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UNITED STATES BANKRUPTCY COURT

for the Northern District of California

UNITED STATES BANKRUPTCY COURT

NORTHERN DISTRICT OF CALIFORNIA

In re: 

PG&E CORPORATION,

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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).

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Bankruptcy Case

No. 19-30088-DM

Chapter 11

Jointly Administered

MEMORANDUM DECISION REGARDING MOTIONS FOR RELIEF FROM STAY

The Official Committee of Tort Claimants (the “TCC”) filed a motion for relief from 

stay on July 2, 2019 (Dkt. 2842) and the Ad Hoc Group of Subrogation Claim Holders filed a 

similar motion on July 3, 2019 (Dkt. 2863) (together the “Motions”). Several parties joined and 

opposed, and the Motions came on for hearing on August 14, 2019. Subsequently, the matters 

were submitted. 

Signed and Filed: August 16, 2019

________________________________________

DENNIS MONTALI

U.S. Bankruptcy Judge

Entered on Docket 

August 16, 2019

EDWARD J. EMMONS, CLERK 

U.S. BANKRUPTCY COURT 

NORTHERN DISTRICT OF CALIFORNIA

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UNITED STATES BANKRUPTCY COURT

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This court has jurisdiction over these contested matters pursuant to 28 U.S.C. §§ 157(b) 

and 1334(b). They are core proceedings under 28 U.S.C. § 157(b)(2)(A) and (G). Venue is 

appropriate in this court. 28 U.S.C. § 1409(a).

I. BACKGROUND

The parties seek relief from the automatic stay in order to pursue state court litigation 

which will decide whether Debtors caused and are liable for the wildfire known as the “Tubbs 

Fire,” which all parties agree is the largest and most destructive fire of the Northern California 

wildfires that occurred in 2017 and 2018. By the movants’ estimate, the potential damages 

could account for as much as two-thirds of Debtors’ liability for the wildfires in Northern 

California. The TCC seeks relief from stay as to eight individuals listed in Exhibit A to their 

motion who are entitled to statutory preference for trial under California Code of Civil 

Procedure § 36 (the “Preference Plaintiffs”) in the San Francisco Superior Court, as coordinated

litigation (the “Coordination Proceeding”). The Ad Hoc Group of Subrogation Claim Holders 

seek relief to determine Debtors’ liability in the same litigation. 

II. ANALYSIS

A bankruptcy court shall lift the automatic stay for cause, which is not defined in the 

Bankruptcy Code but is decided on a case-by-case basis. See 11 U.S.C. § 362(d)(1); 

Christensen v. Tucson Estates, Inc. (In re Tucson Estates, Inc.), 912 F.2d 1162, 1166 (9th Cir. 

1990). If a bankruptcy court may abstain from deciding issues that could be decided by an 

imminent state court trial involving the same issues, cause may exist to allow the state court 

trial to go forward. Id. (citation omitted). To determine whether cause exists, courts often use 

the twelve factors set forth in In re Curtis, 40 B.R. 795, 800 (Bankr. D.Utah 1984) (the “Curtis

factors”), which are as follows (excluding the factors irrelevant to this proceeding): whether the 

relief will result in a partial or complete resolution of the issues; the lack of any connection with 

or interference with the bankruptcy case; 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;

whether the litigation in another forum would prejudice the interests of other creditors, 

the creditor's committee and other interested parties; the interests of judicial economy and 

the expeditious and economical determination of litigation for the parties; whether the 

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UNITED STATES BANKRUPTCY COURT

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foreign proceedings have progressed to the point where the parties are prepared for trial, 

and the impact of the stay and the "balance of hurt." See also (Kronemyer v. Am. 

Contractors Indemn. Co. ( In re Kronemyer), 405 B.R. 915, 921 (B.A.P. 9th Cir. 2009)

(“We agree that the Curtis factors are appropriate, nonexclusive, factors to consider in 

deciding whether to grant relief from the automatic stay to allow pending litigation to 

continue in another forum.”)

Here, cause exists to grant relief from stay, both including and independent of the Curtis 

factors. First, relief from stay will definitively bring a resolution as to Debtors’ liability in the 

Tubbs fire, and provide an important data point that most likely will facilitate resolution of the 

wildfire tort claims in this case. Also relevant to the bankruptcy proceeding is the guidance it 

may provide in this court’s estimation proceedings under 11 U.S.C. § 502(c).

Debtors are correct in their opposition to the TCC’s motion when they state that 

resolution of the Tubbs fire proceedings is central to this case. However, commencement of 

this litigation, while connected to the bankruptcy, will not interfere with the bankruptcy case. 

The state court trial may proceed on a parallel track to the proceedings in this court. The state 

court is also suited for a proceeding which consists entirely of state law issues, and it may be 

aided by the Coordination Proceeding in order to resolve these issues and the several parties 

implicated. Further, there is nothing to show that other creditors would be prejudiced if relief 

were granted, and while they do not appear to be completely ready for trial, the parties filed this 

action prior to the bankruptcy and, as further discussed below, are on a schedule for resolution. 

In addition, the interest of judicial economy and an expeditious determination has been 

served in this case. The TCC has identified the Preference Plaintiffs as entitled to statutory 

preference pursuant to state procedural law. See Cal. Civ. Proc. Code § 36 (West). On petition 

of the Preference Plaintiffs, which petition meets the standard laid out in CCP § 36, the state 

court shall set the matter for trial no more than 120 days after granting the motion for 

preference. Consequently, a trial in state court is likely to commence in an expeditious fashion 

once a preference determination has been made. Thus, the Curtis factors weigh in favor of 

relief from stay. 

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Finally, cause exists to grant relief from stay to advance these cases towards the 

necessary and stated goals of all the parties: a just resolution of the claims of victims of the 

wildfires that have ravaged Northern California in recent years. The pressure to adjudicate 

these claims in a prompt fashion comes from bankruptcy considerations, moral duties, and even 

legislative deadlines. See Assembly Bill No. 1054, Chapter 3 § 3291. The statutorily ensured 

commencement of a trial on the Tubbs fire moves toward liquidating these tort claims and helps 

with the imperfect method of estimating claims as must be done here in the bankruptcy court. 

In sum, although a handful of plaintiffs proceeding to trial does not resolve many claims in this 

case, it advances the goals of this bankruptcy far better than stayed, stagnant proceedings. All 

arguments to the contrary ignore the urgent need for resolution, the inherent suitability of the 

state court to bring about that resolution, and the importance of that resolution to the future 

conduct of these bankruptcy cases.

III. CONCLUSION

The Ad Hoc Group of Subrogation Claim Holders’ motion is GRANTED as requested 

to determine liability in the Coordination Proceeding. The TCC’s motion is GRANTED and 

the stay is lifted as to Preference Plaintiffs and any other parties entitled to the same preference 

as brought forth in the joinders filed to the Motions.

Counsel for the parties are requested to submit orders consistent with this memorandum 

decision that identify the parties entitled to relief from stay. Relief from stay will be effective 

upon entry of those orders. The 14 day stay of Federal Rule of Bankruptcy Procedure 

4001(a)(3) is waived. 

The court will issue a further order regarding coordination and communication with the 

state court proceedings following the August 27, 2019 status conference in this case.1

 

*** END OF MEMORANDUM DECISION ***

 1 The court expects that litigation counsel for Debtors will work collaboratively with plaintiffs' 

counsel to expedite rather than delay the pre-trial process to a get to a jury trial promptly. The 

shoe might be on the other foot when it is time to schedule the final estimation hearings.

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UNITED STATES BANKRUPTCY COURT

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COURT SERVICE LIST

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