tort claim into a personal injury tort when it otherwise would not be.” In 

re Gawker Media LLC, 571 B.R. 612, 623 (Bankr. S.D.N.Y. 2017) (citations omitted); see also Siewert 

v. Christy (In re Finley, Kumble, Wagner, Heine, Underberg, Manley, Myerson, & Casey), 194 B.R. 

728, 734 (S.D.N.Y. 1995) (finding incidental claims of emotional damages insufficient to “transform 

[a] business tort into a personal injury tort” (citing Bertholet v. Harman, 126 B.R. 413, 415 (Bankr. 

D.N.H. 1991))); In re Atron Inc. of Michigan, 172 B.R. 541, 544 (Bankr. W.D. Mich. 1994) (finding 

that Congress did not intend to allow creditors to divest bankruptcy courts of ability to liquidate claims 

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“by merely alleging a questionable, ambiguous emotional injury in the context of a nontraditional 

personal injury tort claim”); Matter of Interco, Inc., 135 B.R. 359, 362 (Bankr. E.D. Mo. 1991) 

(“Congress intended to limit this exception to a ‘narrow range of claims.’” (citation omitted)). 

That leaves the subset of claims that actually involve physical injury or wrongful death claims, 

a small portion of the much larger pool of Tubbs Fire cases. But even for this subset of individuals, 

the Movants’ complaint that they may one day elect to exercise jury rights and may receive less in 

distribution than they otherwise would have simply mischaracterizes the law. See Dow Corning, 211 

B.R. at 569 (“A right to a jury trial does not mean a right to payment in full of the liquidated amount 

of the claim.”). The Debtors of course acknowledge the serious injuries represented by these claims, 

but in the context of this Motion, the Movants’ concerns about jury rights are remote, inapplicable to 

the facts facing the Court right now, and do not justify lifting the stay. 

V. CONCLUSION 

For the reasons stated herein, the Court should deny the Movants’ Lift Stay Motions. 

 Dated: July 19, 2019 WEIL, GOTSHAL & MANGES LLP 

CRAVATH, SWAINE & MOORE LLP 

KELLER & BENVENUTTI LLP 

/s/ Stephen Karotkin

 Stephen Karotkin 

Attorneys for Debtors and Debtors in Possession

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