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XAVIER BECERRA, SBN 118517

Attorney General of California 

MARGARITA PADILLA, SBN 99966 

Supervising Deputy Attorney General 

JAMES POTTER, SBN 166992 

Deputy Attorney General 

1515 Clay Street, 20th Floor 

P.O. Box 70550 

Oakland, CA 94612-0550 

Telephone: (510) 879-0815 

Fax: (510) 622-2270 

Margarita.Padilla@doj.ca.gov 

James.Potter@doj.ca.gov 

STEVEN H. FELDERSTEIN, SBN 059678 

PAUL J. PASCUZZI, SBN 148810 

FELDERSTEIN FITZGERALD 

WILLOUGHBY & PASCUZZI LLP 

400 Capitol Mall, Suite 1750 

Sacramento, CA 95814 

Telephone: (916) 329-7400 

Fax: (916) 329-7435 

sfelderstein@ffwplaw.com 

ppascuzzi@ffwplaw.com 

Attorneys for California Department of Toxic 

Substances Control, et al. 

XAVIER BECERRA, SBN 118517

Attorney General of California 

DANETTE VALDEZ, SBN 141780 

ANNADEL ALMENDRAS, SBN 

192064 

Supervising Deputy Attorneys General 

455 Golden Gate Avenue, Suite 11000 

San Francisco, CA 94102-7004 

Telephone: (415) 510-3367 

Fax: (415) 703-5480 

Danette.Valdez@doj.ca.gov 

Annadel.Almendras@doj.ca.gov 

UNITED STATES BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

In re: 

PG&E CORPORATION 

- and – 

PACIFIC GAS AND ELECTRIC 

COMPANY, 

Debtors.

Bankruptcy Case

No. 19-30088 (DM) 

Chapter 11 

(Lead Case) 

(Jointly Administered) 

 Affects PG&E Corporation 

 Affects Pacific Gas and 

Electric Company 

 Affects both Debtors 

Date: June 11, 2019 

Time: 9:30 a.m. 

Ctrm: 17 

Judge: Dennis Montali 

LIMITED OBJECTION OF THE CALIFORNIA STATE AGENCIES TO MOTION OF 

DEBTORS FOR ORDER (I) ESTABLISHING DEADLINE FOR FILING 

PROOFS OF CLAIM, (II) ESTABLISHING THE FORM AND MANNER OF 

NOTICE THEREOF, AND (III) APPROVING PROCEDURES FOR PROVIDING 

NOTICE OF BAR DATE AND OTHER INFORMATION TO ALL CREDITORS 

AND POTENTIAL CREDITORS [DOCKET NO. 1784] 

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The California Department of Toxic Substances Control, California Department of Water 

Resources acting by and though the California Energy Resources Scheduling Division and on 

behalf of the State Water Project, State Water Resources Control Board, Regional Water Quality 

Control Boards, State Energy Resources Conservation and Development Commission, California 

Department of Forestry and Fire Protection (CAL FIRE), California Coastal Commission, 

California Air Resources Board, Department of Parks and Recreation, San Francisco Bay 

Conservation and Development Commission, Department of Housing and Community 

Development, Central Valley Flood Protection Board, Department of Conservation including the 

Division of Oil, Gas, and Geothermal Resources, State Coastal Conservancy and California 

Department of Fish and Wildlife (collectively, the “California State Agencies”)1

 hereby file this 

limited objection to the Motion of Debtors for an order (i) establishing deadline for filing proofs 

of claim, (ii) establishing the form and manner of notice thereof, and (iii) approving procedures 

for providing notice of bar date and other information to all creditors and potential creditors (the 

“Motion”) [Docket No. 1784] based on the following: 

1. The California State Agencies have met and conferred with the Debtors regarding 

their issues with the Motion. As described below, subject to review and agreement on revised 

language in the proposed order, the California State Agencies believe that most issues may be 

resolved. The Debtors have circulated a revised proposed order, which the California State 

Agencies are reviewing at this time. The unresolved issues include clarity regarding what is 

considered a “claim” for which a proof of claim must be filed. The California State Agencies 

believe other parties also have raised this issue and are discussing this issue with the Debtors. As 

such, the California State Agencies reserve all rights to review any proposed revised language for 

the proposed order on the Motion, to pursue its objection as described herein, and to join other 

objections to the proposed order. Also, the California State Agencies requested the Debtors to 

 

1

 The following California State Agencies were added to the agencies filing this limited objection 

after the filing of the Stipulation Between Debtors and California State Agencies Extending Time 

to Respond to Bar Date: Department of Conservation, including the Division of Oil, Gas, and 

Geothermal Resources, and the State Coastal Conservancy. Counsel for the California State 

Agencies informed Debtors’ counsel that other state agencies may be joining this limited 

objection. 

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include language reserving the right to challenge the Debtors’ characterization of executory 

contracts in their schedules, which language is still being discussed. 

Unresolved Issues 

2. The California State Agencies believe that the proposed order should be clear that 

California residents, businesses, and governmental units, including but not limited to cities, 

counties and state entities, do not need to file proofs of claim based on future fires for which the 

Debtors may be liable. The proper test for whether a claim exists in the Ninth Circuit is the “fair 

contemplation” test.2 The Debtors’ motion can be understood to suggest that given the 

circumstances existing at this time regarding the state of the Debtors’ transmission system and the 

risk of wildfires in the utility Debtor’s service area, it is within the fair contemplation of 

residents, businesses, or governmental units that a fire would occur in the future which would 

cause damage and/or trigger government response actions such that a claim for future damages 

from a fire that has yet to occur is required to be filed against the Debtors in these bankruptcy 

cases. Requiring residents, businesses or governmental units to file a claim in this hypothetical is 

not a proper application of the fair contemplation test. If the Debtors disagree and intend to take 

such a position, the Debtors’ proposed notices are wholly insufficient to provide the notice that 

would satisfy the requirement of due process for a claims bar date. 

3. The California State Agencies are aware that the Sonoma Clean Power Authority 

and others also have raised this issue and are in discussions with the Debtors. The California 

State Agencies join in other objections on this issue. While hopeful that this issue can be 

resolved, the California State Agencies reserve all rights to present this objection to the Court at 

the hearing and/or review and approve language to be added to the proposed order. 

4. The California State Agencies also have requested additional language in 

paragraph 13 of the proposed Order addressing reservations of rights to challenge the designation 

of matters as executory contracts in the Debtors’ schedules. The California State Agencies do not 

 

2

 SNTL Corp. v. Ctr. Ins. Co. (In re SNTL Corp.), 571 F.3d 826, 839 (9th Cir. 2009) (The Ninth 

Circuit has adopted the “fair contemplation” test for determining when a claim accrues for the 

purposes of section 502(b). Under that test, a claim arises when a claimant can fairly or 

reasonably contemplate the claim’s existence even if a cause of action has not yet accrued under 

nonbankruptcy law). 

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necessarily agree with the Debtors’ listing of certain matters in its schedules as “Executory 

Contracts,” and are concerned that this language could be used by the Debtors to bar future 

injunctive relief as to such matters. The Debtors have agreed to revise the proposed order to 

address this issue, but the exact revisions are still being discussed. The California State Agencies 

request that the following underlined language be added to paragraph 13(c) of the proposed order: 

“Nothing contained in this Order or in the Motion is intended to be or shall be construed as . . . (c) 

an approval or assumption of any agreement, contract, program, policy, or lease under section 

365 of the Bankruptcy Code, or a waiver of the right to object to any designation that a matter is 

an executory contract”. 

Potentially Resolved Issues, Subject to Review and Agreement on Revised Proposed Order 

5. The California State Agencies object to the language in the proposed order that 

purports to bar, estop or enjoin claimants from asserting claims if they fail to comply with the 

order. Paragraph 5(i) of the proposed order provides that all holders of claims “that fail to 

comply with this Order by timely filing a Proof of Claim in the appropriate form shall (i) be 

forever barred, estopped, and enjoined from asserting such claims against the Debtors, their 

property, or their estates (or submitting a Proof of Claim with respect thereto) . . .” 

6. Such a provision is not appropriate at this stage of the case since, inter alia, it 

essentially provides the Debtors a discharge prior to confirmation of any chapter 11 plan. It 

further appears to prohibit the possible allowance of late claims as timely in the event of 

excusable neglect. Further, if the Debtors are solvent, then even late claims have to be paid in full 

under the best interests of creditors test in 11 U.S.C. § 1129(a)(7) in the absence of consent.3

 The 

California State Agencies are informed and believe that others have raised this issue with the 

Debtors and that the Debtors have agreed to delete the offending language in a revised proposed 

order. Subject to review and approval of the revised proposed order, this issue appears to be 

resolved. 

 

3

 See e.g., In re Sheehan Mem’l Hosp., 507 B.R. 802 (Bankr. W.D.N.Y. 2014); In re Wash. Mut., 

Inc., 442 B.R. 314, 357 (Bankr. D. Del. 2011); In re Best Payphone, Inc., 523 B.R. 54, 75 (Bankr. 

S.D.N.Y. 2015) (the best interests test would “require the solvent chapter 11 plan proponent to 

satisfy late claims, as the trustee would have to do in a chapter 7 case, before equity can receive 

or retain property”). 

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7. The California State Agencies also note that the definition of a “Wildfire Claim” in 

the Motion is extremely broad and appears to include claims from wildfires that are not tort 

claims. The California State Agencies note that not all claims that arise from a wildfire are tort 

claims. For example, CAL FIRE has statutory claims for cost recovery that would fit within the 

definition of a Wildfire Claim in the Motion, but such claims are not tort claims. See Health & 

Safety Code §§ 13009 and 13009.1. The California State Agencies believe that statutory and 

non-tort claims against the utility Debtor, which stem from responding to numerous wildfires—

including past wildfires not specifically named on the Debtors’ proposed Wildfire Claim form—

should not be required to be filed on the same forms and provided the same treatment as tort 

claims stemming from wildfires. While this Motion might not be determinative of treatment 

under a future chapter 11 plan, the California State Agencies are concerned that the Debtors’ 

broadly defined “Wildfire Claim” may snowball into attempting to treat non-tort, statutory based 

claims in the same manner as tort-based wildfire claims. As such, the California State Agencies 

note their objection for the record and reserve all rights as to treatment of non-tort, statutory based 

wildfire claims in a future chapter 11 plan. 

8. The Debtors have informed the California State Agencies that they will add 

language to the proposed order that addresses this issue. Because of the unduly onerous 

requirements of the Debtors’ proposed Wildfire Claims form and confusion that is likely to arise 

as to which claim form to use, the California State Agencies submit that governmental units of the 

State of California be excluded from being required to use the Wildfire Claim forms entirely. 

However, at a minimum the California State Agencies request language clarifying that, for 

purposes of the Bar Date Order, statutory and non-tort wildfire-related claims of any 

governmental unit of the State of California shall be excluded from the definitions of “Wildfire 

Claim” and “Wildfire Claimant” and such governmental units shall not be required to submit such 

claims using the Wildfire Claimant Proof of Claim Forms but rather such parties may use the 

Standard Proof of Claim Form, or a proof of claim that conforms substantially to the Official 

Form (410B), to file statutory and non-tort wildfire-related claims. Further, the California State 

Agencies are aware that the Official Committee of Tort Claimants (“TCC”) has proposed a 

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different Wildfire Claim form and understand that the Debtors are having discussions with the 

TCC and others regarding the different forms. The California State Agencies reserve their rights 

regarding the forms and procedures for Wildfire Claims. 

9. The Debtors’ proposed order requires claimants to file the different types of claims 

in “substantially” the form specified and imposes drastic consequences if the appropriate form is 

not used. See Order ¶¶ 3(c-e) and 5(ii). Paragraph 5 of the proposed order purports to 

disenfranchise creditors for purposes of voting and distribution if the claim is not filed on the 

“appropriate form.” Order ¶ 5(ii). The requirement to use those forms in this case should be no 

more strictly enforced than is the requirement in other bankruptcy cases to use the standard form. 

See e.g., Fed. Rule. Bankr. Proc. 3001(a). So long as the nature, validity and basis of the claim 

can be determined, the claim should obtain the “deemed allowed” status provided under section 

502(a) regardless of which form the creditor uses. 

10. The California State Agencies and other creditors should not be prejudiced for not 

using a form that “substantially” conforms to the Debtors’ proposed forms or the “appropriate 

form” among the choices for the particular claim. This is particularly true given that the Debtors 

have broadly defined “Wildfire Claim” when there are non-tort or statutory claims that relate to 

wildfires. 

11. On this point, the California State Agencies agree with the language proposed by 

the Ad Hoc Committee of Subrogation claimants (Docket No. 2043, page 5, lines 20-23): 

“Notwithstanding anything to the contrary herein, claimants that make a good faith effort to assert 

a claim in the appropriate form shall be permitted to revise, amend and/or supplement their proof 

of claim until such claim is allowed or disallowed by Court order.” The Debtors have circulated a 

revised proposed order containing similar language, which the California State Agencies are 

reviewing at this time. 

12. The California State Agencies have requested that the Debtors make clear in the 

proposed order that the word claim refers to “claim” as defined in 11 U.S.C. §101(5), which the 

California State Agencies are informed and believe the Debtors have agreed to do. Subject to 

review and approval of the revised proposed order, this issue appears to be resolved. 

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13. The Motion seeks to set a deadline to file a claim if the schedules are amended, 

which typically would be proper. However, the California State Agencies submit that the 

description of the claims in the Debtors’ schedules is often vague and ambiguous with respect to 

agencies of the State of California, with many such entries merely referencing the “State of 

California.” The California State Agencies request that paragraph 3(l) of the order indicate that 

any notice of an amendment to the schedules provide sufficient information for the claimant to be 

able to determine the identity of the claimant and the nature of the amendment or supplement, 

which the Debtors appear to have agreed to do. The Debtors have circulated a revised proposed 

order containing similar language, which the California State Agencies are reviewing at this time. 

14. The Department of Water Resources, acting by and through the California Energy 

Resources Scheduling Division (CERS), requested that the Debtors add language to the proposed 

order clarifying that claims against Debtor, Pacific Gas & Electric Company, arising out of the 

2000-2001 energy crisis refund proceedings before FERC are not required to file a Proof of Claim 

on or before the Bar Date. The Debtors have circulated a revised proposed order containing 

acceptable language on this issue. Subject to review and approval of the final version of the 

revised proposed order, this issue appears to be resolved. 

15. Finally, the Debtors request that proofs of claim using the Debtors’ proposed 

Wildfire Claim form be kept confidential. See Order ¶ 4. The California State Agencies do not 

believe these claims should be confidential, unless otherwise requested by the wildfire claimants 

or the Official Committee of Tort Claimants. The California State Agencies do not want their 

wildfire-related proofs of claim to be treated as confidential. While there may be information in 

the California State Agencies’ and other governmental units of the State of California respective 

supporting documentation which will be redacted to protect state employees’ privacy rights (e.g., 

employee social security numbers), the proofs of claim should not be confidential and limited to 

review by only the select group mentioned in the proposed order. The Debtors have agreed to 

carve out the California State Agencies from the language requiring that information submitted in 

connection with Wildfire Claims remain confidential; however, the California State Agencies 

believe this revision should apply to all governmental units of the State of California. Subject to 

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review and approval of the revised proposed order, this issue may be resolved. 

16. Neither this limited objection nor any subsequent appearance, pleading, proof of 

claim, claim or suit is intended or shall be deemed or construed as: 

a. a consent by the California State Agencies to the jurisdiction of this Court 

or any other court with respect to proceedings, if any, commenced in any case against or 

otherwise involving the California State Agencies; 

b. a waiver of any right of the California State Agencies to (i) have an Article 

III judge adjudicate in the first instance any case, proceeding, matter or controversy as to which a 

Bankruptcy Judge may not enter a final order or judgement consistent with Article III of the 

United States Constitution, (ii) have final orders in non-core matters entered only after de novo 

review by a District Court Judge, (iii) trial by jury in any proceeding so triable in the Chapter 11 

Cases or in any case, controversy, or proceeding related to the Chapter 11 Cases, (iv) have the 

United States District Court withdraw the reference in any matter subject to mandatory or 

discretionary withdrawal, or (v) any and all rights, claims, actions, defenses, setoffs, recoupments 

or remedies to which the California State Agencies are or may be entitled under agreements, in 

law or in equity, all of which rights, claims, actions, defenses, setoffs and recoupments are 

expressly reserved hereby; or 

c. a waiver of any objections or defenses that the State of California, the 

California State Agencies or any other agency, unit or entity of the State of California may have 

to this Court’s jurisdiction over the State of California, the California State Agencies or such 

/// 

/// 

/// 

/// 

/// 

/// 

/// 

/// 

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other agency, unit or entity based upon the Eleventh Amendment to the United States 

Constitution or related principles of sovereign immunity or otherwise, all of which objections and 

defenses are hereby reserved. 

Dated: May 31, 2019 Respectfully submitted, 

XAVIER BECERRA 

Attorney General of California 

MARGARITA PADILLA 

Supervising Deputy Attorney General 

By:/s/ Paul J. Pascuzzi____________________________ STEVEN H. FELDERSTEIN 

PAUL J. PASCUZZI 

FELDERSTEIN FITZGERALD 

WILLOUGHBY & PASCUZZI LLP 

Attorneys for California Department of Toxic 

Substances Control, California Department of Water 

Resources acting by and though the California Energy 

Resources Scheduling Division and on behalf of the 

State Water Project, State Water Resources Control 

Board, Regional Water Quality Control Boards, and 

State Energy Resources Conservation and Development 

Commission, California Department of Forestry and 

Fire Protection (CAL FIRE), California Coastal 

Commission, California Air Resources Board, 

Department of Parks and Recreation, San Francisco Bay 

Conservation and Development Commission, 

Department of Housing and Community Development, 

Central Valley Flood Protection Board, Department of 

Conservation including the Division of Oil, Gas, and 

Geothermal Resources, State Coastal Conservancy, and 

California Department of Fish and Wildlife 

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PROOF OF SERVICE 

I, Lori N. Lasley, declare: 

I am a resident of the State of California and over the age of eighteen years, and not a 

party to the within action; my business address is 400 Capitol Mall, Suite 1750, Sacramento, CA 

95814. On May 31, 2019, I served the within documents: 

LIMITED OBJECTION OF THE CALIFORNIA STATE AGENCIES TO 

MOTION OF DEBTORS FOR ORDER (I) ESTABLISHING DEADLINE FOR

FILING PROOFS OF CLAIM, (II) ESTABLISHING THE FORM AND MANNER

OF NOTICE THEREOF, AND (III) APPROVING PROCEDURES FOR

PROVIDING NOTICE OF BAR DATE AND OTHER INFORMATION TO ALL

CREDITORS AND POTENTIAL CREDITORS [DOCKET NO. 1784] 

By Electronic Service only via CM/ECF. 

/s/ Lori N. Lasley

Lori N. Lasley 

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