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BAKER 

&

HOSTETLER LLP

ATTORNEYS AT LAW

SAN FRANCISCO

EXHIBIT A

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Case 5:18-cv-03509-EJD Document 121 Filed 05/28/19 Page 1 of 228 

1 LABATON SUCHAROWLLP 

THOMAS A. DUBBS (pro hac vice) 

2 LOUIS GOTTLIEB (pro hac vice) 

JEFFREY A. DUBBIN (#287199) 

3 ARAM BOGHOSIAN (pro hac vice) 

140 Broadway 

4 New York, New York 10005 

Telephone: (212) 907-0700 

5 Facsimile: (212) 818-0477 

Email: tdubbs@labaton.com 

6 lgottlieb@labaton.com 

jdubbin@labaton.com 

7 aboghosian@labaton.com 

8 Counsel for Lead Plaintiff the Public Employees Retirement 

Association of New Mexico and Lead Counsel for the Class 

9 

WAGSTAFFE, VON LOEWENFELDT, BUSCH & RADWICK, LLP 

10 JAMES M. WAGSTAFFE (#95535) 

FRANK BUSCH (#258288) 

11 100 Pine Street, Suite 725 

San Francisco, California 94111 

12 Telephone: (415) 357-8900 

Facsimile: (415) 371-0500 

13 Email: wagstaffe@wvbrlaw.com 

busch@wvbrlaw.com 

14 

Liaison Counsel for the Class 

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UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

Civil Action No. 3: 18-cv-03509-EJD 

20 IN RE PG&E CORPORATION 

SECURITIES LITIGATION 

THIRD AMENDED CONSOLIDATED CLASS 

: ACTION COMPLAINT FOR VIOLATION OF 

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: THE FEDERAL SECURITIES LAWS 

: JURY TRIAL DEMANDED 

THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 

CIVIL AcnoK No. 3: 18-cv-03509-EJD 

PGE-BK-0000001288 

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Case 5:18-cv-03509-EJD Document 121 Filed 05/28/19 Page 2 of 228 

I. 

II. 

ITT. 

IV. 

V. 

VI. 

TABLE OF CONTENTS 

INTRODUCTION ......................................................................................... ... .................. 1 

NATURE OF THE CASE ...... ........ ...................... ........ ...................... ........ ........................ 4 

JURISDICTION AND VENUE ....................................... ......................... .. ... ................ 5 

OVERVIEW OF THE EXCHANGE ACT VIOLATIONS ............................. .................. 5 

A. PG&E' s Failure to Comply with Safety Regulations Proximately Caused 

Wildfires in 2017 and Investors' Consequent Losses ................................................... . 

B. PG&E's Failure to Prioritize Safety Continued Unabated, Proximately 

Causing a Disastrous Wildfire in November 2018 as Well as Further Investor 

Losses ............................................................................................................................. 8 

1. After the North Bay Fires, PG&E Continued to Make False and 

Misleading Statements and Omissions ................................................................... 8 

2. PG&E's Continuing Noncompliance With Safety Regulations Caused the 

Camp Fire .............................................................................................................. 10 

C. Exchange Act Claims Being Asserted ........... .............. ................... ....... ................... 1 

THE EXCHANGE ACT PARTIES ...................... ........ ...................... ........ ...................... 13 

SUBSTANTIVE ALLEGATIONS SUPPORTING THE EXCHANGE ACT CLAIMS 15 

A. PG&E Operates Within a Robust Legal Regime ..................................... .................... 15 

1. California Law Required PG&E to Maintain a Safe Distance Between Its 

Electrical Equipment and Nearby Vegetation ....................................................... 15 

2. California Law Required PG&E to Safely Maintain Its Electrical 

Equipment and Infrastructure ............................................................................... 16 

3. PG&E Is Regulated by the CPUC ..................................................... ................... 17 

(a) CPUC's General Orders 95 and 165 Impose Strict Safety 

Regulations on PG&E .................................................................................. 17 

(b) CPUC's Resolution ESRB-8 Imposes on PG&E an Obligation to 

Adopt, Promulgate and Follow the ESRB-8 Shutoff Protocol .................... 19 

(c) PG&E Must Follow CPUC's Regulations Under Penalty of Law .............. 20 

4. Cal Fire Is the Duly Authorized Investigative Arm of the State of 

California for Wildfires ......................................................................................... 20 

5. Under California's Inverse Condemnation Law, PG&E Would Not Bear 

the Cost of Wildfires It Causes iflt Could Prove That It Acted Reasonably 

and Prudent! y ........................................................................................................ 21 

6. Federal Law Also Requires PG&E to Follow Minimum Safety Standards .......... 21 

THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 

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B. PG&E's Vegetation Management Expenditures Did Not Materially Change 

from Year to Year During the Class Period, Let Alone Double at Any Point. ........... .2 

C. PG&E's Tree Trimming and Removal Did Not Come Close to Doubling 

During the Class Period .............................................................................................. .2 

D. After the North Bay Fires, PG&E Started Reporting Inflated Numbers for 

Tree Removal ............................................................................................................... 25 

E. PG&E Concealed Its Unsafe Use of Reclosers During the Class Period ................... .25 

1. PG&E Used Reclosers to Prioritize Convenience Over Safety ...... ...................... 25 

2. PG&E Concealed Its Use ofReclosers from Investors During the Class 

Period .................................................................................................................... 27 

F. PG&E Engaged in an Unsafe Pattern of Noncompliance with Safety 

Requirements Before and Throughout the Class Period ............................................. .28 

1. PG&E Was Convicted of Negligence for Starting a Wildfire in 1994 ................. 28 

2. PG&E Unsafely Flouts Safety Regulations ...... ...... ................... ........ ... ................ 28 

3. PG&E's Unsafe, Noncompliant Vegetation Management Caused the Butte 

Fire in 2015 ........................................................................................................... 30 

4. PG&E's Insufficient Safety Practices Allowed Numerous, Company-Wide 

Vegetation Management and Other Safety Violations During the Class 

Period .................................................................................................................... 30 

(a) PG&E Documented and Tolerated Thousands of Dangerous Safety 

Violations Across Its Territory During the Class Period ............................. 30 

(b) PG&E Had Actual Knowledge That Its Insufficient Safety Practices 

Had the Potential to Allow for Dangerous Safety Violations on the 

Order of Hundreds of Thousands to a Million Wildfire Hazards ................ 32 

G. Investors Could Not Have Reasonably Expected the Extent of PG&E's Unsafe 

Pattern of Noncompliance that Caused the North Bay Fires and the Camp Fire ....... .33 

1. PG&E's Noncompliance with Vegetation Management and Pole Integrity 

Requirements Caused the North Bay Fires ........................................................... 33 

2. PG&E's Noncompliance with Vegetation Management and Pole Integrity 

Requirements Caused the Camp Fire .................................................................... 34 

(a) The Camp Fire's First Ignition Point Was Caused by PG&E Safety 

Violations ..................................................................................................... 34 

(b) The Camp Fire's Second Ignition Point Was Also Caused by 

PG&E's Safety Violations ........................................................................... 37 

H. PG&E's Repeated Vegetation Management and Pole Integrity Safety 

Violations Show that the Company Knew of Its Numerous and Widespread 

Violations of Fire Safety Regulations Throughout the Class Period, but Did 

THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 

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Not Change Its Practices to Reduce, Much Less Eliminate, Those Safety 

Violations ..................................................................................................................... 3 8 

1. PG&E Did Not Improve Its Inadequate Safety Practices After Its Safety 

Violations Caused the Deadly Butte Fire .............................................................. 38 

2. PG&E Internally Acknowledged, Extensively Documented, and Tolerated 

for Years the Safety Violations that Caused the Camp Fire ................................. 39 

I. PG&E's ESRB-8 Shutoff Protocol Was Illusory, and PG&E's Failure to 

Follow It Was a Proximate Cause of the Camp Fire .................................................. .43 

1. PG&E Admitted that All of the Non-Weather Criteria Weighed in Favor 

of Shutting Off the Power ..................................................................................... 45 

(a) Criterion 1: the National Fire Danger Rating System Rated Jarbo 

Gap as Having an "Extreme" Fire Danger Threat Level ............................. 45 

(b) Criterion 2: the National Weather Service Declared a "Red Flag 

Warning" for the Area ................................................................................. 4 7 

(c) Criterion 6: "Critically Dry Vegetation" (i.e., Wildfire Fuel) 

Weighed in Favor of a Shutoff .................................................................... 4 7 

(d) Criterion 7: PG&E's On-the-Ground Observations Weighed in Favor 

of a Shutoff .................................................................................................. 49 

2. All of the Weather Criteria Weighed in Favor of Shutting Off the Power ........... 50 

(a) Criterion 3: The Jarbo Gap Recorded Sufficiently Low Humidity 

Levels ........................................................................................................... 52 

(b) Criterion 4: The Jarbo Gap Recorded Sufficiently High Wind Speed ......... 53 

( c) Criterion 5: Site-Specific Conditions Further Favored Shutoff. .................. 54 

3. PG&E Knew, or Recklessly Disregarded, that All Seven Criteria Weighed 

in Favor of Shutting Off the Power.. ..................................................................... 54 

J. PG&E's Bankruptcy and Other Post-Class-Period Developments .............................. 5 

VII. DEFENDANTS' FALSE AND MISLEADING CLASS PERIOD STATEMENTS 

22 UNDER THE EXCHANGE ACT ................................................................................................ 59 

23 A. Overview of Defendants' Fraudulent Course of Conduct ....................... ... ................. 5 

24 B. Defendants Made Materially False and Misleading Statements and Omissions 

Regarding Its Vegetation Management Activities and Compliance with 

25 Wildfire Safety Regulations Before the North Bay Fires ............................................ 61 

26 1. April 29, 2015 -Misstatement No. 1.. .................................................................. 61 

27 2. October 16, 2015 - Misstatement No. 2 ............................................ ................... 62 

28 3. November 18, 2015-MisstatementNo. 3 ........................................ ... ................ 64 

THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 

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VIII. 

IX 

4. October 6, 2016 -Misstatement No. 4 ................................................................. 65 

5. August 9, 2017 -Misstatement No. 5 ................................................ ................... 67 

C. Defendants Tied the Company's Dividend to Safety Compliance, Making 

Materially False and Misleading Statements and Omissions Regarding Its 

Dividend and Safety Before the North Bay Fires ....................................................... 6 

1. May 23, 2016 -Misstatement No. 6 ............ ...................................... ... ................ 70 

2. November 4, 2016 - Misstatement No. 7 .... ........ ...................... ..... ...................... 71 

3. May 31, 2017-MisstatementNo. 8 .................................................. ... ................ 72 

D. After the North Bay Fires Erupted, the Truth Began to Emerge ................................. 7 

E. After the North Bay Fires Were Contained, the Company Made Additional 

False and Misleading Statements and Omissions Regarding Compliance with 

Wildfire-Related Safety Regulations ........................................................................... 75 

1. October 31, 2017 - Misstatement No. 9 ............................................ ... ................ 75 

2. November 2, 2017 - Misstatement No. 10 ........................................................... 76 

3. November 2, 2017 - Misstatement No. 11 ........................................................... 79 

4. November 5, 2017 - Misstatement No. 12 .... ...... ...................... ..... ...................... 81 

5. May 25, 2018-MisstatementNo. 13 ................................................ ... ................ 83 

F. While the Truth Regarding PG&E's Role in Causing the North Bay Fires 

Emerged, the Company Made Additional False and Misleading Statements 

and Omissions Regarding Compliance with Wildfire-Related Safety 

Regulations, Including Its ESRB-8 Shutoff Protocol .................................................. 85 

1. June 8, 2018 -Misstatement No. 14 .......................................... ........ ... ................ 85 

2. June 8, 2018-MisstatementNo. 15 .................................................. ................... 87 

3. September 27, 2018 -Misstatement No. 16 ......................................................... 88 

4. October9,2018-MisstatementNo.17 ...... ........ ................... ........ ...................... 90 

5. October 9, 2018 -Misstatement No. 18 ............................................................... 91 

6. November 8, 2018 - Misstatement No. 19 ........................................................... 92 

MATERIALITY UNDER THE EXCHANGE ACT. ....................................................... 93 

LOSS CAUSATION UNDER THE EXCHANGE ACT ................... ........ ...................... 94 

A. Defendants' False and Misleading Statements Artificially Inflated the Price of 

PG&E's Securities ....................................................................................................... 9 

B. PG&E's Safety Violations Caused the Devastating North Bay Fires ...... ... ................. 95 

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C. 

D. 

PG&E's Safety Violations Caused the Devastating Camp Fire .................................. 95 

As the Market Learned About the Effects and Extent of PG&E's Inadequate 

Safety Practices, the Price of PG&E's Securities Fell Dramatically ........................... 9 

1. October 12, 2017 - Corrective Disclosure and/or Materialization of 

Concealed Risk 

(a) The Market Began to Learn the Extent and Effects of PG&E' s 

........... 96 

Responsibility for the North Bay Fires ........................................................ 96 

(b) Market Commentators Confirmed the Cause of PG&E's Share Price 

Decline on October 12, 2017 ....................................................................... 97 

2. October 13-16, 2017 - Corrective Disclosure and/or Materialization of 

Concealed Risk ..................................................................................................... 99 

(a) The Market Continued to Learn the Extent and Effects of PG&E's 

Responsibility for the North Bay Fires ........................................................ 99 

(b) Market Commentators Confirmed the Cause of PG&E's Share Price 

Decline on October 13, 2017 ....................................................................... 99 

3. December 20, 2017 - Corrective Disclosure and/or Materialization of 

Concealed Risk ................................................................................................... 100 

(a) The Market Continued to Learn the Extent and Effects of PG&E's 

Responsibility for the North Bay Fires ...................................................... 100 

(b) Market Commentators Confirmed the Proximate Cause of PG&E' s 

Share Price Decline on December 20, 2017 .............................................. 101 

4. May 25, 2018 - Corrective Disclosure and/or Materialization of 

Concealed Risk ................................................................................................... 102 

(a) The Market Continued to Learn the Extent and Effects of PG&E's 

Responsibility for the North Bay Fires ...................................................... 102 

(b) Market Commentators Confirmed that the News Regarding Safety 

Violations Proximately Caused PG&E' s Share Price Decline on May 

25-29,2018 ................................................................................................ 104 

5. June 8, 2018 -Corrective Disclosure and/or Materialization of Concealed 

Risk ..................................................................................................................... 105 

(a) The Market Learned the Truth of PG&E's Continued, Unsafe Use of 

Reclosers .................................................................................................... 107 

(b) The Market Continued to Learn the Extent and Effects of PG&E' s 

Safety Violations and Responsibility for the North Bay Fires .................. 107 

( c) Market Commentators Confirmed that the Number and Range of 

Safety Violations Proximately Caused PG&E's Share Price Decline 

on June 8-11, 2018 ..................................................................................... 108 

THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 

CIVIL AcnoK No. 3: 18-cv-03509-EJD 

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X. 

6. November 8-9, 2018 - Corrective Disclosure and/or Materialization of 

Concealed Risk ................................................................................................... 109 

(a) The Market Began to Learn the Extent and Effects of PG&E's 

Responsibility for the Camp Fire ............................................................... 109 

(b) Market Commentators Confirmed the Cause of PG&E's November 

9, 2018 Share Price Decline ....................................................................... 110 

7. November 9-12, 2018 - Corrective Disclosure and/or Materialization of 

Concealed Risk ................................................................................................... 112 

(a) The Market Continued to Learn the Extent and Effects of PG&E's 

Responsibility for the Camp Fire ............................................................... 112 

(b) Market Commentators Confirmed the Cause of PG&E's November 

9-12, 2018 Share Price Decline ................................................................. 113 

8. November 13-14, 2018 - Corrective Disclosure and/or Materialization of 

Concealed Risk ................................................................................................... 114 

(a) The Market Continued to Learn the Extent and Effects of PG&E's 

Responsibility for the Camp Fire ............................................................... 114 

(b) Market Commentators Confirmed the Cause of PG&E's Share Price 

Decline on November 14, 2018 ................................................................. 115 

9. November 15, 2018 - Corrective Disclosure and/or Materialization of 

Concealed Risk ................................................................................................... 116 

(a) The Market Continued to Learn the Extent and Effects of PG&E's 

Responsibility for the Camp Fire ............................................................... 116 

(b) Market Commentators Confirmed the Cause of PG&E's Share Price 

Decline on November 15, 2018 ................................................................. 117 

SCIENTER UNDER THE EXCHANGE ACT .............................................................. 118 

A. PG&E Knew that Its Safety Practices Continued to Violate the Law Even 

After PG&E Was on Notice of the Butte Fire Safety Violations .............................. 118 

B. Safety Was Core to PG&E's Operations, and the Exchange Act Individual 

Defendants Were Directly Involved in It ................................................................... 12 

C. The Federal Court Overseeing PG&E's Probation, Including Safety 

Monitoring, Has Uncovered Additional Facts Supporting Scienter .......................... 123 

D. PG&E's Noncompliance with Safety Regulations Was Well-Known 

Throughout the Company, Including at the Highest Levels, with Real-Time 

Access to a Database of Known Safety Violations .................................................... 12 

1. PG&E Recorded Its Violations of Safety Regulations in a Sophisticated 

Database, Readily Accessible by the Exchange Act Individual Defendants ...... 129 

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2. PG&E Instituted a Culture Among Its On-the-Ground Employees of 

Reporting Problems up the Corporate Chain, Which Upper Management 

Was Aware of and Monitored ............................................................................. 131 

E. PG&E' s Compliance Statements Were Authorized by Defendant Kane and 

Were Made under Her Ultimate Authority ................................................................ 133 

F. The Threat of a Potential Bankruptcy Gave Defendants a Strong Motive to 

Mislead Investors ....................................................................................................... 135 

G. After PG&E Failed to Follow Its ESRB-8 Shutoff Protocol and Caused the 

Camp Fire, PG&E Attempted to Cover It Up ............................................................ 13 

H. PG&E' s Unprecedented Departure of Officers and Directors Strengthens the 

8 Inference of Sci enter .................................................................................................. 14 

9 XI. APPLICABILITY OF THE PRESUMPTION OF RELIANCE AND FRAUD ON THE 

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MARKET FOR THE EXCHANGE ACT CLAIMS .................................................................. 141 

XII. CLASS ACTION ALLEGATIONS FOR THE EXCHANGE ACT CLAIMS .............. 142 

XIII. CLAIMS FOR RELIEF UNDER THE EXCHANGE ACT. ................. .......... ...... ......... 144 

XIV NATURE OF THE SECURITIES ACT CLAIMS ......... ......................... .... ................ 151 

XV. 

XVI. 

XVII. 

OVERVIEW OF THE SECURITIES ACT VIOLATIONS .............. ........ .................... 151 

THE SECURITIES ACT PARTIES ............................................................................... 153 

A. Securities Act Named Plaintiffs ................................................................................. 153 

B. Bankrupt Entities ....................................................................................................... 15 

C. Securities Act Individual Defendants ............. ........ ...................... ........ ..................... 15 

D. Underwriter Defendants ................................................................... .......................... 15 

SUBSTANTIVE ALLEGATIONS SUPPORTING THE SECURITIES ACT CLAIMS 

162 

A. PG&E's Systemic Failure to Take Measures to Mitigate Wildfires and Safety 

Violations ................................................................................................................... 16 

1. Overview of Laws and Regulations Governing PG&E's Operations ................. 162 

2. PG&E' s Lax Safety Practices, Safety Violations and Resulting Wildfires ........ 164 

XVIII. THE SECURITIES ACT DEFENDANTS' MATERIALLY FALSE AND 

25 MISLEADING STATEMENTS IN THE OFFERING DOCUMENTS FOR THE NOTES 

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OFFERINGS ............................................................................................................................... 186 

A. The Securities Act Defendants Misled Investors Regarding PG&E' s Safety 

Practices, Policies and Compliance ........................................................................... 18 

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2. The Offering Documents Did Not Disclose PG&E's Investments in, 

Commitment to, and Practices Related to Safety Were Inadequate ................... 194 

B. The Securities Act Defendants Materially Misled Investors Regarding 

PG&E' s Liability for Wildfires ................................................................................. 203 

C. PG&E's Offering Documents Misled Investors by Failing to Comply with 

Item 303's Disclosure Requirements and Disclosure Safety Violations ................... 208 

XIX NO SAFE HARBOR FOR THE SECURITIES ACT CLAIMS .................. .. .. .............. 211 

xx CLASS ACTION ALLEGATIONS FOR THE SECURITIES ACT CLAIMS ............. 212 

XXI. CLAIMS FOR RELIEF UNDER THE SECURITIES ACT ........................ .. .. .............. 214 

XXII. PRAYER FOR RELIEF ................................................................................ .. ............... 216 

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1 Court-appointed Lead Plaintiff, the Public Employees Retirement Association of New 

2 Mexico ("PERA" or "Lead Plaintiff'), individually and on behalf of all other persons similarly 

3 situated, alleges the following against PG&E Corporation, Pacific Gas and Electric Company 

4 (the "Utility," and together with PG&E Corporation, "PG&E" or the "Company"), the Exchange 

5 Act Individual Defendants (defined below), the Securities Act Individual Defendants (defined 

6 below), and the Underwriter Defendants (defined below). In addition, named Plaintiff York 

7 County on behalf of the County of York Retirement Fund, City of Warren Police and Fire 

8 Retirement System and Mid-Jersey Trucking Industry & Local No. 701 Pension Fund 

9 ( collectively, the "Securities Act Plaintiffs," and together with Lead Plaintiff, "Plaintiffs"), 

10 individually and on behalf of all others similarly situated, allege violations of the Securities Act 

11 of 1933 ("Securities Act") against the Securities Act Individual Defendants and the Underwriter 

12 Defendants. These allegations are based upon personal knowledge as to Plaintiffs' own acts, and 

13 upon information and belief as to all other matters. Plaintiffs' information and belief is based on 

14 the investigation conducted by and through its attorneys, which included a review of the 

15 Company's Securities and Exchange Commission ("SEC") filings, conference call transcripts 

16 and press releases, media and analyst reports about the Company, court filings, and other public 

17 information regarding the Defendants. Plaintiffs believe that substantial additional evidentiary 

18 support for the allegations set forth herein will be produced through discovery. 

19 I. INTRODUCTION 

20 1. The investing public depends on PG&E to be honest when talking about its safety 

21 practices and level of compliance with vital safety regulations. This federal securities class 

22 action arises out of the materially false statements that Defendants made to investors from April 

23 29, 2015 through November 15, 2018 (the "Class Period"). Their statements and omissions 

24 misled investors about PG&E' s wildfire safety practices, including their representations of 

25 achieving full legal compliance and investing in safety, notwithstanding the Company's 

26 numerous and widespread violations of powerline safety regulations. 

27 2. For example, in just 14 months from October 2017 through November 2018, 

28 California experienced some of the deadliest and most destructive wildfire events of its recorded 

THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 

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1 history. This narrow time period included both the 2017 North Bay Fires and the 2018 Camp 

2 Fire. One thing these fires have in common is that they were started or exacerbated by 

3 noncompliant PG&E electrical equipment and vegetation management: an astounding fact to 

4 those who believed PG&E's public statements that it complied with California and federal safety 

5 regulations. The other thing these fires have in common is that they incited a series of 

6 investigations, which have revealed PG&E's gross deficiencies in the area of safety compliance. 

7 3. The timing of these catastrophic fires is no coincidence; they occurred at the 

8 height of PG&E's knowing noncompliance with safety regulations. Among the many details tha 

9 have emerged, the Honorable William Alsup of the United States District Court for the Northern 

10 District of California, in presiding over PG&E' s criminal probation, has found as fact "that as of 

11 June 2017, there were 3,962 unworked trees which PG&E had identified in 2016 as hazardous 

12 with the potential to 'fall into or otherwise impact the [electrical] conductors, towers or guy 

13 wires before the next inspection cycle."' By June 2017, PG&E had known about these 

14 thousands of vegetation fire hazards for six to eighteen months (i.e., as far back as January 2016) 

15 - yet did nothing other than to internally record their existence. Judge Alsup based this finding 

16 on PG&E's own admissions. 

17 4. Thus, mere months before its vegetation safety violations would cause and 

18 exacerbate the 2017 North Bay Fires, PG&E actually knew it was not addressing thousands of 

19 violations in the form of vegetation fire hazards, even while falsely assuring investors over the 

20 same time period that its vegetation management was, e.g., "in compliance with relevant lawti' 

21 (October 6, 2016 -Misstatement No. 4), and "complying with state and federal regulations and 

22 delivering safe, reliable and affordable electric service" (August 9, 2017 -Misstatement No. 5). 

23 5. The public did not immediately know that PG&E was responsible for the North 

24 Bay Fires-information that would threaten the Company's financial condition. So PG&E 

25 doubled down on misinformation in order to build up the public perception of its safety and 

26 compliance before the tide of public opinion could turn against it. For example, after the North 

27 Bay Fires erupted, Defendants falsely insisted that the Company had "doubl[ed] our typical 

28 vegetation management spending last year" and "inspect[ed] all of our overhead lines" 

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1 (November 2, 2017 -Misstatement Nos. 10 & 11), when it had not. Similarly, the Company 

2 reiterated that it "meets or exceeds all applicable federal and state vegetation clearance 

3 requirements" (November 5, 2017 -Misstatement No. 12), yet soon thereafter, state 

4 investigators would link evidence of PG&E's violations of California safety regulations to at 

5 least eleven of the North Bay Fires. 

6 6. Even as the truth began to emerge about PG&E' s insufficient safety practices, and 

7 PG&E continued to falsely insist on its compliance, California imposed additional safety 

8 regulations on the Company. This included a mandate that PG&E formalize a protocol for 

9 proactively turning off its power lines when certain extreme conditions were met, to prevent any 

10 further wildfires. By the deadline, PG&E stated that it had "created a set of procedures for ... 

11 [d]etermining what combination of conditions necessitates turning off lines for safety" 

12 (September 27, 2018 -Misstatement No. 16). Yet less than two months later, on a day when 

13 hazardous weather and other conditions required PG&E to shut off certain lines, the Camp Fire 

14 erupted. Not only is it now known that those very power lines caused the Camp Fire, but facts 

15 have emerged suggesting that PG&E' s shutoff program was not in effect when Defendants said 

16 it was - facts which PG&E has tried to cover up. 

17 7. PG&E' s false and misleading statements destroyed billions of dollars of economi 

18 value in the Company's stocks and bonds. When the true nature and extent of PG&E's 

19 responsibility for these fires materialized, investors holding PG&E' s publicly traded securities 

20 experienced compensable losses. 

21 8. PG&E' s ability to maintain safe power lines, compliant with federal and 

22 California safety regulations, is essential to the Company's financial health. PG&E has admitted 

23 that it is probable it will incur billions of dollars in losses for claims in connection with the North 

24 Bay and Camp wildfires. According to a recent SEC filing, the Company has, to date, recorded 

25 charges exceeding $14.2 billion, an amount which it believes is at the "lower end of the range of 

26 ... reasonably estimated losses." 1 

27 

1 PG&E recently announced in its May 2, 2019 Form 10-Q that the SEC is "conducting an 

28 investigation related to PG&E Corporation's and the Utility's public disclosures and accounting 

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1 9. Indeed, PG&E's responsibility for the North Bay Fire and Camp Fire catastrophes 

2 has caused the Company to file for bankruptcy under Chapter 11 of Title 11 of the United States 

3 Code (11 U.S.C. § 101 et seq.). The Company's bankruptcy filings stated that it was facing 

4 $51.7 billion in liabilities, including more than $30 billion in potential liabilities tied to the North 

5 Bay and Camp Fires.2 

6 10. Because it was vital for PG&E' s business to be perceived as making safety its 

7 highest priority, Defendants assured investors that the Company's wildfire safety measures were 

8 adequate and compliant with applicable laws and regulations. However, the investigations 

9 following these devastating fires have revealed that PG&E' s assurances were false: evidence has 

10 emerged that PG&E' s safety violations caused at least twelve of these devastating fires, 

11 including the Camp Fire-California's deadliest and most destructive wildfire ever. 

12 II. 

13 

NATURE OF THE CASE 

11. This is a federal securities class action brought pursuant to the Securities 

14 Exchange Act of 1934 (the "Exchange Act") on behalf of a class of all persons and entities who, 

15 during the period from April 29, 2015 through November 15, 2018, inclusive (the "Class 

16 Period"), purchased or otherwise acquired publicly traded PG&E securities and were damaged 

17 thereby. Excluded from the class are: (i) all defendants in the Action; (ii) members of the 

18 immediate family of any individual defendant; (iii) any person who is or was an officer or 

19 director of PG&E during or after the Class Period; (iv) any firm, trust, corporation, or other 

20 entity in which any defendant has or had a controlling interest; (v) PG&E's employee retirement 

21 and benefit plan(s) and their participants or beneficiaries, to the extent they made purchases 

22 through such plan(s); and (vi) the legal representatives, affiliates, heirs, successors-in-interest, or 

23 assigns of any such excluded person. Lead Plaintiff seeks to recover compensable damages 

24 caused by defendants' violations of the federal securities laws and to pursue remedies under 

25 

26 

27 

28 

(continued) 

for losses associated with the 2017 and 2018 Northern California wildfires and the 2015 Butte 

Fire." See i]i]663-72, infra. 

2 Amended Deel. of Jason P. Wells at 3 & 7, Case No. 19-bk-30088 (N.D. Cal. Feb. 1, 2019), 

ECF No. 263. 

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1 Sections l0(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 

2 lOb-5 promulgated thereunder. This Action also is brought pursuant to the Securities Act of 

3 1933 (the "Securities Act") as set forth in Sections XIV-XII, infra. 

4 III. 

5 

JURISDICTION AND VENUE 

12. The claims asserted herein arise under and pursuant to Sections l0(b) and 20(a) o 

6 the Exchange Act (15 U. S.C. §§78j(b) and 78t(a)) and Rule 1 0b-5 promulgated thereunder by the 

7 SEC (17 C.F.R. § 240. l0b-5), as well as Sections 11 and 15 of the Securities Act (15 U.S.C. 

8 §§77k and 770). 

9 13. This Court has jurisdiction over the subject matter of this action under 28 U.S. C. 

10 §1331, Section 27 of the Exchange Act, and Section 22 of the Securities Act. 

11 14. Venue is proper in this Judicial District pursuant to Section 27 of the Exchange 

12 Act (15 U.S.C. §78aa) and 28 U.S.C. §1391(b) as PG&E's principal executive offices are located 

13 within this Judicial District. Further, many of the acts and practices complained of herein 

14 occurred in substantial part in this Judicial District. 

15 15. In connection with the acts, conduct and other wrongs alleged in this Complaint, 

16 Defendants, directly or indirectly, used the means and instrumentalities of interstate commerce, 

17 including but not limited to, the United States mail, interstate telephone communications and the 

18 facilities of the national securities markets. 

19 IV. 

20 

OVERVIEW OF THE EXCHANGE ACT VIOLATIONS 

16. PG&E's false statements began on April 29, 2015 and continued through 

21 February 8, 2018. As detailed herein, they misled investors about PG&E's wildfire safety 

22 practices, including representations that the Company was in full legal compliance and 

23 continuing to invest in safety, notwithstanding the Company's numerous and widespread 

24 violations of safety regulations and inadequate safety practices. 

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26 

27 

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A. PG&E's Failure to Comply with Safety Regulations Proximately Caused 

Wildfires in 2017 and Investors' Consequent Losses 

17. Throughout the Class Period, Defendants wanted investors to believe that PG&E 

was not cutting corners with its vegetation management. So PG&E repeatedly represented to its 

investors that: 

• "PG&E's Vegetation Management" was "in compliance with relevant laws" (October 

6, 2016 -Misstatement No. 4); 

• Its "vegetation management program ... compl[ies] with state and federal regulations" 

(August 9, 2017 - Misstatement No. 5); 

• "PG&E follows all applicable federal and state vegetation clearance requirements" to 

"help to reduce outages or fires caused by trees or other vegetation" ( October 31, 2017 

Misstatement No. 9); and 

• "PG&E meets or exceeds all applicable federal and state vegetation clearance 

requirements" (November 5, 2017 - Misstatement No. 12).3 

18. These statements, and others, were materially false and misleading because they 

misrepresented PG&E's level of compliance with California and federal law, and consequently 

the extent to which shareholders would be exposed to liability for damages caused by wildfires 

and additional costs to improve their inadequate wildfire safety practices. 

19. The fraud began to unravel when investors learned about PG&E's responsibility -

and liability - for the wildfires that devastated Northern California in October 2017 (the "North 

Bay Fires"). 4 These fires burned approximately 249,000 acres, destroyed 8,898 structures, and 

killed 44 people across nine counties: Napa, Sonoma, Mendocino, Lake, Humboldt, Butte, 

Nevada, Solano, and Yuba. They resulted in damages estimated at more than $17 billion. 5 The 

3 The statements made by Defendants that are bolded and italicized are the statements alleged 

to be false and misleading. All other emphasis is in bold. 

4 There may have been as many as 170 individual fires, but many smaller fires combined into 

larger fires as they burned. Taking that into consideration, the North Bay Fires consisted of 

eighteen main fires. 

5 This $17 billion estimate is approximately six times greater than the second most expensive 

California wildfire at the time, the October 1991 Tunnel Fire in Oakland, which, according to a 

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1 size of this liability imperiled the financial viability of the Company. In fact, several of 

2 Defendants' false and misleading statements were made in the months before PG&E openly 

3 expressed its fear that its liability for the North Bay Fires could send the Company into 

4 bankruptcy. 

5 20. As the State of California's official investigations into the eighteen North Bay 

6 Fires were completed by the California Department of Forestry and Fire Protection ("Cal Fire"), 

7 the truth emerged over time that at least seventeen were caused by PG&E equipment. Indeed, 

8 Cal Fire has determined that eleven of these fires, across seven counties, evidenced violations of 

9 California safety regulations - contradicting Defendants' false representations of compliance 

10 with those regulations. 

11 21. Defendants' false and misleading misrepresentations and omissions came at a 

12 crucial time for the Company. As described below, over the past three decades, PG&E caused a 

13 series of wildfires and other disasters in California. For example, in September 2015, its 

14 violations of California safety regulations regarding vegetation clearance caused a wildfire 

15 known as the "Butte Fire," which burned over 70,000 acres, destroyed 921 structures, and killed 

16 two people- making it then the seventh most destructive wildfire in California history, but small 

17 compared to the North Bay and Camp Fires that would follow. 

18 22. Revealingly, just months before the North Bay Fires began, in an April 2017 non19 public deposition concerning PG&E' s responsibility for the Butte Fire, a PG&E Vegetation 

20 Program Manager named Richard Yarnell admitted: "PG&E-to the best of my knowledge, we 

21 have not made any changes as a result of this fire." Thus, despite being on notice of its 

22 dangerous safety violations and their deadly consequences, neither the Company nor its officers 

23 took any steps to improve safety or compliance between the Butte Fire and the far more 

24 

25 

26 

27 

28 

(continued) 

May 27, 2011 article in Scientific American, caused $2.687 billion in insured property damage. 

Mark Fischetti, How Much Do Wildfires Cost in Terms of Property Damage? Scientific 

American (May 27, 2011), https://www.scientificamerican.com/article/graphic-science-howmuch-do-fires-cost-property-damage/?redirect= 1. 

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1 disastrous North Bay Fires. Over this time period, Defendants either knew or should have 

2 known that the Company's wildfire-related safety violations continued unabated. 

3 23. Though the North Bay Fires began on a windy night, they were not the result of 

4 an unexpected or unique event. Rather, the circumstance of PG&E causing seventeen concurrent 

5 fires across nine counties shows that the Company tolerated numerous and widespread 

6 violations of California safety regulations across its territory. As detailed herein, the underlying 

7 explanation for these near-simultaneous North Bay Fires is neither unusual weather nor 

8 coincidence, but PG&E's failure to comply with even minimal legal requirements. Accordingly, 

9 PG&E and its officers knew, or deliberately disregarded, that the Company's power lines and 

10 other electrical infrastructure were often not in compliance with federal and California safety 

11 requirements when making false and misleading statements to the contrary. 

12 

13 

14 

15 

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18 

19 

20 

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22 

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24 

25 

26 

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B. PG&E's Failure to Prioritize Safety Continued Unabated, Proximately 

Causing a Disastrous Wildfire in November 2018 as Well as Further Investor 

Losses 

1. After the North Bay Fires, PG&E Continued to Make False and 

Misleading Statements and Omissions 

24. After the public came to understand PG&E' s responsibility for the North Bay 

Fires over the course of five events from October 12, 2017 and June 11, 2018 (see Sections 

IX.D.1-5, infra), the Company faced a new crisis: the widespread belief that it failed to prioritize 

safety in maintaining its power lines and preventing wildfires. It also faced a financial crisis, as 

its liabilities for the North Bay Fires threatened to bankrupt the Company. 

25. As a result, PG&E needed the public, including investors, to believe that it would 

prioritize safety thereafter. So when Cal Fire announced (on June 8, 2018) its conclusions that 

PG&E had caused the preponderance of the North Bay Fires, and PG&E's share price continued 

to decline as its financial situation deteriorated, PG&E responded that same day by reassuring its 

investors that, e.g.: 

• Its "Programs Overall Met [California]'s High Standards," including "Vegetation 

Management," and "meets or exceeds regulatory requirements for pole integrity 

management" (May 25, 2018 -Misstatement No. 13); 

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• "To address the growing threats posed by wildfires and extreme weather, and in light of 

the wildfires throughout our state last year, PG&E has launched . .. a program to 

proactively turn off electric power for safety when extreme fire danger conditions 

occur" (June 8, 2018 - Misstatement No. 15); 

26. Indeed, one month later, on July 16, 2018, PG&E's primary state regulator 

6 mandated that PG&E formalize and publicize its protocol for proactively turning off its power 

7 lines to prevent further wildfires, enacting a regulation known as Resolution ESRB-8. The 

8 Company announced its response to this new safety requirement on or about September 27, 2018 

9 (the "ESRB-8 Shutoff Protocol"), including: 

10 • "PG&E's Community Wildfire Safety Program implements additional precautionary 

11 measures intended to reduce wildfire threats. It includes ... executing protocols to 

12 temporarily turn off electric power for safety when extreme fire danger conditions are 

13 occurring" and "PG&E has created a set of procedures for ... [d]etermining what 

14 combination of conditions necessitates turning off lines for safety" (September 27, 2018 

15 - Misstatement No. 16). 

16 27. While the Company was finalizing its protocol, on September 21, 2018, 

17 California enacted S.B. 901, a law to rescue PG&E from the threat of bankruptcy due to its 

18 responsibility for the North Bay Fires. The resulting law put in place a financial stress test to 

19 monitor PG&E' s financial health, as well as a method to raise capital should PG&E' s liability fo 

20 the North Bay Fires cause it to fail the test. The same law made it less likely that PG&E would 

21 bear the costs of wildfires it caused in 2019 or later. 

22 28. However, the new law did not help the Company bear the financial consequences 

23 of any wildfires it might cause in the remaining months of 2018. 

24 29. Put differently, PG&E's vegetation management, proactive power line shutoff 

25 program, and other touted means of safety compliance would have to ensure wildfire safety for 

26 the remainder of 2018, or their failure would drive the Company to ruin. 

27 30. PG&E continued to assure the public that it had implemented these measures 

28 successfully. For example, when the news broke on October 9, 2018 that Cal Fire had concluded 

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1 that PG&E was the cause of yet another one of the prior year's North Bay Fires, the Cascade 

2 Fire, the Company reassured investors by stating: 

3 • "[W]e are continuing to focus on implementing additional precautionary measures 

4 intended to further reduce wildfire threats, such as working to remove and reduce 

5 dangerous vegetation, improving weather forecasting, upgrading emergency response 

6 warnings, [and] making lines and poles stronger in high fire threat areas, and taking 

7 other actions to make our system, and our customers and communities, even safer in the 

8 face of a growing wildfire threat" (October 9, 2018 -Misstatement No. 17); and 

9 • "PG&E has launched . .. a program to proactively turn off electric power for safety 

10 when extreme fire danger conditions occur" (October 9, 2018 -Misstatement No. 18). 

11 31. Such statements were materially false and misleading because PG&E had not 

12 meaningfully improved its safety practices-as would soon be revealed by the Camp Fire. By 

13 pitching their statements to convince the investing public that PG&E had resolved its fire safety 

14 failures and would prioritize fire safety thereafter, Defendants concealed the true extent to which 

15 the Company was exposed to massive liability for causing further wildfires, thereby significantly 

16 inflating PG&E' s share price. 

17 32. Ultimately, the North Bay Fires resulted in damages estimated up to $17 billion, 

18 for which the Company has already taken a charge of $3. 5 billion, admitting the likelihood that it 

19 will be liable for, and bear the costs of, at least some of these fires. 6 

20 

21 

22 

23 

24 

25 

26 

27 

28 

2. PG&E's Continuing Noncompliance With Safety Regulations Caused 

the Camp Fire 

33. This continuation of the fraud unraveled when evidence emerged that PG&E was 

responsible for the Camp Fire, which devastated Northern California in November 2018, 

burning 153,336 acres, destroying 18,804 structures, and killing at least 85 people7

-making it 

6 Press Release, PG&E, PG&E Provides Update on Financial Impact of 2017 and 2018 

Wildfires (Feb. 28, 2019) (filed with Form 8-K), 

https://www.sec.gov/ Archives/edgar/data/75488/000119312519055751/d710309dex991.htm. 

7 Press Release, Cal Fire, CAL FIRE Investigators Determine Cause of the Camp Fire (May 

15, 2019), 

https:// calfire.ca.gov/ communications/downloads/newsreleases/2019/CampFire _ Cause. pdf. 

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1 the single most destructive and deadliest wildfire in California history. It has resulted in 

2 damages estimated up to $13 billion, for which the Company has already taken a $10.5 billion 

3 charge, admitting the likelihood that it will be liable for, and bear the costs of, the Camp Fire. 8 

4 Moreover, Cal Fire has confirmed that PG&E's electrical equipment caused the Camp Fire.9 

5 34. The Camp Fire began when a PG&E electrical tower, carrying a high-voltage 115 

6 kilovolt transmission line, failed. PG&E has also acknowledged a second ignition point for the 

7 Camp Fire that exhibited damaged and downed poles, vegetation on top of downed wires, and 

8 other signs of safety violations. 

9 35. As a result, vegetation underneath the lines ignited at two ignition points 

10 approximately 30 minutes apart. PG&E's failure to remove such vegetation violated California 

11 Public Resources Code Section 4293, and its failure to maintain the integrity of its poles and 

12 towers violated California Public Utilities Code Section 451. 

13 36. Starting with two PG&E admissions at the end of the day the Camp Fire began 

14 (November 8, 2019), it emerged that PG&E's promises to prioritize fire safety were false and 

15 misleading. PG&E's statements promoting its ESRB-8 Shutoff Protocol were a prime example 

16 of this prioritization, promising to shut off electricity broadly rather than risk further wildfires. 

17 Soon, however, it emerged that PG&E's ESRB-8 Shutoff Protocol was illusory: the protocol 

18 dictated that the electrical lines that caused the Camp Fire should have been shut off, but 

19 PG&E flouted it. Investors learned not only that PG&E's ESRB-8 Shutoff Protocol should 

20 have prevented the fire entirely, but also that PG&E needlessly imperiled lives rather than risk 

21 upsetting customers. 

22 

23 

24 

25 

26 

27 

28 

8 

Press Release, PG&E, PG&E Corporation Provides Update on Financial Impact of 2017 and 

2018 Wildfires (Feb. 28, 2019) (filed with Form 8-K), 

https://www.sec.gov/ Archives/edgar/data/75488/000119312519055751/d710309dex991.htm. 

9 Press Release, Cal Fire, CAL FIRE Investigators Determine Cause of the Camp Fire (May 

15, 2019), 

https://calfire.ca.gov/communications/downloads/newsreleases/2019/CampFire _ Cause. pdf. 

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1 37. PG&E would later attempt to justify its inaction by claiming that its ESRB-8 

2 Shutoff Protocol did not apply to high-voltage transmission lines like the one that caused the 

3 Camp Fire. However, Plaintiffs investigation has uncovered that this explanation is 

4 demonstrably false. The fact is that PG&E's promised ESRB-8 Shutoff Protocol would have 

5 prevented the Camp Fire if only it were followed. The Company's attempt to cover it up 

6 substantiates not only that PG&E' s safety failures caused the Camp Fire, but further that 

7 PG&E' s false and misleading statements-concealing how the Company was not sufficiently 

8 prioritizing safety-were made with knowledge of their falsity, or at least deliberate 

9 recklessness. 

10 38. Accordingly, the true risks leading to the Camp Fire were concealed by PG&E's 

11 materially false and misleading statements assuring investors of the Company's compliance with 

12 California safety regulations, including the ESRB-8 Shutoff Protocol. 

13 

14 

C. 

39. 

Exchange Act Claims Being Asserted 

Notwithstanding PG&E' s false and misleading statements to the marketplace, 

15 investors learned over time that PG&E' s safety violations were numerous and widespread. 

16 Indeed, they were responsible for most of the North Bay Fires and the Camp Fire. As 

17 information regarding the impact of PG&E's deficient safety practices emerged between October 

18 12, 2017 and November 15, 2018, investors were surprised, given Defendants' numerous public 

19 statements during the Class Period touting the Company's compliance, safety measures, and its 

20 intertwined financial health. As information came to light relating to PG&E' s inadequate safety 

21 measures and/or the effects thereof~ PG&E' s artificially inflated share price dropped 

22 significantly. Thus, as a result of Defendants' wrongful acts and omissions, Lead Plaintiff and 

23 other Class members have suffered significant damages. 

24 40. Lead Plaintiff asserts the claims herein against PG&E and certain of its executives 

25 and officers, seeking to recover for its damages suffered due to these declines in PG&E's 

26 publicly traded securities. PG&E's statements of compliance with safety regulations during the 

27 Class Period misrepresented current facts and were not statements of opinion. 

28 

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1 V. 

2 

THE EXCHANGE ACT PARTIES 

41. Lead Plaintiff PERA was established in 1947 and manages a retirement system 

3 for state, county, and municipal employees including police, firefighters, judges, magistrates, 

4 legislators and volunteer firefighters. PERA oversees assets of more than $15 billion on behalf o 

5 its members, retirees, and beneficiaries. As set forth in its Certification (attached hereto as 

6 "Attachment A"), PERA purchased securities of PG&E at artificially inflated prices during the 

7 Class Period and was damaged as the result of Defendants' wrongdoing as alleged in this 

8 Complaint. On September 10, 2018, this Court appointed PERA to serve as the Lead Plaintiff in 

9 this action pursuant to the Private Securities Litigation Reform Act of 1995 (the "PSLRA"). 

10 42. Defendant PG&E Corporation is a publicly traded corporation that is 

11 headquartered in San Francisco, California, with principal executive offices located at 77 Beale 

12 Street, P.O. Box 770000, San Francisco, California 94177. PG&E's securities trade on the New 

13 York Stock Exchange ("NYSE") under the ticker symbol "PCG." It is a holding company that 

14 holds, directs the actions of, and controls energy-based businesses such as the Utility. 

15 43. Defendant Utility, the Pacific Gas and Electric Company, is a wholly-owned 

16 subsidiary of PG&E and operates as a public utility in California. It generates revenue by selling 

17 and delivering electricity and natural gas to its customers, also known as "rate-payers." The 

18 Utility effectively acts as an alter ego of PG&E; the two entities share the same address, have 

19 overlapping directors, intermix finances, and file joint annual reports with the SEC on Form 10-

20 K. Indeed, all of the Utility's shares are owned by PG&E Corporation. Alternatively, PG&E 

21 Corporation controls the Utility as detailed herein. Accordingly, this Complaint refers to the 

22 Utility and PG&E interchangeably as "PG&E" or the "Company," unless otherwise specified. 

23 44. It is understood that the action against the PG&E Defendants (PG&E Corporation 

24 and Pacific Gas and Electric Company) is stayed pursuant to the automatic stay provisions of 11 

25 U.S.C. § 362. 

26 45. Defendant Anthony F. Earley, Jr. ("Earley") served as PG&E Corporation's 

27 President, Chief Executive Officer ("CEO"), and Chairman of the Board from September 13, 

28 2011 to March 1, 2017, and as its Executive Chairman from March 1, 2017 to December 2017. 

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1 46. Defendant Geisha J. Williams ("Williams") served as PG&E Corporation's CEO 

2 and President from March 1, 2017 until her resignation on January 13, 2019. Previously, she 

3 served as the President of Electric Operations at the Utility from August 17, 2015 to February 28, 

4 2017. Prior to that, she served as Executive Vice President of Electric Operations at the Utility 

5 from June 1, 2011 to August 16, 2015. Additionally, Williams was a director of PG&E 

6 Corporation from May 2017 to January 2019 and a director of the Utility from August 2015 to 

7 January 2019. 

8 47. Defendant Nickolas Stavropoulos ("Stavropoulos") served as the President and 

9 COO of PG&E Corporation from March 1, 2017 to September 30, 2018, and served as President 

10 of Gas Operations at the Utility from August 17, 2015 to February 28, 2017. Prior to that, he 

11 served as Executive Vice President of Gas Operations at the Utility from June 13, 2011 to 

12 August 16, 2015. Stavropoulos was a director of the Utility from August 2015 to September 

13 2018. 

14 48. Defendant Julie M. Kane ("Kane") has served as Senior Vice President, Chief 

15 Ethics and Compliance Officer, and Deputy General Counsel for PG&E Corporation since May 

16 18, 2015. Kane is named as a Defendant solely in her capacity as Chief Ethics and Compliance 

17 Officer. 

18 49. Defendant Christopher P. Johns ("Johns") served as the President of Pacific Gas 

19 and Electric Company from August 1, 2009 to August 17, 2015. 

20 50. Defendant Patrick M. Hogan ("Hogan") served as the Utility's Senior Vice 

21 President of Electric Operations from March 2016 through January 8, 2019, and he retired from 

22 the Utility on January 28, 2019. Prior to that, he served as the Utility's Vice President of Electric 

23 Operations Asset Management from November 2013 through February 2016. 

24 51. The Defendants referenced above in i]i]45-50 are referred to herein as the 

25 "Exchange Act Individual Defendants." 

26 52. The Exchange Act Individual Defendants, because of their high-level positions of 

27 control and authority as senior executive officers of PG&E, possessed the power and authority to 

28 control, and did ultimately control, the contents of PG&E's SEC filings, press releases, content 

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1 on the Company's website and official Twitter.com account, and other market communications 

2 during the Class Period. The Exchange Act Individual Defendants were provided with copies of 

3 the Company's reports and press releases alleged herein to be misleading prior to or shortly after 

4 their issuance and had the ability and opportunity to prevent their issuance or to cause them to be 

5 corrected. Because of their positions within the Company and/or Utility, and their access to 

6 material information available to them but not to the public, the Exchange Act Individual 

7 Defendants knew that the adverse facts specified herein had not been disclosed to, and were 

8 being concealed from, the public, and that the positive representations being made were then 

9 materially false and misleading. The Exchange Act Individual Defendants are liable for the false 

10 statements and omissions pleaded herein. 

11 VI. 

12 

SUBSTANTIVE ALLEGATIONS SUPPORTING THE EXCHANGE ACT 

CLAIMS 

13 

14 

15 

16 

17 

A. PG&E Operates Within a Robust Legal Regime 

53. As detailed herein, electricity transmission and distribution is a heavily regulated 

industry in California. 

1. California Law Required PG&E to Maintain a Safe Distance Between 

Its Electrical Equipment and Nearby Vegetation 

54. To ensure public safety from wildfires, California has laws and regulations that 

18 require PG&E to keep its electrical equipment clear from vegetation growth or hazardous trees, 

19 and otherwise safe. 

20 

21 

22 

23 

24 

25 

26 

27 

28 

55. 

56. 

Pursuant to California Public Resources Code Section 4292, for instance: 

[A]ny person that owns, controls, operates, or maintains any 

electrical transmission or distribution line upon any mountainous 

land, or forest-covered land, brush-covered land, or grass-covered 

land shall, during such times and in such areas as are determined to 

be necessary by the director or the agency which has primary 

responsibility for fire protection of such areas, maintain around and 

adjacent to any pole or tower which supports a switch, fuse, 

transformer, lightning arrester, line junction, or dead end or corner 

pole, a firebreak which consists of a clearing of not less than 10 

feet in each direction from the outer circumference of such pole or 

tower. 

Similarly, California Public Resources Code Section 4293 provides that: 

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57. 

[ A ]ny person that owns, controls, operates, or maintains any 

electrical transmission or distribution line upon any mountainous 

land, or in forest-covered land, brush-covered land, or grasscovered land shall, during such times and in such areas as are 

determined to be necessary by the director or the agency which has 

primary responsibility for the fire protection of such areas, 

maintain a clearance of the respective distances which are 

specified in this section in all directions between all vegetation 

and all conductors which are carrying electric current: (a) For 

any line which is operating at 2,400 or more volts, but less than 

72,000 volts, four feet. (b) For any line which is operating at 

72,000 or more volts, but less than 110,000 volts, six feet. (c) For 

any line which is operating at 110,000 or more volts, 10 feet. In 

every case, such distance shall be sufficiently great to furnish the 

required clearance at any position of the wire, or conductor when 

the adjacent air temperature is 120 degrees Fahrenheit, or less. 

Dead trees, old decadent or rotten trees, trees weakened by 

decay or disease and trees or portions thereof that are leaning 

toward the line which may contact the line from the side or 

may fall on the line shall be felled, cut, or trimmed so as to 

remove such hazard. 

Cal Fire interprets this law to "mean[] that a tree, or portion thereof, that is 

13 leaning toward the line, must be 'felled, cut, or trimmed' regardless of its health, if it 'may 

14 contact the line from the side or may fall on the line.'" The law also "requires utilities to identify 

15 and remove such hazards." Thus, Section 4293 not only "mandates that utilities trim or remove 

16 limbs overhanging powerlines if those limbs are inside the statutory clearance distances," but 

17 further "also mandates that utilities trim or remove, among other hazards, trees or portions 

18 thereof that are leaning toward the powerlines, including overhanging limbs, if those trees or 

19 limbs may contact the line from the side or fall on the line." Cal Fire also makes clear that "[a] 

20 utility's compliance with Section 4293 is mandatory, not discretionary." 10 

21 

22 

23 

24 

25 

26 

27 

28 

2. California Law Required PG&E to Safely Maintain Its Electrical 

Equipment and Infrastructure 

58. In addition to the vegetation management regulations discussed above, California 

laws and regulations further require PG&E to safely maintain its electrical equipment and 

10 Supplemental Response of Cal Fire following Jan. 30. 2019 Hearing on Order to Show 

Cause, US. v. Pacific Gas and Electric Co., No. 14-cr-175 ("PG&E Criminal Proceedings") 

(N.D. Cal. Feb. 6, 2019), ECF No. 1012. 

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1 infrastructure, including an obligation to maintain the towers and poles that carry its transmission 

2 and distribution lines. 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

59. Pursuant to California Public Utilities Code Section 451: 

Every public utility shall furnish and maintain such adequate, 

efficient, just, and reasonable service, instrumentalities, equipment, 

and facilities, including telephone facilities, as defined in Section 

54 .1 of the Civil Code, as are necessary to promote the safety, 

health, comfort, and convenience of its patrons, employees, and the 

public. 

60. California Health & Safety Code Section 13007 further provides: 

61. 

Any person who personally or through another wilfully, 

negligently, or in violation of law, sets fire to, allows fire to be set 

to, or allows a fire kindled or attended by him to escape to, the 

property of another, whether privately or publicly owned, is liable 

to the owner of such property for any damages to the property 

caused by the fire. 

Accordingly, California law required PG&E to maintain its electrical equipment 

13 and infrastructure, including electrical towers and poles, sufficiently to prevent wildfires from 

14 being caused by the failure of its towers and poles. 

15 

16 62. 

3. PG&E Is Regulated by the CPUC 

PG&E' s primary regulator is the California Public Utilities Commission 

17 ("CPUC"). The CPUC promulgates safety regulations and adjudicates PG&E's annual General 

18 Rate Cases - essentially determining which costs PG&E may pass on to rate-payers, and which 

19 costs PG&E must bear. The CPUC was created under Article XII of the California State 

20 Constitution, and derives its regulatory authority from Section 701 of the California Public 

21 Utilities Code. 

22 

23 

24 

25 

26 

27 

28 

(a) CPUC's General Orders 95 and 165 lmpose Strict Safety 

Regulations on PG&E 

63. Pursuant to CPUC General Order 95, Rule 35, PG&E was required "to establish 

necessary and reasonable clearances" between overhead conductors and nearby vegetation, with 

certain "minimum clearances" set forth by CPUC. Furthermore, this rule required that: 

When a supply or communication company has actual knowledge, 

obtained either through normal operating practices or notification 

to the company, that dead, rotten or diseased trees or dead, rotten 

or diseased portions of otherwise healthy trees overhang or lean 

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toward and may fall into a span of supply or communication lines, 

said trees or portions thereof should be removed. 

* * * 

When a supply or communication company has actual knowledge, 

obtained either through normal operating practices or notification 

to the company, that its circuit energized at 750 volts or less shows 

strain or evidences abrasion from vegetation contact, the condition 

shall be corrected by reducing conductor tension, rearranging or 

replacing the conductor, pruning the vegetation, or placing 

mechanical protection on the conductor(s). 

64. CPUC General Order 95 provides further details regarding the maintenance and 

upkeep of PG&E's power lines and infrastructure. Among other things, it provides that "[a]ll 

lines and portions of lines shall be maintained in such condition as to provide safety factors not 

less than those specified in Rule 44.3." Rule 44, in tum, details the safety factors that apply to 

"Poles Towers and Structures," and provides that "[i]n no case shall the application of this rule 

be held to permit the use of structures or any member of any structure with a safety factor less 

than one." This order further provides certain requirements intended to, among other things, 

d . . 11 

guar agamst corros10n. 

65. Pursuant to CPUC General Order 165, PG&E must also follow certain 

"requirements for electric distribution and transmission facilities ( excluding those facilities 

contained in a substation) regarding inspections in order to ensure safe and high-quality electrical 

service." In relevant part, General Order 165 requires that: "Each utility subject to this General 

Order shall conduct inspections of its distribution facilities, as necessary, to ensure reliable, highquality, and safe operation." 12 

11 CPUC General Order 95, Rules/or Overhead Electric Line Construction (May 2018), 

http://docs.cpuc.ca.gov/PublishedDocs/Published/GOOO/M217 /KA 18/217418779 .pdf 

12 CPUC General Order 165, Inspection Requirements for Electric Distribution and 

Transmission Facilities (Dec. 2017), 

http://docs.cpuc.ca.gov/PublishedDocs/Published/GOOO/M209/K552/209552704.pdf. 

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(b) CPUC's Resolution ESRB-8 Imposes on PG&E an Obligation 

to Adopt, Promulgate and Follow the ESRB-8 Shutoff Protocol 

66. On July 16, 2018, the CPUC issued Resolution ESRB-8. Recognizing that the 

"2017 California wildfire season was the most destructive wildfire season on record," the 

resolution required California's utilities, including PG&E, to adopt, promulgate and follow "deenergization policy and procedures" pursuant to which each utility will "de-energize power 

lines" as a means to mitigate wildfire risks "to ensure public safety." It further established 

notification, mitigation, and reporting requirements. 

67. Resolution ESRB-8 included the following directives: 

PROPOSED OUTCOME: 

This Resolution extends the de-energization reasonableness, public 

notification, mitigation and reporting requirements in Decision 

(D.) 12-04-024 to all electric Investor Owned Utilities (IOUs) 

[including PG&E] and adds new requirements. It also places a 

requirement on utilities to make all feasible and appropriate 

attempts to notify customers of a de-energization event prior to 

performing de-energization. 

SAFETY CONSIDERATIONS: 

De-energizing electric facilities during dangerous conditions can 

save lives and property and can prevent wildfires. This resolution 

provides guidelines that IOUs must follow and strengthens public 

safety requirements when an IOU decides to de-energize its 

facilities during dangerous conditions. 

* * * 

PG&E reports that prior to 2018, it did not have a policy to deenergize lines as a fire prevention measure. PG&E reported that it 

did not proactively de-energize lines due to extreme fire weather 

conditions in 2017. However, in March 2018 PG&E announced 

that it is developing a program to de-energize lines during periods 

of extreme fire conditions and has been meeting with local 

communities to gather feedback. 

* * * 

• The IOU shall ensure that de-energization policies and 

procedures are well-communicated and made publicly 

available, including the following: 

• Make available and post a summary of deenergization policies and procedures on its 

website. 

• Meet with representatives from local communities 

that may be affected by de-energization events, 

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68. 

before putting the practice in effect in a particular 

area. 

• Provide its de-energization and restoration policy in 

full, and in summary form, to the affected 

community officials before de-energizing its 

circuits. 

* * * 

De-energization of electric facilities could save lives, protect 

property, and prevent fires. 

(c) PG&E Must Follow CPU C's Regulations Under Penalty of 

Law 

The CPUC' s regulations have the full force of law, and PG&E has a legal 

10 obligation to follow them, including the general orders and resolutions listed above, under 

11 penalty of law. 

12 

13 

14 

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16 

17 

18 

19 

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24 

69. For example, California Public Utilities Code Section 702 provides that: 

Every public utility shall obey and comply with every order, 

decision, direction, or rule made or prescribed by the commission 

in the matters specified in this part, or any other matter in any way 

relating to or affecting its business as a public utility, and shall do 

everything necessary or proper to secure compliance therewith by 

all of its officers, agents, and employees. 

70. Further, under California Public Utilities Code Section 2106: 

71. 

Any public utility which does, causes to be done, or permits any 

act, matter, or thing prohibited or declared unlawful, or which 

omits to do any act, matter, or thing required to be done, either by 

the Constitution, any law of this State, or any order or decision of 

the commission, shall be liable to the persons or corporations 

affected thereby for all loss, damages, or injury caused thereby or 

resulting therefrom. If the court finds that the act or omission was 

wilful, it may, in addition to the actual damages, award exemplary 

damages. 

4. Cal Fire Is the Duly Authorized Investigative Arm of the State of 

California for Wildfires 

Cal Fire is an agency of the State of California that, pursuant to Title 14 of 

25 California's Code of Regulations, is administratively in charge of both the state's fire 

26 departments and its law enforcement related to state fire and forest laws. As a result, it is 

27 responsible for both fighting fires as they occur and for investigating the causes of fires after they 

28 have been contained. Cal Fire conducts official investigations as an arm of the State of California 

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1 to determine the causes of wildfires within the state, as well as any violations of state laws and 

2 regulations. 

3 72. Pursuant to an agreement with the U.S. Department of the Interior and the U.S. 

4 Department of Agriculture, Cal Fire is the state agency that is authorized to make fire cause and 

5 origin determinations for wildfires - such as the North Bay fires and Camp Fire - that fall within 

6 its jurisdiction. 

7 

8 

9 73. 

5. Under California's Inverse Condemnation Law, PG&E Would Not 

Bear the Cost of Wildfires It Causes if It Could Prove That It Acted 

Reasonably and Prudently 

The California Supreme Court has interpreted Article 1, Section 19 of the 

10 California Constitution as imposing a doctrine known as "inverse condemnation," whereby 

11 public utilities such as PG&E are required to compensate individuals whose real property has 

12 been damaged by the utility under a strict liability regime. However, importantly, a utility such 

13 as PG&E is able to recover those same costs from the CPUC - effectively passing the costs from 

14 the shareholders to the rate payers - if it can "affirmatively prove that it reasonably and 

15 prudently operated and managed its system." Order Denying Rehearing of Decision (D.) 17-11-

16 033 at 3, App. of SDG&E for Authorization to Recover Costs Related to the 2007 Southern Cal. 

17 Wildfires Recorded in the Wildfire Expense Memo Account, App. No. 15-09-010, Decision 18-

18 07-025 (July 12, 2018). 

19 74. In other words, PG&E bears the costs of wildfires it causes unless it can prove 

20 that it was "reasonable and prudent," meaning "that at a particular time any of the practices, 

21 methods, and acts engaged in by a utility follows the exercise of reasonable judgment in light of 

22 facts known or which should have been known at the time the decision was made." Id Embodied 

23 in this standard, at a minimum, is compliance with state safety laws and regulations. 

24 

25 

26 

27 

28 

6. Federal Law Also Requires PG&E to Follow Minimum Safety 

Standards 

75. PG&E is also required by law to adhere to a number of federal laws and 

regulations. FERC Electric Reliability Standard FAC-003-4, for example, "requires that trees 

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1 and other vegetation growing in or adjacent to the power line right-of-way be trimmed to prevent 

2 power outages caused by tree contact with a transmission line." 13 

3 76. F AC-003-4 also imposes minimum vegetation clearance distances that depend on 

4 the type of current (alternating or direct), the nominal and maximum system voltages, and the 

5 altitude of the conductor above sea level. F AC-003-4 also imposes other requirements on owners 

6 and operators of transmission facilities, including but not limited to annual inspections, annual 

7 completion of necessary work, timely notification and correction of urgent conditions and 

8 documentation of vegetation management practices. 14 

9 

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B. PG&E's Vegetation Management Expenditures Did Not Materially Change 

from Year to Year During the Class Period, Let Alone Double at Any Point 

77. The State of California declared a state of emergency due to drought conditions in 

January 2014, 15 which ended in April 2017. 16 In October 2015, California also declared a state o 

emergency regarding tree mortality due to both the ongoing effects of the drought and an 

epidemic of insect infestations causing millions of trees to die annually. 17 These conditions 

added to the already existing danger of wildfires in the North Bay region of California as a result 

of PG&E's safety violations. PG&E knew about these conditions and its obligations to ensure 

safety from wildfires in spite of these environmental factors. For example, the "Proclamation of 

State of Emergency" regarding tree mortality made explicit: "fUltilities ... to the extent 

13 See FERC, Tree Trimming & Vegetation Management (updated Apr. 10, 2018), 

https://www.ferc.gov/industries/electric/indus-act/reliability/vegetation-mgt.asp; FERC, FAC003-4 Transmission Vegetation Management, https://www.ferc.gov/industries/electric/indusact/reliability/vegetation-mgt/fac-003-4.pdf; see also Order Adopting New Conditions of 

Probation, PG&E Criminal Proceedings, (N.D. Cal. Apr. 3, 2019), ECF No. 1040. 

14 See PG&E Response to Request for Information at 4, PG&E Criminal Proceedings (N.D. 

Cal. Feb. 22, 2019), ECF No. 1016. 

15 California Drought, State Water Board Approves State and Federal Water Projects Petition 

to Conserve Water During Drought Conditions, Drought News Release Archive (Jan. 31, 2014), 

https://drought.ca.gov/news/story-21.html. 

16 California Executive Dept., Executive Order B-40-17 (Apr. 7, 2017), 

https://www.gov.ca.gov/wp-content/uploads/2017/09/4.7.17 _ Exec_ Order_ B-40-17.pdf. 

17 California Executive Dept., Proclamation OJ A State of Emergency (Oct. 30, 2015), 

https:/ /www.gov.ca.gov/wpcontent/uploads/2017 /09/10.30.15 _Tree_ Mortality _State_of _ Emergency.pdf. 

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1 required by their existing responsibilities to protect the public health and safety, shall 

2 undertake efforts to remove dead or dying trees in these high hazard zones that threaten 

3 power lines . ... " 

4 78. Based on information released by CPUC, PG&E spent $194,094,406 on 

5 vegetation management in 2015, $198,735,579 in 2016, and $201,456,193 in 2017 - increases of 

6 only 2.4% and 1 .4%, respectively .

18 Each year's spending was substantially identical to the 

7 amounts PG&E requested, and the amounts CPUC approved, in PG&E's 2015, 2016, and 2017 

8 General Rate Cases - notwithstanding the state of emergency directive above and PG&E's 

9 continued deficient safety practices. In contrast, inflation rose 5.48% over the same three-year 

10 period. 19 Thus, PG&E's spending did not even keep pace with inflation during the Class Period. 

11 

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79. CPUC released the following chart confirming that PG&E's vegetation 

management spending underwent only modest increases over the relevant time period: 

Table ho1 ing 2011-2017 Iii tory of PG&E an,mal spending ($ million) 

on vegetation management 

2017 

2016 

2015 

2014 

2013 

2012 

2011 

PG&E CP 

Re nested Authorized 

_01.0 01.0 

PG&E 

ent 

$150.4 

YTD 

18 Letter from CPUC to PG&E re: Advice Letter 4827-E (June 3, 2016), 

https://www.pge.com/tariffs/tm2/pdf/ELEC _ 4827-E.pdf; Letter from CPUC to PG&E re: Advice 

Letter 5036-E (Apr. 25, 2017), https://www.pge.com/tariffs/assets/pdf/adviceletter/ELEC _5036-

E.pdf.; Letter from CPUC to PG&E re: Advice Letter 5402-E (Nov. 29, 2018), 

https://www.pge.com/tariffs/assets/pdf/adviceletter/ELEC_5402-E.pdf. 

19 CPI Inflation Calculator, Bureau of Labor Statistics, 

https://www.bis.gov/ data/inflation_ calculator.htm. 

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1 80. While Defendants falsely represented on November 2, 2017 that PG&E 

2 "doublet!' vegetation management expenditures in 2016 (see iJiJ258 & 264), tellingly, they made 

3 this claim only after the North Bay Fires. At no point did the Company identify any specific 

4 budget item indicating that its vegetation management budget had, in fact, doubled. Nor did it 

5 disclose these expenditures were inadequate to reasonably ensure safety. Indeed, as Judge Alsup 

6 later found, "PG&E' s performance with respect to vegetation management has been dismal." 

7 81. It was only after the Camp Fire that PG&E announced in December 2018 that it 

8 plans to spend an additional $5 billion on wildfire safety programs over five years, with a focus 

9 on improving its vegetation management efforts. This post-Class-Period development strongly 

10 supports the inference that the Company's previous vegetation management expenditures of 

11 around $200 million per year had been dangerously inadequate. 20 In fact, it was not until 

12 PG&E's 2019 vegetation management plan, detailed further below, that the Company indicated 

13 that it was materially increasing its vegetation management spending, to more than $338 million. 

14 

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C. PG&E's Tree Trimming and Removal Did Not Come Close to Doubling 

During the Class Period 

82. Likewise, the Company's reported numbers for trees that it trimmed or removed 

during this time period did not double, or come close to doubling. During the Class Period, the 

Company reported the results of its vegetation management expenditures, slowly inflating the 

numbers it was reporting. Initially, it touted that its tree trimming and removal amounted to "1.2 

million trees" total (November 18, 2015, statement of Hogan) or generally "more than 1 

million trees each year" (May 4, 2016, statement of Earley). At first, it stated that these totals 

included "about 236,000 dead or dying trees" as "part of its comprehensive response to tree 

mortality in the state" (May 3, 2017, Press Release). 

20 PG&E asking state regulators to charge customers up to $12 more a month, KTVU Fox 2 

(Dec. 14, 2018), http://www.ktvu.com/news/pg-e-asking-state-regulators-to-charge-customersup-to-12-more-a-month. 

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1 83. Soon, however, it was touting that 2016's "236,000 dead or dying trees" 

2 removed were "in addition to the 1.2 million trees that PG&E works each year" (May 10, 2017, 

3 Press Release). 

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D. After the North Bay Fires, PG&E Started Reporting Inflated Numbers for 

Tree Removal 

84. Then, after the North Bay Fires, PG&E's numbers crept up by 100,000 trees: 

"Typically, we spend about $200 million every year to line clear or remove 1.3 million trees to 

mitigate both the risk of wildfires and to prevent electric outages" in addition to the 

"incremental 236,000 dead or dying trees" (November 2, 2017, statement of Williams). This is 

the same statement where PG&E began to falsely and/or misleadingly tout to investors that it had 

"doubl[edf' vegetation management expenditures in 2016, i.e., to $400 million (see ~258, infra). 

85. Then, when negative news emerged on May 25, 2018 about PG&E's safety 

violations causing many of the North Bay Fires, the Company's reported number of cleared trees 

crept up by another 100,000 trees: "Under PG&E's industry-leading Vegetation Management 

Program, we ... prune or remove approximately 1.4 million trees annually" (May 25, 2018, 

press release). 

E. PG&E Concealed Its Unsafe Use of Reclosers During the Class Period 

1. PG&E Used Reclosers to Prioritize Convenience Over Safety 

86. "Reclosers" are devices that are affixed to power line poles, to send pulses of 

electricity into lines when service has become briefly interrupted (i.e., an outage). Although 

reclosers can in some instances prevent blackouts, it is well known in the industry that they are 

dangerous in certain circumstances. For instance, if a power line has come into contact with 

nearby vegetation, it would be dangerous to send an additional pulse of electricity through the 

line because this could start a fire. 

87. San Diego Gas & Electric Co. and Southern California Edison are two other 

utility companies that operate in California, along with PG&E. According to a complaint filed in 

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1 the state court litigation concerning the North Bay Fires,21 these two utility companies are aware 

2 of the dangers of using reclosers, and they have a practice of blocking reclosers from working 

3 d . fi 22 unng 1re season. 

4 88. Prior to the North Bay Fires, PG&E knew that its reclosers posed a great risk of 

5 causing wildfires. PG&E was specifically warned of this hazard in a May 2013 report that the 

6 Liberty Consulting Group (the "Liberty Report") submitted to the Safety and Enforcement 

7 Division of the CPUC. Moreover, at a November 18, 2015 hearing before the California Senate 

8 Sub-Committee on Gas, Electric, and Transportation Safety, the Utility's Vice President of 

9 Electrical Operations Asset Management, Defendant Hogan, stated that PG&E had the ability to 

10 reprogram its reclosers during fire season so that they did not attempt to restart lines that had 

11 been stopped. Hogan acknowledged that shutting down power means "you take the reliability hit, 

12 but you gain the wildfire benefit." This statement evidenced that PG&E recognized the downside 

13 to disabling its reclosers (because it would increase the risk of blackouts, i.e., the "reliability hit," 

14 which would lead to consumer complaints), but that PG&E also understood this measure would 

15 improve safety (i.e., the "wildfire benefit"). Unbeknownst to investors, the Company chose 

16 short-term "reliability" over safety .

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21 Senate Bill Policy Committee Analysis, Assembly Committee on Utilities and Energy 

(amended June 7, 2018), 

https://autl.assembly.ca.gov/sites/autl.assembly.ca.gov/files/SB%20901 %20%28Dodd%29%20U 

%26E%20Analysis%206-25-l 8.pdf. 

22 Wildfire season is a portion of the year, generally 6 to 8 months in the summer and fall in 

California, declared such by the responsible public agency fire administrator. This declaration is 

based on fuel and weather conditions conducive to the ignition and spread of wildland fires. Cal 

Fire Incident Information, Fire Terminology page, 

http:// cdf data.fire. ca. gov/incidents/incidents_ terminal ogy?filter= F. 

23 Notably, PG&E's ESRB-8 Shutoff Protocol embodied the same tradeoff. As a protocol tha 

required PG&E to proactively shut off power when certain conditions were met, it similarly 

purported to prioritize safety over reliability. Likewise, a failure to abide by the ESRB-8 Shutoff 

Protocol would evidence another example of the Company choosing reliability over safety, 

unbeknownst to investors. 

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2. PG&E Concealed Its Use of Reclosers from Investors During the 

Class Period 

89. On November 18, 2015, Defendant Hogan assured the public that PG&E was 

''just about done" with the process of disabling its recloser devices as of that date. He 

represented that reclosers would be disabled ''first" in "high wildfire risk areas," followed by 

"126" of "about 130 some odd locations ... this year," i.e., 2015, which left only "six for next 

year." 

90. However, PG&E did not disable all of its reclosers during fire season, like San 

Diego Gas & Electric Co. and Southern California Edison did. Rather, during the time of the 

North Bay Fires, some of PG&E's devices were programmed to try up to three times to restore 

power by sparking electricity. Hogan's statement concealed that PG&E kept at least certain of its 

reclosers dangerously in use in a high wildfire risk area through October 2017: PG&E reclosers 

were to blame for at least one of the North Bay Fires, known as the Pythian Fire. 

91. Notably, State Senator Jerry Hill was quoted by NBC on January 3, 2018 as 

saying that he felt "misled" by PG&E' s executives into believing that the Company had followed 

the lead of its counterparts and shut off its reclosers in all 132 of its high risk fire areas by the 

start of 2017: 

Hill said he was surprised the company's recloser shutdown was so 

limited, given that a top PG&E official assured him back in 2015 

that the company would be able to shut down reclosers in all 132 

of the high risk fire areas by the start of 2017. 

"I think that's the troubling part," Hill said, "that they misled us in 

that. 

"Had they said they did not have that system in place, then we 

22 would have followed up with more questions to try to find what the 

problem was -- and may have been able to focus in on that a couple 

23 of years ago that may have prevented these fires in October." 

24 Likewise, investors were misled by PG&E' s recloser statements. 

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1 92. Yet, even as late as 2018, PG&E was still stating that it would need to commit to 

2 disabling these reclosers.24 

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F. PG&E Engaged in an Unsafe Pattern of Noncompliance with Safety 

Requirements Before and Throughout the Class Period 

93. Despite the important safety measures imposed by California law, PG&E has 

caused deadly wildfires through its failure to comply with the legal requirements for vegetation 

management, pole maintenance, and other safety requirements. Between causing the devastating 

Trauner Fire in 1994 and the deadly Butte Fire in 2015, PG&E repeatedly violated California's 

vegetation management laws and other regulations. PG&E assured investors during the Class 

Period that it had changed, stating in its 2015, 2016, and 2017 Corporate Responsibility and 

Sustainability Reports that its "vegetation management" was now "in compliance with relevant 

l aws " " or comp l. ymg wit .h state an dfid l l . " . e .era. regu atwns. 

94. Notably, in its undated 2018 Corporate Responsibility and Sustainability Report 

issued after the public learned the true causes of the North Bay Fires, PG&E no longer 

represents to investors that its vegetation management complies with California's safety laws. 

1. PG&E Was Convicted of Negligence for Starting a Wildfire in 1994 

95. One of the most notable of the pre-Class Period fires was the "Trauner Fire," 

where PG&E was convicted of 739 counts of criminal negligence and required to pay $24 

million in penalties due to the Company's deficient vegetation management systems. 25 

2. PG&E Unsafely Flouts Safety Regulations 

96. Subsequently, PG&E's deficient vegetation management practices ignited other 

fires, including the Pendola Fire (1999). 26 

24 PG&E Public Safety Power Shutoff Policies and Procedures, CPUC website (Sept. 2018), 

http://cpuc.ca.gov/uploadedFiles/CPUC _Public_ Website/Content/News_ Room/Public-SafetyPower-Shutoff-Policies-and-Procedures-September-2018.pdf. 

25 In 1994, PG&E's failure to maintain vegetation surrounding its electrical equipment caused 

the Trauner Fire that burned approximately 500 acres, destroyed 12 homes, and burned 22 

structures in the town of Rough and Ready. The fire began when a power line brushed against a 

tree limb that PG&E was supposed to keep trimmed. Investigators found numerous safety 

violations involving contact between vegetation and PG&E' s power lines. 

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1 97. Moreover, according to documents released by The Utility Reform Network 

2 ("TURN"), PG&E planned to replace a segment of the San Bruno pipeline in 2007 that it had 

3 identified as one of the riskiest natural gas pipelines in PG&E's system. PG&E collected $5 

4 million from its customers to complete the project by 2009, but instead deferred the project and 

5 repurposed the money to other priorities. On September 9, 2010, the San Bruno pipeline 

6 exploded, killing 8 people, injuring over 50 more, and destroying 38 homes. 

7 98. On August 9, 2016, a California federal jury found PG&E guilty of five criminal 

8 felony counts for violating minimum federal safety standards under the Natural Gas Pipeline 

9 Safety Act, as well as one count for obstructing an agency proceeding after it failed to provide all 

10 of its records to the National Transportation Safety Board during an investigation into the San 

11 Bruno explosion. 

12 99. On December 14, 2018, the CPUC opened a case against PG&E alleging, inter 

13 alia, that the Company falsified records and data concerning the safety of its gas pipelines, did 

14 not employ an adequate number of pipeline inspectors, and pressured supervisors to unsafely 

15 rush work over a five-year period from 2012 to 2017. These deliberate efforts to cut corners, and 

16 defraud regulators and the public about the safety of PG&E's utilities, continued up to and 

17 including the Class Period. The strong inference is that PG&E's statements concealing the 

18 inadequate safety of its electrical utilities, during the Class Period, were likewise made with an 

19 intent to defraud. 27 On December 21, 2018, the CPUC issued a Scoping Memo and Ruling, 

20 which found that "PG&E has had serious safety problems with both its gas and electric 

21 operations for many years" and failed "to develop a comprehensive enterprise-wide approach to 

22 address safety." CPUC concluded that it "was, and remains, concerned that the safety problems 

23 

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(continued) 

26 PG&E paid a $14.75 million settlement to the U.S. Forest Service, and a $22.7 million 

settlement with CPUC after PG&E had been reprimanded for not spending money that had been 

earmarked for tree trimming and removal. 

27 George Avalos, PG&E Accused of Gas Pipeline Violations, Falsifying Records: Regulator, 

Mercury News (updated Dec. 17, 2018 4:06 am), 

https :/ /www.mercurynews.com/2018/12/14/pge-accused-of-gas-pi peline-vi olati ons-fal sifyingrecords-regulators/. 

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1 being experienced by PG&E were not just one-off situations or bad luck, but indicated a 

2 deeper and more systemic problem." 

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3. PG&E's Unsafe, Noncompliant Vegetation Management Caused the 

Butte Fire in 2015 

100. In September of 2015, five months after PG&E made Misstatement No. 1 touting 

its vegetation management, PG&E's vegetation management program once again failed, causing 

the Butte Fire that killed two people, destroyed 921 homes, businesses, and other structures, and 

scorched more than 70,000 acres over 22 days. 

101. On April 28, 2016, Cal Fire issued a press release announcing its conclusion that 

the Butte Fire was caused by PG&E' s safety violations. Cal Fire also referred its investigation to 

the two relevant district attorneys for the counties the Butte Fire burned. 

102. There is currently pending litigation over PG&E' s liability for the Butte Fire, 

including an April 13, 2017 lawsuit in which Cal Fire sued PG&E for $87 million to recover the 

costs that the agency devoted to fighting that fire. Cal Fire's lawsuit alleges that PG&E caused 

the Butte Fire by maintaining an inadequate vegetation management system. 

4. PG&E's Insufficient Safety Practices Allowed Numerous, CompanyWide Vegetation Management and Other Safety Violations During 

the Class Period 

103. Internally, PG&E's numerous and widespread violations ofrelevant safety laws 

are shown by the fact that the Company's internal controls were designed to permit vegetation 

management and other violations to go unchecked on a dangerous scale. 

(a) PG&E Documented and Tolerated Thousands of Dangerous 

Safety Violations Across Its Territory During the Class Period 

104. On March 5, 2019, the U.S. District Court presiding over PG&E's criminal 

23 probation (Judge Alsup) issued a revised Order to Show Cause relating to PG&E' s lack of 

24 compliance with vegetation management and other safety regulations. The Order stated that 

25 PG&E's "unsafe conduct led to a deadly pipeline explosion and to six felony convictions," and 

26 found that PG&E' s conduct had now "led to recurring deadly wildfires caused by its 

27 electrical system." It contained the following findings summarizing the results of the federal 

28 

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1 court's probe into PG&E' s actual knowledge of safety violations leading up to the North Bay 

2 and Camp Fires: 

3 PG&E's filings have included several relevant admissions. 

Significantly, PG&E acknowledged "that vegetation contact is the 

4 primary risk driver with respect to ignitions on its distribution 

lines." ("Vegetation" means trees and limbs in this context.) In 

5 2016 alone, PG&E experienced approximately 1,400 wires down 

caused by vegetation contact. As PG&E reported to the CPUC, 

6 during 2015 and 2016, vegetation contact with conductors was the 

leading cause of the 486 fire ignitions associated with PG&E 

7 facilities, causing 37% of those fires. PG&E further admitted 

that as of June 2017, there were 3,962 unworked trees which 

8 PG&E had identified in 2016 as hazardous with the potential 

to "fall into or otherwise impact the conductors, towers or guy 

9 wires before the next inspection cycle."28 

10 105. Thus, PG&E has admitted that it had actual knowledge since 2015 that its 

11 vegetation management practices did not comply with California safety regulations on the order 

12 of thousands of violations per year. PG&E has further admitted to actually knowing that its 

13 violations have caused hundreds of wildfires per year since 2015. However, PG&E never 

14 disclosed that their own internal compliance reviews showed a lack of compliance on such a 

15 huge scale. 

16 106. According to data released by the CPUC, 29 PG&E equipment caused a total of 

17 1,486 vegetation fires between June 10, 2014 and December 29, 2017. Among those vegetation 

18 fires, 69 were caused by transmission lines like the line implicated in causing the Camp Fire, 

19 including 26 fires caused by lines of the exact same high voltage, 115 kilovolts. PG&E supplied 

20 the CPUC with this information under the regulator's Decision 14-02-015, which enacted a "Fire 

21 Incident Data Collection Plan."30 

22 

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24 

25 

26 

27 

28 

28 Second Order to Show Cause Why PG&E's Conditions of Probation Should Not Be 

Modified, PG&E Criminal Proceedings (N.D. Cal. Mar. 5, 2019), ECF No. 1027. 

29 PG&E Fire Incident Data Collection Plan Report Data Compiled from 2014-2017, CPUC 

website, 

http:/ /www.cpuc.ca.gov/uploadedFiles/CPUC _Website/Content/About_ U s/Organization/Divisio 

ns/News _and_ Outreach_ Office/PGE _Fire%20Incident%20Data%202014-2017. pdf. 

30 Decision Adopting Regulations To Reduce The Fire Hazards Associated With Overhead 

Electric Utility Facilities and Aerial Communications Facilities, CPUC Decision 14-02-015 

(CPUC Feb. 5, 2014), 

http://docs.cpuc.ca.gov/PublishedDocs/Published/GOOO/M087 /K892/878923 06.PDF. Pursuant to 

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1 107. Similarly, according to documents described in a report by NBC Bay Area, PG&E 

2 completed a review of its transmission towers' safety compliance immediately after the Camp 

3 Fire. As a result, "PG&E' s inspections of thousands of transmission towers since the deadly 

4 Camp Fire in Butte County found more than 450 safety violations, including 59 that posed 

5 serious safety hazards."31 

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(b) PG&E Had Actual Knowledge That Its Insufficient Safety 

Practices Had the Potential to Allow for Dangerous Safety 

Violations on the Order of Hundreds of Thousands to a Million 

Wildfire Hazards 

108. Investigative journalists and attorneys have uncovered that PG&E internally 

accepts that its vegetation management practices leave 1 of every 100 trees noncompliant with 

California regulations, and further reportedly "cheats" on its internal compliance reviews, in 

order to give a misleading impression of compliance with tree clearance requirements when it is 

in fact noncompliant. According to a report from NBC reporter Jaxon Van Derbeken on 

November 6, 2017, published a month after the North Bay Fires began, PG&E's own internal 

inspectors allow one out of 100 trees they check to violate state power line clearance standards: 

(continued) 

PG&E auditors allow one out of 100 trees they check to violate 

state power line clearance standards, NBC Bay Area has 

learned. 

* * * 

[I]t emerged during the Butte fire litigation that [internal] auditors 

were giving out a passing grade when one out of 100 trees they 

checked turned out to be too close to power lines under state 

standards. 

* * * 

When [PG&E] failed to reach that 99 percent compliance rate in 

the area around the fire ... the company just expanded the 

universe of trees covered in a particular audit. 

the Fire Incident Data Collection Plan, PG&E and other investor-owned electric utilities must 

"collect and report data to SED regarding power-line fires." Id ("SED" refers to CPUC's 

Safety and Enforcement Division). 

31 Jaxon van Derbeken, PG&E Inspectors Find Hundreds of Safety Issues on Electrical 

Towers, NBC Bay Area (Apr. 12, 2019), https://www.nbcbayarea.com/investigations/PGEInspectors-F ind-Hundreds-of-Safety-Issues-on-Electrical-Towers-508344011. html. 

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"So what PG&E does when it doesn't pass, it basically cheats," 

[Amanda Riddle, one of the attorneys participating in a lawsuit 

against PG&E related to the Butte Fire] said. "It adds more miles 

and more miles until it reaches a passing grade." 

109. With approximately 123 million trees under PG&E's control, 32 this means that 

PG&E knew during the Class Period that it may have been tolerating as many as approximately 

1.2 million trees to be noncompliant with state safety laws at any given time. The measurement 

of 1.2 million safety violations is a conservative estimate when combined with the detail that 

PG&E "cheats" to get its rate of violations down to 1 %, hence PG&E's real rate of 

noncompliance may be even higher. 

110. According to the plaintiffs litigating against PG&E for injuries caused by the 

2015 Butte Fire, Defendant Hogan's and another PG&E employee's deposition testimony 

purportedly showed that "PG&E knows and accepts that 1-in-100 trees will be non-compliant, 

and that 1-in-1000 will be touching its powerlines." Using the same metrics, this means that 

PG&E knows that it could be allowing as many as approximately 123,000 safety violations in th 

nature of trees touching its powerlines at any given time. 

G. Investors Could Not Have Reasonably Expected the Extent of PG&E's 

Unsafe Pattern of Noncompliance that Caused the North Bay Fires and the 

Camp Fire 

1. PG&E's Noncompliance with Vegetation Management and Pole 

Integrity Requirements Caused the North Bay Fires 

111. Of the eighteen main North Bay Fires for which Cal Fire's investigations have 

20 been completed, seventeen were caused by PG&E equipment. Eleven of these fires evidenced 

21 violations of California safety regulations, in seven different counties at the same time. Most of 

22 these violations pertained to PG&E' s failures to clear vegetation or maintain the integrity of its 

23 poles. 

24 

25 

26 

27 

28 

32 See PG&E' s Response to Safety and Enforcement Divisions' 10/14/17 Questions, CPUC 

website (Oct. 17, 2017), 

http ://www.cpuc.ca.gov/uploadedFiles/CPUC _Public_ Website/Content/Safety /Response%20to 

%20Data%20Request. pdf. 

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1 112. Even though Cal Fire's investigations have not found evidence of violations for 

2 six of the fires, PG&E' s numerous, widespread safety violations actually caused or exacerbated 

3 all of the North Bay Fires. PG&E' s safety violations exacerbated even the fires that lacked 

4 evidence of violations, in two ways. First, some of the eleven fires caused by PG&E's safety 

5 violations merged into and strengthened other fires. Second, PG&E' s safety violations diverted 

6 scarce firefighting resources to contain the eleven North Bay Fires which never should have 

7 ignited, leading to the other fires causing more damage. As such, PG&E' s safety violations were 

8 responsible, in full or in part, for all of the North Bay Fires, thereby negatively impacting the 

9 Company's financial condition. 

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2. PG&E's Noncompliance with Vegetation Management and Pole 

Integrity Requirements Caused the Camp Fire 

113. On May 15, 2019, Cal Fire issued a press release announcing its determination 

that PG&E's electrical equipment caused the Camp Fire. 33 Cal Fire further concluded, "[a]fter a 

very meticulous and thorough investigation," that PG&E caused both of the Camp Fire's two 

ignition points. Cal Fire also referred its investigation to the Butte County District Attorney to 

review for potential criminal violations. As noted above, PG&E expects to bear at least $10.5 

billion, if not more, in liability for causing this fire. 

(a) The Camp Fire's First Ignition Point Was Caused by PG&E 

Safety Violations 

114. The Camp Fire's first ignition point was "in the Pulga area," according to Cal 

20 Fire, and "was caused by electrical transmission lines owned and operated by Pacific Gas and 

21 Electric[]" 34 Per its May 15, 2019 press release, "PG&E accepts this determination."35 

22 

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27 

28 

33 Press Release, Cal Fire, CAL FIRE Investigators Determine Cause of the Camp Fire (May 

15, 2019), 

https:/ / calfire.ca.gov/ communications/downloads/newsreleases/2019/CampFire _ Cause. pdf. 

34 Press Release, Cal Fire, CAT, FTRF Investigators Determine Cause of the Camp Fire (May 

15, 2019), 

https:// calfire.ca.gov/ communications/downloads/newsreleases/2019/CampFire _ Cause. pdf. 

35 Press Release, PG&E, PG&E Responds to Camp Fire Announcement from CAL FIRE (May 

15, 2019), 

https:/ /www.pge.com/ en/about/newsroom/newsdetails/index.page?title=20190515 _pge _responds 

_to_ camp _fire_ announcement_from _ cal _fire. 

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1 115. According to firefighter radio transmissions and the journalist whose investigatio 

2 made them public late on November 9, 2018, firefighters were dispatched to a vegetation fire 

3 "under the high tension power lines" across the Feather River from Poe Dam in Butte County on 

4 November 08, 2018 at 6:33 a.m.

36-matching the location where Cal Fire officials pinpointed th 

5 Camp Fire's origin four minutes earlier. 37 As one firefighter described the fire to dispatch: "It is 

6 on the west side of the river underneath the transmission lines." 

7 116. Independently that evening, PG&E admitted to the CPUC that one of its 115-

8 kilovolt transmission lines on Pulga Road in Butte County experienced an outage at 6: 15 a.m. 

9 that day, and noted that the site was near the Camp Fire. 38 Cal Fire has listed Pulga Road as the 

10 Camp Fire starting point. 39 

11 117. The same report acknowledged that an aerial patrol later that day, "in the 

12 afternoon," observed "damage to a transmission tower" on the same 115 kilovolt transmission 

13 line. In a supplemental report filed with the CPUC on December 11, 2018, PG&E identified the 

14 tower as number ":27/222" and further specified that this observed damage included the 

15 separation of a suspension insulator, meant to support a transposition jumper, from an arm on the 

16 tower. 40 PG&E also observed a broken C-hook attached to the separated suspension insulator 

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36 Matthias Gafni, PG&E Power Lines May Have Sparked Deadly Camp Fire, According To 

Radio Transmissions, Mercury News (updated Nov. 12, 2018 12:03 pm), 

https://www.mercurynews.com/2018/11/09/pge-power-lines-may-have-sparked-deadly-buttecounty-wildfire-according-to-radio-transmissions/. 

37 Camp Fire Incident Update, CAL FIRE Incident Information (Nov. 22, 2018 7:00 pm), 

http://cdfdata.fire.ca.gov/admin8327985/cdf/images/incidentfile2277 _ 4319.pdf. 

38 CPUC Email re: Electric Safety Incident Reported - PG&E Incident No: 181108-9002 

(Nov. 8, 2018), http://sl.q4cdn.com/880l35780/files/doc_downloads/2018/wildfire/l l/ElectricSafety-Incident-Reported-Pacific-Gas-Electric-Incident-No-181108-9002.pdf; see also, Tony 

Bizjak, PG&E Reports Power Line Problem In Butte County Near Time and Place Where 

Wildfire Sparked, The Fresno Bee (updated Nov. 10, 2018 7:51 PM), 

https://www.fresnobee.com/news/state/ california/article221448500 .html. 

39 Camp Fire Incident Information, CAL FIRE Incident Information (last modified May 15, 

2019), http://cdfdata.fire.ca.gov/incidents/incidents _ details _info?incident_id=2277. 

40 PG&E Letter to CPUC re: Supplements the Notices provided Nov. 8, 2018 (Dec. 11, 2018), 

http:/ ls 1.q4cdn.com/880135780/files/doc _ downloads/2018/wildfire/12/12-11-18.pdf. 

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1 that once connected the suspension insulator to a tower arm.

41 According to the report, the 

2 connection point showed signs of wear; a flash mark was visible close to where the transposition 

3 jumper was suspended; and there was damage to the transposition jumper and suspension 

4 insulator. 42 

5 118. PG&E had not inspected Tower :27/222 since August 2014, and prior to that, not 

6 since 2009, pursuant to an internal policy whereby "Steel structures on PG&E's 115 kV 

7 transmission lines, such as Tower :27/222, are subject to maintenance patrols annually and 

8 detailed inspections every five years." PG&E has admitted that an aerial patrol is not an 

9 inspection, as it is only " [ d]uring a detailed inspection of a transmission line" that "PG&E 

10 personnel are instructed to look for and document abnormalities or circumstances that will 

11 negatively impact safety, reliability, or asset life." 43 

12 119. Moreover, just one day prior to the Camp Fire's ignition, PG&E had contacted a 

13 Pulga landowner named Betsy Ann Cowley regarding transmission line poles on her property 

14 that "were having problems with sparks."44 

15 120. Accordingly, it emerged that a PG&E electrical pole carrying a high-voltage 115 

16 kilovolt transmission line lost its integrity, in whole or in part, on the morning of November 8, 

17 2018. Shortly thereafter, vegetation underneath the line ignited. PG&E's failure to maintain a 

18 clearance for vegetation up to 10 feet away from this transmission line, inclusive of all 

19 vegetation underneath, violated California Public Resources Code Section 4293. Further, 

20 PG&E' s failure to maintain the integrity of its poles and prevent their loss of function violated 

21 California Public Utilities Code Section 451. 

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41 Id 

42 Id The same report noted that, at a neighboring tower, an "insulator hold down anchor" 

had become disconnected. Id 

43 PG&E Camp Fire Incident Description & Factual Summary at 4, PG&E Criminal 

Proceedings (N.D. Cal. Dec. 31, 2018), ECF No. 956-1. 

44 Matthias Gafni, Update: PG&E says email to Camp Fire Victim Focused on Different 

Transmission Line, Mercury News (updated Nov. 14, 2018 3:59 PM), 

https://www.mercurynews.com/2018/11/12/state-regulators-investigating-pge-socal-edison-forrol es-in-deadly-camp-wool sey-fires/. 

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(b) The Camp Fire's Second Ignition Point Was Also Caused by 

PG&E's Safety Violations 

121. Cal Fire determined that the Camp Fire also had a second ignition point, which 

began "near the intersection of Concow Rd. and Rim Rd" before merging with the first fire 

PG&E caused at first ignition point. 45 According to Cal Fire's report: "The cause of the second 

fire was determined to be vegetation into electrical distribution lines owned and operated by 

PG&E," a violation of California Public Resources Code Sections 4292 and 4293, as well as 

California Public Utilities Code Section 451. Thus, Cal Fire has concluded that PG&E' s 

violation of safety regulations caused at least one of the Camp Fire's two ignition points. 

122. Cal Fire first announced that it had identified a second ignition point for the Camp 

Fire on November 15, 2018. 46 On November 16, 2018, PG&E admitted to CPUC that the same 

day the Camp Fire ignited (indeed, minutes later at 6:45 a.m.), it experienced a second outage on 

another power line in a nearby part of Butte County near Concow, California. 47 

123. In PG&E's December 11, 2018 supplemental report to CPUC, PG&E further 

admitted that it discovered a broken pole on the second power line on November 9, 2018; that 

the pole was on the ground, along with pole equipment; and that the pole had a line recloser. 48 

The supplemental report also detailed a second inspection of the area on November 12, 2018, 

where a PG&E employee found damaged and downed poles, several snapped trees, downed 

45 Press Release, Cal Fire, CAL FIRE Investigators Determine Cause of the Camp Fire (May 

15, 2019), 

http:/ /cal fire. ca.gov/communications/ downloads/newsreleases/2019/CampFire _ Cause.pdf. 

46 Andre Byik, Camp Fire Investigation Leads To Possible Second Origin Away From Pulga, 

Enterprise-Record (updated Nov. 15, 2018 10:06 PM), 

https://www.chicoer.com/2018/11/15/ camp-fire-investigation-leads-to-another-area-away-frompulga/. 

47 CPUC Email re: Electric Safety Incident Reported -PG&E Incident No: 181116-9015 

(Nov. 16, 2018), 

http://www.cpuc.ca.gov/uploadedFiles/CPUCWebsite/Content/News_Room/NewsUpdates/2018 

EIR _ IncidentN o 181116-9015. pdf; PG&E Reports Another Outage On The Morning When 

California Camp Fire Started, CNBC (Nov. 19, 2018 6:43 AM), 

https ://www.cnbc.com/2018/11 / 19 /pge-reports-another-outage-on-the-morning-when-californiacam p-fire-started.html. 

48 PG&E Letter to CPUC re: Supplements the Notices provided Nov. 8, 2018 (Dec. 11, 2018), 

http:/ ls 1.q4cdn.com/880135780/files/doc _ downloads/2018/wildfire/12/12-11-18.pdf. 

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1 wires, and some snapped trees on top of the downed wires. 49 The presence of the line recloser 

2 further calls into question PG&E' s prior representation that it was "just about done" disabling 

3 recloser devices in "high wildfire risk areas" as of November 18, 2015 (Misstatement No. 3). 

4 124. Accordingly, the truth emerged that the Camp Fire's second ignition point also 

5 exhibited evidence of failures regarding vegetation management, pole integrity, and the possible 

6 use of a recloser in further violation of California safety regulations, including Public Resources 

7 Code Sections 4292, 4293 and Public Utilities Code Section 451. Cal Fire's investigation later 

8 confirmed these facts. 

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H. PG&E's Repeated Vegetation Management and Pole Integrity Safety 

Violations Show that the Company Knew of Its Numerous and Widespread 

Violations of Fire Safety Regulations Throughout the Class Period, but Did 

Not Change Its Practices to Reduce, Much Less Eliminate, Those Safety 

Violations 

1. PG&E Did Not Improve Its Inadequate Safety Practices After Its 

Safety Violations Caused the Deadly Butte Fire 

125. Even though PG&E suffered from endemic wildfire safety problems, the 

Company did not meaningfully change its practices even after the deadly Butte Fire that occurre 

in 2015. As noted above, in a deposition transcript that has not yet been made publicly available, 

PG&E's Vegetation Program Manager (Stockton Division)5° Richard Yarnell reportedly testified 

under oath: "PG&E-to the best of my knowledge, we have not made any changes as a 

result of this fire" as of April 10, 2017. Accordingly, the known noncompliance that caused the 

Butte Fire in 2015 continued unabated throughout the Class Period, contrary to PG&E's public 

statements. 

126. Moreover, the vegetation management problems detailed herein were 

institutionally entrenched by certain incentive structures PG&E put in place. According to a 

lawsuit that was filed in California Superior Court against PG&E on December 21, 2017 (Case 

No. CGC-17-563293), which asserted claims on behalf of victims of the North Bay Fires, PG&E 

49 Id 

50 PG&E' s Stockton Division is a geographic subdivision within the Company that contained 

the Butte Fire. 

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1 provided monetary incentives to its employees that had the effect of discouraging the 

2 implementation of vegetation safety measures. 

3 127. For instance, PG&E's Vegetation Management Program adopted a Vegetation 

4 Management Incentive Initiative ("VMTT") program, which was purportedly designed to reduce 

5 the "annual routine compliance" tree work of PG&E and to shift resources to "reliability" work 

6 that focused on urban consumer satisfaction instead of overall safety. By doing so, PG&E 

7 effectively shifted its resources away from rural areas that were more prone to wildfires (where 

8 the "annual routine compliance" work was typically done), and towards more densely populated 

9 urban areas (where the "reliability" work was done). For example, pursuant to this program, 

10 PG&E set a goal to reduce "routine" work by 7.5% annually from 2014 through 2016. PG&E's 

11 bonus incentive program therefore (like its policy of not shutting off its reclosers during wildfire 

12 season) put safety at risk in an effort to reduce consumer complaints. See ~569, infra. 

13 128. According to the same lawsuit, Robert Urban, a regional officer for a PG&E 

14 contractor, stated that he had a concern that the bonus system incentivized his employees to not 

15 do their job, but PG&E chose to keep this program despite knowing this risk. 

16 129. As noted above, though PG&E falsely and repeatedly assured investors during 

17 the Class Period that its compliance failures had been resolved after the Butte Fire, the 

18 Company's own employee Richard Yarnell later admitted that nothing of substance had changed 

19 over much of the same time period. Accordingly, PG&E's repeated safety violations show that 

20 the Company knew of its numerous and widespread violations of California safety regulations 

21 throughout the Class Period, but did nothing to change them. 

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2. PG&E Internally Acknowledged, Extensively Documented, and 

Tolerated for Years the Safety Violations that Caused the Camp Fire 

130. PG&E's Caribou-Palermo transmission powerline was originally built in 1919, 

and was responsible for causing the first ignition point of the Camp Fire. 

131. PG&E knew, but concealed, that this powerline had dangerously deteriorated. In 

December 2012, five steel towers supporting the Caribou-Palermo transmission line collapsed 

due to windy conditions. In a July 16, 2013 letter to the CPUC, PG&E proposed replacing the 

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1 five collapsed towers, and one additional tower, on the Caribou-Palermo line "[s]panning 

2 Plumas-Butte County border" in a row "up slope and west of Highway 70 and generally parallel 

3 to the unpaved Pulga Road in a remote area of the Feather River Canyon within Plumas National 

4 Forest" 51-that is, to say, near the first Camp Fire ignition point. 

5 132. The rest of the aging towers on the line, including the tower alleged to have 

6 started the Camp Fire, were not replaced during that project. 52 The age of these remaining 

7 towers created a strong, undisclosed risk that corrosion, metal fatigue, or other age-related 

8 factors would fail to support transmission line cables and cause wildfires. Indeed, the relevant 

9 tower included uninsulated "jumper" lines used to switch currents between transmission lines, 

10 making the risk of fire even greater. 53 Tellingly, the cross arm from that transmission tower, 

11 which was attached to the "jumper" line, was removed by Cal Fire investigators as part of its 

12 probe into the cause of the Camp Fire. 54 And Cal Fire's investigation has not only concluded 

13 that PG&E equipment caused the Camp Fire in a manner evidencing safety violations, but also 

14 referred the matter to the Butte County district attorney for a criminal investigation. 

15 133. In a July 26, 2017 FERC filing that news outlets have reported on extensively, 55 

16 PG&E proposed considerable work for the Caribou-Palermo line as part of the Company's 

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51 Letter from CPUC to PG&E re: Advice Letter 4256-E (Sept. 6, 2013), 

https://www.pge.com/nots/rates/tariffs/tm2/pdf/ELEC _ 4256-E.pdf. 

52 Ivan Penn, et al., How PG&E Ignored Fire Risks in Favor of Profits, New York Times 

(Mar. 18, 2019), https:/ /www.nytimes.com/interactive/2019/03/18/business/pge-califomiawildfires.html. 

53 Matthias Gafni, It was originally built in 1919. What failed on PG&E tower at heart of 

Camp Fire probe? Mercury News (updated Dec. 10, 2018 4:09 AM), 

https://www.mercurynews.com/2018/12/07 /it-was-originally-built-in-1919-what-failed-onpge-tower-at-heart-of-cam p-fire-probe/. 

54 Matthias Gafni, et al., Why Did Fire !investigators Remove PG&E Transmission Tower 

Part in Camp Fire Probe, Enterprise-Record (updated Dec. 6, 2018 8:07 AM), 

https://www.chicoer.com/2018/12/05/why-did-fire-investigators-remove-pge-transmissiontower-part-in-camp-fire-probe. 

55 E.g., George Avalos, PG&E Knew For Years That Repairs Were Needed On Transmission 

Lines In Area Of Fatal Camp Fire, Mercury News (updated Feb. 28, 2019 6:05 AM), 

https://www.mercurynews.com/2019/02/27 /pge-delayed-repairs-for-years-on-transmission-linelinked-to-lethal -camp-fire/. 

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