1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DEPARTMENT OF JUSTICE

CIVIL DIVISION

JOSEPH H. HUNT

Assistant Attorney General

RUTH A. HARVEY

Director

KIRK MANHARDT

Deputy Director

MATTHEW J. TROY (GABN 717258)

Senior Trial Counsel

P.O. Box 875

Ben Franklin Station

Washington, DC 20044-0875

Telephone: (202) 514-9038

E-mail: matthew.troy@usdoj.gov

DAVID L. ANDERSON (CABN 149604)

United States Attorney

ROBIN M. WALL (CABN 235690)

Assistant United States Attorney

Attorneys for the United States of America

UNITED STATES BANKRUPTCY COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISION

In re:

PG&E CORPORATION

- and -

PACIFIC GAS AND ELECTRIC

COMPANY,

 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).

)

)

)

)

)

)

)

)

)

) 

)

) 

) 

) 

)

)

)

)

)

)

Bankruptcy Case

No. 19-30088 (DM)

Chapter 11

(Lead Case)

 (Jointly Administered)

 Date: August 14, 2019

 Time: 9:30 a.m.

 Place: United States Bankruptcy Court

 450 Golden Gate Avenue

 Courtroom 17

 San Francisco, CA 94102

 Judge: Hon. Dennis Montali

 RE: Docket No. 3091

 

RESPONSE OF THE UNITED STATES OF AMERICA TO DEBTORS’ MOTION

PURSUANT TO 11 U.S.C. §§ 105(a) and 502(c) FOR THE ESTABLISHMENT OF 

WILDFIRE CLAIMS ESTIMATION PROCEDURES

Case: 19-30088 Doc# 3424 Filed: 08/07/19 Entered: 08/07/19 15:02:30 Page 1 of

5
2

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

The United States of America, on behalf of various federal agencies, including, but not limited

to, the United States Department of Agriculture, United States Forest Service (“USDA”); the United 

States Department of the Interior, Bureau of Land Management, and the National Park Service 

(“DOI”); and the Department of Homeland Security, Federal Emergency Management Agency 

(“FEMA”), hereby files this response to the Debtors’ Motion Pursuant to 11 U.S.C. §§ 105(a) and 

502(c) for the Establishment of Wildfire Claims Estimation Procedures (the “Motion”).1

UNITED STATES CLAIMS

Together, USDA and DOI hold significant claims against the Debtors resulting from the

Wildfires as well as other prepetition wildfires not within the Motion’s definition of Wildfires. These 

claims include, but are not limited to, (i) costs of suppressing wildfires on federal lands; (ii) damage to 

federal lands and the resources they contain including timber, habitat, wildlife, soil, and watersheds as 

well as the scenic, aesthetic, historic, archeological, and recreational values of those lands; and (iii) 

reforestation and other costs associated with stabilizing, rehabilitating, and restoring federal lands. 

Additionally, FEMA has provided substantial disaster assistance, pursuant to the Stafford Act, 42 

U.S.C. § 5121 et seq., to the State of California and directly to individuals to assist in responding to 

the Wildfires, which assistance is recoverable against the Debtors under the Stafford Act.

2

ESTIMATION MOTION

Relying on 11 U.S.C. §§ 105(a) and 502(c), the Motion seeks entry of an order establishing 

procedures and schedules for the estimation of the Debtors’ aggregate liability for contingent and/or 

unliquidated claims arising out of the 2015, 2017 and 2018 Northern California Wildfires. Motion at 

iii. Specifically, it seeks approval for a three-phased process to estimate this liability: (1) 

determination of whether PG&E can be strictly liable under the state law doctrine of inverse 

condemnation; (2) determination of whether PG&E caused the Tubbs Fire; and (3) the Court’s 

determination of the estimated aggregate value of the Wildfire Claims, id. at 4-8. As to Phase 3, the 

 1 Terms not otherwise defined herein shall have the meaning ascribed to them in the Motion and 

accompanying exhibits.

2 The United States is still in the process of identifying its claims against the Debtors. The 

description of some of the United States’ claims in this Response is without prejudice, and the United 

States expressly reserves its right, to assert other claims arising out of the Wildfires, any other wildfires 

for which PG&E is liable, or any other claims not related to the Wildfires.

Case: 19-30088 Doc# 3424 Filed: 08/07/19 Entered: 08/07/19 15:02:30 Page 2 of

5
3

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Motion does not make clear whether the Debtors consider the United States’ wildfire related claims as 

contingent or unliquidated and thus, subject to that phase. Indeed, the focus of the proposed 

estimation process appears to be individual tort victims’ Wildfire Claims, Motion at 1 (“Tens of 

thousands of California residents whose lives have been affected by the Wildfires need to know 

whether, and how much , they will recover from PG&E.”), as opposed to the wildfire related claims of 

governmental units like the United States.

RESPONSE

The United States takes no position with respect to the Motion’s first two phases of the 

proposed process. With respect to Phase 3, the United States acknowledges the desire and need to 

establish procedures for dealing with individual tort victims’ Wildfire Claims. The Motion is, 

however, unclear whether the United States’ wildfire related claims would be subject to the section 

502(c) estimation proceeding, and its requested relief does not include the Court making such a ruling. 

The United States does not believe its wildfire related claims are subject to section 502(c) estimation, 

but if the Debtors believe they are, the Court will need to resolve the issue in a subsequent proceeding. 

Accordingly, the United States files this response to expressly reserve its right in any further 

proceedings to be heard on whether its wildfire related claims can be included in any estimation 

proceeding and/or be heard as to the procedures for such a proceeding.

By its terms, section 502(c) applies to contingent or unliquidated claims. If a claim is neither

contingent nor unliquidated, it is not subject to estimation under section 502(c). In re Rhead, 179 B.R. 

169, 172 (Bankr. D. Ariz. 1995) (citing In re Continental Airlines, 981 F.2d 1450 (5th Cir. 1993)).

While the Bankruptcy Code does not define contingent, the Ninth Circuit has held that “a 

contingent debt is one which the debtor will be called upon to pay only upon the occurrence or 

happening of an extrinsic event which will trigger the liability of the debtor to the alleged creditor.” 

Fostvedt v. Dow (In re Fostvedt), 823 F.2d 305, 306 (9th Cir. 1987) (citations omitted). Hence, “a debt 

is noncontingent if all events giving rise to liability occurred prior to the filing of the bankruptcy 

petition,” Nicholes v. Johnny Appleseed (In re Nicholes), 184 B.R. 82, 88 (B.A.P. 9th Cir. 1995), even 

if the debt is unliquidated or disputed, id. at 88 n.7. While Fostvedt and Nicholes interpreted the 

definition of contingent for purposes of chapter 13 eligibility under section 109(e), courts have applied 

Case: 19-30088 Doc# 3424 Filed: 08/07/19 Entered: 08/07/19 15:02:30 Page 3 of

5
4

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

the same definition to section 502(c). In re Audre, Inc., 202 B.R. 490, 492 (Bankr. S.D. Cal. 1996); In 

re Kennan, 201 B.R. 263, 265 (Bankr. S.D. Cal. 1996).3

The Bankruptcy Code also does not define the term liquidated, but “whether a debt is 

liquidated turns on whether it is subject to ready determination and precision in computation of the 

amount due.” In re Fostvedt, 823 F.2d at 306. Moreover, a debt is unliquidated even if liability has 

not been adjudicated or it is disputed. Slack v. Wilshire Ins. Co. (In re Slack), 187 F.3d 1070, 1075 

(9th Cir. 1999) (section 109(e) case). Indeed, even where courts consider claims based in tort, they 

have held those claims were liquidated so long as the claim amount was readily determinable. In re 

Corson, 2004 WL 5865045 *5 n.10 (Bankr. E.D. Pa. 2004) (collecting cases). As with the term 

contingent, courts have used the same definition from section 109(e) decisions in interpreting the term 

unliquidated in section 502(c). In re Audre, Inc., 202 B.R. at 492; In re Kennan, 201 B.R. at 265.

As noted, the United States is continuing the process of determining its claims, including those 

that might be wildfire related. Nevertheless, it believes that its wildfire related claims, as identified 

and developed by the October 21, 2019 bar date, are neither contingent nor unliquidated. They are not 

contingent because all the events giving rise to the United States’ wildfire related claims (prepetition 

wildfires) occurred prior to the Debtors’ petition date. No extrinsic event must occur to trigger the 

Debtors’ liability. Moreover, the claims are liquidated because the vast majority of their amounts are 

readily ascertainable in the form of already expended costs for fire suppression and other emergency 

services, debris removal and clean up, reforestation and rehabilitation of damaged federal lands,

repair/replacement of damaged infrastructure, financial assistance to individuals for housing and other 

needs, direct temporary housing, and associated administrative costs.

Therefore, the United States’ wildfire related claims are not subject to estimation under section 

502(c).

 3 The Supreme Court has held that there is no difference between the definitions of “claim” and 

“debt” in the Bankruptcy Code. Penn. Dep't of Pub. Welfare v. Davenport, 495 U.S. 552, 558 (1990)

(finding that by defining “ ‘debt’ as a ‘liability on a claim,’ ” Congress intended “that the meanings of ‘debt’ and ‘claim’ be coextensive”); accord Davis v. U.S. Bank, N.A. (In re Davis), 778 F.3d 809, 812 

(9th Cir. 2015).

Case: 19-30088 Doc# 3424 Filed: 08/07/19 Entered: 08/07/19 15:02:30 Page 4 of

5
5

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

CONCLUSION

The United States takes no position on the first two phases requested in the Motion. Because 

its claims are neither contingent nor unliquidated, the United States reserves, however, its right to be 

heard, if needed, in any further proceedings on whether its wildfire related claims can be included in 

the proposed Phase 3 estimation proceeding. To the extent the Court does subsequently order its 

wildfire related claims are subject to section 502(c), the United States further reserves its right to be 

heard on the procedures for such a proceeding.4

Date: August 7, 2019 Respectfully submitted,

JOSEPH H. HUNT

Assistant Attorney General

DAVID L. ANDERSON (CABN 149604)

United States Attorney

ROBIN M. WALL (CABN 235690)

Assistant United States Attorney

/s/ Matthew J. Troy

RUTH A. HARVEY

Director

KIRK MANHARDT

Deputy Director

MATTHEW J. TROY

Senior Trial Counsel

Attorneys for United States

CERTIFICATE OF SERVICE

I hereby certify that on August 7, 2019, I electronically filed the foregoing Response with the Clerk of the Court 

by using the CM/ECF system, which will send a notice of electronic filing to all CM/ECF participants.

/s/ Matthew J. Troy

Matthew J. Troy

Senior Trial Counsel 

Attorney for United States

 4

 The United States also reserves it right to object to any plan that purports to classify the United 

States’ wildfire related claims as Wildfire Claims whose only source of recovery is a litigation trust with 

a channeling injunction and a capped funding amount established pursuant to an estimation proceeding. 

See Response of the United States of America to Motion of Ad Hoc Committee of Senior Unsecured 

Noteholders to Terminate the Debtors’ Exclusivity Periods Pursuant to Section 1121(d)(1) of the 

Bankruptcy Code (Docket No. 3010). 

Case: 19-30088 Doc# 3424 Filed: 08/07/19 Entered: 08/07/19 15:02:30 Page 5 of

5