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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 

Cara M. Porter, SBN 266045 

Deputy Attorney 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 

Cara.Porter@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 26, 2019 

Time: 9:30 a.m. 

Ctrm: 17 

Judge: Dennis Montali 

OBJECTION OF THE CALIFORNIA STATE AGENCIES TO MOTION OF 

DEBTORS FOR ENTRY OF PROTECTIVE ORDER PURSUANT TO 

FED. R. BANKR. P. 7026 AND 9014(c) AND 11 U.S.C. § 105(a) GOVERNING 

DISCOVERY MATERIALS AND OTHER INFORMATION [DOCKET NO. 2459]

Case: 19-30088 Doc# 2631 Filed: 06/19/19 Entered: 06/19/19 13:53:21 Page 1 of

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

Resources, State Water Resources Control Board, Regional Water Quality Control Boards, State 

Energy Resources Conservation and Development Commission, California Department of 

Forestry and Fire Protection, California Department of Fish and Wildlife, California Air 

Resources Board, California Franchise Tax Board, California Coastal Commission, 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, California High Speed Rail Authority, California Natural Resources 

Agency, and California State Lands Commission (collectively, the “California State Agencies”) 

hereby file this objection to the Debtors’ motion for entry of a protective order governing 

discovery materials and other information in the above-captioned jointly administered Chapter 11 

cases (“Chapter 11 Cases”) (the “Motion”) [Docket No. 2459] based on the following: 

INTRODUCTION 

1. The Debtors and the TCC1

 have filed competing motions for the entry of a 

protective order that would apply to any person or entity, which includes governmental units 

under Bankruptcy Code section 101(15), for all matters in these Chapter 11 Cases, 

notwithstanding the fact that the Proposed Protective Orders were negotiated solely between the 

Debtors, the TCC and the UCC. Both motions are set for hearing on June 26. The California 

State Agencies have no objection if the Proposed Protective Order applies only to the parties that 

negotiated it, namely the Debtors, the TCC and the UCC. However, the California State 

Agencies object to having the Proposed Protective Order apply to governmental units, including 

but not limited to governmental units of the State of California. The California State Agencies 

are informed and believe that other governmental entities have a similar objection, including the 

United States Department of Justice which represents federal agencies, and the California Public 

Utilities Commission. 

 

1

 Capitalized terms not otherwise defined shall have the same meaning as in the Motion. 

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OBJECTION 

2. Under Ninth Circuit authority, “[i]t is well-established that the fruits of pretrial 

discovery are, in the absence of a court order to the contrary, presumptively public.” San Jose 

Mercury News, Inc. v. U.S. Dist. Ct., 187 F.3d 1096, 1103 (9th Cir. 1999). The party seeking a 

protective order “bears the burden of showing specific prejudice or harm will result if no 

protective order is granted.” Phillips v. G.M. Corp., 307 F.3d 1206, 1210-11 (9th Cir. 2002). The 

Debtors have failed to meet this burden. The Court should order that the Proposed Protective 

Order shall not apply to any person or entity that did not participate in its negotiation. 

3. The Proposed Protective Order was negotiated solely among the Debtors, the TCC 

and the UCC. No other parties to the Debtors’ bankruptcy cases were included in the drafting of 

the Proposed Protective Order. Motion at 4:5-12. However, the Motion proposes to impose the 

requirements of the Proposed Protective Order on any person or entity and for all matters in these 

Chapter 11 Cases, regardless of whether such parties even have notice of the Motion, and without 

citing any legal authority to authorize such a sweepingly broad order. 

4. Among other things, the Proposed Protective Order purports to limit the use of any 

Discovery Material to the Chapter 11 Cases. None of the example orders attached to the Motion 

applies broadly to every “person or entity” in a Chapter 11 case. Rather, each example order 

applies only to the parties who negotiated the particular order or to a limited group of parties 

involved in a specified, particular matter. 

5. The Debtors’ utility operations are highly regulated by federal, state and local 

governmental entities. There are significant issues with restricting governmental units from using 

information received in discovery, including in these Chapter 11 Cases, for law enforcement or 

regulatory purposes. Further, the Proposed Protective Order appears to prohibit third parties from 

reporting information obtained in the Chapter 11 Cases that should be reported to law 

enforcement or regulatory authorities. The overly broad Proposed Protective Order infringes on 

the governmental entities’ police and regulatory authority in three main ways. 

6. First, governmental units of the State of California have investigative, enforcement 

and regulatory powers that cannot be restricted by the Proposed Protective Order. These 

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governmental units must be able to use information obtained for their own purposes and proceed 

with their usual authority without being restricted by the overly broad Proposed Protective Order. 

See, e.g., Cal. Gov’t Code §11180 (authorizing the head of each department of an agency of the 

State of California to investigate and prosecute actions concerning all matters relating to the 

business activities and subjects under the jurisdiction of the department including violations of 

any law, rule or order of the department). A court may not enjoin an official from carrying out 

his duties under the law. See Cal. Code Civ. Proc., § 526, subd. (b)(4), (6); Cal. Civ. Code § 

3423(d), (f); People v. Superior Court (Witzerman) (1967) 248 Cal.App.2d 276, 282-84 

(protective order that tied hands of the Attorney General was an abuse of discretion).2

7. Second, under California law, governmental units of the State of California must 

be able to share information with law enforcement and to communicate among themselves for 

regulatory and law enforcement purposes without any curtailment. For example, any 

governmental unit of the State of California, including the California State Agencies, has the 

authority to disclose information obtained through its investigations to law enforcement personnel 

and agencies and to personnel of other government agencies for law enforcement or regulatory 

purposes. See, e.g., Cal. Gov’t. Code § 11181(g). Government Code section 11181(g) permits a 

department head to divulge information related to unlawful activity that is discovered from 

“interrogatory answers, papers, books, accounts, documents, and [other discoverable items] or 

testimony” to the Attorney General or any prosecuting attorney in the State of California, other 

state or the United States with responsibility for investigating the unlawful activity under certain 

conditions. See also, Cal. Gov’t. Code § 11180.5 (state agency may assist Attorney General in 

 

2

 For example, the California Franchise Tax Board (“FTB”) has statutory authority to conduct 

investigations using demands for information and administrative subpoenas under California 

Revenue and Taxation Code section 19504. To the extent that the Proposed Protective Order 

seeks to limit the FTB’s ability to utilize an administrative subpoena, such order would violate 

Article XIII, Section 32, of the California Constitution which provides: “No legal or equitable 

process shall issue in any court against this State or any officer thereof to prevent or enjoin the 

collection of any tax. After payment of tax claimed to be illegal, an action may be maintained to 

recover the tax paid, with interest, in such manner as may be provided by the Legislature.” A 

subpoena issued by FTB “is the first step in the collection of tax and an integral part of the tax 

collection process, and section 32 mandates that it shall not be prevented or enjoined by the legal 

or equitable process of any court.” People ex rel. Franchise Tax Board v. The Superior Court, 

164 Cal.App.3d 526, 545 (1985). 

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conducting investigations). California Government Code section 11181 sets forth the wide 

variety of methods by which the Attorney General may carry out his authority to conduct an 

investigation to ascertain whether any laws are being violated. Such activities cannot be 

enjoined. See Cal. Code Civ. Proc., § 526, subd. (b)(4), (6); Cal. Civ. Code § 3423(d), (f); People 

v. Superior Court (Witzerman) (1967) 248 Cal.App.2d 276, 282-84 (protective order that tied 

hands of the Attorney General was an abuse of discretion). 

8. Third, the California State Agencies are concerned that the Proposed Protective 

Order appears to prohibit third parties from providing information to law enforcement or 

regulatory authorities regarding potential violations of the law. 

9. Rather than having governmental units swept up in the overly broad Proposed 

Protective Order being requested by the Debtors and the TCC, and negotiated solely by the 

Debtor, the UCC and the TCC apparently without any consideration of law enforcement and 

regulatory exceptions, governmental units should be carved out from the Proposed Protective 

Order. These issues can and should be dealt with on a case-by-case basis with governmental units 

as they arise in the Chapter 11 Cases. 

10. The California State Agencies are informed and believe that other governmental 

authorities involved in the Chapter 11 Cases, including the United States Department of Justice, 

which represents federal agencies in the Chapter 11 Cases, concur with the position of the 

California State Agencies that the Proposed Protective Order should apply solely to the parties 

who negotiated it. 

11. The California State Agencies reserve the right to present other objections to the 

form of protective order in the event the Court denies their request to be excluded therefrom. As 

admitted by the Debtors and the TCC, no one other than the Debtors, the TCC and the UCC have 

been privy to the negotiations. 

12. The California State Agencies have presented these issues to counsel for the 

Debtors and will continue to attempt to resolve them prior to the hearing on the Motion. 

RESERVATION OF RIGHTS 

13. Neither this objection nor any subsequent appearance, pleading, proof of claim, 

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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 judgment 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 

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. 

CONCLUSION 

The California State Agencies request that Court order that the Proposed Protective Order 

apply only to the Debtors, the UCC and the TCC. Alternatively, at a minimum, the California 

/// 

/// 

/// 

/// 

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State Agencies request that the Court include in any Proposed Protective Order an express 

exception that such order does not apply to governmental units. 

Dated: June 19, 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, State Water Resources Control Board, 

Regional Water Quality Control Boards, State Energy 

Resources Conservation and Development Commission, 

California Department of Forestry and Fire Protection, 

California Department of Fish and Wildlife, California 

Air Resources Board, California Franchise Tax Board, 

California Coastal Commission, 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, California High Speed Rail 

Authority, California Natural Resources Agency, and 

California State Lands Commission 

Case: 19-30088 Doc# 2631 Filed: 06/19/19 Entered: 06/19/19 13:53:21 Page 7 of

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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 June 19, 2019, I served the within documents: 

OBJECTION OF THE CALIFORNIA STATE AGENCIES TO MOTION OF 

DEBTORS FOR ENTRY OF PROTECTIVE ORDER PURSUANT TO

FED. R. BANKR. P. 7026 AND 9014(C) AND 11 U.S.C. § 105(A) GOVERNING

DISCOVERY MATERIALS AND OTHER INFORMATION [DOCKET NO. 2459] 

By Electronic Service only via CM/ECF. 

/s/ Lori N. Lasley

Lori N. Lasley 

Case: 19-30088 Doc# 2631 Filed: 06/19/19 Entered: 06/19/19 13:53:21 Page 8 of

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