EXHIBIT B 

Case: 19-30088 Doc# 5374-2 Filed: 01/14/20 Entered: 01/14/20 15:56:59 Page 1

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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LABATON SUCHAROW LLP 

THOMAS A. DUBBS (pro hac vice) 

LOUIS GOTTLIEB (pro hac vice) 

JEFFREY A. DUBBIN (#287199) 

ARAM BOGHOSIAN (pro hac vice) 

140 Broadway 

New York, New York 10005 

Telephone: (212) 907-0700 

Facsimile: (212) 818-0477 

Email: tdubbs@labaton.com 

lgottlieb@labaton.com 

jdubbin@labaton.com 

aboghosian@labaton.com 

Counsel for Lead Plaintiff the Public Employees Retirement 

Association of New Mexico and Lead Counsel for the Class 

WAGSTAFFE, VON LOEWENFELDT, BUSCH & RADWICK, LLP 

JAMES M. WAGSTAFFE (#95535) 

FRANK BUSCH (#258288) 

100 Pine Street, Suite 725 

San Francisco, California 94111 

Telephone: (415) 357-8900 

Facsimile: (415) 371-0500 

Email: wagstaffe@wvbrlaw.com 

busch@wvbrlaw.com 

Liaison Counsel for the Class 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

IN RE PG&E CORPORATION 

SECURITIES LITIGATION 

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

THIRD AMENDED CONSOLIDATED CLASS 

ACTION COMPLAINT FOR VIOLATION OF 

THE FEDERAL SECURITIES LAWS 

JURY TRIAL DEMANDED 

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TABLE OF CONTENTS 

I. INTRODUCTION .............................................................................................................. 1

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

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

IV. 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 ....................................................6

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 .........................................................................12

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

VI. 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 if It Could Prove That It Acted Reasonably 

and Prudently ........................................................................................................ 21

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

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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 .............22

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

During the Class Period ...............................................................................................24

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 of Reclosers 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 

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

Violations .....................................................................................................................38

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 ................................................................................. 47

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

Weighed in Favor of a Shutoff .................................................................... 47

(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 ..............................56

VII. DEFENDANTS’ FALSE AND MISLEADING CLASS PERIOD STATEMENTS 

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

A. Overview of Defendants’ Fraudulent Course of Conduct ...........................................59

B. Defendants Made Materially False and Misleading Statements and Omissions 

Regarding Its Vegetation Management Activities and Compliance with 

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

1. April 29, 2015 – Misstatement No. 1 .................................................................... 61

2. October 16, 2015 – Misstatement No. 2 ............................................................... 62

3. November 18, 2015 – Misstatement No. 3 ........................................................... 64

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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 ........................................................69

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

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

3. May 31, 2017 – Misstatement No. 8 ..................................................................... 72

D. After the North Bay Fires Erupted, the Truth Began to Emerge .................................74

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 – Misstatement No. 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 – Misstatement No. 15 ..................................................................... 87

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

4. October 9, 2018 – Misstatement No. 17 ............................................................... 90

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

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

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

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

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

PG&E’s Securities .......................................................................................................94

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

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

D. 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 ...........................96

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

Concealed Risk ..................................................................................................... 96

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

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

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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

X. 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 ...................................................................120

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 ....................................................129

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 ............................................................136

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

Inference of Scienter ..................................................................................................140

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

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

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

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

B. Bankrupt Entities .......................................................................................................154

C. Securities Act Individual Defendants ........................................................................154

D. Underwriter Defendants .............................................................................................159

XVII. SUBSTANTIVE ALLEGATIONS SUPPORTING THE SECURITIES ACT CLAIMS

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

Violations ...................................................................................................................162

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 

MISLEADING STATEMENTS IN THE OFFERING DOCUMENTS FOR THE NOTES 

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

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

Practices, Policies and Compliance ...........................................................................187

1. The Offering Documents Omitted PG&E’s Widespread Safety Failures 

and the Existing Risks Associated with Its Inadequate Safety Practices ............ 188

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

Mexico (“PERA” or “Lead Plaintiff”), individually and on behalf of all other persons similarly 

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

(the “Utility,” and together with PG&E Corporation, “PG&E” or the “Company”), the Exchange 

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

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

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

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

(collectively, the “Securities Act Plaintiffs,” and together with Lead Plaintiff, “Plaintiffs”), 

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

of 1933 (“Securities Act”) against the Securities Act Individual Defendants and the Underwriter 

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

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

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

Company’s Securities and Exchange Commission (“SEC”) filings, conference call transcripts 

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

information regarding the Defendants. Plaintiffs believe that substantial additional evidentiary 

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

I. INTRODUCTION 

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

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

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

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

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

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

numerous and widespread violations of powerline safety regulations. 

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

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

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

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

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

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

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

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

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

height of PG&E’s knowing noncompliance with safety regulations. Among the many details that 

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

District of California, in presiding over PG&E’s criminal probation, has found as fact “that as of 

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

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

wires before the next inspection cycle.’” By June 2017, PG&E had known about these 

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

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

on PG&E’s own admissions. 

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

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

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

same time period that its vegetation management was, e.g., “in compliance with relevant laws” 

(October 6, 2016 – Misstatement No. 4), and “complying with state and federal regulations and 

delivering safe, reliable and affordable electric service” (August 9, 2017 – Misstatement No. 5). 

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

Bay Fires—information that would threaten the Company’s financial condition. So PG&E 

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

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

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

vegetation management spending last year” and “inspect[ed] all of our overhead lines” 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 3 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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

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

requirements” (November 5, 2017 – Misstatement No. 12), yet soon thereafter, state 

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

least eleven of the North Bay Fires. 

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

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

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

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

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

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

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

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

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

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

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

7. PG&E’s false and misleading statements destroyed billions of dollars of economic 

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

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

experienced compensable losses. 

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

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

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

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

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

. . . reasonably estimated losses.”1

 

 1

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

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

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 4 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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

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

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

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

Bay and Camp Fires.2

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

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

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

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

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

including the Camp Fire—California’s deadliest and most destructive wildfire ever. 

II. NATURE OF THE CASE 

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

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

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

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

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

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

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

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

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

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

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

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

 

(continued) 

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

Fire.” See ¶¶663-72, infra. 2

 Amended Decl. 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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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 5 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 

10b-5 promulgated thereunder. This Action also is brought pursuant to the Securities Act of 

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

III. JURISDICTION AND VENUE 

12. The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) of 

the Exchange Act (15 U.S.C. §§78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder by the 

SEC (17 C.F.R. § 240.10b-5), as well as Sections 11 and 15 of the Securities Act (15 U.S.C. 

§§77k and 77o). 

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

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

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

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

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

occurred in substantial part in this Judicial District. 

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

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

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

facilities of the national securities markets. 

IV. OVERVIEW OF THE EXCHANGE ACT VIOLATIONS 

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

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

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

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

violations of safety regulations and inadequate safety practices. 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 6 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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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 

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 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. 

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 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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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 7 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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

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

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

bankruptcy. 

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

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

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

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

California safety regulations – contradicting Defendants’ false representations of compliance 

with those regulations. 

21. Defendants’ false and misleading misrepresentations and omissions came at a 

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

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

violations of California safety regulations regarding vegetation clearance caused a wildfire 

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

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

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

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

Program Manager named Richard Yarnell admitted: “PG&E—to the best of my knowledge, we 

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

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

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

 

(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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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 8 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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

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

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

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

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

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

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

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

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

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

requirements when making false and misleading statements to the contrary. 

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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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 9 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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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 

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

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

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

(the “ESRB-8 Shutoff Protocol”), including: 

• “PG&E’s Community Wildfire Safety Program implements additional precautionary 

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

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

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

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

– Misstatement No. 16). 

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

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

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

monitor PG&E’s financial health, as well as a method to raise capital should PG&E’s liability for 

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

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

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

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

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

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

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

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

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

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 10 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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

Fire, the Company reassured investors by stating: 

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

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

dangerous vegetation, improving weather forecasting, upgrading emergency response 

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

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

face of a growing wildfire threat” (October 9, 2018 – Misstatement No. 17); and 

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

when extreme fire danger conditions occur” (October 9, 2018 – Misstatement No. 18). 

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

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

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

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

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

inflating PG&E’s share price. 

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

for which the Company has already taken a charge of $3.5 billion, admitting the likelihood that it 

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

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 

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 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. 

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 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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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 11 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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

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

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

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

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

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

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

other signs of safety violations. 

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

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

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

towers violated California Public Utilities Code Section 451. 

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

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

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

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

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

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

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

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

upsetting customers. 

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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. 

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15, 2019), 

https://calfire.ca.gov/communications/downloads/newsreleases/2019/CampFire_Cause.pdf. 

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CIVIL ACTION NO. 3:18-CV-03509-EJD 

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

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

Camp Fire. However, Plaintiff’s investigation has uncovered that this explanation is 

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

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

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

PG&E’s false and misleading statements—concealing how the Company was not sufficiently 

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

recklessness. 

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

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

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

C. Exchange Act Claims Being Asserted 

39. Notwithstanding PG&E’s false and misleading statements to the marketplace, 

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

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

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

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

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

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

measures and/or the effects thereof, PG&E’s artificially inflated share price dropped 

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

other Class members have suffered significant damages. 

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

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

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

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

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 13 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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V. THE EXCHANGE ACT PARTIES 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Utility and PG&E interchangeably as “PG&E” or the “Company,” unless otherwise specified. 

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

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

U.S.C. § 362. 

45. Defendant Anthony F. Earley, Jr. (“Earley”) served as PG&E Corporation’s 

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

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

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46. Defendant Geisha J. Williams (“Williams”) served as PG&E Corporation’s CEO 

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

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

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

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

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

January 2019. 

47. Defendant Nickolas Stavropoulos (“Stavropoulos”) served as the President and 

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

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

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

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

2018. 

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

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

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

Officer. 

49. Defendant Christopher P. Johns (“Johns”) served as the President of Pacific Gas 

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

50. Defendant Patrick M. Hogan (“Hogan”) served as the Utility’s Senior Vice 

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

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

Operations Asset Management from November 2013 through February 2016. 

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

“Exchange Act Individual Defendants.” 

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

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

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

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

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

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

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

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

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

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

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

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

statements and omissions pleaded herein. 

VI. SUBSTANTIVE ALLEGATIONS SUPPORTING THE EXCHANGE ACT 

CLAIMS 

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 

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

and otherwise safe. 

55. 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. 

56. Similarly, California Public Resources Code Section 4293 provides that: 

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[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. 

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

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

contact the line from the side or may fall on the line.’” The law also “requires utilities to identify 

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

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

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

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

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

utility’s compliance with Section 4293 is mandatory, not discretionary.”10

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, U.S. 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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infrastructure, including an obligation to maintain the towers and poles that carry its transmission 

and distribution lines. 

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: 

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. 

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

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

being caused by the failure of its towers and poles. 

3. PG&E Is Regulated by the CPUC 

62. PG&E’s primary regulator is the California Public Utilities Commission 

(“CPUC”). The CPUC promulgates safety regulations and adjudicates PG&E’s annual General 

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

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

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

Utilities Code. 

(a) CPUC’s General Orders 95 and 165 Impose 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 turn, 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, 

guard against corrosion.11

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 for Overhead Electric Line Construction (May 2018), 

http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M217/K418/217418779.pdf 

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

Transmission Facilities (Dec. 2017), 

http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/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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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 CPUC’s Regulations Under Penalty of 

Law 

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

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

penalty of law. 

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: 

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 

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

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

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

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

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

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

regulations. 

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

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

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

its jurisdiction. 

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 

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

California Constitution as imposing a doctrine known as “inverse condemnation,” whereby 

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

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

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

the shareholders to the rate payers – if it can “affirmatively prove that it reasonably and 

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

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

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

07-025 (July 12, 2018). 

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

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

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

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

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

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

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

76. FAC-003-4 also imposes minimum vegetation clearance distances that depend on 

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

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

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

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

documentation of vegetation management practices.14

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 of 

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 a 

State of Emergency” regarding tree mortality made explicit: “[U]tilities . . . 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 Of 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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required by their existing responsibilities to protect the public health and safety, shall 

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

power lines. . . .” 

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

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

only 2.4% and 1.4%, respectively.18 Each year’s spending was substantially identical to the 

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

General Rate Cases – notwithstanding the state of emergency directive above and PG&E’s 

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

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

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

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

 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.bls.gov/data/inflation_calculator.htm. 

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

“doubled” vegetation management expenditures in 2016 (see ¶¶258 & 264), tellingly, they made 

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

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

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

later found, “PG&E’s performance with respect to vegetation management has been dismal.” 

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

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

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

supports the inference that the Company’s previous vegetation management expenditures of 

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

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

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

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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83. Soon, however, it was touting that 2016’s “236,000 dead or dying trees” 

removed were “in addition to the 1.2 million trees that PG&E works each year” (May 10, 2017, 

Press Release). 

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[ed]” 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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the state court litigation concerning the North Bay Fires,21 these two utility companies are aware 

of the dangers of using reclosers, and they have a practice of blocking reclosers from working 

during fire season.22

88. Prior to the North Bay Fires, PG&E knew that its reclosers posed a great risk of 

causing wildfires. PG&E was specifically warned of this hazard in a May 2013 report that the 

Liberty Consulting Group (the “Liberty Report”) submitted to the Safety and Enforcement 

Division of the CPUC. Moreover, at a November 18, 2015 hearing before the California Senate 

Sub-Committee on Gas, Electric, and Transportation Safety, the Utility’s Vice President of 

Electrical Operations Asset Management, Defendant Hogan, stated that PG&E had the ability to 

reprogram its reclosers during fire season so that they did not attempt to restart lines that had 

been stopped. Hogan acknowledged that shutting down power means “you take the reliability hit, 

but you gain the wildfire benefit.” This statement evidenced that PG&E recognized the downside 

to disabling its reclosers (because it would increase the risk of blackouts, i.e., the “reliability hit,” 

which would lead to consumer complaints), but that PG&E also understood this measure would 

improve safety (i.e., the “wildfire benefit”). Unbeknownst to investors, the Company chose 

short-term “reliability” over safety.23

 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%206-25-18.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://cdfdata.fire.ca.gov/incidents/incidents_terminology?filter=F. 

23 Notably, PG&E’s ESRB-8 Shutoff Protocol embodied the same tradeoff. As a protocol that 

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 

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 

of years ago that may have prevented these fires in October.” 

Likewise, investors were misled by PG&E’s recloser statements. 

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92. Yet, even as late as 2018, PG&E was still stating that it would need to commit to 

disabling these reclosers.24 

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 

laws” or “complying with state and federal regulations.” 

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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97. Moreover, according to documents released by The Utility Reform Network 

(“TURN”), PG&E planned to replace a segment of the San Bruno pipeline in 2007 that it had 

identified as one of the riskiest natural gas pipelines in PG&E’s system. PG&E collected $5 

million from its customers to complete the project by 2009, but instead deferred the project and 

repurposed the money to other priorities. On September 9, 2010, the San Bruno pipeline 

exploded, killing 8 people, injuring over 50 more, and destroying 38 homes. 

98. On August 9, 2016, a California federal jury found PG&E guilty of five criminal 

felony counts for violating minimum federal safety standards under the Natural Gas Pipeline 

Safety Act, as well as one count for obstructing an agency proceeding after it failed to provide all 

of its records to the National Transportation Safety Board during an investigation into the San 

Bruno explosion. 

99. On December 14, 2018, the CPUC opened a case against PG&E alleging, inter 

alia, that the Company falsified records and data concerning the safety of its gas pipelines, did 

not employ an adequate number of pipeline inspectors, and pressured supervisors to unsafely 

rush work over a five-year period from 2012 to 2017. These deliberate efforts to cut corners, and 

defraud regulators and the public about the safety of PG&E’s utilities, continued up to and 

including the Class Period. The strong inference is that PG&E’s statements concealing the 

inadequate safety of its electrical utilities, during the Class Period, were likewise made with an 

intent to defraud.27 On December 21, 2018, the CPUC issued a Scoping Memo and Ruling, 

which found that “PG&E has had serious safety problems with both its gas and electric 

operations for many years” and failed “to develop a comprehensive enterprise-wide approach to 

address safety.” CPUC concluded that it “was, and remains, concerned that the safety problems 

 

(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-pipeline-violations-falsifyingrecords-regulators/. 

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being experienced by PG&E were not just one-off situations or bad luck, but indicated a 

deeper and more systemic problem.” 

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 of relevant 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 

probation (Judge Alsup) issued a revised Order to Show Cause relating to PG&E’s lack of 

compliance with vegetation management and other safety regulations. The Order stated that 

PG&E’s “unsafe conduct led to a deadly pipeline explosion and to six felony convictions,” and 

found that PG&E’s conduct had now “led to recurring deadly wildfires caused by its 

electrical system.” It contained the following findings summarizing the results of the federal 

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court’s probe into PG&E’s actual knowledge of safety violations leading up to the North Bay 

and Camp Fires: 

PG&E’s filings have included several relevant admissions. Significantly, PG&E acknowledged “that vegetation contact is the 

primary risk driver with respect to ignitions on its distribution 

lines.” (“Vegetation” means trees and limbs in this context.) In 

2016 alone, PG&E experienced approximately 1,400 wires down 

caused by vegetation contact. As PG&E reported to the CPUC, 

during 2015 and 2016, vegetation contact with conductors was the 

leading cause of the 486 fire ignitions associated with PG&E 

facilities, causing 37% of those fires. PG&E further admitted 

that as of June 2017, there were 3,962 unworked trees which 

PG&E had identified in 2016 as hazardous with the potential 

to “fall into or otherwise impact the conductors, towers or guy 

wires before the next inspection cycle.”

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105. Thus, PG&E has admitted that it had actual knowledge since 2015 that its 

vegetation management practices did not comply with California safety regulations on the order 

of thousands of violations per year. PG&E has further admitted to actually knowing that its 

violations have caused hundreds of wildfires per year since 2015. However, PG&E never 

disclosed that their own internal compliance reviews showed a lack of compliance on such a 

huge scale. 

106. According to data released by the CPUC,29 PG&E equipment caused a total of 

1,486 vegetation fires between June 10, 2014 and December 29, 2017. Among those vegetation 

fires, 69 were caused by transmission lines like the line implicated in causing the Camp Fire, 

including 26 fires caused by lines of the exact same high voltage, 115 kilovolts. PG&E supplied 

the CPUC with this information under the regulator’s Decision 14-02-015, which enacted a “Fire 

Incident Data Collection Plan.”30

 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_Us/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/G000/M087/K892/87892306.PDF. Pursuant to 

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107. Similarly, according to documents described in a report by NBC Bay Area, PG&E 

completed a review of its transmission towers’ safety compliance immediately after the Camp 

Fire. As a result, “PG&E’s inspections of thousands of transmission towers since the deadly 

Camp Fire in Butte County found more than 450 safety violations, including 59 that posed 

serious safety hazards.”31

(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: 

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. 

 

(continued) 

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-Find-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 the 

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 

been completed, seventeen were caused by PG&E equipment. Eleven of these fires evidenced 

violations of California safety regulations, in seven different counties at the same time. Most of 

these violations pertained to PG&E’s failures to clear vegetation or maintain the integrity of its 

poles. 

 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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112. Even though Cal Fire’s investigations have not found evidence of violations for 

six of the fires, PG&E’s numerous, widespread safety violations actually caused or exacerbated 

all of the North Bay Fires. PG&E’s safety violations exacerbated even the fires that lacked 

evidence of violations, in two ways. First, some of the eleven fires caused by PG&E’s safety 

violations merged into and strengthened other fires. Second, PG&E’s safety violations diverted 

scarce firefighting resources to contain the eleven North Bay Fires which never should have 

ignited, leading to the other fires causing more damage. As such, PG&E’s safety violations were 

responsible, in full or in part, for all of the North Bay Fires, thereby negatively impacting the 

Company’s financial condition. 

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 

Fire, and “was caused by electrical transmission lines owned and operated by Pacific Gas and 

Electric[].”34 Per its May 15, 2019 press release, “PG&E accepts this determination.”35 

 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, CAL FIRE 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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115. According to firefighter radio transmissions and the journalist whose investigation 

made them public late on November 9, 2018, firefighters were dispatched to a vegetation fire 

“under the high tension power lines” across the Feather River from Poe Dam in Butte County on 

November 08, 2018 at 6:33 a.m.36—matching the location where Cal Fire officials pinpointed the 

Camp Fire’s origin four minutes earlier.37 As one firefighter described the fire to dispatch: “It is 

on the west side of the river underneath the transmission lines.” 

116. Independently that evening, PG&E admitted to the CPUC that one of its 115-

kilovolt transmission lines on Pulga Road in Butte County experienced an outage at 6:15 a.m. 

that day, and noted that the site was near the Camp Fire.38 Cal Fire has listed Pulga Road as the 

Camp Fire starting point.39 

117. The same report acknowledged that an aerial patrol later that day, “in the 

afternoon,” observed “damage to a transmission tower” on the same 115 kilovolt transmission 

line. In a supplemental report filed with the CPUC on December 11, 2018, PG&E identified the 

tower as number “:27/222” and further specified that this observed damage included the 

separation of a suspension insulator, meant to support a transposition jumper, from an arm on the 

tower.40 PG&E also observed a broken C-hook attached to the separated suspension insulator 

 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://s1.q4cdn.com/880135780/files/doc_downloads/2018/wildfire/11/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://s1.q4cdn.com/880135780/files/doc_downloads/2018/wildfire/12/12-11-18.pdf. 

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that once connected the suspension insulator to a tower arm.41 According to the report, the 

connection point showed signs of wear; a flash mark was visible close to where the transposition 

jumper was suspended; and there was damage to the transposition jumper and suspension 

insulator.42

118. PG&E had not inspected Tower :27/222 since August 2014, and prior to that, not 

since 2009, pursuant to an internal policy whereby “Steel structures on PG&E’s 115 kV 

transmission lines, such as Tower :27/222, are subject to maintenance patrols annually and 

detailed inspections every five years.” PG&E has admitted that an aerial patrol is not an 

inspection, as it is only “[d]uring a detailed inspection of a transmission line” that “PG&E 

personnel are instructed to look for and document abnormalities or circumstances that will 

negatively impact safety, reliability, or asset life.”43

119. Moreover, just one day prior to the Camp Fire’s ignition, PG&E had contacted a 

Pulga landowner named Betsy Ann Cowley regarding transmission line poles on her property 

that “were having problems with sparks.”44 

120. Accordingly, it emerged that a PG&E electrical pole carrying a high-voltage 115 

kilovolt transmission line lost its integrity, in whole or in part, on the morning of November 8, 

2018. Shortly thereafter, vegetation underneath the line ignited. PG&E’s failure to maintain a 

clearance for vegetation up to 10 feet away from this transmission line, inclusive of all 

vegetation underneath, violated California Public Resources Code Section 4293. Further, 

PG&E’s failure to maintain the integrity of its poles and prevent their loss of function violated 

California Public Utilities Code Section 451. 

 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-forroles-in-deadly-camp-woolsey-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://calfire.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_IncidentNo181116-9015.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-californiacamp-fire-started.html. 

48 PG&E Letter to CPUC re: Supplements the Notices provided Nov. 8, 2018 (Dec. 11, 2018), 

http://s1.q4cdn.com/880135780/files/doc_downloads/2018/wildfire/12/12-11-18.pdf. 

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wires, and some snapped trees on top of the downed wires.49 The presence of the line recloser 

further calls into question PG&E’s prior representation that it was “just about done” disabling 

recloser devices in “high wildfire risk areas” as of November 18, 2015 (Misstatement No. 3). 

124. Accordingly, the truth emerged that the Camp Fire’s second ignition point also 

exhibited evidence of failures regarding vegetation management, pole integrity, and the possible 

use of a recloser in further violation of California safety regulations, including Public Resources 

Code Sections 4292, 4293 and Public Utilities Code Section 451. Cal Fire’s investigation later 

confirmed these facts. 

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 occurred 

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)50 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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provided monetary incentives to its employees that had the effect of discouraging the 

implementation of vegetation safety measures. 

127. For instance, PG&E’s Vegetation Management Program adopted a Vegetation 

Management Incentive Initiative (“VMII”) program, which was purportedly designed to reduce 

the “annual routine compliance” tree work of PG&E and to shift resources to “reliability” work 

that focused on urban consumer satisfaction instead of overall safety. By doing so, PG&E 

effectively shifted its resources away from rural areas that were more prone to wildfires (where 

the “annual routine compliance” work was typically done), and towards more densely populated 

urban areas (where the “reliability” work was done). For example, pursuant to this program, 

PG&E set a goal to reduce “routine” work by 7.5% annually from 2014 through 2016. PG&E’s 

bonus incentive program therefore (like its policy of not shutting off its reclosers during wildfire 

season) put safety at risk in an effort to reduce consumer complaints. See ¶569, infra. 

128. According to the same lawsuit, Robert Urban, a regional officer for a PG&E 

contractor, stated that he had a concern that the bonus system incentivized his employees to not 

do their job, but PG&E chose to keep this program despite knowing this risk. 

129. As noted above, though PG&E falsely and repeatedly assured investors during 

the Class Period that its compliance failures had been resolved after the Butte Fire, the 

Company’s own employee Richard Yarnell later admitted that nothing of substance had changed 

over much of the same time period. Accordingly, PG&E’s repeated safety violations show that 

the Company knew of its numerous and widespread violations of California safety regulations 

throughout the Class Period, but did nothing to change them. 

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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five collapsed towers, and one additional tower, on the Caribou-Palermo line “[s]panning 

Plumas-Butte County border” in a row “up slope and west of Highway 70 and generally parallel 

to the unpaved Pulga Road in a remote area of the Feather River Canyon within Plumas National 

Forest”51—that is, to say, near the first Camp Fire ignition point. 

132. The rest of the aging towers on the line, including the tower alleged to have 

started the Camp Fire, were not replaced during that project.52 The age of these remaining 

towers created a strong, undisclosed risk that corrosion, metal fatigue, or other age-related 

factors would fail to support transmission line cables and cause wildfires. Indeed, the relevant 

tower included uninsulated “jumper” lines used to switch currents between transmission lines, 

making the risk of fire even greater.53 Tellingly, the cross arm from that transmission tower, 

which was attached to the “jumper” line, was removed by Cal Fire investigators as part of its 

probe into the cause of the Camp Fire.54 And Cal Fire’s investigation has not only concluded 

that PG&E equipment caused the Camp Fire in a manner evidencing safety violations, but also 

referred the matter to the Butte County district attorney for a criminal investigation. 

133. In a July 26, 2017 FERC filing that news outlets have reported on extensively,55

PG&E proposed considerable work for the Caribou-Palermo line as part of the Company’s 

 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-californiawildfires.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-camp-fire-probe/. 

54 Matthias Gafni, et al., Why Did Fire Iinvestigators 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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annual request to FERC for rate changes. PG&E reported that “[t]he Caribou-Palermo 115 

kilovolt circuit was analyzed as part of [a] 2013 NERC Assessment,” referring to an analysis by 

the North American Electric Reliability Corporation (“NERC”). The filing indicated that the 

2013 NERC study examined 455 spans of the of the transmission line and found that vegetation 

or trees were allowed to grow too close to 127 (27.9%) of them: “The completed [NERC] 

analysis identified 127 spans with clearance issues out of the 455 spans on the electric 

transmission line.” PG&E never fixed the identified issues from the time it learned about them 

in 2013 as reflected in the July 2017 filing. PG&E’s Caribou-Palermo transmission system 

would later be implicated in the 2018 Camp Fire. 

134. On March 18, 2019, The New York Times published an exposé on PG&E titled, 

“How PG&E Ignored California Fire Risks in Favor of Profits.” The article discussed an internal 

Company email, sent long before the Camp Fire, which noted that a group of structures including 

the transmission tower implicated in the Camp Fire, Tower :27/222, were at risk of collapse due 

to their age and windy conditions in the area. Indeed, the Company noted that corrosion on 

another tower in the vicinity was so severe that it had endangered crews attempting to repair it. 

The Company’s own guidelines had warned that the tower was a quarter-century past its 

useful life, yet PG&E failed to repair or replace the aging tower. 

135. The article also portrayed a corporate culture at the Company which disregarded 

safety risks and avoided paying for necessary fire prevention precautions in favor of short-term 

operating results. The article quoted Mike Florio, a former California utilities commissioner, 

who observed, “There was very much a focus on the bottom line over everything [at PG&E]: 

‘What are the earnings we can report this quarter? . . . And things really got squeezed on the 

maintenance side.” The article also quoted California’s Governor Gavin Newsom, who 

expressed a similar sentiment: “[PG&E] have simply been caught red-handed over and over 

again, lying, manipulating or misleading the public. . . They cannot be trusted.” The article 

contrasted the lack of focus on safety at the Company with the approach taken by another 

California utility facing similar risks, San Diego Gas & Electric, which had significantly 

revamped its safety protocols to respond to increased wildfire dangers. 

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136. Also on March 18, 2019, a coalition of law firms representing fire victims 

published excerpts of internal Company emails demonstrating that PG&E had identified the 

transmission lines implicated in the 2018 Camp Fire as unsafe long before the fire started.56 For 

example, internal Company documents showed that in December 2012 five aging towers 

along the Caribou-Palermo transmission line had collapsed, and a 2014 internal Company 

email stated that “the likelihood of failed structures happening is high” – a risk PG&E 

concealed from the public. 

137. Similarly, a November 1, 2016 PG&E document detailed the failure of necessary 

hardware along the transmission line, with a support hook snapping off during routine painting. 

PG&E documents internally acknowledged that the supports “had been compromised through 

corrosion.”57 

138. Despite the internal acknowledgment that the Caribou-Palermo lines were in need 

of repair and posed a significant risk of collapse, PG&E never had the lines fixed. Instead, the 

Company reasoned that any collapse would not impact a sufficient number of customers to 

warrant the repairs and that the risks would be mitigated because any fire may be extinguished 

by rain. Tragically, needed repairs were never undertaken, and the Caribou-Palermo line 

caused the first ignition point of the Camp Fire in 2018. 

139. Accordingly, PG&E had actual knowledge about the safety violations that caused 

the Camp Fire, months if not years in advance. 

140. It was in this context that Defendants touted PG&E’s vegetation management and 

infrastructure maintenance to investors, falsely representing that it was in full compliance with 

all relevant regulations throughout the Class Period. E.g., ¶197 (Misstatement No. 2, October 16, 

2015); ¶222 (Misstatement No. 5, August 9, 2017); ¶249 (Misstatement No. 9, October 31, 

 56 Northern California Fire Lawyers Obtain Documents That Show PG&E Knew About 

Risk of Caribou-Palermo Line Failure, MarketWatch (Mar. 18, 2019), 

https://www.marketwatch.com/press-release/northern-california-fire-lawyers-obtain-documentsthat-show-pge-knew-about-risk-of-caribou-palermo-line-failure-2019-03-18. 

57 Id.

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2017); ¶270 (Misstatement No. 12, November 5, 2017); ¶280 (Misstatement No. 13, May 25, 

2018); ¶287 (Misstatement No. 14, June 8, 2018). 

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 

141. After the North Bay Fires but before the Camp Fire, on July 16, 2018, the CPUC 

passed Resolution ESRB-8. As noted above, this regulation mandated that PG&E formalize and 

publicize a program to de-energize power lines for safety when extreme fire danger conditions 

occur. PG&E announced its response to this new safety requirement on September 27, 2018 (the 

“ESRB-8 Shutoff Protocol”), and touted its existence throughout the rest of the Class Period. 

142. PG&E also stated that its ESRB-8 Shutoff Protocol applied to all of its 

powerlines, without qualification. Its protocol stated: “PG&E’s Wildfire Safety Operations 

Center team will monitor conditions across our system and evaluate whether to temporarily turn 

off electric power lines, in the interest of public safety.” Thus, PG&E’s ESRB-8 Shutoff 

Protocol applied to both higher-voltage transmission power lines and lower-voltage distribution 

power lines. 

143. Under the ESRB-8 Shutoff Protocol, PG&E represented that it would balance 

seven criteria when determining whether to shut off electricity for safety: 

• “Extreme” fire danger threat level, as classified by the 

National Fire Danger Rating System 

• A Red Flag Warning declared by the National Weather 

Service 

• Low humidity levels, generally 20 percent and below 

• Sustained winds above approx. 25 mph and wind gusts in 

excess of approx. 45 mph 

• Site-specific conditions such as temperature, terrain and 

local climate 

• Critically dry vegetation that could serve as fuel for a 

wildfire 

• On-the-ground, real-time observations from PG&E field 

crews 

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(Emphasis original.) PG&E stated that “no single factor will drive a Public Safety Power 

Shutoff,” and never identified any other criteria, during the Class Period or since. 

144. When PG&E’s lines ignited the Camp Fire on November 8, all seven criteria had 

been met or exceeded – a fact of which PG&E could not have been ignorant. Indeed, PG&E had 

warned customers in that area as early as November 6 – two days before the Camp Fire began – 

that it may need to “proactively turn off power for safety starting on Thursday, November 8.”58 

145. PG&E had only shut off electricity under its ESRB-8 Shutoff Protocol once 

before, on October 14 through 17, 2018, when it shut off eight transmission power line circuits 

and thirty-three distribution power line circuits, in seven counties. Though PG&E found damage 

to its equipment before restoring power, it nevertheless faced strong backlash from customers 

who were affected by the shutoff. 

146. On November 8, 2018 at 6:14 p.m. EST (3:14 p.m. PST), PG&E announced, via 

its official Twitter.com account: “PG&E has determined that it will not proceed with plans today 

for a Public Safety Power Shutoff in portions of 8 Northern CA counties, as weather conditions

did not warrant this safety measure.”59 The three weather-relevant criteria are humidity levels (at 

20% or below), wind speed (with sustained winds around 25 miles per hour or stronger, and 

wind gusts around 45 miles per hour or stronger), and general site-specific conditions (e.g., local 

climate and terrain). 

147. However, as detailed below, each of these factors weighed in favor of a shutoff. 

Where and when the Camp Fire started, humidity was around or below 20%, wind speeds were 

measured above 25 (sustained) and 45 (gusts) miles per hour, and a myriad of site-specific 

conditions contributed to the ignition of the most destructive and deadliest fire in California 

 58 Press Release, PG&E, PG&E Notifying Customers in Parts of Nine Counties About 

Extreme Weather Forecasts and Potential for Public Safety Power Shutoff (Nov. 6, 2018), 

https://www.pge.com/en/about/newsroom/newsdetails/index.page?title=20181106_pge_notifyin

g_customers_in_parts_of_nine_counties_about_extreme_weather_forecasts_and_potential_for_p

ublic_safety_power_shutoff. 

59 PG&E Twitter Account Post (Nov. 8, 2018 3:14PM), 

https://twitter.com/PGE4Me/status/1060672000929267713. 

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history. As Cal Fire later confirmed in its determination that PG&E caused the Camp Fire: “The 

tinder dry vegetation and Red Flag conditions consisting of strong winds, low humidity and 

warm temperatures promoted this fire and caused extreme rates of spread, rapidly burning into 

Pulga to the east and west into Concow, Paradise, Magalia and the outskirts of east Chico.”60 

148. The Camp Fire originated at “Pulga Road at Camp Creek Road near Jarbo Gap.”61 

Jarbo Gap is a geographical area in Butte County and contains a weather station located at 39° 

44’ 09” N (Latitude), 121° 29’ 20” W (Longitude),62 approximately six miles from the Camp 

Fire’s origin.63 The Jarbo Gap weather station provided the most accurate record of weather 

conditions at the time and place where the Camp Fire ignited. 

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

Favor of Shutting Off the Power 

149. On November 6 and 7, 2018, just before the Camp Fire ignited, PG&E admitted 

in three press releases that all seven criteria weighed in favor of a shutoff—providing only small 

caveats that weather-related factors might change. 

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

Jarbo Gap as Having an “Extreme” Fire Danger Threat Level 

150. The area where the Camp Fire ignited was classified as having an “Extreme” fire 

danger threat level by the National Fire Danger Rating System (“NFDRS”). The U.S. Forest 

Service “Wildland Fire Assessment System” (“WFAS”) archives historical NFDRS ratings in 

map64 and data65 form, both of which confirm that the Jarbo Gap was rated “Extreme” on 

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

15, 2019), 

http://calfire.ca.gov/communications/downloads/newsreleases/2019/CampFire_Cause.pdf. 

61 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. 

62 Jarbo Gap California Weather Station Information, RAWS USA Climate Archive, 

https://raws.dri.edu/cgi-bin/wea_info.pl?caCJAR. 

63 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. 

64 Observed Fire Danger Class, WFAS-Maps Graphics Fire Behavior Research (Nov. 8, 

2018), https://www.wfas.net/archive/www.fs.fed.us/land/wfas/archive/2018/11/08/fd_class.png. 

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November 8, 2018. The graphic on the following page has modified the WFAS map to 

highlight, with a red circle, the “Extreme” rating received by the Jarbo Gap weather station on 

November 8, 2018: 

151. As the U.S. Department of Agriculture Forest Service explained the NFDRS: 

When the fire danger is “extreme”, fires of all types start quickly 

and burn intensely. All fires are potentially serious and can spread 

very quickly with intense burning. Small fires become big fires 

much faster than at the “very high” level. Spot fires are probable, 

with long-distance spotting likely. These fires are very difficult to 

fight and may become very dangerous and often last for several 

days.66

 

(continued) 65 See Data Chart of Fire Weather Observations from WIMS at 1700 Mountain Time (Nov. 8, 

2018), https://www.wfas.net/archive/www.fs.fed.us/land/wfas/archive/2018/11/08/fdr_obs.txt 

(row labeled “Jarbo Gap,” column labeled “ADJ” for “adjective,” data entry “E” for “Extreme”). 

66 USDA Forest Service, National Fire Danger Rating System, 

https://www.fs.usda.gov/detail/cibola/landmanagement/resourcemanagement/?cid=stelprdb5368

839. 

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152. Indeed, in a press release on November 7, 2018, PG&E admitted: “Due to 

expected extreme fire danger conditions . . . PG&E may temporarily turn off power in portions 

of the following communities: Butte County (including . . . Paradise)” on November 8, 2018.67 

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

Flag Warning” for the Area 

153. The National Weather Service issued a “Red Flag Warning” for Butte County on 

November 8, 2018,68 as PG&E admitted in a November 6, 2018 Press Release: “Due to expected 

extreme fire danger conditions, including the Red Flag warning from the National Weather 

Service and several other weather factors, Pacific Gas and Electric Company (PG&E) today 

began notifying customers in portions of nine counties that the company may proactively turn off 

power for safety starting on Thursday, November 8” including “Butte County.”69 

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

Weighed in Favor of a Shutoff 

154. Throughout the area where the Camp Fire ignited, the soil and vegetation were 

unusually dry, as there had been almost no rainfall since April 2018. As PG&E admitted in a 

November 27, 2018 filing to the CPUC, its decision not to shut off the power “was preceded by 

 67 Press Release, PG&E, PG&E Continues to Notify Customers in Parts of Nine Counties 

About the Potential for Public Safety Power Shutoff Due to Forecasted Extreme Weather (Nov. 

7, 2018), 

https://www.pge.com/en/about/newsroom/newsdetails/index.page?title=20181107_pge_continue

s_to_notify_customers_in_parts_of_nine_counties_about_the_potential_for_public_safety_powe

r_shutoff_due_to_forecasted_extreme_weather. 

68 Shirin Rajaee, PG&E Could Cut Power to 63,000 Amid Red Flag Warning, CBS13 

Sacramento (Nov. 8, 2018 12:17 A.M.), https://sacramento.cbslocal.com/2018/11/08/red-flagwarning-pge/. 

69 Press Release, PG&E, PG&E Notifying Customers in Parts of Nine Counties About 

Extreme Weather Forecasts and Potential for Public Safety Power Shutoff Due to (Nov. 6, 

2018), 

https://www.pge.com/en/about/newsroom/newsdetails/index.page?title=20181106_pge_notifyin

g_customers_in_parts_of_nine_counties_about_extreme_weather_forecasts_and_potential_for_p

ublic_safety_power_shutoff . 

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an extended period of dry fall weather, only one rain event since May, and periods of dry north 

winds which caused the moisture content of live and dry fuels to remain low.”70 

155. PG&E confirmed this conclusion in a November 7, 2018 press release: “Due to 

forecasted high winds and dry vegetation, PG&E may temporarily turn off power in portions of 

the following communities: Butte County (including Berry Creek, Chico, Forest Ranch, 

Magalia, Oroville, Paradise). . . .”71

156. As Pulitzer Prize winning journalist Matthias Gafni would later report, 

information from the National Aeronautics and Space Administration (“NASA”) showed that 

California’s moisture levels that month were “at the lowest levels in [the] last four years.”72 As 

the graphic below confirms, this led to extremely dry vegetation: 

 70 PG&E Letter to CPUC re: Compliance Report (Nov. 27, 2018), 

http://www.cpuc.ca.gov/uploadedFiles/CPUCWebsite/Content/News_Room/NewsUpdates/2018/

11-27-18%20PGE%20PSPS%20Report.pdf. 

71 Press Release, PG&E, PG&E Continues to Notify Customers in Parts of Nine Counties 

About the Potential for Public Safety Power Shutoff Due to Forecasted Extreme Weather (Nov. 

7, 2018), 

https://www.pge.com/en/about/newsroom/newsdetails/index.page?title=20181107_pge_continue

s_to_notify_customers_in_parts_of_nine_counties_about_the_potential_for_public_safety_powe

r_shutoff_due_to_forecasted_extreme_weather . 

72 Matthias Gafni, Why Didn’t PG&E Shut Down Power In Advance Of Deadly Camp Fire? 

Here’s The Data, Bay Area News Group (Nov. 18, 2018 5:00 P.M.), 

https://www.chicoer.com/2018/11/18/why-didnt-pge-shut-down-power-in-advance-of-deadlycamp-fire-heres-the-data/. 

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

Favor of a Shutoff 

157. PG&E’s on-the-ground observations favored a shutoff. In a press release dated 

November 7, 2018, PG&E warned customers that it was considering a shutoff due to “expected 

extreme fire danger conditions,” and that “[f]actors that PG&E considers when deciding to 

initiate” a shutoff included its “on-the-ground observations.”73 

 73 Press Release, PG&E, PG&E Continues to Notify Customers in Parts of Nine Counties 

About the Potential for Public Safety Power Shutoff Due to Forecasted Extreme Weather (Nov. 

7, 2018), 

https://www.pge.com/en/about/newsroom/newsdetails/index.page?title=20181107_pge_continue

s_to_notify_customers_in_parts_of_nine_counties_about_the_potential_for_public_safety_powe

r_shutoff_due_to_forecasted_extreme_weather. 

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158. This conclusion is corroborated by PG&E’s admission in a November 8, 2018 

press release that only weather factors weighed against shut-off: “[PG&E] has determined that it 

will not proceed with plans today for a Public Safety Power Shutoff in portions of eight Northern 

California counties, as weather conditions did not warrant this safety measure.”74

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

Power 

159. As described above, PG&E attributed its decision not to shut off power to weather 

conditions. Specifically, in a November 27, 2018 filing to the CPUC, PG&E explained that the 

primary weather condition that fell short was wind speed: 

On Wednesday, November 7, 2018, PG&E refined the forecasted 

impact down to 63,000 customers and eight counties (Butte, Lake, 

Napa, Nevada, Placer, Plumas, Sierra and Yuba). Weather 

conditions stayed consistent, nearing but not reaching 

forecasted levels that would warrant temporarily turning off 

power for customer safety. 

By around 13:00 on Thursday, November 8, winds were 

decreasing, and conditions were no longer forecast to approach 

[Public Safety Power Shutoffs] criteria. Based on the forecasted 

information, PG&E no longer anticipated a possible need to deenergize. 

160. However, all weather factors – including wind speed – weighed in favor of an 

electricity shutoff in Jarbo Gap on November 7-8, 2018. The charts75 on the following page 

show weather conditions at the Jarbo Gap Weather Station from late November 7, 2018 through 

the next day: 

 74 Press Release, PG&E, PG&E Determines to Not Proceed with Public Safety Power Shutoff 

Planned for Portions of Eight Northern California Counties (Nov. 8, 2018),

https://www.pge.com/en/about/newsroom/newsdetails/index.page?title=20181108_pge_determin

es_to_not_proceed_with_public_safety_power_shutoff_planned_for_portions_of_eight_northern

_california_counties. 

75 Weather Station Summary for Jarbo Gap California (Nov. 7, 2018), https://raws.dri.edu/cgibin/wea_daysum2.pl?stn=cjar&day=7&mon=11&yea=18&unit=E; Weather Station Summary 

for Jarbo Gap California (Nov. 8, 2018), https://raws.dri.edu/cgibin/wea_daysum2.pl?stn=cjar&day=8&mon=11&yea=18&unit=E. 

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161. Accordingly, PG&E’s November 27, 2018 statement to the CPUC that its 

decision not to shut off power was justified in part by the fact that “[b]y around 13:00 on 

Thursday, November 8, winds were decreasing,” was misdirection. The Camp Fire had already 

begun over six hours before that point. And indeed, as shown in the chart above, wind speed 

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weighed in favor of a shutoff in the hours before the fire started. In fact, all of the weather 

factors weighed in favor of a shut off in the hours before the fire started, as detailed below. 

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

Humidity Levels 

162. Throughout the night on November 7, 2018, humidity was below the “generally 

20%” level, supporting a shutoff. From 9:00 p.m. to midnight, humidity never exceeded 19%. In 

the ten hours before the Camp Fire, average humidity was 20.1%. Over the 24-hour period, 

humidity averaged a mere 16.42%. 

163. Throughout November 8, 2018, humidity at the Jarbo Gap was at or below the 

“generally 20%” level that supported a shutoff. Between 6 a.m. and 7 a.m., when the Camp Fire 

ignited, humidity was between 23% and 21% and falling precipitously; it would drop to as low 

as 11% in the coming hours. 

164. PG&E knew that the humidity would drop precipitously because National 

Weather Service’s forecast of a red flag warning that day—the same red flag warning PG&E 

mentioned in its press release late the previous evening76—warned that “Afternoon [Relative 

Humidity] values of 5-15% will be common across the area.”77 

165. In fact, humidity weighed even more strongly in favor of a shutdown that day 

than it did on October 14, 2018, the day on which PG&E had previously determined that a power 

shutoff was necessary. The National Weather Service’s forecast of humidity under 15% and as 

low as 5% was even more severe than its red flag warning on October 14, 2018, where it 

predicted relative humidity “into the 7-15% range for much of this region.”78

 76 Press Release, PG&E, PG&E Continues to Closely Monitor Weather Conditions Ahead of 

Possible Public Safety Power Shutoff in Parts of Eight Counties (Nov. 7, 2018), 

https://www.pge.com/en/about/newsroom/newsdetails/index.page?title=20181107_pge_continue

s_to_closely_monitor_weather_conditions_ahead_of_possible_public_safety_power_shutoff_in_

parts_of_eight_counties. 

77 Storm Prediction Center Day 1 Fire Weather Outlook, NOAA (Nov. 8, 2018 07:51:02 

UTC), https://www.spc.noaa.gov/products/fire_wx/2018/181108_1200_fwdy1_print.html. 

78 Storm Prediction Center Day 1 Fire Weather Outlook, NOAA (Oct. 14, 2018 06:58:03 

UTC), https://www.spc.ncep.noaa.gov/products/fire_wx/2018/181014_1200_fwdy1_print.html. 

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

Speed 

166. As noted above (see ¶159), PG&E informed the CPUC on November 27, 2018 

that the primary reason it did not shut off the power was wind speed. 

167. Yet throughout the night on November 7, 2018, sustained winds at the Jarbo Gap 

were at or above the “approx. 25 mph” level that weighed in favor of a shutoff. Similarly, wind 

gusts reached the “approx. 45 mph” level by midnight, further supporting a shutoff. In the ten 

hours leading up to the Camp Fire, average sustained winds and gusts were 26.8 and 45.8 miles 

per hour, respectively. 

168. At 5 a.m. on November 8, 2018, approximately an hour and a half before the 

Camp Fire erupted, sustained winds reached 30 miles per hour, with gusts of 51 miles per hour. 

Overall, wind conditions strongly weighed in favor of a shutoff in the hours before the Camp 

Fire’s ignition. 

169. PG&E knew that sustained winds would be high because National Weather 

Service’s forecast of a red flag warning that day—the same red flag warning PG&E mentioned 

in its press release late the previous evening79—warned of winds “during the morning and 

afternoon” with a “[s]trong northerly/northeasterly flow of 20-25 mph.”80 

170. In fact, sustained wind speed weighed even more strongly in favor of a shutdown 

that day than it did on October 14, 2018, the day on which PG&E had previously determined that 

a power shutoff was necessary. The National Weather Service’s forecast of sustained winds of 

20-25 miles per hour was even more severe than its red flag warning on October 14, 2018, which 

 79 Press Release, PG&E, PG&E Continues to Closely Monitor Weather Conditions Ahead of 

Possible Public Safety Power Shutoff in Parts of Eight Counties (Nov. 7, 2018), 

https://www.pge.com/en/about/newsroom/newsdetails/index.page?title=20181107_pge_continue

s_to_closely_monitor_weather_conditions_ahead_of_possible_public_safety_power_shutoff_in_

parts_of_eight_counties. 

80 Storm Prediction Center Day 1 Fire Weather Outlook, NOAA (Nov. 8, 2018 07:51:02 

UTC), https://www.spc.noaa.gov/products/fire_wx/2018/181108_1200_fwdy1_print.html. 

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predicted “Strong/gusty east-northeasterly winds of 15-20 mph. . . . where sustained winds are 

forecast to reach 20-25 mph for a few hours.”81 

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

171. The specific conditions beneath PG&E’s 115 kilovolt transmission line where the 

Camp Fire ignited were highly conducive to wildfires. Just one day earlier, PG&E contacted 

Betsy Ann Cowley regarding transmission line poles on her property in Pulga that “were having 

problems with sparks,” indicating that conditions were hazardous.82 Further, it is indisputable 

that dry vegetation existed underneath the transmission line given reports of vegetation burning 

beneath it (see ¶115, supra). Notably, PG&E identified nothing about the area’s terrain, 

temperature or climate in its November 27, 2018 letter to the CPUC explaining its decision not to 

shut off its lines.83 

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

Weighed in Favor of Shutting Off the Power 

172. PG&E knew that severe weather conditions requiring a shutoff were in effect. 

First, the Company admitted it had been monitoring the weather in the area for days; its 

November 7 press release confirmed that “PG&E meteorologists continuously monitor weather 

conditions.” Second, the Company had its own “network of PG&E weather stations to enhance 

 81 Storm Prediction Center Day 1 Fire Weather Outlook, NOAA (Oct. 14, 2018 06:58:03 

UTC), https://www.spc.ncep.noaa.gov/products/fire_wx/2018/181014_1200_fwdy1_print.html. 

82 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-forroles-in-deadly-camp-woolsey-fires/. 

83 The remoteness and ruggedness of the relevant terrain where the Camp Fire started further 

supported a shutoff. In a July 16, 2013 letter to the CPUC concerning the exact same CaribouPalermo transmission line, PG&E described the relevant terrain as being “in a remote area” with 

“extreme topography.” See 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. After the Camp Fire, 

an article reported on the terrain immediately around the same transmission line as making fire 

containment more difficult: “The remoteness and rugged terrain around the tower would make 

any firefight by hand crews nearly impossible.” See 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-on-pge-tower-at-heart-of-camp-fire-probe/. 

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weather forecasting and modeling,” and stated that the Company had the capability of 

“[m]onitoring wildfire risks in real time from our new Wildfire Safety Operations Center.”84 

Finally, the weather data referenced above was publicly available. Indeed, for the hour from 

midnight to 1 a.m. on November 8, 2018 just before the Camp Fire started, the Jarbo Gap 

weather station reported that all weather conditions were met: humidity at 19%, sustained 

winds at 27 miles per hour, and wind gusts at 45 miles per hour. Accordingly, PG&E either 

knew that weather conditions existed that weighed in favor of a shutoff, or deliberately 

disregarded such information. 

173. Every factor weighed in favor of shutting off PG&E’s transmission line running 

through the Jarbo Gap outside of Paradise, California. PG&E knew or should have known that 

all such factors were met. 

174. Indeed, PG&E had only shut off electricity in the face of wildfire conditions once 

before, in October 2018. The backlash to that shutoff was strong, and PG&E received numerous 

customer complaints. PG&E noted in its October 31, 2018 report to the CPUC that as of October 

24, “17 residential customers have complained to the CPUC as a result of the PSPS [Public 

Safety Power Shutoffs] event since the first customer notification on October 13.”85 Moreover, 

PG&E reported to the CPUC that it had “received a total of 146 claims as of October 24, 2018,” 

including claims for property damage, business interruption, and spoiled food. 

175. In sum, all seven criteria weighed in favor of a shutoff that never happened. From 

the beginning, the Company misrepresented to investors that it would prioritize safety over 

customer satisfaction and reliability under the requirements of CPUC’s Resolution ESRB-8. The 

strongest inference from PG&E’s failure to shut off power on November 8, 2018 is that its 

ESRB-8 Shutoff Protocol was illusory, and that the Company did not believe itself bound by the 

 84 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. 

85 Letter from PG&E to CPUC re: Compliance Report (Oct. 31, 2018), 

http://cpuc.ca.gov/uploadedFiles/CPUC_Public_Website/Content/Utilities_and_Industries/En

ergy_-_Electricity_and_Natural_Gas/PGE%20PSPS%20Report%20Letter%2020181031.pdf. 

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seven criteria it told the public and investors were the crucial criteria. By PG&E’s statements 

listing these – and only these – criteria in its ESRB-8 Shutoff Protocol, investors were entitled to 

believe that when all criteria were met, PG&E would prioritize safety and shut off the power 

rather than risk causing wildfires and the resulting economic as well as reputational harm to 

PG&E. 

176. In the alternative, PG&E had a duty to update investors once it decided to 

abandon its ESRB-8 Shutoff Protocol and risk the chance of wildfire. The result of PG&E’s 

non-adherence to the protocol was the deadliest and most destructive wildfire California has ever 

faced. 

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

177. Following PG&E’s felony convictions for knowingly and willfully violating 

safety standards in causing the deadly San Bruno gas explosion and obstructing justice (see 

supra Section VI.F.2.), PG&E’s sentence included criminal probation. Since November 27, 

2018, the U.S. District Court presiding over PG&E’s probation instituted further proceedings to 

determine whether, inter alia, PG&E’s safety violations causing the North Bay and Camp Fires 

may have violated its probation. These proceedings remain ongoing as of the filing of this 

Complaint, and are detailed in Section X.C., infra. 

178. On January 14, 2019, PG&E filed a current report on Form 8-K stating that it 

expected to file for Chapter 11 bankruptcy on or about January 29, 2019. The reason the 

Company provided for the expected bankruptcy was the “series of catastrophic wildfires that 

occurred in Northern California in 2017 and 2018” – namely, the North Bay and Camp Fires.86 

179. On January 29, 2019, PG&E declared Chapter 11 bankruptcy. The Company’s 

bankruptcy filings stated that it was facing $51.7 billion in liabilities, including more than $30 

billion in potential liabilities tied to the North Bay and Camp Fires.87

 86 PG&E Corp., Current Report (Form 8-K) (Jan. 13, 2019), 

https://www.sec.gov/Archives/edgar/data/75488/000095015719000032/form8k.htm. 

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

ECF No. 263. 

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180. On February 6, 2019, PG&E submitted to CPUC its new wildfire mitigation plan, 

as required by SB 901. PG&E later corrected the filing on February 12, 2019 and amended it on 

February 14, 2019 (the “2019 Mitigation Plan”). On April 29, 2019, the CPUC largely approved 

PG&E’s 2019 Mitigation Plan, with the exception of “several aspects of the company’s planned 

mitigation that require improvement or other follow-up activity,” including improved “[a]nalysis 

of data to determine whether PG&E’s new vegetation-pole clearances have contributed to 

reduced ignitions, especially during critical weather conditions.”88 As detailed below, the 

dramatic expansion of safety practices and expenditures in PG&E’s 2019 Mitigation Plan 

confirms the inadequacy of PG&E’s prior activities, showing that PG&E did far less than it 

should have during the Class Period. 

181. PG&E’s 2019 Mitigation Plan stated that the Company would substantially 

increase its vegetation management efforts. First, the plan provided that approximately 375,000 

“additional” hazard trees should be trimmed or cleared in 2019, a 235% increase compared to 

PG&E’s purported totals of 160,000 in 2018 (estimated), 156,344 in 2017 (actual), 225,168 in 

2016 (actual), 18,557 in 2015 (actual), and 8,042 in 2014 (actual). Second, it called for 

performing 2,450 miles of “enhanced vegetation management” (including fuel reduction and 

overhang clearing,) in 2019, an increase of 320% from its 2018 target of only 760 miles. In 

approving this proposal, the CPUC noted that “PG&E proposes to spend between $800 million 

and $1.3 billion to support [this] expansion of its vegetation management program.” 

182. PG&E’s 2019 Mitigation Plan also stated that the Company would substantially 

increase its inspections. Instead of just routinely inspecting 517,500 electricity distribution 

poles, PG&E would also commit to conducting “enhanced inspections” of 685,000 electricity 

distribution poles in High Fire Threat Districts “in addition to routine inspections” over the 

course of just “five months.” (Emphasis original.) “Enhanced Inspection” was described as 

 88 Although PG&E submitted a second corrected plan on April 25, 2019 “proposing to extend 

the timelines on many of its major wildfire mitigation efforts,” the CPUC determined it was 

“filed too late to be considered and to receive party comment,” and thus “not act on those 

proposals.” See Proposed Decision of Administrative Law Judge re: 18-10-007 (Apr. 29, 2019), 

http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M285/K712/285712576.pdf. 

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“includ[ing] ground inspections, drone and helicopter inspections where needed, and climbing 

inspections of every transmission tower,” implying such measures had not been undertaken in 

the past. Similarly, for its electricity transmission structures, PG&E committed to conducting 

enhanced inspections for 40,600 structures in addition to 76,000 routine inspections (up from 

9,400 and 76,000, respectively). PG&E also committed to conducting “enhanced risk-based 

inspections” of 200 electricity substations in High Fire Threat Districts. 

183. The CPUC noted that these increased inspections were expected to cost PG&E 

between $798 million and $1.396 billion—“an increase from $15 million authorized in 

PG&E’s last [General Rate Case].” 

184. The 2019 Mitigation Plan also proposed that the Company would significantly 

expand the geographic regions where it might preemptively shutoff power pursuant to its ESRB8 Shutoff Protocol, estimating that the protocol would now cover as many as 5.4 million 

customers, a 950% increase from what previously covered approximately 570,000 consumers. 

185. Thus, PG&E’s 2019 Mitigation Plan described dramatic increases in safety 

practices and expenditures compared to prior years. These and other aspects of PG&E’s 

expensive proposals represented that it was finally providing the necessary, dramatic expansion 

of its safety practices and increases in expenditures, which had been absent. Accordingly, the 

vastly expanded scope of PG&E’s 2019 wildfire plan strongly demonstrates the inadequacy of 

PG&E’s prior safety practices, showing that PG&E did far less than it should have during the 

Class Period. 

186. Following the plan’s release, the Associated Press summarized the general 

reaction, “Lawyers, industry watchdogs and a federal judge alike wonder: What took so long?”89 

187. On February 28, 2019, PG&E issued a press release providing an update on the 

financial impact of the North Bay and Camp Fires, along with the Company’s fourth quarter and 

full-year 2018 financial results. The release stated that the Company “believes it is probable that 

 89 Paul Elias, Critics Ask What Took PG&E So Long on Wildfire Safety Effort, Associated 

Press (Feb. 7, 2019), https://www.apnews.com/c1d0e16811914177a9b4b473f1eeebee. 

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its equipment will be determined to be an ignition point of the 2018 Camp Fire,” halfanticipating Cal Fire’s determination three months later implicating PG&E in both of the Camp 

Fire’s ignition points. The press release also stated that the Company would be recording a

$10.5 billion charge related to the 2018 Camp Fire. It also reported an additional $1 billion 

charge related to the North Bay Fires, “in addition to the previously recorded $2.5 billion charge 

in the second quarter of 2018” related to the same fires. As a result, the Company reported fullyear net losses of $6.9 billion, compared to 2017 net income of $1.6 billion. It further stated: 

“Management has concluded that these circumstances raise substantial doubt about PG&E 

Corporation’s and the Utility’s ability to continue as going concerns....” 

VII. DEFENDANTS’ FALSE AND MISLEADING CLASS PERIOD STATEMENTS 

UNDER THE EXCHANGE ACT90

188. Investors and analysts were focused on the Company’s compliance with wildfirerelated safety regulations during the Class Period. With an eye towards artificially inflating its 

share price, PG&E responded to this interest with false and misleading reassurances that PG&E 

was in compliance with safety regulations. PG&E also significantly raised its quarterly dividend 

during the Class Period, repeatedly touting that such a move was based, in part, on its success in 

ensuring safety. As detailed below, Defendants’ fraud proximately caused investors’ losses. 

A. Overview of Defendants’ Fraudulent Course of Conduct 

189. PG&E was responsible for the North Bay Fires. Of the eighteen main North Bay 

Fires for which Cal Fire’s investigations have been completed, seventeen were caused by PG&E 

equipment. Among those, eleven of these fires evidenced violations of California safety 

regulations, in seven different counties at the same time. 

190. Furthermore, PG&E was responsible for the Camp Fire, which began when a 

PG&E electrical tower – carrying a high-voltage 115 kilovolt transmission line – failed. On May 

15, 2019, Cal Fire issued a news release confirming that its investigation had “determined that 

the Camp Fire was caused by electrical transmission lines owned and operated by Pacific Gas 

 90 All references to “Defendants” in Sections I & IV-XIII refer to the Exchange Act 

Defendants (PG&E and the Exchange Act Individual Defendants). 

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and Electric[].”91 PG&E acknowledged a second ignition point for the Camp Fire that exhibited 

damaged and downed poles, vegetation on top of downed wires, and a recloser. As a result, 

vegetation underneath the lines ignited in two ignition points approximately 30 minutes apart. 

PG&E’s failure to remove such vegetation violated California Public Resources Code §4293. 

PG&E’s failure to maintain the integrity of its poles violated California Public Utilities Code 

§451. Cal Fire’s investigation also confirmed: “The cause of the second fire was determined to 

be vegetation into electrical distribution lines owned and operated by PG&E.”92

191. Moreover, PG&E’s ESRB-8 Shutoff Protocol required that the responsible power 

lines be shut off. While the ESRB-8 Shutoff Protocol requires that PG&E consider seven criteria 

when determining whether a shutoff would be appropriate, all seven criteria were satisfied in 

the hours leading up to the Camp Fire in the precise location where it started. This, too, Cal Fire 

confirmed in its determination that PG&E caused the Camp Fire: “The tinder dry vegetation and 

Red Flag conditions consisting of strong winds, low humidity and warm temperatures promoted 

this fire and caused extreme rates of spread....”93 Though adhering to the ESRB-8 Shutoff 

Protocol would have prevented the Camp Fire entirely, PG&E flouted it. 

192. Tellingly, the CPUC is investigating whether PG&E violated CPUC rules and 

standards. And since determining that PG&E is responsible for the Camp Fire, Cal Fire has 

forwarded its investigative report to the Butte County District Attorney. 

193. The news about PG&E’s responsibility for causing the North Bay Fires and Camp 

Fire directly impacted the Company’s bottom line, because California law requires PG&E to 

bear the cost of wildfire-related property damage and personal injury caused by its violations of 

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

15, 2019), 

http://calfire.ca.gov/communications/downloads/newsreleases/2019/CampFire_Cause.pdf. 

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

15, 2019), 

http://calfire.ca.gov/communications/downloads/newsreleases/2019/CampFire_Cause.pdf. 

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

15, 2019), 

http://calfire.ca.gov/communications/downloads/newsreleases/2019/CampFire_Cause.pdf. 

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California safety regulations. In other words, those costs likely could not be passed on to 

ratepayers. And, given the information that has emerged, including the conclusions of Cal Fire’s 

investigations into these fires to date – where Cal Fire has referred at least twelve of its 

investigations to the appropriate counties’ district attorneys’ offices to review for potential 

criminal violations – the market has come to understand that the financial consequences to 

PG&E are extraordinary. 

B. Defendants Made Materially False and Misleading Statements and 

Omissions Regarding Its Vegetation Management Activities and Compliance 

with Wildfire Safety Regulations Before the North Bay Fires 

1. April 29, 2015 – Misstatement No. 1 

194. The Class Period begins on April 29, 2015, when PG&E held a conference call to 

discuss the Company’s financial and operating results for the first financial quarter of 2015, 

which ended March 31, 2015. During the call, Defendant Johns, then President of the Utility, 

misleadingly assured investors of the Company’s commitment to safety: 

As California enters its fourth year of drought, we’re working hard 

to help the state meet this challenge by reducing water usage at our 

own facilities, encouraging customers to conserve by offering 

rebates for more efficient washers and agricultural pumps. We’re 

stepping up our vegetation management activities to mitigate 

wildfire risk and improve access for firefighters. 

195. This statement was materially false and/or misleading because PG&E did not 

materially increase its vegetation management budget in 2015. In fact, based on information 

released by CPUC, PG&E underspent its vegetation management budget in both 2014 and 2015: 

whereas CPUC approved PG&E to spend $190,000,000 and $194,153,000 in 2014 and 2015, 

respectively, PG&E actually spent only $189,617,402 and $194,094,406, respectively. 

Moreover, this small budget increase of 2.4% between 2014 and 2015 was only 1.28 percentage 

points above inflation, which rose 1.12% over the same time period.94 Indeed, Judge Alsup held 

that the “large number of trees that should have been removed by PG&E but weren’t . . . was a 

major contributing factor, maybe the single-biggest factor, in causing the fires in 2017 and 2018 

 94 CPI Inflation Calculator, Bureau of Labor Statistics, 

https://www.bls.gov/data/inflation_calculator.htm. 

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in Northern California,” and he concluded that “PG&E’s performance with respect to vegetation 

management has been dismal.” Accordingly, PG&E had not meaningfully “stepp[ed] up” its 

vegetation management activities.95 

196. Further, this statement materially omitted the numerous and widespread safety 

violations that would not be fixed by PG&E’s “stepp[ed] up . . . vegetation management 

activities.” 

2. October 16, 2015 – Misstatement No. 2 

197. On October 16, 2015, PG&E issued its 2015 Corporate Responsibility and 

Sustainability Report. This report falsely assured investors that PG&E’s “vegetation 

management” was “in compliance with relevant laws”: 

Vegetation Management 

Each year, PG&E’s Vegetation Management department, in 

consultation with utility arborists and foresters, inspects every mile 

of power line in our service area for public safety and electric 

reliability. We do so in compliance with relevant laws and with a 

focus on public involvement, including extensive “Right Tree, 

Right Place” outreach. PG&E has been recognized by the National 

Arbor Day Foundation as a Tree Line USA recipient for 20 

consecutive years for demonstrating best practices in utility 

arboriculture. 

198. Because PG&E’s vegetation management practices failed to follow relevant 

federal and California safety laws, PG&E’s vegetation management activities were decidedly not 

“in compliance with relevant laws.” 

199. First, according to reports released in subsequent corrective disclosures, including 

on May 25 and June 8, 2018, PG&E violated relevant wildfire safety laws, including California 

Public Resources Code Section 4293, multiple times. 

200. Second, Cal Fire found sufficient evidence of violations of state law to refer 

PG&E to the relevant district attorneys for eleven of the North Bay fires. See Sections IX.D.4-5, 

infra. 

 95 PG&E also omitted that it was supposed to perform at least $441,192 (the total amount by 

which PG&E underspent its allowance in 2014 and 2015) in additional vegetation management 

during 2015, but failed to do so. 

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201. Third, investigations into the causes of the Camp Fire have already disclosed 

evidence that this most destructive and deadly wildfire in California history was caused by 

PG&E violating California Public Resources Code Section 4293 and California Public Utilities 

Code Section 451, among other safety regulations. Indeed, Cal Fire has found that PG&E 

equipment was responsible for both ignition points of the Camp Fire and has since reported 

PG&E to the Butte County District Attorney based on evidence of safety violations. 

202. Fourth, it has been documented that PG&E actually knew that it was not in 

compliance with relevant safety laws and best practices at the time of this statement. In 

proceedings related to PG&E’s criminal probation before Judge Alsup, PG&E has admitted “that 

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

hazardous with the potential to ‘fall into or otherwise impact the conductors, towers or guy wires 

before the next inspection cycle.’” See ¶104. 

203. Fifth, PG&E has admitted that it did not “inspect[] every mile of power line” 

“each year,” because at the time this statement was made, it did not inspect Tower :27/222 of the 

Caribou-Palermo transmission line since August 2014. This lack of annual inspection 

contributed to Tower :27/222’s failure on November 8, 2018, which was part of the Camp Fire’s 

first ignition point. 

204. Sixth, this statement materially omitted the true risk that PG&E would cause 

wildfires serious enough to imperil the Company’s financial condition. 

205. Thus, this statement was materially false and/or misleading because of PG&E’s 

numerous and widespread violations of safety regulations, including regulations specifically 

related to vegetation management – regulations which were essential for preventing devastating 

wildfires. See Section VI.F.4. As Judge Alsup held, PG&E’s “unsafe conduct has led to 

recurring deadly wildfires caused by its electrical system” and the “large number of trees that 

should have been removed by PG&E but weren’t . . . was a major contributing factor, maybe the 

single-biggest factor, in causing the fires in 2017 and 2018 in Northern California.” In fact, 

PG&E’s violations were so pervasive that they caused multiple North Bay Fires all at the same 

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time in seven different counties, and then caused both of the Camp Fire’s two ignition points a 

year later – therefore the violations cannot be explained away as an isolated lapse. 

206. This statement regarding compliance was reviewed and authorized by Defendant 

Kane, in her capacity as PG&E’s Chief Ethics and Compliance Officer. According to the same 

2015 Corporate Responsibility and Sustainability Report: 

Within senior leadership, ethics and compliance are managed by a 

Chief Ethics and Compliance Officer, a position created in 2015 as 

part of our commitment to achieve a best-in-class ethics and 

compliance program. The position reports to the PG&E 

Corporation CEO and has additional reporting responsibility to the 

Audit Committees of the Board of Directors, and the Compliance 

and Public Policy Committee of PG&E Corporation. 

The new position is responsible for: 

• Building a best-in-class ethics and compliance program 

and overseeing its implementation, 

• Overseeing company-wide programs for compliance 

reporting and related investigatory processes. . . . 

207. Kane therefore was responsible for both “overseeing . . . implementation” of 

PG&E’s compliance and “overseeing . . . compliance reporting,” including this report. 

3. November 18, 2015 – Misstatement No. 3 

208. On November 18, 2015, Hogan publicly testified before the California Senate 

Energy, Utilities and Communication Subcommittee on Gas and Electric Infrastructure Safety. 

During that testimony, Hogan assured the public that PG&E was “just about done” implementing 

a program that would remotely disable the Company’s recloser devices in areas that included 

“high wildfire risk areas”: 

So as I mentioned earlier, our SCADA capabilities where we are 

able to take our reclosers out of service remotely, we first focus 

on the wildfire areas and then we have about 130 some odd 

locations, we are going to complete about 126 of those this year, 

just about done with that program, which leaves six for next year, 

which will be completed. 

209. This statement was materially false and/or misleading because PG&E 

misleadingly said that it had implemented policies and procedures to disable recloser devices 

from areas that were at high risk for wildfires, which includes the areas where the North Bay 

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Fires occurred, by the end of 2015 (approximately 1 month away). Hogan’s statement concealed 

that PG&E dangerously kept reclosers in use through at least October 2017; Cal Fire has 

determined that PG&E reclosers caused one of the North Bay Fires, known as the Pythian Fire. 

Indeed, a recloser was found on a broken PG&E pole at the second ignition point for the Camp 

Fire. Thus, PG&E did not have the safety policies and procedures in place that they led investors 

to believe they had. 

210. This statement materially omitted the true risk that PG&E would cause wildfires 

serious enough to imperil the Company’s financial condition. 

4. October 6, 2016 – Misstatement No. 4 

211. On October 6, 2016, PG&E issued its 2016 Corporate Responsibility and 

Sustainability Report. This report provided false assurances to investors regarding PG&E’s 

compliance with relevant regulations: 

Vegetation Management 

Each year, PG&E’s Vegetation Management department and its 

contracting arborists and foresters inspect miles of power lines in 

our service area for public safety and electric reliability. We do so 

in compliance with relevant laws and with a focus on public 

involvement, including extensive “Right Tree, Right Place” 

outreach. PG&E has been recognized by the National Arbor Day 

Foundation as a Tree Line USA recipient for 21 consecutive years 

for demonstrating best practices in energy sector arboriculture. 

212. Because PG&E’s vegetation management practices failed to follow relevant 

federal and California safety laws, PG&E’s vegetation management activities were decidedly not 

“in compliance with relevant laws.” 

213. First, according to reports released in subsequent corrective disclosures, including 

on May 25 and June 8, 2018, PG&E violated relevant wildfire safety laws, including California 

Public Resources Code Section 4293, multiple times. 

214. Second, Cal Fire found sufficient evidence of violations of state law to refer 

PG&E to the relevant district attorneys for eleven of the North Bay fires. See Sections IX.D.4-5, 

infra. 

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215. Third, investigations into the causes of the Camp Fire have already disclosed 

evidence that this most destructive and deadly wildfire in California history was caused by 

PG&E violating California Public Resources Code Section 4293 and California Public Utilities 

Code Section 451, among other safety regulations. Indeed, Cal Fire has found that PG&E 

equipment was responsible for both ignition points of the Camp Fire and has since reported 

PG&E to the Butte County District Attorney based on evidence of safety violations. 

216. Fourth, it has been documented that PG&E actually knew that it was not in 

compliance with relevant safety laws and best practices at the time of this statement. In 

proceedings related to PG&E’s criminal probation before Judge Alsup, PG&E has admitted “that 

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

hazardous with the potential to ‘fall into or otherwise impact the conductors, towers or guy wires 

before the next inspection cycle.’” See ¶104. 

217. Fifth, PG&E has admitted that it did not “inspect” all of its powerlines “each 

year,” because at the time this statement was made, it did not inspect Tower :27/222 of the 

Caribou-Palermo transmission line since August 2014. This lack of annual inspection 

contributed to Tower :27/222’s failure on November 8, 2018, which was part of the Camp Fire’s 

first ignition point. 

218. Sixth, this statement materially omitted the true risk that PG&E would cause 

wildfires serious enough to imperil the Company’s financial condition. 

219. Thus, this statement was materially false and/or misleading because of PG&E’s 

numerous and widespread violations of safety regulations, including regulations specifically 

related to vegetation management – regulations which were essential for preventing devastating 

wildfires. See Section VI.F.4. As Judge Alsup held, PG&E’s “unsafe conduct has led to 

recurring deadly wildfires caused by its electrical system” and the “large number of trees that 

should have been removed by PG&E but weren’t . . . was a major contributing factor, maybe the 

single-biggest factor, in causing the fires in 2017 and 2018 in Northern California.” In fact, 

PG&E’s violations were so pervasive that they caused at least 11 of the North Bay Fires all at the 

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same time in seven different counties, and then caused both of the Camp Fire’s two ignition 

points a year later – therefore the violations cannot be explained away as an isolated lapse. 

220. This statement regarding compliance was reviewed and authorized by Defendant 

Kane, in her capacity as PG&E’s Chief Ethics and Compliance Officer. According to the same 

2016 Corporate Responsibility and Sustainability Report: 

Within senior leadership, ethics and compliance are managed by 

the Chief Ethics and Compliance Officer (CECO), who reports to 

the PG&E Corporation Chairman and CEO. The CECO has 

additional reporting responsibility to the Audit Committees of the 

PG&E Corporation and Pacific Gas and Electric Company Boards 

of Directors, and the Compliance and Public Policy Committee of 

the PG&E Corporation Board. 

The CECO is responsible for: 

• Building a best-in-class ethics and compliance program 

and managing its implementation, 

• Overseeing enterprise-wide programs for compliance 

monitoring, reporting, assessment and remediation. . . . 

221. Kane therefore was responsible for both “managing . . . implementation” of 

PG&E’s compliance and “overseeing . . . compliance monitoring [and] reporting,” including 

this report. 

5. August 9, 2017 – Misstatement No. 5 

222. On August 9, 2017, PG&E issued its 2017 Corporate Responsibility and 

Sustainability Report. This report provided false assurances to investors regarding PG&E’s 

compliance with relevant regulations: 

Vegetation Management 

PG&E prunes and removes trees growing too close to power lines

while maintaining as much vegetation as possible to balance land 

use and environmental stewardship with customer needs. Through 

a well-established and innovative vegetation management 

program, PG&E balances the need to maintain a vast system of 

trees growing along power lines while complying with state and 

federal regulations and delivering safe, reliable and affordable 

electric service. 

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223. Because PG&E’s vegetation management practices failed to follow relevant 

federal and California safety laws, PG&E’s vegetation management activities were decidedly not 

“complying with state and federal regulations and delivering safe . . . electric service.” 

224. First, according to reports released in subsequent corrective disclosures, including 

on May 25 and June 8, 2018, PG&E violated relevant wildfire safety laws, including California 

Public Resources Code Section 4293, multiple times. 

225. Second, Cal Fire found sufficient evidence of violations of state law to refer 

PG&E to the relevant district attorneys for eleven of the North Bay fires. See Sections IX.D.4-5, 

infra. 

226. Third, investigations into the causes of the Camp Fire have already disclosed 

evidence that this most destructive and deadly wildfire in California history was caused by 

PG&E violating California Public Resources Code Section 4293 and California Public Utilities 

Code Section 451, among other safety regulations. Indeed, Cal Fire has found that PG&E 

equipment was responsible for both ignition points of the Camp Fire and has since reported 

PG&E to the Butte County District Attorney based on evidence of safety violations. 

227. Fourth, it has been documented that PG&E actually knew that it was not in 

compliance with relevant safety laws and best practices at the time of this statement. In 

proceedings related to PG&E’s criminal probation before Judge Alsup, PG&E has admitted “that 

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

hazardous with the potential to ‘fall into or otherwise impact the conductors, towers or guy wires 

before the next inspection cycle.’” See ¶104. 

228. Fifth, this statement materially omitted the true risk that PG&E would cause 

wildfires serious enough to imperil the Company’s financial condition. 

229. Thus, this statement was materially false and/or misleading because of PG&E’s 

numerous and widespread violations of safety regulations, including regulations specifically 

related to vegetation management – regulations which were essential for preventing devastating 

wildfires. See Section VI.F.4. As Judge Alsup held, PG&E’s “unsafe conduct has led to 

recurring deadly wildfires caused by its electrical system” and the “large number of trees that 

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should have been removed by PG&E but weren’t . . . was a major contributing factor, maybe the 

single-biggest factor, in causing the fires in 2017 and 2018 in Northern California.” In fact, 

PG&E’s violations were so pervasive that they evidently caused multiple North Bay Fires all at 

the same time in seven different counties, and then caused both of the Camp Fire’s two ignition 

points a year later – therefore the violations cannot be explained away as an isolated lapse. 

230. This statement regarding compliance was reviewed and authorized by Defendant 

Kane, in her capacity as PG&E’s Chief Ethics and Compliance Officer. According to the same 

2017 Corporate Responsibility and Sustainability Report: 

Within senior leadership, compliance and ethics are managed by 

the Senior Vice President, Chief Ethics and Compliance Officer 

and Deputy General Counsel (CECO), who reports to the PG&E 

Corporation Chief Executive Officer (CEO) and President. The 

CECO has additional reporting responsibility to the Audit 

Committees of the PG&E Corporation and Pacific Gas and Electric 

Company Boards of Directors, and the Compliance and Public 

Policy Committee of the PG&E Corporation Board. 

The CECO is responsible for: 

• Building a best-in-class compliance and ethics program 

and managing its implementation, 

• Overseeing enterprise-wide programs for compliance

monitoring, reporting, assessment and remediation. . . . 

231. Kane therefore was responsible for both “managing implementation” of PG&E’s 

compliance and “overseeing . . . compliance monitoring [and] reporting,” including this 

report. 

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 

232. Throughout the Class Period, Defendants repeatedly tied the sustainability of its 

quarterly cash dividend to safety. In fact, PG&E increased its dividend during the Class Period 

for the first time in six years, and then raised it again – touting the Company’s “progress on 

safety” and “improvements we have made in safety.” Yet PG&E’s violations of relevant safety 

regulations were so numerous and widespread that they caused and exacerbated the North Bay 

Fires, resulting in PG&E having to suspend its dividend entirely on December 20, 2017. 

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1. May 23, 2016 – Misstatement No. 6 

233. Less than three weeks after its May 4, 2016 earnings call, PG&E issued a press 

release titled “PG&E Corporation Raises Common Stock Dividend, Highlights Progress at 

Annual Shareholder Meeting.” It stated: 

PG&E Corporation (NYSE: PCG) today announced that it is 

raising its quarterly common stock dividend to 49 cents per share, 

an increase of 3.5 cents per share, beginning with dividends for the 

second quarter of 2016. 

* * * 

The increase, which is the company’s first in six years, is a 

meaningful step toward gradually returning the company’s 

dividend payout to levels that are comparable with those of similar 

utilities. 

* * * 

Earley and other senior executives also discussed continued 

progress on safety, reliability and other goals, as well as PG&E’s 

strategy for the future [at the annual shareholder meeting]. 

Earley said, ‘We’ve continued to demonstrate leadership and 

commitment on safety. We’re delivering the most reliable service 

in our company’s history. 

234. This statement was materially false and/or misleading because it affirmed that 

PG&E’s dividend would not be negatively impacted by the Company’s role in causing wildfires. 

Indeed, it affirmed to investors that PG&E had attained “progress on safety,” specifically 

connecting purported safety achievements to its ability to increase its dividend, importantly, “to 

levels that are comparable with those of similar utilities.” In reality, PG&E lacked the touted 

“progress on safety” as well as “leadership and commitment on safety” for all the reasons found 

by Judge Alsup (see ¶¶104-105 & 411) that led him to conclude: “it’s not really true. Safety is 

not your number one thing.” PG&E’s purported “leadership and commitment on safety” is 

belied by each unaddressed safety violation and safety deficiency alleged herein, and 

corroborated by the fact that PG&E’s electrical equipment caused far more, and more serious, 

wildfires than comparable utilities in California (¶412).96

 96 Furthermore, this statement is false and misleading for all of the reasons discussed in 

¶¶649-658, infra. 

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235. PG&E fell so far short of this touted achievement that its safety violations, and 

resulting responsibility for wildfires, would cause PG&E to suspend its dividend entirely on 

December 20, 2017 due to PG&E’s responsibility for the North Bay Fires. This statement gave 

investors a false impression that safety risks would not imperil the Company’s dividend, which is 

precisely what occurred on December 20, 2017. Further, this statement touting PG&E’s 

“commitment on safety” materially omitted that the Company’s spending on vegetation 

management was inadequate and barely kept pace with inflation at that time. It also materially 

omitted the true risk that PG&E would cause wildfires serious enough to imperil the Company’s 

financial condition. 

236. The false and misleading nature of this statement was further revealed in a series 

of events from November 8-15, 2018, as evidence emerged that PG&E’s safety violations caused 

the Camp Fire: the most destructive and deadly wildfire in California history. 

2. November 4, 2016 – Misstatement No. 7 

237. On November 4, 2016, PG&E hosted a conference call with analysts to discuss its 

financial results for the third quarter of 2016. In his prepared remarks, Earley stated as follows: 

The improvements we have made in safety and reliability over the 

last six years have put us in a position to deliver strong financial 

results going forward. 

Earlier this year, we announced our first dividend increase in six 

years, and we have committed to achieving a roughly 60% payout 

ratio by 2019. Combined with our expected rate based growth, we 

are confident we can deliver a strong overall return for our 

shareholders. 

238. The statement was materially false and/or misleading because PG&E did not 

make substantial “improvements” in wildfire “safety . . . over the last six years.” In fact, a 

PG&E Vegetation Program Manager, Richard Yarnell, later testified that for the entire period 

from September 2015 to April 10, 2017, “PG&E—to the best of my knowledge, we have not 

made any changes” to improve safety. Nor was the Company “in a position to deliver strong 

financial results going forward.” In reality, PG&E’s responsibility for causing multiple wildfires 

– as the results of its numerous, widespread safety violations – had such a significant negative 

impact on PG&E’s financial results and financial outlook that PG&E had to suspend its dividend 

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entirely on December 20, 2017 due to PG&E’s responsibility for causing the North Bay Fires. 

This statement gave investors a false impression that concealed safety risks would not imperil the 

Company’s dividend, which is precisely what occurred on December 20, 2017. Further, this 

statement touting PG&E’s “improvements . . . made in safety” materially omitted that the 

Company’s deficient investments in safety, including inadequate spending on vegetation 

management that barely kept pace with inflation at that time. It also materially omitted the true 

risk that PG&E would cause wildfires serious enough to imperil the Company’s financial 

condition. 

239. In addition, it has been documented that PG&E actually knew that it was not in 

compliance with relevant safety laws and best practices at the time of this statement. In 

proceedings related to PG&E’s criminal probation before Judge Alsup, PG&E has admitted “that 

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

hazardous with the potential to ‘fall into or otherwise impact the conductors, towers or guy wires 

before the next inspection cycle.’” See ¶104. 

240. The false and misleading nature of this statement was further revealed in a series 

of events from November 8-15, 2018, as evidence emerged that PG&E’s safety violations 

caused the Camp Fire: the most destructive and deadly wildfire in California history. 

3. May 31, 2017 – Misstatement No. 8 

241. On May 31, 2017, PG&E issued a press release titled “PG&E Corporation Raises 

Common Stock Dividend, Shareholders Elect Former Secretary of Homeland Security Jeh C. 

Johnson to Boards of Directors.” The release stated: 

PG&E Corporation (NYSE: PCG) today announced that it is 

raising its quarterly common stock dividend by 4 cents per share to 

53 cents per share, beginning with the dividend for the second 

quarter of 2017. On an annual basis, this action increases PG&E 

Corporation’s dividend by 8 percent, from $1.96 per share to $2.12 

per share. 

* * * 

Yesterday, in remarks at the joint annual shareholders meeting of 

PG&E Corporation and Pacific Gas and Electric Company, [CEO] 

Williams highlighted the companies’ progress on safety, reliability

and reducing greenhouse gas emissions, among other 

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accomplishments. She reaffirmed PG&E’s commitment to safety 

and operational excellence, delivering for customers and leading 

the way to achieve California’s clean energy goals. 

242. This statement falsely connected PG&E’s decision increasing its dividend to 

“progress on safety” and PG&E’s “commitment to safety and operational excellence,” only 

months before the Company’s pervasive failure to comply with safety regulations caused at least 

eleven of the North Bay Fires all at the same time in seven different counties. Indeed, it omitted 

that there was no progress on wildfire safety, as confirmed by PG&E’s own Vegetation Program 

Manager Richard Yarnell, only one month before the statement was made, when he reportedly 

testified under oath: “PG&E—to the best of my knowledge, we have not made any changes as a 

result of th[e Butte] fire,” i.e., from September 2015 to April 10, 2017 (when Yarnell so 

testified). In reality, PG&E lacked the touted “progress on safety” as well as “commitment to 

safety and operational excellence” for all the reasons found by Judge Alsup (see ¶¶104-105 & 

411) that led him to conclude: “it’s not really true. Safety is not your number one thing” and 

“PG&E’s performance with respect to vegetation management has been dismal.” 

243. PG&E’s above statement on May 31, 2017 gave investors a false impression that 

concealed safety risks would not imperil the Company’s dividend, which is precisely what 

occurred on December 20, 2017. Further, this statement materially omitted the true risk that 

PG&E would cause wildfires serious enough to imperil the Company’s financial condition. 

244. In addition, it has been documented that PG&E actually knew that it was not in 

compliance with relevant safety laws and best practices at the time of this statement. In 

proceedings related to PG&E’s criminal probation before Judge Alsup, PG&E has admitted “that 

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

hazardous with the potential to ‘fall into or otherwise impact the conductors, towers or guy wires 

before the next inspection cycle.’” See ¶104. 

245. The false and misleading nature of this statement was further revealed in a series 

of events from November 8-15, 2018, as evidence emerged that PG&E’s safety violations caused 

the Camp Fire: the most destructive and deadly wildfire in California history. 

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

246. The North Bay Fires began on Sunday evening, October 8, 2017. However, it was 

not until Thursday, October 12, 2017 that the market began to understand that PG&E’s safety 

regulation violations were likely a major cause. On that date, as detailed below (see Section 

VII.D.1, infra), CPUC sent PG&E a litigation hold letter reminding PG&E that it (a) “must 

preserve any factual or physical evidence ... includ[ing] all failed poles, conductors and 

associated equipment from each fire event” and (b) “must inform all employees and contractors 

that they must preserve all electronic (including emails) and non-electronic documents related to 

potential causes of the fires, vegetation management, maintenance and/or tree-trimming.” This 

was the first disclosure indicating that PG&E caused any of the North Bay Fires. In response to 

this news, PG&E’s share price declined 6.7%. 

247. Late the next day, PG&E issued a statement explaining to investors that: “The 

causes of these fires are being investigated by [Cal Fire], including the possible role of [PG&E’s] 

power lines and other facilities.” It reported that the Company “has approximately $800 million 

in liability insurance for potential losses that may result from these fires” – to prepare investors 

for the possibility that “the amount of insurance is insufficient to cover the Utility’s liability,” in 

which case, its “financial condition or results of operations could be materially affected.” The 

market had understood that PG&E would be reimbursed by rate-payers for damages by fires it 

caused while nevertheless acting as a prudent manager; hence, the Company’s discussion of 

liability and insurance signaled to the market that at least some of the North Bay Fires were 

proximately caused by PG&E’s negligence or worse. In response to this news, PG&E’s share 

price continued to decline until the end of the next trading day, Monday, October 16, 2017, 

falling by approximately 16.5%. 

248. Thereafter, PG&E’s management attempted to reassure investors, falsely, as 

detailed below. 

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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 

1. October 31, 2017 – Misstatement No. 9 

249. On October 31, 2017, PG&E issued a press release titled “Facts About PG&E’s 

Electric Vegetation Management Efforts.” The release stated: “PG&E follows all applicable 

federal and state vegetation clearance requirements and performs regular power line tree 

safety activities in accordance with industry standards, guidelines, and acceptable procedures 

that help to reduce outages or fires caused by trees or other vegetation.” 

250. This statement was materially false and/or misleading because PG&E did not

follow “all applicable ... state vegetation clearance requirements.” 

251. First, according to reports released in subsequent corrective disclosures, including 

on May 25 and June 8, 2018, PG&E violated relevant wildfire safety laws, including California 

Public Resources Code Section 4293, multiple times. 

252. Second, Cal Fire found sufficient evidence of violations of state law to refer 

PG&E to the relevant district attorneys for eleven of the North Bay fires. See Sections IX.D.4-5, 

infra.

253. Third, investigations into the causes of the Camp Fire have already disclosed 

evidence that this most destructive and deadly wildfire in California history was caused by 

PG&E violating California Public Resources Code Section 4293 and California Public Utilities 

Code Section 451, among other safety regulations. Indeed, Cal Fire has found that PG&E 

equipment was responsible for both ignition points of the Camp Fire and has since reported 

PG&E to the Butte County District Attorney based on evidence of safety violations. This 

statement concealed that, far from “help[ing] to reduce . . . fires caused by trees or other 

vegetation,” PG&E’s vegetation management practices tolerated numerous and widespread 

violations of safety regulations that would worsen the risk of fires. 

254. Fourth, it has been documented that PG&E actually knew that it was not in 

compliance with relevant safety laws and best practices at the time of this statement. In 

proceedings related to PG&E’s criminal probation before Judge Alsup, PG&E has admitted “that 

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

hazardous with the potential to ‘fall into or otherwise impact the conductors, towers or guy wires 

before the next inspection cycle.’” See ¶104. 

255. Fifth, this statement materially omitted the true risk that PG&E would cause 

wildfires serious enough to imperil the Company’s financial condition. 

256. Thus, this statement was materially false and/or misleading because of PG&E’s 

numerous and widespread violations of safety regulations, including regulations specifically 

related to vegetation management – regulations which were essential for preventing devastating 

wildfires. See Section VI.F.4. As Judge Alsup held, PG&E’s “unsafe conduct has led to 

recurring deadly wildfires caused by its electrical system” and the “large number of trees that 

should have been removed by PG&E but weren’t . . . was a major contributing factor, maybe the 

single-biggest factor, in causing the fires in 2017 and 2018 in Northern California.” In fact, 

PG&E’s violations were so pervasive that they evidently caused multiple North Bay Fires all at 

the same time in seven different counties, and then caused both of the Camp Fire’s two ignition 

points a year later – therefore the violations cannot be explained away as an isolated lapse. 

257. This statement regarding compliance was reviewed and authorized by Defendant 

Kane, in her capacity as PG&E’s Chief Ethics and Compliance Officer. Kane was responsible 

for both “overseeing . . . implementation” of PG&E’s compliance and “overseeing . . . 

compliance reporting,” including this press release. Because of her senior position within the 

Company, Kane had ultimate authority to control the content of this statement. 

2. November 2, 2017 – Misstatement No. 10 

258. On November 2, 2017, PG&E hosted a conference call with analysts to discuss its 

financial results for the third quarter of 2017. In her prepared remarks, now-CEO Williams 

falsely reassured investors regarding the effectiveness of PG&E’s vegetation management: 

Thank you, Chris, and good morning, everyone. Given the recent 

wildfires impacting our customers and communities, our 

discussion today will be different from our usual earnings call. . . . 

* * * 

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Now I know there’s a lot of interest in how these fires started and 

in how PG&E assets might have been involved in or impacted by 

the wildfires. Our communities deserve answers and we are 

committed to learning what happened. It’s critical that we identify 

anything that will help us to keep our customers and communities 

safe in the future. That is our goal as we work with CAL FIRE and 

the CPUC. 

* * * 

Many of you have reached out with questions about the 

potential impact of the wildfires to the company’s financials 

and also about the doctrine of inverse condemnation in 

California. At this time, the known financial impact of the 

wildfires is limited to the cost of the unprecedented response and 

restoration efforts, costs related to our liability insurance and some 

legal expenses, and Jason [Wells] will cover these later this 

morning. 

* * * 

I know there’s a lot of interest in our pole maintenance and 

vegetation management programs, so let me address these as 

well. First, we routinely inspect, maintain and replace our electric 

poles. This includes annual scheduled patrols, 5-year visual 

inspections, an intrusive testing and treating on our wood poles on 

a frequency that significantly exceeds CPUC requirements. 

We also have one of, if not, the most comprehensive vegetation 

management programs in the country. Our vegetation 

management program manages about 123 million trees across the 

service territory. And every year, we inspect every segment of the 

99,000 miles of overhead line and we clear vegetation as needed.

This is well beyond what is typical in our industry where most 

utilities have a 3-year vegetation management cycle or sometimes 

longer. 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. With the drought 

and the tree mortality crisis we’ve experienced in California, 

we have been expanding our vegetation management work 

since 2014.

In 2016, we spent an additional $200 million, essentially 

doubling our typical vegetation management spending last year. We’ve removed an incremental 236,000 dead or dying trees, and 

we enhanced our tree maintenance work with additional patrols in 

areas of high fire danger, including a combination of boots on the 

ground, aerial patrols, and sophisticated LiDAR technology. 

259. These statements were materially false and/or misleading because PG&E did not 

“doubl[e]” its “typical vegetation management spending last year.” As explained in Section 

IV.B., supra, PG&E’s Vegetation Management Balancing Accounts for the relevant years 

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indicate that PG&E spent $194,094,406 on vegetation management in 2015, $198,735,579 in 

2016, and $201,456,193 in 2017 – increases of only 2.4% and 1.4%, respectively.97 The lack of 

improvement to PG&E’s vegetation management practices was confirmed by PG&E’s own 

Vegetation Program Manager Richard Yarnell, who reportedly testified under oath that, even by 

April 10, 2017: “PG&E—to the best of my knowledge, we have not made any changes as a 

result of th[e September 2015 Butte] fire.” 

260. Second, PG&E failed to comply with safety regulations – including regulations 

specifically related to vegetation management. Thus, when Williams touted PG&E’s vegetation 

management program as “one of, if not, the most comprehensive vegetation management 

programs in the country,” she gave investors the false impression that PG&E’s vegetation 

management did not fall short of applicable safety regulations, when in fact it did. Given 

PG&E’s numerous and widespread violations of safety regulations, including those violations 

that would cause multiple of the North Bay Fires as well as evidently cause the Camp Fire, its 

“vegetation management programs” were not “comprehensive.” 

261. Third, PG&E has admitted that it did not “every year . . . inspect every segment of 

the 99,000 miles of overhead line,” because at the time this statement was made, it did not 

inspect Tower :27/222 of the Caribou-Palermo transmission line since August 2014. This lack of 

annual inspection contributed to Tower :27/222’s failure on November 8, 2018, which was part 

of the Camp Fire’s first ignition point. 

262. Fourth, PG&E did not “have one of, if not, the most comprehensive vegetation 

management programs in the country” for all the reasons found by Judge Alsup (see ¶¶104-105 

& 411) that led him to conclude: “PG&E’s performance with respect to vegetation 

management has been dismal.” 

263. Fifth, this statement materially omitted the true risk that PG&E would cause 

wildfires serious enough to imperil the Company’s financial condition. 

 97 This spending did not differ more than $100,000 from the amounts PG&E requested, and 

the amounts CPUC approved, in PG&E’s 2015, 2016, and 2017 General Rate Cases. 

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3. November 2, 2017 – Misstatement No. 11 

264. Later on the same call, an analyst asked the Company for more detail about 

PG&E’s vegetation management practices. President and COO Nickolas Stavropoulos replied as 

follows: 

[ANALYST:] And then, I guess, can you discuss your vegetation 

practices for trees that are located near power lines? I guess 

we’ve seen sort of end reports that have come out for some of your 

peers that they sort of track vegetation that’s within certain 

distances from the lines, and they basically make their decisions on 

what to do based on sort of updates. 

[Stavropoulos:] Thank you for the question. So as Geisha 

mentioned, we have a very aggressive vegetation management 

program across our 70,000-mile -- square mile territory. We 

manage about 123 million trees that are near and adjacent to our 

facilities. And over the last 2 years, we’ve doubled the amount 

that we’ve invested in veg[etation] management. That includes 

line clearing to remove parts of trees that are adjacent to our 

facilities as well as removal of dead and dying trees. So the 

program involves year-round effort to identify these dead and 

dying trees through inspection processes where we use foot and 

aerial patrols; we use LiDAR, which is light, detecting and ranging 

technology, to identify the trees that need to be worked. We 

inspect all of our overhead lines every year, and we do second 

patrols in high fire danger areas at least twice a year. In some 

areas, we do as often as 4x a year. So it’s a very aggressive 

program. There are specific requirements around line clearing, and 

it depends upon the voltage of the lines. And it can range up to feet 

[sic] to as much a sort of 18 inches away from the facility. So there 

are all sorts of different requirements, depending upon where the 

facilities are located and the voltage of the facilities. 

265. This statement was materially false and/or misleading because PG&E did not 

“doubl[e] the amount that we’ve invested in veg[etation] management.” As explained in Section 

VI.B., supra, PG&E’s Vegetation Management Balancing Accounts for the relevant years 

indicate that PG&E spent $194,094,406 on vegetation management in 2015, $198,735,579 in 

2016, and $201,456,193 in 2017. Moreover, the lack of improvement to PG&E’s vegetation 

management practices was confirmed by PG&E’s own Vegetation Program Manager Richard 

Yarnell, who reportedly testified under oath that, even by April 10, 2017: “PG&E—to the best of 

my knowledge, we have not made any changes as a result of th[e Butte] fire,” i.e., since 

September 2015. 

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266. Second, PG&E failed to comply with safety regulations specifically related to 

vegetation management. By representing that it “inspect[s] all of [its] overhead lines every year,” 

and inspects some trees “twice” or “4x” each year, Stavropoulos falsely created the impression 

that PG&E would prevent many safety violations from occurring, especially in “high fire danger 

areas” such as those where the North Bay Fires and Camp Fire erupted. In reality, safety 

violations were so pervasive that they evidently caused both ignition points of the Camp Fire as 

well as at least eleven fires at the same time in seven different counties. In touting its “very 

aggressive vegetation management program,” the statement actionably omitted the widespread 

failure of these measures to bring PG&E into compliance. Indeed, if PG&E had been properly 

“inspect[ing] all of our overhead lines “every year,” “twice a year,” or “4x a year,” many of the 

causes of the North Bay Fires and Camp Fire would have been discovered and the fires 

prevented. For instance, in addition to the fires caused by dead or dying trees, Cal Fire found that 

the Cascade Fire was caused “by sagging power lines coming into contact” and the Blue Fire was 

caused when “a PG&E power line conductor separated from a connector.” 

267. As another example, in the afternoon of November 8, 2018, PG&E’s aerial 

inspection of the 115 kilovolt transmission line that caused the Camp Fire discovered “damage to 

a transmission tower” carrying that electrical line. PG&E has also acknowledged a second 

ignition point for the Camp Fire that exhibited damaged and downed poles, vegetation on top of 

downed wires, and other signs of safety violations. Cal Fire has determined that PG&E caused 

both of these ignition points. 

268. Third, PG&E has admitted that it did not “inspect all of our overhead lines every 

year,” much less “twice a year” or “4x a year,” because at the time this statement was made, it 

did not inspect Tower :27/222 of the Caribou-Palermo transmission line since August 2014. 

This lack of annual inspection contributed to Tower :27/222’s failure on November 8, 2018, 

which was part of the Camp Fire’s first ignition point. 

269. Fourth, this statement materially omitted the true risk that PG&E would cause 

wildfires serious enough to imperil the Company’s financial condition. 

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4. November 5, 2017 – Misstatement No. 12 

270. At all relevant times, PG&E’s Media Relations department maintained a news 

website named Currents,

98 providing news, information, and commentary about PG&E’s 

activities, including the delivery of electricity and the operation, maintenance, and safety of the 

Company’s electric services. Through the website, PG&E repeatedly touted the safety of its 

power lines, the Company’s vegetation management program, and its purported success 

mitigating wildfire risk. 

271. In one such article, dated November 5, 2017 and titled “Facts About PG&E’s 

Wildfire and Prevention Safety Efforts,” PG&E reassured investors that “PG&E meets or 

exceeds all applicable federal and state vegetation clearance requirements.”99

272. This statement was materially false and/or misleading because PG&E did not 

“meet” – much less “exceed” – “all applicable ... state vegetation clearance requirements.” 

273. First, according to reports released in subsequent corrective disclosures, including 

on May 25 and June 8, 2018, PG&E violated relevant wildfire safety laws, including California 

Public Resources Code Section 4293, multiple times. See Section VII.D.4., infra. 

274. Second, Cal Fire found sufficient evidence of violations of state law to refer 

PG&E to the relevant district attorneys for eleven of the North Bay fires. See Sections IX.D.4-5, 

infra. 

275. Third, investigations into the causes of the Camp Fire have already disclosed 

evidence that this most destructive and deadly wildfire in California history was caused by 

PG&E violating California Public Resources Code Section 4293 and California Public Utilities 

Code Section 451, among other safety regulations. Indeed, Cal Fire has found that PG&E 

 98 Currents, PG&E, http://www.pgecurrents.com. 

99 On November 14, 2017, PG&E spokesperson Greg Snapper repeated this false and 

misleading reassurance verbatim in an NBC article titled “Utility Company’s Risk Assessment at 

Issue in NorCal Wildfires.” See Jaxon Van Derbeken, Utility Company's Risk Assessment at 

Issue in NorCal Wildfires, NBC Universal Media (Nov. 14, 2017), 

https://www.nbcconnecticut.com/troubleshooters/national-investigations/PGE-Risk-Assessmentat-Issue-in-North-Bay-Wildfires-457356963.html.

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equipment was responsible for both ignition points of the Camp Fire and has since reported 

PG&E to the Butte County District Attorney based on evidence of safety violations. 

276. Fourth, it has been documented that PG&E actually knew that it was not in 

compliance with relevant safety laws and best practices at the time of this statement. In 

proceedings related to PG&E’s criminal probation before Judge Alsup, PG&E has admitted “that 

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

hazardous with the potential to ‘fall into or otherwise impact the conductors, towers or guy wires 

before the next inspection cycle.’” See ¶104. 

277. Fifth, this statement materially omitted the true risk that PG&E would cause 

wildfires serious enough to imperil the Company’s financial condition. 

278. Thus, this statement was materially false and/or misleading because of PG&E’s 

numerous and widespread violations of safety regulations, including regulations specifically 

related to vegetation management – regulations which were essential for preventing devastating 

wildfires. See Section VI.F.4. As Judge Alsup held, PG&E’s “unsafe conduct has led to 

recurring deadly wildfires caused by its electrical system” and the “large number of trees that 

should have been removed by PG&E but weren’t . . . was a major contributing factor, maybe the 

single-biggest factor, in causing the fires in 2017 and 2018 in Northern California.” In fact, 

PG&E’s violations were so pervasive that they evidently caused multiple North Bay Fires all at 

the same time in seven different counties, and then caused both of the Camp Fire’s two ignition 

points a year later – therefore the violations cannot be explained away as an isolated lapse. 

279. This statement regarding compliance was reviewed and authorized by Defendant 

Kane, in her capacity as PG&E’s Chief Ethics and Compliance Officer. Kane was responsible 

for both “overseeing . . . implementation” of PG&E’s compliance and “overseeing . . . 

compliance reporting,” including this news release. Because of her senior position within the 

Company, Kane had ultimate authority to control the content of this statement. 

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5. May 25, 2018 – Misstatement No. 13 

280. On May 25, 2018, PG&E issued a press release to respond to Cal Fire’s reports 

regarding some of the October 2017 North Bay Fires (see Section VII.D.4, infra), to reassure 

investors that PG&E had met all state regulations concerning fire safety. The press release stated: 

• Following Governor Brown’s January 2014 Drought State 

of Emergency Proclamation and the California Public 

Utilities Commission's Resolution ESRB-4, PG&E has 

added enhanced measures to address areas particularly 

affected by drought and bark beetles including: 

• Increased foot and aerial patrols along power lines in high 

fire-risk areas; 

• Removed approximately 236,000 dead or dying trees in 

2016 and 140,000 dead or dying trees in 2017; these tree 

removals were in addition to approximately 30,000 trees 

removed per year prior to the drought; 

• Launched daily aerial fire detection patrols during high fire 

season to improve fire spotting and speed of fire response; 

• Since 2014, provided $11.4 million to local Fire Safe 

Councils (FSCs) for fuel reduction projects in 

communities; and 

• Provided $1.7 million to local FSCs for 28 highly 

programmable remote-sensing cameras for critical fire 

lookout towers. 

• PG&E meets or exceeds regulatory requirements for pole 

integrity management, using a comprehensive database to 

manage multiple patrol and inspection schedules of our 

more than two million poles.

281. This statement was materially false and/or misleading because PG&E did not 

“meet” – much less “exceed” – “regulatory requirements for pole integrity management.” 

According to a report released in a subsequent corrective disclosure, PG&E violated California’s 

safety regulations multiple times. Indeed, on June 8, 2018, Cal Fire disclosed that its 

“investigators have determined that 12 Northern California wildfires in the October 2017 Fire 

Siege were caused by electric power and distribution lines, conductors and the failure of power 

poles.” In fact, at least one of the North Bay Fires – the Sulphur Fire – “was caused by the failure 

of a PG&E owned power pole” evidencing “violations of state law” sufficient to be referred to 

the relevant district attorney. Further, Cal Fire found enough evidence of violations of state law 

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to refer PG&E to the relevant district attorneys for eight of these twelve North Bay fires. See

Section VII.D.5., infra. 

282. Second, PG&E acknowledged that an aerial patrol of the Camp Fire’s origin later 

the same day showed “damage to a transmission tower” or pole that PG&E failed to maintain, as 

well as a second ignition point that exhibited damaged and downed poles, in violation of Section 

451. Thus, PG&E did not “meet[] or exceed[] regulatory requirements for pole integrity 

management” – regulations which were essential for preventing devastating wildfires. PG&E’s 

representation to the contrary was materially false and/or misleading. Cal Fire has since 

confirmed that PG&E equipment was responsible for both of the Camp Fire’s ignition points, 

and referred its investigations to the relevant district attorney based on evidence of safety 

violations. 

283. Overall, this statement was materially false and/or misleading because of PG&E’s 

numerous and widespread violations of safety regulations – regulations which were essential for 

preventing devastating wildfires. In fact, PG&E’s violations were so pervasive that they 

evidently caused multiple North Bay Fires all at the same time in seven different counties, and 

then caused both of the Camp Fire’s two ignition points a year later – therefore the violations 

cannot be explained away as an isolated lapse. This statement materially omitted the true risk 

that PG&E would cause wildfires serious enough to imperil the Company’s financial condition. 

284. It has additionally been documented that PG&E actually knew that it was not in 

compliance with relevant safety laws and best practices at the time of this statement. In 

proceedings related to PG&E’s criminal probation before Judge Alsup, PG&E has admitted “that 

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

hazardous with the potential to ‘fall into or otherwise impact the conductors, towers or guy wires 

before the next inspection cycle.’” See ¶104. 

285. This statement regarding compliance was reviewed and authorized by Defendant 

Kane, in her capacity as PG&E’s Chief Ethics and Compliance Officer. Kane was responsible 

for both “overseeing . . . implementation” of PG&E’s compliance and “overseeing . . . 

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compliance reporting,” including this press release. Because of her senior position within the 

Company, Kane had ultimate authority to control the content of this statement. 

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 

286. As detailed below (see Section VII.D., infra), PG&E’s share price declined 

precipitously as the truth about its responsibility for the North Bay Fires emerged. As liabilities 

for the North Bay Fires threatened the Company’s financial viability, Defendants would realize 

that the Company needed a legislative bailout to avoid bankruptcy. As a result, PG&E needed 

the public, including investors, to believe that it would prioritize safety thereafter. 

1. June 8, 2018 – Misstatement No. 14 

287. On June 8, 2018, Cal Fire announced its conclusions that PG&E caused the 

preponderance of the North Bay Fires (see Section VII.D.5, infra), PG&E’s share price 

continued its decline, and its financial situation deteriorated. Later that day, PG&E issued a 

press release to respond to Cal Fire’s report, falsely and misleadingly reassuring investors that 

PG&E had met all state regulations concerning fire safety. The press release, titled “PG&E 

Responds to Latest CAL FIRE Announcement” stated, in relevant part: 

Programs Overall Met State’s High Standards 

We look forward to the opportunity to carefully review the 

CAL FIRE reports to understand the agency's perspectives. 

Based on the information we have so far, we continue to 

believe our overall programs met our state’s high standards. 

For example, PG&E meets or exceeds regulatory 

requirements for pole integrity management, using a 

comprehensive database to manage multiple patrol and 

inspection schedules of our more than two million poles. 

Similarly, under PG&E’s industry-leading Vegetation 

Management Program, we inspect and monitor every PG&E 

overhead electric transmission and distribution line each year, 

with some locations patrolled multiple times. We also prune or 

remove approximately 1.4 million trees annually. 

288. Because PG&E’s compliance violations would soon cause the Camp Fire, the 

most destructive and deadly wildfire in California history, PG&E’s “Vegetation Management 

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Program” and “pole integrity management” decidedly did not meet California’s “High 

Standards.” Investigations into the causes of the Camp Fire have already uncovered evidence 

that it was caused by PG&E violating California Public Resources Code Section 4293 and 

California Public Utilities Code Section 451, among other safety regulations. Indeed, Cal Fire 

has found that PG&E equipment was responsible for both ignition points of the Camp Fire and 

has since reported PG&E to the Butte County District Attorney based on evidence of safety 

violations. 

289. First, the Camp Fire was described in initial communications between firefighters 

and dispatch as a vegetation fire “underneath the transmission lines,” which vegetation should 

have been cleared by PG&E pursuant to Section 4293. 

290. Second, PG&E acknowledged that an aerial patrol of the Camp Fire’s origin later 

the same day showed “damage to a transmission tower” or pole that PG&E failed to maintain, in 

violation of Section 451. 

291. Third, PG&E has also acknowledged a second ignition point for the Camp Fire 

that exhibited damaged and downed poles, vegetation on top of downed wires, and other signs of 

safety violations. Cal Fire has since confirmed that PG&E equipment was responsible for both of 

the Camp Fire’s ignition points, and referred its investigations to the relevant district attorney 

based on evidence of safety violations. 

292. Fourth, it has been documented that PG&E actually knew that it was not in 

compliance with relevant safety laws and best practices at the time of this statement. In 

proceedings related to PG&E’s criminal probation before Judge Alsup, PG&E has admitted “that 

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

hazardous with the potential to ‘fall into or otherwise impact the conductors, towers or guy wires 

before the next inspection cycle.’” See ¶104. 

293. Fifth, this statement materially omitted the true risk that PG&E would cause 

wildfires serious enough to imperil the Company’s financial condition. 

294. Thus, PG&E did not “meet[] or exceed[] regulatory requirements for pole 

integrity management” or “Vegetation Management” – regulations which were essential for 

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preventing devastating wildfires. See Section VI.F.4. As Judge Alsup held, PG&E’s “unsafe 

conduct has led to recurring deadly wildfires caused by its electrical system” and the “large 

number of trees that should have been removed by PG&E but weren’t . . . was a major 

contributing factor, maybe the single-biggest factor, in causing the fires in 2017 and 2018 in 

Northern California.” PG&E’s representation to the contrary was materially false and/or 

misleading. 

295. This statement regarding compliance was reviewed and authorized by Defendant 

Kane, in her capacity as PG&E’s Chief Ethics and Compliance Officer. Kane was responsible 

for both “overseeing . . . implementation” of PG&E’s compliance and “overseeing . . . 

compliance reporting,” including this press release. Because of her senior position within the 

Company, Kane had ultimate authority to control the content of this statement. 

2. June 8, 2018 – Misstatement No. 15 

296. The same press release contained a further false and/or misleading statement: 

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 the Community 

Wildfire Safety Program to help keep our customers and 

communities safe. Among the key components of the new 

program are. . . 

• Public Safety Power Shutoff: As a last resort, a program to 

proactively turn off electric power for safety when 

extreme fire danger conditions occur, while helping 

customers prepare and providing early warning 

notification, when and where possible. 

297. PG&E’s representation that it “has launched . . . a program to proactively turn off 

electric power for safety when extreme fire danger conditions occur” was false and misleading. 

It was false because the touted program, which would eventually become its ESRB-8 Shutoff 

Protocol, was illusory; hence, PG&E never “launched” it. Further, it misleadingly omitted that 

any guidelines PG&E did develop were a mere pretense of safety that the Company did not 

follow. Even when all seven relevant “extreme fire danger conditions” did “occur,” weighing 

strongly in favor of shutting off PG&E’s transmission lines near the Jarbo Gap on November 7 

and 8, 2018, PG&E flouted its own supposed program. PG&E’s failure to shut off its 

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transmission line caused the Camp Fire: the most destructive and deadly wildfire in California 

history. By touting a wildfire safety program PG&E did not adhere to, and where its 

nonadherence would risk devastating wildfires, PG&E misrepresented existing and material facts 

to investors. 

298. This press release regarding compliance was reviewed and authorized by 

Defendant Kane, in her capacity as PG&E’s Chief Ethics and Compliance Officer. Kane was 

responsible for both “overseeing . . . implementation” of PG&E’s compliance and “overseeing . . 

. compliance reporting,” including this press release. Because of her senior position within the 

Company, Kane had ultimate authority to control the content of this statement. 

3. September 27, 2018 – Misstatement No. 16 

299. On July 16, 2018, the CPUC enacted Resolution ESRB-8, which required PG&E 

to adopt, promulgate and follow “de-energization policy and procedures” to “de-energize power 

lines” in the face of unprecedented wildfire threats “to ensure public safety.” It was the 

Company’s official announcement of its de-energization policy and procedures implementing 

Resolution ESRB-8, detailed below, that materially misled investors. 

300. On or about September 27, 2018, PG&E announced the full details of its ESRB-8 

Shutoff Protocol in a filing with CPUC100 that was also posted on its website.101 The ESRB-8 

Shutoff Protocol stated: 

PG&E’s Community Wildfire Safety Program implements 

additional precautionary measures intended to reduce wildfire 

threats. It includes . . . executing protocols to temporarily turn off 

electric power for safety when extreme fire danger conditions are 

occurring.” 

. . . 

Public Safety Power Shutoff is one component of the Community 

Wildfire Safety Program. PG&E has created a set of procedures 

 100 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. 

101 PG&E Public Safety Power Shutoff Policies and Procedures, PG&E website (Sept. 2018), 

https://www.pge.com/pge_global/common/pdfs/safety/emergency-preparedness/naturaldisaster/wildfires/Public-Safety-Power-Shutoff-Policies-and-Procedures-September-2018.pdf. 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 89 

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for. . . [d]etermining what combination of conditions necessitates 

turning off lines for safety. 

. . . 

PG&E will take a combination of many criteria into consideration, 

including: 

• “Extreme” fire danger threat level, as classified by the 

National Fire Danger Rating System 

• A Red Flag Warning declared by the National Weather 

Service 

• Low humidity levels, generally 20 percent and below 

• Sustained winds above approx. 25 mph and wind gusts in 

excess of approx. 45 mph 

• Site-specific conditions such as temperature, terrain and 

local climate 

• Critically dry vegetation that could serve as fuel for a 

wildfire 

• On-the-ground, real-time observations from PG&E field 

crews 

(Emphasis original.) 

301. PG&E’s representation that it had “implement[ed] additional precautionary 

measures” including “determining what combination of conditions necessitates turning off lines 

for safety” was false and misleading. It was false because the ESRB-8 Shutoff Protocol was 

illusory; hence, PG&E did not “implement” it, as required by law. Further, it misleadingly 

omitted that any guidelines PG&E did develop were a mere pretense of safety that the Company 

did not follow. Even when all seven relevant “criteria” weighed in favor of shutting off PG&E’s 

transmission lines near the Jarbo Gap on November 7 and 8, 2018, PG&E nevertheless flouted 

its protocol. PG&E’s failure to shut off its transmission line caused the Camp Fire: the most 

destructive and deadly wildfire in California history. By touting a wildfire safety program 

PG&E did not adhere to, where its nonadherence would risk devastating wildfires, PG&E 

misrepresented existing and material facts to investors. 

302. This statement regarding compliance was reviewed and authorized by Defendant 

Kane, in her capacity as PG&E’s Chief Ethics and Compliance Officer. Kane was responsible 

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for both “overseeing . . . implementation” of PG&E’s compliance and “overseeing . . . 

compliance reporting,” including this report. Because of her senior position within the Company, 

Kane had ultimate authority to control the content of this statement. 

4. October 9, 2018 – Misstatement No. 17 

303. On October 9, 2018 Cal Fire announced its conclusions that PG&E equipment 

caused another of the North Bay Fires, known as the Cascade Fire. Later the same day, PG&E 

issued a press release to respond to Cal Fire’s report, falsely and misleadingly reassuring 

investors that PG&E had met all state regulations concerning fire safety. The press release, titled 

“PG&E Responds to Cascade Wildfire Announcement” stated, in relevant part: 

[W]e are continuing to focus on implementing additional 

precautionary measures intended to further reduce wildfire 

threats, such as working to remove and reduce dangerous 

vegetation, improving weather forecasting, upgrading 

emergency response warnings, [and] making lines and poles 

stronger in high fire threat areas, and taking other actions to 

make our system, and our customers and communities, even 

safer in the face of a growing wildfire threat. 

304. It was false and misleading for PG&E to tout “implementing additional 

precautionary measures . . . to remove and reduce dangerous vegetation” and “mak[e] lines and 

poles stronger in high fire threat areas.” Indeed, just one month later, PG&E would cause the 

Camp Fire through its failure to remove vegetation and maintain its poles, in violation of 

California Public Resources Code Section 4293 and California Public Utilities Code Section 451, 

among other safety regulations. 

305. As noted above, the Camp Fire was described in initial communications between 

firefighters and dispatch as a vegetation fire “underneath the transmission lines,” which 

vegetation should have been cleared by PG&E under Section 4293. Second, PG&E 

acknowledged that an aerial patrol of the Camp Fire’s origin later the same day showed “damage 

to a transmission tower” or pole that PG&E failed to maintain, as well as a second ignition point 

that exhibited damaged and downed poles, in violation of Section 451. PG&E’s representation 

to the contrary was materially false and/or misleading. Indeed, Cal Fire has found that PG&E 

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equipment was responsible for both ignition points of the Camp Fire and has since reported 

PG&E to the Butte County District Attorney based on evidence of safety violations. 

306. Moreover, PG&E was not “making lines and poles stronger in high fire threat 

areas.” For example, PG&E never performed planned safety work on, or otherwise updated, the 

100 year-old Caribou-Palermo transmission line even though it knew that its lines and poles were 

weak and that “the likelihood of failed structures happening is high” (¶136). The same 

transmission line would soon cause the Camp Fire’s first ignition point, as found by Cal Fire and 

accepted by PG&E (¶138). 

307. Further, this statement materially omitted the true risk that PG&E would cause 

wildfires serious enough to imperil the Company’s financial condition. 

308. This statement regarding compliance was reviewed and authorized by Defendant 

Kane, in her capacity as PG&E’s Chief Ethics and Compliance Officer. Kane was responsible 

for both “overseeing . . . implementation” of PG&E’s compliance and “overseeing . . . 

compliance reporting,” including this press release. Because of her senior position within the 

Company, Kane had ultimate authority to control the content of this statement. 

5. October 9, 2018 – Misstatement No. 18 

309. The same PG&E press release contained a further false and/or misleading 

statement: 

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 the Community Wildfire Safety 

Program to help keep our customers and communities safe by 

implementing additional precautionary measures intended to 

further reduce wildfire threats. Among the key components of 

the new program are. . . 

• Public Safety Power Shutoff: As a last resort, a program to 

proactively turn off electric power for safety when 

extreme fire danger conditions occur, while helping 

customers prepare and providing early warning 

notification, when and where possible. 

310. PG&E’s representation that it “has launched” and “implement[ed] . . . a program 

to proactively turn off electric power for safety when extreme fire danger conditions occur” was 

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false and misleading. It was false because the touted program, its ESRB-8 Shutoff Protocol, was 

illusory from the beginning; hence, PG&E never “launched” or “implement[ed]” it. 

311. Further, it misleadingly omitted that any guidelines PG&E did develop were a 

mere pretense of safety that the Company did not follow. Even when all seven relevant “extreme 

fire danger conditions” did “occur,” weighing in favor of shutting off PG&E’s transmission lines 

near the Jarbo Gap on November 7 and 8, 2018, PG&E nevertheless flouted its supposed 

program. 

312. PG&E’s failure to shut off its transmission line caused the Camp Fire: the most 

destructive and deadly wildfire in California history. By touting a wildfire safety program 

PG&E did not adhere to, where its nonadherence would risk devastating wildfires, PG&E 

misrepresented existing and material facts to investors. 

313. This statement regarding compliance was reviewed and authorized by Defendant 

Kane, in her capacity as PG&E’s Chief Ethics and Compliance Officer. Kane was responsible 

for both “overseeing . . . implementation” of PG&E’s compliance and “overseeing . . . 

compliance reporting,” including this press release. Because of her senior position within the 

Company, Kane had ultimate authority to control the content of this statement. 

6. November 8, 2018 – Misstatement No. 19 

314. On November 8, 2018, the Camp Fire started after PG&E decided not to shut off 

its power. Before the public became aware of PG&E’s true role in causing the Camp Fire, the 

Company announced via its official Twitter.com account at 6:14 p.m. that day: “PG&E has 

determined that it will not proceed with plans today for a Public Safety Power Shutoff in portions 

of 8 Northern CA counties, as weather conditions did not warrant this safety measure.”102 

315. This statement was affirmatively false: weather conditions did, in fact, warrant a 

shutoff. As detailed above, all seven criteria that PG&E deemed relevant, including those related 

 102 PG&E Twitter Account Post (Nov. 8, 2018 3:14PM), 

https://twitter.com/PGE4Me/status/1060672000929267713. 

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to weather conditions, weighed in favor of a shutoff under PG&E’s ESRB-8 Shutoff Protocol. 

See Section IV.H., supra. 

316. This statement regarding compliance was reviewed and authorized by Defendant 

Kane, in her capacity as PG&E’s Chief Ethics and Compliance Officer. Kane was responsible 

for both “overseeing . . . implementation” of PG&E’s compliance and “overseeing . . . 

compliance reporting,” including this announcement. Because of her senior position within the 

Company, Kane had ultimate authority to control the content of this statement. 

VIII. MATERIALITY UNDER THE EXCHANGE ACT 

317. PG&E’s reassurances to investors about its safety, prudence, and compliance with 

the law were especially important to investors because of California’s legal regime known as 

inverse condemnation. As described in more detail above (see Section VI.A.5., supra), PG&E is 

strictly liable for the property costs of wildfires it caused. However, during the Class Period, it 

could be reimbursed for those costs by ratepayers by petitioning CPUC and showing that it had 

acted as a prudent manager. On such a showing, CPUC could have rate payers reimburse PG&E 

for some or all of its liability. 

318. PG&E’s investors understood that PG&E would bear the costs of wildfires it 

caused, and that PG&E’s ability to pass some or all of those costs on to ratepayers was limited 

by PG&E’s prudence. For example, an analyst report issued by Evercore ISI on December 21, 

2017 stated: 

On the 3Q17 call PCG indicated company operations were 

conducted properly leading up to and after the fire, but they still 

had little information regarding the cause of the fire or potential 

shareholder exposure. 

* * * 

PCG reiterated the company routinely inspects, maintains, and 

replaces poles, and tests and treats wood poles on a frequency that 

significantly exceeds CPUC requirements. The company claims to 

have one of, if not the most comprehensive vegetation 

management programs in the country. Further, the company 

doubled its vegetation management spending in 2016 due to the 

drought and tree mortality crisis in California. That being said, we 

still do not know and likely will not know what caused the various 

fires for some time, whether or not PCG’s equipment was solely 

or partly the cause, and whether or not the facts will support a 

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ruling at CPUC that PCG acted prudently should they be 

successfully sued under inverse condemnation. 

319. In light of these provisions of California law, PG&E’s repeated reassurances to its 

investors – e.g., that it complied with relevant safety regulations, doubled its vegetation 

management spending, inspected all of its powerlines every year, and would adhere to a formal 

ESRB-8 Shutoff Protocol – effectively communicated that the Company would be able to 

recover any property damage liabilities from wildfires caused by its systems, through the CPUC. 

Those reassurances, when revealed to have been false and misleading, impacted the Company’s 

valuation by at least the amount of damage it caused by starting or exacerbating the North Bay 

and Camp Fires. The impact of these misstatements, and their importance to the Company’s 

financial condition, is underscored by PG&E’s decision to file for Chapter 11 bankruptcy based 

on its anticipated $30 billion in potential liabilities tied to the North Bay and Camp Fires, and 

related concern that as a result, neither PG&E Corporation nor the Utility would be able “to 

continue as going concerns.” 

320. In total, PG&E’s share price declined $55.60 per share on the nine corrective 

disclosures and/or materializations of concealed risk herein alleged. Given that the Company had 

between approximately 514.4 and 518.6 million shares outstanding from October 24, 2017 to 

October 25, 2018, the losses caused by PG&E’s fraud under the Exchange Act were in the 

billions of dollars. 

IX. LOSS CAUSATION UNDER THE EXCHANGE ACT 

A. Defendants’ False and Misleading Statements Artificially Inflated the Price 

of PG&E’s Securities 

321. As a result of their purchases of PG&E’s securities during the Class Period, Lead 

Plaintiff and the other Class members suffered economic loss, i.e., damages, under the federal 

securities laws. Defendants’ false and misleading statements had the intended effect and caused 

PG&E securities to trade at artificially inflated levels throughout the Class Period, reaching as 

high as $71.56 per share on September 11, 2017 – a month before the truth started to emerge on 

October 12, 2017. 

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

322. PG&E caused the North Bay Fires. Of the eighteen fires for which Cal Fire has 

determined the cause, it has determined that seventeen were caused by PG&E equipment. 

323. Of these seventeen fires, Cal Fire determined that eleven were due to PG&E’s 

violation of California safety regulations. Under California law, PG&E bears the cost for the 

destruction caused by these fires unless it can show to CPUC that its violations were 

“reasonable.” Together, these fires were responsible for more than 100,000 acres of land 

devastated, more than 2,000 structures destroyed, and at least 9 of the 44 North Bay Fire 

fatalities. 

324. Six more of the North Bay Fires were also deemed to have been caused by PG&E 

electrical lines; though Cal Fire found no specific evidence of safety violations for these six fires, 

PG&E may still be found liable under California’s legal regime known as inverse condemnation, 

which provides strict liability for utilities when their power lines are involved in wildfires that 

lead to property damage. Together, these fires were responsible for an additional more than 

50,000 acres of land devastated, more than 800 structures destroyed, and at least 13 of 44 

fatalities. Necessarily, these six fires would have been more easily contained, and accordingly 

less destructive, if not for the fires caused by PG&E’s violations and inadequate safety 

practices.103

C. PG&E’s Safety Violations Caused the Devastating Camp Fire 

325. At or about 6:29 a.m. on November 8, 2018, the Camp Fire was started in Pulga, 

California by faulty PG&E equipment on Pulga Road and Camp Creek Road, near the Jarbo 

Gap.104 A second ignition point, also caused by faulty PG&E equipment, began approximately 

15 minutes later near the community of Concow. The combined Camp Fire soon devastated 

 103 Similarly, another of the North Bay Fires known as the Tubbs fire (which burned 36,807 

acres, destroyed 5,636 structures, and resulted in 22 fatalities) would have been more easily 

contained, and accordingly less destructive, if not for the fires caused by PG&E’s violations and 

inadequate safety practices at the same time. 

104 Camp Fire Incident Update (Nov. 25, 2018 7:00AM), 

http://cdfdata.fire.ca.gov/admin8327985/cdf/images/incidentfile2277_4326.pdf. 

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several surrounding communities, largely destroying Paradise, Concow, Magalia, and Parkhill. 

The Camp Fire incinerated 153,336 acres, destroyed 18,804 structures, and killed at least 85 

people. 

326. As noted above, Cal Fire has concluded that PG&E caused both of the Camp 

Fire’s two ignition points under circumstances evidencing violations of safety regulations and 

referred its investigation to the Butte County District Attorney. 

D. 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 

327. On or about October 8, 2017, eighteen major wildfires known as the North Bay 

Fires started in California, burning at least 249,000 acres and devastating properties across nine 

California counties. 

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 

Responsibility for the North Bay Fires 

328. It was not until Thursday, October 12, 2017 that the market began to understand 

that PG&E’s safety regulation violations were likely a proximate cause of the North Bay Fires. 

On that date, CPUC sent PG&E a litigation hold letter informing the Company of its “obligation 

to preserve all evidence with respect to the Northern California wildfires in Napa, Sonoma, and 

Solano Counties.” Although this letter was made public on October 12, 2017, it “affirm[ed] a 

verbal communication” of the same obligation by CPUC Safety Enforcement Division Program 

Manager Charlotte TerKeurst to PG&E “at approximately 6:00 p.m. on October 10, 2017.” The 

public disclosure on October 12, 2017 also revealed that “Ms. TerKeurst reminded PG&E of the 

need to preserve all evidence, and PG&E acknowledged that it would do so.” 

329. Further, the disclosure made clear that PG&E (a) “must preserve any factual or 

physical evidence ... includ[ing] all failed poles, conductors and associated equipment from 

each fire event” and (b) “must inform all employees and contractors that they must preserve all 

electronic (including emails) and non-electronic documents related to potential causes of the 

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fires, vegetation management, maintenance and/or tree-trimming.” This was the first 

indication that PG&E failures caused any of the North Bay Fires. 

330. On this news that PG&E would likely bear at least some responsibility for the 

fires, PG&E’s stock dropped $4.65 per share, from a closing price of $69.15 on October 11 to a 

closing price of $64.50 on October 12, or -6.7%, with unusually heavy trading volume of almost 

13 million shares (compared to a Class Period daily average trading volume of 3.5 million105). 

The price of PG&E securities, however, remained artificially inflated. 

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

Price Decline on October 12, 2017 

331. The following morning, news outlets began to report that PG&E was being 

connected with the causes of some of the North Bay fires. For example, at 10:54 a.m. on October 

13, 2017, CNBC published an article titled “PG&E shares plunge on concern its power lines may 

have started California wildfires.”106 The article began by observing: “The California Public 

Utilities Commission sent a letter on Thursday to PG&E reminding them to preserve ‘all 

evidence with respect to the Northern California wildfires in Napa, Sonoma and Solano 

Counties,’ according to multiple reports.” It continued to note that PG&E’s share price decline 

occurred “on concerns its power lines may have started the massive wildfires that have ravaged 

California recently.” The article also repeated market commentary that the decline in PG&E’s 

share price reflected investors’ understanding that PG&E was financially responsible for the 

North Bay Fires: 

The drop in the stock “reflects the following assumptions: 1) the 

fire was caused by PCG’s negligence, 2) insurance coverage for 

3rd party liabilities will be very limited, 3) damage costs per acre 

far larger than those for the 2015 Butte fire and 4) material fines 

and penalties will be assessed,” Christopher Turnure, an analyst at 

JPMorgan, said in a note Thursday. “We appreciate the severity of 

the fires and the legal challenges of operating in California, but 

estimate this loss of value as approaching a worst-case scenario for 

PCG shares.” 

 105 This average excludes alleged corrective disclosure and/or materialization of risk dates. 

106 This article was published prior to the Company’s corrective disclosure later that day, 

discussed infra. 

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332. Similarly, on the same date, SF Gate published an article observing: “[T]he state 

agency that regulates utilities has told PG&E to save every piece of damaged equipment 

from the area as evidence for the investigations to come.” The article concluded by stating 

that PG&E’s vegetation management practices caused the North Bay Fires: “In all, the company 

spent $198 million in 2016 on ‘vegetation management.’ But those efforts and that money – 

all of it coming from PG&E’s customers – may not have been enough.”107

333. Investors started to be concerned regarding whether PG&E violated any 

regulations (e.g., failed to adequately trim trees) with respect to the North Bay Fires. For 

example, Wells Fargo stated in its analyst report the very next day: 

Yesterday (10/12), shares of PCG underperformed the S&P 

Utilities by roughly 720 bps. We attribute the material decline in 

price to the revelation that the company’s power lines might have 

played a role in the Northern California fires. Over the weekend 

Northern California experienced winds in excess of 70 miles per 

hour, which could have caused trees to impact power lines that 

could have sparked fires particularly given the very dry vegetation. 

While there is still significant uncertainty in what caused the fires, 

apparently investigators are looking into the role of PCG’s 

infrastructure. The concern for investors is whether PCG did 

not adequately trim trees around their power lines it is our 

understanding that in California utilities are required to clear 

vegetation within 10 feet of power lines. In the absence of 

inadequate tree trimming, we think that property damage 

attributable to PCG’s infrastructure should be largely covered 

by insurance.

334. Similarly, an October 13, 2017 report by a Guggenheim stock analyst stated that 

the decline was caused by “media reports linking the company to some of the most destructive 

wildfires experienced in CA, which continued to burn.” 

 107 David R. Baker, PG&E Spent Millions on Fire Prevention; It May Not Have Been Enough, 

San Francisco Gate (Oct. 13, 2017), https://www.sfgate.com/bayarea/article/PG-E-millions-fireprevention-Santa-Rosa-wildfires-12277237.php. 

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

Concealed Risk 

(a) The Market Continued to Learn the Extent and Effects of 

PG&E’s Responsibility for the North Bay Fires 

335. Late on October 13, 2017, PG&E filed a Form 8-K with the SEC shortly before 

the close of trading. Therein, the Company stated in relevant part: 

Investigation of Northern California Fires 

Since October 8, 2017, several catastrophic wildfires have started 

and remain active in Northern California. The causes of these fires 

are being investigated by the California Department of Forestry 

and Fire Protection (Cal Fire), including the possible role of 

power lines and other facilities of Pacific Gas and Electric 

Company’s (the “Utility”), a subsidiary of PG&E Corporation. 

It currently is unknown whether the Utility would have any 

liability associated with these fires. The Utility has 

approximately $800 million in liability insurance for potential 

losses that may result from these fires. If the amount of 

insurance is insufficient to cover the Utility’s liability or if 

insurance is otherwise unavailable, PG&E Corporation’s and 

the Utility’s financial condition or results of operations could 

be materially affected. 

336. On these disclosures, PG&E’s share price continued to decline. From its opening 

price of $63.95 per share that day to its closing price of $53.43 per share at the end of the next 

trading day (Monday, October 16, 2017), PG&E’s stock declined $10.52 per share, or 

approximately 16.5%. Over the same period, it experienced unusually heavy trading volume of 

over 68.5 million shares. The price of PG&E securities, however, remained artificially inflated. 

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

Price Decline on October 13, 2017 

337. Investors understood the Company’s October 13, 2017 8-K filing as a disclosure 

that PG&E’s conduct with respect to causing the North Bay Fires was greater in severity than 

previously disclosed and was a proximate cause of at least some of the North Bay Fires. Because 

the market understood that PG&E would be reimbursed for damages by fires it innocently 

caused, the Company’s discussion of liability signaled to the market that at least some of the 

North Bay Fires were caused by PG&E’s negligence or worse. For example, a Guggenheim 

stock analyst published a report that day reacting to this news, noting that PG&E “had slid even 

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further in the early afternoon actually as well, following the company’s 8-K disclosing the 

utility’s $800mm in liability insurance, which we noted had not been disclosed previously (since 

it had been renewed following the Butte fire).” 

338. PG&E’s announcement and resulting share price decline were proximately caused 

by PG&E’s inadequate safety practices and violations that resulted in the North Bay Fires. 

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

Concealed Risk 

(a) The Market Continued to Learn the Extent and Effects of 

PG&E’s Responsibility for the North Bay Fires 

339. On December 20, 2017, after the market closed, PG&E filed a press release on 

Form 8-K with the SEC titled “PG&E Announces Suspension of Dividend, Citing Uncertainty 

Related to Causes and Potential Liabilities Associated with Northern California Wildfires.” The 

filing also included, as exhibit 99.1, a press release in which the Company announced that it 

would be suspending its quarterly cash dividend. In the press release, PG&E stated in pertinent 

part: 

SAN FRANCISCO, Calif.-PG&E Corporation (NYSE: PCG) 

today announced that its Board of Directors has determined to 

suspend the quarterly cash dividend on the Corporation’s 

common stock, beginning with the fourth quarter of 2017, citing 

uncertainty related to causes and potential liabilities associated 

with the extraordinary October 2017 Northern California 

wildfires. 

In addition, the Board of Directors of the Corporation’s utility 

subsidiary, Pacific Gas and Electric Company, determined to 

suspend the dividend on the utility’s preferred stock, beginning 

with the three-month period ending Jan. 31, 2018, citing the 

same uncertainty. 

No causes have yet been identified for any of the unprecedented 

wildfires, which continue to be the subject of ongoing 

investigations. 

However, California is one of the only states in the country in 

which courts have applied inverse condemnation to events caused 

by utility equipment. This means that if a utility’s equipment is 

found to have been a substantial cause of the damage in an event 

such as a wildfire - even if the utility has followed established 

inspection and safety rules - the utility may still be liable for 

property damages and attorneys’ fees associated with that 

event. 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 101 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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“After extensive consideration and in light of the uncertainty 

associated with the causes and potential liabilities associated with 

these wildfires as well as state policy uncertainties, the PG&E 

boards determined that suspending the common and preferred 

stock dividends is prudent with respect to cash conservation and is 

in the best long-term interests of the companies, our customers and 

our shareholders,” said PG&E Corporation Chair of the Board 

Richard C. Kelly. 

340. On this news, PG&E’s share price fell $6.62, or 12.95%, to close at $44.50 on 

December 21, 2017, the following trading day. The stock experienced heavy trading volume, 

with over 52 million shares trading hands. 

341. Though PG&E had previously intertwined safety, fires, and its dividend (see 

¶232), investors were shocked by this unexpected suspension of the dividends due to 

Defendants’ intervening false reassurances of progress on safety and compliance with safety 

regulations. Only six months prior, on May 31, 2017, PG&E had announced that it was 

increasing its dividend due to the Company’s “progress on safety.” Even more recently, for 

example on October 31, 2017, PG&E had reassured investors that it “follows all applicable 

federal and state vegetation clearance requirements and performs regular power line tree 

safety activities in accordance with industry standards, guidelines, and acceptable procedures 

that help to reduce outages or fires caused by trees or other vegetation.” And on November 2, 

2017, PG&E had repeatedly reassured investors that it had “doubl[ed]” its vegetation 

management expenditures. Accordingly, the true likelihood of PG&E’s responsibility for the 

North Bay Fires remained concealed from the market, and the price of PG&E securities 

remained artificially inflated. 

(b) Market Commentators Confirmed the Proximate Cause of 

PG&E’s Share Price Decline on December 20, 2017 

342. When PG&E announced it would suspend its dividend entirely, investors 

understood that as a revelation that Defendants’ prior representations regarding its safety 

operations may have been misleading and PG&E would bear a higher than expected level of 

responsibility, and thus liability, for the North Bay Fires. 

343. For example, a RBC Capital Markets analysts report issued on December 21, 

2017, stated: “We downgrade PCG to Sector Perform following the Board’s decision to suspend 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 102 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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the dividend. This unexpected decision suggests greater risk than we had assumed 

surrounding regulatory treatment of the October 2017 Northern California wildfires.” 

344. Similarly, an analyst report issued by Evercore ISI the same day stated: 

On the 3Q17 call PCG indicated company operations were 

conducted properly leading up to and after the fire. . . . PCG 

also indicated they found instances of wires down, vegetation near 

PCG facilities and some broke poles. PCG reiterated the company 

routinely inspects, maintains, and replaces poles, and tests and 

treats wood poles on a frequency that significantly exceeds CPUC 

requirements. The company claims to have one of, if not the most 

comprehensive vegetation management programs in the country. 

345. PG&E’s suspension of its dividend and resulting share price decline were 

proximately caused by PG&E’s inadequate safety practices and violations that resulted in the 

North Bay Fires. 

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

Concealed Risk 

(a) The Market Continued to Learn the Extent and Effects of 

PG&E’s Responsibility for the North Bay Fires 

346. On May 25, 2018, Cal Fire issued a press release announcing the cause of four 

wildfires in Butte and Nevada counties (“May 2018 Press Release”), stating in relevant part: 

CAL FIRE Investigators Determine Cause of Four Wildfires in 

Butte and Nevada Counties 

Sacramento - After extensive and thorough investigations, CAL 

FIRE investigators have determined that four Northern California 

wildfires in last year’s October Fire Siege were caused by trees 

coming into contact with power lines. The four fires, located in 

Butte and Nevada counties, are the first fire investigations from 

last October to be completed. 

CAL FIRE investigators were dispatched to the fires last year and 

immediately began working to determine their origin and cause. 

The Department continues to investigate the remaining 2017 fires, 

both in October and December, and will release additional reports 

as they are completed. 

The October 2017 Fire Siege involved more than 170 fires and 

charred more than 245,000 acres in Northern California. More than 

11,000 firefighters from 17 states helped battle the blazes. 

Below is a summary of the four completed investigations: 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 103 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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• The La Porte Fire, in Butte County, started in the early 

morning hours of Oct. 9 and burned a total of 8,417 acres, 

destroying 74 structures. There were no injuries to civilians 

or firefighters. CAL FIRE has determined the fire was 

caused by tree branches falling onto PG&E power lines. 

CAL FIRE investigators determined there were no 

violations of state law related to the cause of this fire. 

• The McCourtney Fire, in Nevada County, started the 

evening of Oct. 8 and burned a total of 76 acres, destroying 

13 structures. There were no injuries to civilians or 

firefighters. CAL FIRE has determined the fire was caused 

by a tree falling onto PG&E power lines. The investigation 

found evidence that PG&E allegedly failed to remove a 

tree from the proximity of a power line, in violation of 

the state Public Resources Code section 4293.

• The Lobo Fire, in Nevada County, started the evening of 

Oct. 8 and burned a total of 821 acres, destroying 47 

structures. There were no injuries to civilians or 

firefighters. CAL FIRE has determined the fire was 

caused by a tree contacting PG&E power lines. The 

investigation found evidence that Public Resources 

Code section 4293, which requires adequate clearance 

between trees and power lines, was allegedly violated.

• The Honey Fire, in Butte County, started in the early 

morning hours of Oct. 9 and burned a total of 76 acres. 

There were no injuries to civilians or firefighters and no 

structures were destroyed. CAL FIRE has determined the 

fire was caused by an Oak branch contacting PG&E 

power lines. The investigation found evidence that 

Public Resources Code 4293, which requires adequate 

clearance between trees and power lines, was allegedly 

violated.

The McCourtney, Lobo, Honey investigations have been referred 

to the appropriate county District Attorney’s offices for review. 

347. Then, early on May 29, 2018, prior to the start of trading, PG&E filed a Current 

Report on Form 8-K with the SEC. Rather than contradicting any of Cal Fire’s findings, the 

filing quoted extensively from the May 25, 2018 Cal Fire release described above, including the 

role of PG&E equipment in starting all four of the relevant North Bay Fires, Cal Fire’s findings 

that three of the fires were caused by violations of California safety laws, and Cal Fire’s decision 

to refer criminal investigations regarding these three fires to the relevant district attorneys’ 

offices. The filing also stated: “It is reasonably possible that facts could emerge that lead PG&E 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 104 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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Corporation and the Utility to believe that a loss is probable, resulting in an accrued liability in 

the future, the amount of which could be substantial.” 

348. On this news, PG&E’s share price fell $2.32, or 5.19%, to close at $42.34 on May 

29, 2018, the following trading day. The stock experienced unusually high trading volume that 

day, with over 5.7 million shares changing hands on May 29, 2018. The price of PG&E 

securities, however, remained artificially inflated. 

(b) Market Commentators Confirmed that the News Regarding 

Safety Violations Proximately Caused PG&E’s Share Price 

Decline on May 25-29, 2018 

349. Analysts were surprised by the results of the Cal Fire reports. For example, 

Deutsche Bank stated in its May 28, 2018 report: 

From the investor perspective the market should not be particularly 

surprised that PG&E’s lines have been found to be involved in 

starting the fires. That said, the fact that this was the case in all 

four of the fires – and that violations were found in three of the 

four instances – will likely be seen as a negative data point.

Reading through the LaPorte fire investigation for other data 

points, investors may be concerned to note that the wind speeds 

around the time of the ignition do not seem to have been 

particularly high – with a maximum gust of 29 mph. 

350. One Citigroup analyst wrote on May 29, 2018 that the new Cal Fire reports 

specifically “link the fires to [PG&E’s] equipment,” “claim improper vegetation management for 

three of the fires,” and were “suggesting negligence” on PG&E’s part. Based on this, the Cal Fire 

reports “will support ‘causation’ and likely lead to [PG&E] bearing the liability for damages 

under Inverse Condemnation.” Moreover, the analyst noted that PG&E might even be liable for 

“Gross Negligence,” and could be barred from recovering costs from ratepayers insofar as it 

would be “tough to meet” the “prudent manager” standard that is necessary for such a recovery. 

351. Accordingly, the new information contained in these disclosures, including the 

severity of PG&E’s conduct and the role of its violations of California safety laws in causing the 

North Bay Fires, proximately caused PG&E’s share price decline. 

352. Defendants, however, continued to mislead investors regarding the extent of 

PG&E’s safety deficiencies and the impact thereof. 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 105 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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

Concealed Risk 

353. On Friday, June 8, 2018, after the market closed, Cal Fire issued another press 

release announcing the causes of twelve wildfires in Mendocino, Humboldt, Butte, Sonoma, 

Lake, and Napa Counties, stating in relevant part: 

CAL FIRE Investigators Determine Causes of 12 Wildfires in 

Mendocino, Humboldt, Butte, Sonoma, Lake, and Napa 

Counties 

Sacramento – After extensive and thorough investigations, CAL 

FIRE investigators have determined that 12 Northern California 

wildfires in the October 2017 Fire Siege were caused by electric 

power and distribution lines, conductors and the failure of power 

poles. 

The October 2017 Fire Siege involved more than 170 fires and 

burned at least 245,000 acres in Northern California. About 11,000 

firefighters from 17 states and Australia helped battle the blazes. 

CAL FIRE investigators were dispatched to the fires last year and 

immediately began working to determine their origin and cause. 

CAL FIRE investigators continue to investigate the remaining 

2017 fires, both in October and December, and will release 

additional reports as they are completed. The cause of four 

Northern California fires were released on May 25. 

Below is a summary of the findings from the 12 completed 

investigations: 

The Redwood Fire, in Mendocino County, started the evening of 

Oct. 8 and burned a total of 36,523 acres, destroying 543 

structures. There were nine civilian fatalities and no injuries to 

firefighters. CAL FIRE has determined the fire started in two 

locations and was caused by tree or parts of trees falling onto 

PG&E power lines. 

The Sulphur Fire, in Lake County, started the evening of Oct. 8 

and burned a total of 2,207 acres, destroying 162 structures. There 

were no injuries. CAL FIRE investigators determined the fire 

was caused by the failure of a PG&E owned power pole, resulting in the power lines and equipment coming in contact with 

the ground. 

The Cherokee Fire, in Butte County, started the evening of Oct. 8 

and burned a total of 8,417 acres, destroying 6 structures. There 

were no injuries. CAL FIRE investigators have determined the 

cause of the fire was a result of tree limbs coming into contact with 

PG&E power lines. 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 106 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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The 37 Fire, in Sonoma County, started the evening of Oct. 9 and 

burned a total of 1,660 acres, destroying 3 structures. There were 

no injuries. CAL FIRE investigators have determined the cause of 

the fire was electrical and was associated with the PG&E 

distribution lines in the area. 

The Blue Fire, in Humboldt County, started the afternoon of Oct. 

8 and burned a total of 20 acres. There were no injuries. CAL 

FIRE investigators have determined a PG&E power line conductor 

separated from a connector, causing the conductor to fall to the 

ground, starting the fire. 

The Norrbom, Adobe, Partrick, Pythian and Nuns fires were part 

of a series of fires that merged in Sonoma and Napa counties. 

These fires started in the late-night hours of Oct. 8 and burned a 

combined total of 56,556 acres, destroying 1355 structures. There 

were three civilian fatalities. 

CAL FIRE investigators determined the Norrbom Fire was 

caused by a tree falling and coming in contact with PG&E 

power lines. 

CAL FIRE investigators determined the Adobe Fire was 

caused by a eucalyptus tree falling into a PG&E powerline. 

CAL FIRE investigators determined the Partrick Fire was 

caused by an oak tree falling into PG&E powerlines. 

CAL FIRE investigators determined the Pythian Fire was 

caused by a downed powerline after PG&E attempted to 

reenergize the line

CAL FIRE investigators determined the Nuns Fire was caused 

by a broken top of a tree coming in contact with a power line. 

The Pocket Fire, in Sonoma County, started the early morning 

hours of Oct. 9 and burned a total of 17,357 acres, destroying 6 

structures. There were no injuries. CAL FIRE has determined the 

fire was caused by the top of an oak tree breaking and coming into 

contact with PG&E power lines. 

The Atlas Fire, in Napa County, started the evening of Oct. 8 and 

burned a total of 51,624 acres, destroying 783 structures. There 

were six civilian fatalities. CAL FIRE investigators determined the 

fire started in two locations. At one location, it was determined a 

large limb broke from a tree and came into contact with a PG&E 

power line. At the second location, investigators determined a tree 

fell into the same line. 

CAL FIRE’s investigations have been referred to the 

appropriate county District Attorney’s offices for review in 

eight of the 12 fires - Sulphur, Blue, Norrbom, Partrick, 

Pythian, Adobe, Pocket and Atlas - due to evidence of alleged 

violations of state law. 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 107 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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354. While this news release did not discuss specific violations found, it disclosed that 

the causes of the fires involved PG&E equipment and vegetation, as well as the facts that Cal 

Fire referred its investigations to the relevant district attorneys of five counties due to evidence 

Cal Fire discovered of state law violations. 

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

Use of Reclosers 

355. By stating that “CAL FIRE investigators determined the Pythian Fire was caused 

by a downed powerline after PG&E attempted to reenergize the line,” this press release revealed 

that the Pythian Fire had been proximately caused by PG&E’s use of reclosers. 

(b) The Market Continued to Learn the Extent and Effects of 

PG&E’s Safety Violations and Responsibility for the North 

Bay Fires 

356. On Saturday, June 9, 2018, Bloomberg published an article entitled “PG&E May 

Face Criminal Charges After Probe of Deadly Wildfires.” The article reported, in part, that 

following an investigation into the causes of wildfires “that altogether killed 44 people, 

consumed thousands of homes and racked up an estimated $10 billion in damages” in October 

2017, California’s fire agency “found evidence of alleged violations of law by PG&E in 

connection with” the fires. Specifically, the state’s investigation found “that PG&E equipment 

caused at least 12 of the wine country blazes.” 

357. Early on Monday, June 11, 2018, prior to the start of trading, PG&E filed a 

Current Report on Form 8-K with the SEC. Rather than contradicting any of Cal Fire’s findings, 

the filing quoted extensively from the June 8, 2018 Cal Fire release described above, including 

the role of PG&E equipment in starting all 12 of the relevant North Bay Fires and Cal Fire’s 

decision to refer criminal investigations regarding eight of the fires to the relevant district 

attorneys’ offices “due to evidence of alleged violations of state law.” The filing also admitted 

that Defendants expected to “record a significant liability for losses associated with” at least 14 

of the North Bay Fires, as follows: 

Although the Utility’s analysis is ongoing regarding the fires that 

were the subject of the June 8, 2018 and May 25, 2018 CAL FIRE 

news releases: 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 108 

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• for the La Porte, McCourtney, Lobo, Honey, Redwood, 

Sulphur, Cherokee, Blue, Pocket and Sonoma/Napa merged 

fires (which include Nuns, Norrbom, Adobe, Partrick and 

Pythian), based on the current state of the law on inverse 

condemnation, the information currently available to the 

Utility, and the CAL FIRE determinations of cause, PG&E 

Corporation and the Utility currently expect that they 

will record a significant liability for losses associated 

with such fires in PG&E Corporation and the Utility’s 

condensed consolidated financial statements to be included 

in their Form 10-Q for the quarterly period ending June 30, 

2018 (the “Q2 financial statements”); and 

• for the Atlas and Highway 37 fires, PG&E Corporation and 

the Utility do not believe a loss is probable at this time, 

given the information currently available. However, it is 

reasonably possible that facts could emerge that lead 

PG&E Corporation and the Utility to believe that a loss 

is probable, resulting in the accrual of a liability in the 

future, the amount of which could be significant. 

358. Following these disclosures, PG&E’s share price fell $1.69, or 4.08%, to close at 

$39.76 on June 11, 2018, the following trading day. The stock experienced unusually high 

trading volume that day, with over 12.6 million shares trading hands on June 11, 2018. The 

price of PG&E securities, however, remained artificially inflated. 

(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 

359. The market was surprised by the number and range of alleged violations of safety 

laws in the Cal Fire report. For example, in J.P. Morgan’s analyst report on June 10, 2018, it 

stated that “[w]ith this batch of reports, we find the range of ‘alleged’ law violations 

noteworthy. CAL FIRE opined on law regarding not just vegetation management but also 

pole and conductor failure and the re-energizing of equipment by the company.” Deutsche 

Bank also stated in its June 10, 2018 analyst report that “[o]verall, Friday’s data points are 

likely to be read as another negative for PCG, given the high percentages of incidents 

blamed on the company's lines and referred to DAs.” Guggenheim further reiterated its “Sell” 

recommendation on June 10, 2018 because “[o]ut of the 16 fires now investigated thus far, PCG 

was found to have allegedly violated state law in 11 of those instances with Cal Fire 

referring its evidence to the District Attorney – likely a strong indictment to potential 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 109 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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criminal and civil cases/lawsuits against the company.” The analyst from Guggenheim noted 

that “all signs seem to point to PCG being imprudent operators in the majority of instances, 

which would therefore mean it should assume liability.” Accordingly, the number and range of 

safety violations proximately caused PG&E’s Share Price Decline on June 8-11, 2017. 

360. On June 11, 2018, Bloomberg published an article reporting: “The company said 

Monday it expects to record a ‘significant liability’ for fires, and the shares plunged the most in 

five months at the open” of trading. The article also noted that “[t]he alleged violations could 

also expose PG&E to criminal charges only two years after the San Francisco company was 

convicted of breaking safety rules that led to a deadly gas pipeline explosion in San Bruno, 

California.” 

361. Accordingly, the new information contained in these June 8 and 11 disclosures, 

including the severity of PG&E’s conduct, the role of its violations of California safety laws in 

causing the North Bay Fires, and the “significant liability” it would incur as a result, proximately 

caused PG&E’s share price decline. 

362. Defendants, however, continued to mislead investors regarding the extent of 

PG&E’s safety deficiencies and the impact thereof. 

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

Concealed Risk 

363. The Camp Fire began in the early morning of November 8, 2018 and grew 

steadily throughout the day. However, as of the close of trading that day, no prominent news 

sources had reported that PG&E may have caused it. 

(a) The Market Began to Learn the Extent and 

Effects of PG&E’s Responsibility for the Camp Fire 

364. After the close of trading on November 8, 2018, PG&E announced via its official 

Twitter.com account that it had decided not to implement its procedure for shutting power lines 

during dangerous weather conditions. This communication was the first indication that PG&E’s 

equipment and decisions may have contributed to the Camp Fire, undermining the Company’s 

assurances to investors that it would comply with safety regulations and prioritize safety, detailed 

above. While the announcement began to disclose the truth regarding PG&E’s responsibility for 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 110 

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the Camp Fire, it also contained a further false reassurance that PG&E’s decision was because 

“weather conditions did not warrant this safety measure,” as detailed above. 

365. Also after the close of trading on November 8, 2018, PG&E filed an Electric 

Incident Report with the CPUC stating that PG&E had experienced a problem with its CaribouPalermo high-voltage transmission line on “Pulga Rd. Pulga, Butte County” only fourteen 

minutes before the Camp Fire began, “in the area of the Camp Fire.” The same report 

acknowledged that an aerial patrol later in the day showed “damage” to the same transmission 

tower. However, this information undermining PG&E’s statements about compliance and 

prioritizing safety during the Class Period would not be reported by major news outlets until the 

next day, November 9, 2018. 

366. On this news, PG&E’s share price fell $7.88, or approximately 19.7% to close at 

$39.92 on November 9, 2018, the following trading day. The stock experienced unusually high 

trading volume of 23,627,100 shares. The price of PG&E securities, however, remained 

artificially inflated. 

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

November 9, 2018 Share Price Decline 

367. Market commentators confirmed that PG&E’s share price declined due to news 

connecting PG&E to the Camp Fire, the true risk of which was concealed by PG&E’s false and 

misleading statements and omissions. 

368. On November 9, 2018, CNBC published an article entitled “Shares of electricity 

provider PG&E have worst day since 2002 as wildfires ravage California.”108 The article noted 

that “Shares of PG&E plunged more than 16 percent on Friday as wildfires continued to rage 

through California. This was the biggest one-day decline for the stock since Aug. 8, 2002. . . .” 

It further observed: “PG&E also traded 23.6 million shares, about five time [sic] its average 30-

day volume.” The article was initially published at 1:03 p.m. Eastern Time (i.e., prior to the 

 108 Fred Imbert, Shares of Electricity Provider PG&E Have Worst Day Since 2002 as 

Wildfires Ravage California, CNBC (Nov. 9, 2018), https://www.cnbc.com/2018/11/09/sharesof-electricity-provider-pge-plunge-as-wildfires-ravage-california.html. 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 111 

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close of trading) and updated at 4:19 p.m. the same day (after the close of trading), yet made no 

mention of PG&E’s Electric Incident Report tying the Company’s equipment to the origin of the 

Camp Fire. 

369. On November 9, 2018, Deutsche Bank described how investors were 

“understandably concerned” given the emerging news of the Camp Fire and S.B. 901’s lack of 

provisions regarding 2018 wildfires: 

While there has been no specific indication of utility lines being 

involved in these ignitions, investors are understandably concerned 

considering that the recently passed wildfire bill (SB901) left 

utilities particularly exposed to 2018 fires if their infrastructure 

ends up being implicated. This is due to the fact that the so-called 

stress test or customer harm threshold is only applicable to 2017 

fire losses. Meanwhile, the new reasonableness standard which the 

CPUC will use to determine eligibility for recovery of liability 

costs from customers only kicks in from 2019. 

370. A Barclays report from the same day supported the conclusion that investor 

concern regarding the Camp Fire and its lack of coverage by S.B. 901 were contributing to the 

stock price drop: 

We believe the lack of explicit language for 2018 wildfires in 

SB 901 may be increasing market pressure. SB 901 specifically 

addresses 2017 wildfire liability by tasking the CPUC with 

creating a cap on IOU [Investor-Owned Utility] liability to ensure 

safe and affordable service. The bill addresses wildfire liability in 

2019 and beyond by creating a securitization mechanism. 

However, specific language addressing 2018 liability coverage is 

noticeably absent. The general consensus among CA stakeholders 

is that 2018 will be treated in a similar fashion to 2017, however 

the lack of a specific prescription may be heightening investor 

concern if the Camp Fire is found to be started by PCG. 

371. While this report stated that there was no indication yet that electrical equipment 

had caused the Camp Fire, it emphasized that PG&E’s decision not to de-energize its lines could 

become a source of liability if PG&E equipment was found to be involved: “we expect PCG’s 

decision not to de-energize lines after warning of high fire risk will be investigated if the fire is 

found to have been sparked by PCG equipment.” 

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

of Concealed Risk 

(a) The Market Continued to Learn the Extent and Effects of 

PG&E’s Responsibility for the Camp Fire 

372. Because PG&E had concealed the extent of its safety violations and failures to 

prioritize safety, the market was shocked to learn how much evidence supported the conclusion 

that PG&E had not only caused the Camp Fire, but did so in a manner that violated state safety 

regulations. Thus, investors began to learn the true likelihood and extent to which PG&E would 

bear financial responsibility for the Camp Fire’s destruction, i.e., without eligibility for 

reimbursement by ratepayers. See Section VIII, supra. 

373. After the close of trading on Friday, November 9, 2018, news outlets began to 

report that there was evidence PG&E caused the Camp Fire based on PG&E’s incident report the 

previous evening. The first such report, written by Pulitzer Prize-winning journalist Matthias 

Gafni and published in Mercury News, occurred at 5:49 p.m. EST on November 9, 2018.109 

374. On Saturday, November 10, 2018, it was reported that the town of Paradise was 

destroyed as the Camp Fire continued to spread.110 It was further reported that the fire had raced 

through the communities of Concow and Magalia, causing at least nine fatalities and the loss of 

at least 6,453 homes and 260 commercial buildings.111 The Camp Fire grew in size and severity 

over the weekend, with reports on Saturday that it had already consumed 70,000 acres and was 

only 5 percent contained—with winds pushing it toward Chico and Yankee Hill. By Sunday 

November 11, 2018, it was reported that more than 200 people were missing, the death toll had 

 109 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/. 

110 Anna Sciacca and Lisa Krieger, ‘Our Town Has Burned’: Most of Paradise is Lost After 

Camp Fire Ravages the Area, Enterprise Record (Nov. 10, 2018), 

https://www.chicoer.com/2018/11/10/our-town-has-burned-most-of-paradise-is-lost-after-campfire-ravages-the-area/. 

111 Id.

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risen to 29, and the fire—which had by then consumed 111,000 acres—was only 25 percent 

contained.112

375. Then on Monday, November 12, 2018, the next trading day, it was reported that 

BetsyAnn Cowley, a property owner in Pulga, received an email from PG&E the day before the 

Camp Fire ignited; the email communicated that the Utility needed access to her property to 

repair a transmission line that was “sparking.” It was further reported that the incident occurred 

near the origin point of the Camp Fire, with Cowley’s property next to the junction of Pulga and 

Camp Creek Road. 

376. On this news, PG&E’s share price fell $6.94, or 17.385%. to close at $32.98 on 

November 12, 2018. The stock experienced a trading volume of 44,033,200 on November 12, 

2018. The price of PG&E securities, however, remained artificially inflated. 

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

November 9-12, 2018 Share Price Decline. 

377. Investors were concerned over this evidence that PG&E’s safety violations likely 

caused the Camp Fire, including the impact on PG&E’s likely liability of Cowley’s comments to 

the press regarding PG&E’s knowledge of transmission line problems in the area. As a result, 

PG&E’s stock price continued to drop. As the San Francisco Chronicle reported on November 

12, 2018, “Cowley’s revelation came as shares of Pacific Gas and Electric Co.’s parent company 

plummeted Monday amid concerns from investors about the utility’s liability connected to the 

Camp Fire.”113 

378. Similarly, a Wells Fargo analyst report observed the same day that “[t]he Camp 

Fire is in PCG’s service territory and there are initial indications that the company’s transmission 

infrastructure may have been a root cause of the fire pending an investigation by Cal Fire.” 

 112 Melody Gutierrez, More than 200 Remain Missing in Camp Fire, San Francisco Chronicle 

(Nov. 8, 2018), https://www.sfchronicle.com/california-wildfires/article/100-missing-in-CampFire-butte-county-death-toll-13382433.php. 

113 J.D. Morris and Kurtis Alexander, Homeowner’s Claim on PG&E Work Raises Questions 

on Camp Fire’s Origin, San Francisco Chronicle (Nov. 12, 2018), 

https://www.sfchronicle.com/california-wildfires/article/PG-E-stock-hammered-on-wildfirefallout-13384830.php. 

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379. A Macquarie Research analyst report on November 13, 2018 estimated PG&E’s 

fire-related liabilities at $8 billion, while noting that the real measure of PG&E’s liability could 

be higher given that the Camp Fire was not yet contained: 

We’ve reduced our [target price] to US$45 from US$57, is based 

on 10.4x our ’20E EPS vs 13.6x previously. Our new [target price] 

reflects incremental ~US$8bn in fire-related liabilities, which we 

hope proves excessive given the stress test included in the SB901, 

but we have no way to assess the potential liabilities as the fire is 

only 30% contained. 

380. A November 13, 2018 Bloomberg Intelligence report remarked that the analyst 

expected PG&E’s liability to exceed its total equity valued absent additional assistance from 

the California government, and that such a bailout was not certain: “Unless mitigated by 

regulators, we expect PG&E’s write-offs could exceed the company’s total equity. California’s 

utility owners are dangerously squeezed between two forces: Onerous inverse-condemnation rule 

makes utilities liable for most of the billions in fire damage, but powerful political resistance 

prevents customer bills from rising much above inflation.” 

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

of Concealed Risk 

(a) The Market Continued to Learn the Extent and Effects of 

PG&E’s Responsibility for the Camp Fire 

381. After the close of trading on November 13, 2018, PG&E released a Form 8-K that 

showed a much bleaker picture of PG&E’s deteriorating financial situation than investors had 

reason to expect, even calling into question its ability to remain solvent in the face of mounting 

evidence of its liability for the Camp Fire. The SEC filing admitted, among other things, that 

PG&E’s and the Utility’s revolving credit facilities were fully drawn and that its liability for the 

Camp Fire could exceed its insurance: 

Item 2.03. Creation of a Direct Financial Obligation or an 

Obligation Under an Off-Balance Sheet Arrangement of a 

Registrant

As of November 13, 2018, Pacific Gas and Electric 

Company (“Utility”), a subsidiary of PG&E Corporation, and 

PG&E Corporation have aggregate borrowings outstanding under 

their respective revolving credit facilities of $3.0 billion and $300 

million, respectively. . . . No additional amounts are available 

under the Utility’s and PG&E Corporation’s respective 

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revolving credit facilities. 

* * * 

Item 8.01 Other Events. 

Camp Fire

On November 8, 2018, a wildfire began near the city of 

Paradise, Butte County, California (the “Camp Fire”), located in 

the service territory of the Utility. . . . 

As previously reported, during the third quarter of 2018, 

PG&E Corporation and the Utility renewed their liability insurance 

coverage for wildfire events in an aggregate amount of 

approximately $1.4 billion for the period from August 1, 2018 

through July 31, 2019. . . . 

While the cause of the Camp Fire is still under 

investigation, if the Utility’s equipment is determined to be the 

cause, the Utility could be subject to significant liability in excess 

of insurance coverage that would be expected to have a material 

impact on PG&E Corporation’s and the Utility’s financial 

condition, results of operations, liquidity, and cash flows. 

382. On this news, PG&E’s share price fell $7.13, or 21.791%. to close at $25.59 on 

November 14, 2018. The stock experienced high trading volume of 53,543,100. The price of 

PG&E securities, however, remained artificially inflated. 

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

Price Decline on November 14, 2018 

383. Analyst commentary attributed the drop in PG&E’s stock price to news about 

PG&E’s insufficient insurance coverage and deteriorating financial situation, including the 

chance of bankruptcy, revealed in PG&E’s Form 8-K disclosures published after the market 

closed the previous day. 

384. CNBC reported that PG&E’s Form 8-K disclosures were responsible for the drop 

in stock price on November 14, 2018: 

Shares of utility PG&E fell 21 percent on Wednesday after the 

company said that if its equipment is responsible for the “Camp 

Fire” burning in Northern California, the cost of the damage would 

exceed its insurance coverage and harm its financial health. . . . “With these borrowings, the entire credit facility has been drawn 

and PG&E now has $3.5 billion of cash on its balance sheet,” Citi 

 

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analyst Praful Mehta wrote in a note Wednesday. “We think the 

primary driver could be a concern around a downgrade to a noninvestment grade credit rating and the liquidity requirements as a 

result of the downgrade.”114

385. Similarly, a November 14, 2018 Bloomberg Intelligence report also connected 

PG&E’s Form 8-K disclosures to its share price decline afterward, stating that the filing 

indicated the Company’s own concern about bankruptcy: 

The abrupt drawdown of its entire $3.3 billion in revolving 

credit suggests to us that PG&E (PCG -22%) is concerned 

about a near-term cash and credit crunch. The company warned 

of bankruptcy earlier this year, and the situation is more 

desperate now. If found liable for California’s Camp Fire, which 

may match or surpass 2017’s $15 billion in damages, the total 

exceeds PG&E's book equity and annual revenue. 

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

Concealed Risk 

(a) The Market Continued to Learn the Extent and Effects of 

PG&E’s Responsibility for the Camp Fire 

386. On November 15, 2018, Cal Fire announced that it had identified a second 

ignition point for the Camp Fire.115 This news further evidenced the extent of PG&E’s 

responsibility for the Camp Fire, undermining the Company’s assurances to investors that it 

would comply with safety regulations and prioritize safety, detailed above. 

387. On this news, PG&E’s share price fell $7.85, or 30.676%. to close at $17.74 on 

November 15, 2018. The stock experienced its highest trading volume during the Class Period 

of 107,155,700 on November 15, 2018. 

 114 Thomas Franck, PG&E Plunges 21% Amid Disclosure of an ‘Electric Incident’ Just 

Before Wildfire, CNBC (Nov. 14, 2018), https://www.cnbc.com/2018/11/14/pge-plunges20percent-after-disclosing-an-electric-incident-just-before-fire.html. 

115 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/. 

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

Price Decline on November 15, 2018 

388. Market commentary confirmed that the November 15, 2018 decline in PG&E’s 

share price was due to mounting evidence of PG&E’s liability for the Camp Fire and chance of 

bankruptcy, the true risk of which was concealed by PG&E’s false and misleading statements 

and omissions. Indeed, PG&E’s share price declined until CPUC President Michael Picker 

commented after the close of trading that day that he did not want the Company to become 

bankrupt. A Bloomberg article reported: “His comments capped a roller-coaster week for PG&E 

shares. They lost about two-thirds of their value during several days of free fall, then partially 

rebounded Friday after Picker said he doesn’t want the company to slide into bankruptcy.”116

389. A J.P. Morgan report from November 16, 2018 noted that the market was affected 

by continued uncertainty over California’s willingness to aid PG&E: 

if one assumes for sake of argument a $30Bn grand total of 

liabilities for the 2017-18 events for PCG, a 40 year 

amortization of securitized debt would still only be $10/month 

for the average customer; this would be even less if a 

multibillion dollar stress test cap was absorbed by the 

company; it is a small price to pay for safe electric service and 

environmental goals. We remain focused on upcoming 

policymaker statements on the issue, and the pending CPUC 

implementation of securitization and stress-test mandates created 

with SB901. We acknowledge the long and challenging road ahead 

for investors, but see too much at stake for the state to realistically 

abandon utilities given the above considerations 

* * * 

390. As a result of Defendants’ wrongful acts and omissions, and the precipitous 

decline in the market value of the Company’s securities, Lead Plaintiff and other Class members 

have suffered significant losses and damages. 

 116 David R. Baker, Mark Chediak & Romy Varghese, PG&E State Review Puts Board 

Shuffle and Breakup on the Table, Bloomberg (updated Nov. 17, 2018 12:00AM), 

https://www.bloomberg.com/news/articles/2018-11-16/pg-e-soars-after-regulator-eases-concernon-bankruptcy-risk. 

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X. SCIENTER UNDER THE EXCHANGE ACT 

391. The public was surprised to learn the extent to which PG&E had misled everyone 

about its lack of safety procedures related to wildfire prevention and responsibility for the North 

Bay and Camp Fires. Based on the extensive, widespread, and egregious nature of PG&E’s 

underlying noncompliance and disregard for safety, there is a strong inference that PG&E itself, 

and the officers who spoke on its behalf and controlled its public statements, knew or should 

have known the truth. As detailed below, they either knew the material, adverse facts about 

PG&E’s lack of safety undermining and contradicting their public representations, or were 

culpably reckless in avoiding knowledge of and/or disregarding that reality. Thus, throughout 

the Class Period, Defendants acted with scienter (a) by making false and misleading statements 

and omissions about PG&E’s financial health and compliance with relevant safety rules and 

regulations while having actual knowledge of their false or misleading nature, and/or (b) by 

acting in a deliberately reckless manner. 

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 

392. As detailed above, PG&E’s safety lapses caused the 2015 Butte Fire when a tree 

came into contact with PG&E’s power line due to PG&E violating multiple safety regulations. 

At the time, the Butte Fire was the seventh most destructive wildfire in California history; it 

killed two people, destroyed 921 homes, and destroyed more than 70,000 acres over 22 days. As 

noted above (¶¶127-28) and described in more detail below (¶569), PG&E had a company policy 

to perversely incentivize its contractors to clear less vegetation than is safe. 

393. Even after PG&E caused the disastrous Butte Fire through its serious fire safety 

lapses, PG&E made no changes at all to improve its vegetation management or compliance with 

safety regulations. In a deposition transcript that has not yet been made publicly available, 

PG&E’s Vegetation Program Manager 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.” 

Despite being on notice of its dangerous safety violations, neither the Company nor its officers 

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made any changes to improve safety or compliance. Thus, they either knew, or should have 

presumed, that its violations continued unabated. 

394. On March 5, 2019, Judge Alsup, presiding over PG&E’s criminal probation, 

issued a revised Order to Show Cause relating to PG&E’s lack of compliance with vegetation 

management and other safety regulations. The Order contained the following findings 

summarizing the results of the federal court’s probe into PG&E’s actual knowledge of safety 

violations leading up to the North Bay and Camp Fires: 

PG&E’s filings have included several relevant admissions. 

Significantly, PG&E acknowledged “that vegetation contact is the 

primary risk driver with respect to ignitions on its distribution 

lines.” (“Vegetation” means trees and limbs in this context.) In 

2016 alone, PG&E experienced approximately 1,400 wires down 

caused by vegetation contact. As PG&E reported to the CPUC, 

during 2015 and 2016, vegetation contact with conductors was the 

leading cause of the 486 fire ignitions associated with PG&E 

facilities, causing 37% of those fires. PG&E further admitted that 

as of June 2017, there were 3,962 unworked trees which PG&E 

had identified in 2016 as hazardous with the potential to “fall into 

or otherwise impact the conductors, towers or guy wires before the 

next inspection cycle.”117

395. Thus, PG&E has admitted its actual knowledge from 2015 to 2017 that its 

vegetation management practices did not comply with California safety regulations on the order 

of thousands of violations per year. PG&E has further admitted to actually knowing that its 

violations have caused hundreds of wildfires per year since 2015. However, PG&E never 

disclosed to investors that their own internal compliance reviews showed a lack of compliance 

on a huge scale. 

396. In the time period of 2017 to 2018, after the North Bay Fires and leading up to the 

Camp Fire, PG&E’s notice of its numerous and widespread safety violations was even stronger. 

For example, PG&E had known about the dangerous noncompliance of its Caribou-Palermo 

transmission line – the same line whose failure would cause the Camp Fire’s first ignition point – 

 117 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. 

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since a 2014 internal Company email stated that “the likelihood of failed structures [on the 

Caribou-Palermo line] happening is high.” 

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

Defendants Were Directly Involved in It 

397. In a January 16, 2019 filing to the CPUC, PG&E stated unequivocally that safety 

is its “core business,” and as such, was the “focus” of Defendant Williams’s activities as CEO: 

“Since the Utility is the sole operating subsidiary of PG&E Corporation, the activities of the 

PG&E Corporation CEO and President focus on the Utility’s core business, including most 

notably safety.”118 

398. During the Class Period, PG&E repeatedly acknowledged that “[s]afety is at the 

heart of everything we do at PG&E” (Geisha Williams, July 27, 2017 Analyst Call), that safety 

was PG&E’s “top priority” (Patrick Hogan, November 18, 2015 California Senate SubCommittee Hearing), and that “[n]othing is more important than the safety of our customers, 

employees and the communities we serve” (Kevin Dasso, vice president of Electric Asset 

Management, May 10, 2017 Press Release). PG&E further represented to the public that PG&E’s 

safety and compliance were closely monitored by the Company’s management and the Exchange 

Act Individual Defendants. For instance, the PG&E Board’s Finance Committee was alleged in 

a separate lawsuit over the Butte Fire – where litigation is still ongoing – to have been “actively 

involved in, and responsible for, assisting the Boards in their oversight of safety risk through its 

review of strategies to manage the largest individual risks identified in the enterprise risk 

management program,” including the risk of “wildfire.” Indeed, because the Company faced the 

possibility of strict liability for property damages caused by wildfires, and such liability could 

not only be extraordinary but also non-reimbursable if its officers had not acted “prudently,” 

wildfire safety was a particular focus of the Exchange Act Individual Defendants, who spoke 

personally on the subject with investors and regulators throughout the Class Period. Further, 

 118 Summary of Corporate Structure of Pacific Gas and Electric Company (U 39 M) and 

PG&E Corporation (Cal. Public Utilities Commission filed Jan. 16, 2019),

http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M263/K658/263658434.PDF. 

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Defendants’ repeated misrepresentations about PG&E’s safety and compliance record concerned 

the Company’s core operations. Therefore, the Exchange Act Individual Defendants, by virtue of 

the importance of safety to the Company and their positions as its leaders, reasonably had 

knowledge about PG&E’s safety and regulatory failures during the Class Period. 

399. As discussed in Sections VI.C. and VI.D., supra, the Exchange Act Individual 

Defendants repeatedly spoke to investors on the specifics of PG&E’s vegetation management 

procedures and results. For example, they kept investors apprised about how many hundreds of 

thousands of trees the Company was trimming and removing, including how many thousands 

were “dead or dying.” Not only that, but the Exchange Act Individual Defendants also inflated 

these numbers over time without explanation, raising the number of trees supposedly trimmed or 

removed from 1.2 million to 1.4 million. In both reporting and inflating these numbers, the 

Exchange Act Individual Defendants showed they knew that vegetation management and 

compliance was important to investors on a granular level. 

400. A core operation concerns a company’s primary products or services, and it 

extends to matters of importance that might significantly impact the company’s bottom line. 

There is no question that PG&E’s safety policies and procedures were critically important to the 

Company’s operations. In addition to the fact that PG&E repeatedly acknowledged this reality, it 

is also notable that PG&E is potentially facing $30 billion of liability or more due to its failures, 

and that California’s regulatory regime imposes significant liability for PG&E’s vegetation 

management and other safety failures. This is strong evidence of the centrality of the Company’s 

wildfire safety and compliance regime. 

401. In a separate lawsuit that was filed in connection with the Butte Fire, it was 

publicly alleged – based on discovery and deposition testimony that has not yet been publicly 

revealed – that Exchange Act Individual Defendants Williams and Hogan both served on an 

Executive Officer Risk & Compliance Committee that was charged with monitoring vegetation 

management issues. Further, according to the parties litigating against PG&E for injuries caused 

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by the 2015 Butte Fire, Defendant Hogan’s and another individual’s119 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.” As noted above, this means noncompliance 

for approximately 1.2 million trees in PG&E’s territory of 123 million trees, approximately 

123,000 of which are safety violations in the nature of trees touching its powerlines at any given 

time. See Section IV.F.4. 

402. Just months before the North Bay Fires broke out, United States District Judge 

Thelton E. Henderson in the Northern District of California ordered that PG&E work with 

federal prosecutors to retain a monitor to oversee the Company’s compliance and ethics 

programs, and implement “policies and procedures that address threats caused by vegetation,” in 

light of the deadly San Bruno explosion. Order at 3, PG&E Criminal Proceedings, (N.D. Cal. 

Jan. 26, 2017), ECF No. 916 (the “San Bruno Order”). As part of the sentencing process, PG&E 

had promised the Court that Defendant Julie Kane – as Chief Ethics and Compliance Officer of 

the Company – “reports directly to PG&E Corporation’s Chairman and CEO” regarding PG&E’s 

compliance efforts, and that “PG&E’s senior executives” regularly reviewed the Company’s 

safety and compliance, such that “high-level personnel of the organization ensure its 

effectiveness.” Id., Def’s Sentencing Memo. at 6-7, PG&E Criminal Proceedings (N.D. Cal. Jan. 

9, 2017), ECF No. 906. Accordingly, Exchange Act Individual Defendants Kane, Earley, and 

Williams had actual knowledge of PG&E’s lack of compliance. 

403. Because the Defendants represented that they closely monitored PG&E’s 

critically important safety and compliance, and because PG&E’s fire safety practices resulted in 

thousands of fire safety violations during the Class Period, they knew – or were deliberately 

reckless in not knowing – that PG&E’s level of safety with respect to vegetation management 

and wildfire prevention did not comport with state law. 

 119 Court filings identify this individual as Dean McFarren, PG&E’s Quality Assurance 

Supervisor. 

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

Monitoring, Has Uncovered Additional Facts Supporting Scienter 

404. As described above, see supra Section IV.F.2., PG&E was convicted of five 

felony counts for knowingly and willfully violating federal safety standards in causing the deadly 

San Bruno explosion in September 2010. On January 26, 2017, Judge Henderson sentenced 

PG&E to an expansive program of probation, including a corporate compliance and ethics 

monitorship program, 10,000 hours of community service, expenditure of $3 million to inform 

the public of its criminal conduct, and a mandate to refrain from any further criminal behavior. 

San Bruno Order. 

405. The first condition to PG&E’s probation is that it “Not Commit Another Federal, 

State, or Local Crime During the Term of the Probation.” PG&E did not object to this term in its 

responsive sentencing memorandum. PG&E Sentencing Memorandum at 15, PG&E Criminal 

Proceedings (N.D. Cal. Jan. 9, 2017), ECF No. 906. PG&E reassured the Court, prosecutors, the 

public, and its investors that it would not engage in further criminal acts, including criminally 

negligent or reckless safety violations. This condition of PG&E’s probation applied to PG&E’s 

electrical operations and gas operations alike. Accordingly, as of January 8, 2017, PG&E had an 

unusual motive to deceive investors and conceal its lack of compliance with safety regulations: it 

needed investors to believe it was meeting the terms of its probation. 

406. On August 14, 2017, Judge Alsup was assigned to preside over the criminal case 

and PG&E’s resulting probation. 

407. After the deadly Camp Fire, Judge Alsup ordered the parties on November 27, 

2018 to answer the following questions by December 31, 2018: 

1. What requirements of the judgment herein, including the 

requirement against further federal, state, or local crimes, might be 

implicated were any wildfire started by reckless operation or 

maintenance of PG&E power lines? 

2. What requirements of the judgment herein might be implicated 

by any inaccurate, slow, or failed reporting of information about 

any wildfire by PG&E? 

3. What specific steps has the monitor herein taken to monitor and 

improve PG&E safety and reporting with respect to power lines 

and wildfires? 

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4. Provide an accurate and complete statement of the role, if 

any, of PG&E in causing and reporting the recent Camp Fire 

in Butte County and all other wildfires in California since the 

judgment herein. 

408. On December 5, 2018, Judge Alsup requested “that the Office of the California 

Attorney General advise the Court of its view on one aspect of this question, namely, the extent 

to which, if at all, the reckless operation or maintenance of PG&E power lines would 

constitute a crime under California law.” In response, the Attorney General of California 

replied that PG&E’s actions or failures to act could constitute a range of criminal violations if the 

Utility was found to be “reckless” in causing California wildfires.120 The listed potential 

offenses ranged from “misdemeanor offenses related to vegetation and power lines” to “impliedmalice murder and involuntary manslaughter.” 

409. On January 17, 2019, Judge Alsup issued a tentative finding that “the single most 

recurring cause of the large 2017 and 2018 wildfires attributable to PG&E’s equipment has been 

the susceptibility of PG&E’s distribution lines to trees or limbs falling onto them during 

high-wind events.”121

410. On January 30, 2019, Judge Alsup held a probationary hearing to determine 

whether PG&E’s conduct had violated the terms of its probation. Part of the hearing concerned 

PG&E’s failure to inform the probation officer that the Butte County District Attorney’s Office 

was investigating PG&E’s role starting several of the North Bay Fires, that the District Attorney 

considered criminal prosecution, and that it executed a settlement with PG&E to avoid such 

prosecution. The court made a “find[ing] that PG&E violated the conditions of probation,” 

with sentencing to be determined at a later date.122 Judge Alsup also reminded the Company: 

[O]ne of the conditions of probation is you will not commit 

another federal, state, or local crime. It doesn’t have to be a 

pipeline or a natural gas. It can be any crime. You cannot – you’ve 

 

120Attorney General’s Amicus Brief Regarding PG&E’s Potential Criminal Liability, PG&E 

Criminal Proceedings (N.D. Cal. Dec. 28, 2018), ECF No. 954. 121 U.S. Response to Court’s Order to Show Cause and Request for Comment, PG&E 

Criminal Proceedings (N.D. Cal. Jan. 17, 2019), ECF No. 970. 

122 Transcript of Proceedings, PG&E Criminal Proceedings (N.D. Cal. Jan. 31 2019), ECF 

No. 999. 

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got to be on your absolute best behavior. No more crimes. . . . 

That’s what PG&E is up against now. 

411. During the hearing, Judge Alsup reportedly stated: “[T]here is one very clear-cut 

pattern here: That PG&E is starting these fires. . . . PG&E, according to Cal Fire, started the 

fire. Global warming did not start the fire. According to Cal Fire, PG&E started it, all 17 of 

them.” Judge Alsup continued, “what do we do[?] Does the judge just turn a blind eye and say, 

‘PG&E, continue your business as usual. Kill more people by starting more fires’?”123 Judge 

Alsup heard testimony from PG&E’s probation officer, Jennifer Hutchings, concerning the 

Honey Fire – one of the North Bay Fires for which Cal Fire found evidence of a safety violation 

and referred further criminal investigation to the relevant district attorney for Butte County. 

Probation Officer Hutchings testified: “I discovered that there had actually been an extensive 

investigation done by Butte County, that they were fully prepared to bring criminal charges 

against Pacific Gas and Electric; that Pacific Gas and Electric had entered into a settlement 

agreement with them in order to avoid these charges being brought.” The court then made a 

“find[ing] that PG&E violated the conditions of probation as charged in the Form 12.” 

Thereafter, the court turned to address whether it “should not impose further condition on PG&E 

to help protect the public from possible further other crimes of the offender,” including the 

following exchange with PG&E representative: 

The Court: Okay. When you say “mitigate,” why can’t the risk 

[of wildfire] be zero? Why is it that PG&E should 

be permitted to start a single wildfire?” 

PG&E: Well, the answer to the first question is bringing the 

risk to zero is an incredibly complicated series of 

policy decisions that have to factor in reliability, 

cost, safety, and there’s a tremendous amount of 

analysis that goes into how best to, for instance, 

make vegetation management decisions and how 

aggressive vegetation management should be versus 

the cost of – 

. . . 

 123 Transcript of Proceedings, PG&E Criminal Proceedings (N.D. Cal. Jan. 31 2019), ECF 

No. 999. 

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The Court: So why is it PG&E says all the time “Safety is our 

number one thing”? I hear it all the time, “Safety. 

Safety. Safety,” but it’s not really true. Safety is 

not your number one thing. 

At the conclusion of this proceeding, PG&E accepted that full compliance with safety 

regulations, rather than “mitigation,” was both possible and PG&E’s goal: “[U]ltimately we 

agree with Your Honor’s goal. We think that Your Honor’s goal of trying to eliminate the risk is 

exactly what we all need to be working towards.” 

412. On February 6, 2019, attorneys for fire victims provided a submission to Judge 

Alsup in response to the January 30, 2019 probationary hearing.124 The submission compiled 

data from PG&E’s regulators which demonstrated that the Company posed a far greater risk to 

the public than its peers. For example, according to the submission, Southern California Edison 

(“SoCalEd”) serves 15 million people across approximately 50,000 square-miles, operating and 

maintaining 91,375 miles of distribution lines and 1,433,336 electric poles. By comparison, 

PG&E services approximately 16 million people throughout a 70,000-square-mile service area, 

operating and maintaining between 81,000 miles and 115,000 miles of distribution lines and 

2,400,000 electric poles. Yet, despite these similarities in service size and miles of distribution 

lines, PG&E’s electrical equipment caused 1,208 more wildfires than SoCalEd’s equipment 

between 2014 to 2017 as self-reported to the CPUC. In total, PG&E’s equipment caused 1,552 

wildfires, while SoCalEd only caused 344 fires over the same time period. Put differently, 

PG&E’s equipment caused 4.5 times more wildfires than SoCalEd. PG&E’s equipment was also 

responsible for more large-scale fires, including 43 more fires than SoCalEd that burned between 

10-99 acres, three more between 100-299 acres, and two more between 300-999 acres. 

Similarly, since 2014, the electrical equipment of San Diego Gas & Electric (“SDG&E”) caused 

109 wildfires with only one wildfire burning over 10 (and below 300) acres. By contrast, PG&E 

caused 1,552 wildfires during that same timeframe with 68 of those fires burning over 10 acres. 

 124 Submission of Attorneys Pitre and Campora in Response to Order dated Jan. 30, 2019, 

PG&E Criminal Proceedings (N.D. Cal. Feb. 6, 2019), ECF No. 1005. 

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413. On March 5, 2019, Judge Alsup issued a revised order to show cause as to why 

the court should not modify the terms of PG&E’s probation in light of subsequent 

submissions.125 Judge Alsup’s Revised Order further found that this “record demonstrates that 

PG&E’s performance with respect to vegetation management has been dismal.” Although 

PG&E had previously balked at new conditions of probation that would require full compliance 

on the grounds that they would be impossible to achieve, Judge Alsup’s March 5, 2019 order 

rejected that notion: 

To address PG&E’s complaints that the vegetation-management 

conditions proposed in the January 9 order would be unduly 

expensive, require superhuman efforts, and exceed the 

requirements of state and federal law, the above conditions would 

now simply require full compliance with existing law and with the 

metrics proposed in PG&E’s own wildfire mitigation plan. This 

order rejects PG&E’s back-up contention that “perfect 

compliance” with Section 4293 is impossible due to “densely 

forested, highly dynamic, living environments, in which conditions 

can rapidly change” (Dkt. No. 1016 at 9). The record 

demonstrates that PG&E’s performance with respect to 

vegetation management has been dismal. And, not only does the 

offender provide no evidentiary support for its claim, but anyone 

who knows the terrain and its vegetation knows that it takes years 

for trees to grow to the height of PG&E’s lines. Regular 

inspections could easily spot trees that are high enough to present a 

hazard. If state or federal law is too strict, moreover, PG&E’s 

remedy would be to seek the relaxation of such laws through its 

well-oiled lobbying efforts. . . . The proposed conditions would 

help ensure that, going forward, funds are adequately allocated to 

PG&E’s vegetation management and wildfire mitigation costs.126

414. On April 2, 2019, Judge Alsup held a hearing on his second order to show cause 

in PG&E’s probation proceedings. At the hearing, Judge Alsup stated: 

PG&E over several years allowed the trees that needed to be 

removed to be built up and did not remove them, did not trim them 

so that we wound up with a large number of trees that should have 

been removed by PG&E but weren’t. And that was a major 

contributing factor, maybe the single-biggest factor, in causing the 

fires in 2017 and 2018 in Northern California.127 

 125 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. 

126 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. 

127 Transcript of Proceedings at 6-7, PG&E Criminal Proceedings (N.D. Cal. Apr. 2, 2019), 

ECF No. 1047. 

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Judge Alsup also explained “as we’ve gotten into the evidence, and I’ve studied quite a lot of it, 

again I want to say it’s quite clear that PG&E . . . let the tree budget wither so that a lot of trees 

that should have been taken down were not.” He concluded, “[t]his is a crisis, a crisis that 

California faces on these wildfires, and PG&E is the single-most culpable entity in the mix. . . . 

PG&E has started more than – way more than its share of these fires. . . This is a problem of 

your own making.” 

415. Under these circumstances, PG&E’s violation of court-imposed probation and 

California law, while under monitoring and reporting obligations regarding its purported 

compliance throughout the Class Period, support strong inferences that Defendants knew, or 

were severely reckless in not knowing, that it failed to comply with relevant laws and regulations 

when making the false and misleading statements detailed above. 

416. As a result, on April 3, 2019, Judge Alsup issued an Order Adopting New 

Conditions of Probation. The court modified the terms of PG&E’s probation to require it to (i) 

“fully comply with all applicable laws concerning vegetation management and clearance 

requirements”; (ii) “fully comply with the specific targets and metrics set forth in its” 2019 

Mitigation Plan, and (iii) not issue dividends until it was in compliance with all applicable 

vegetation management requirements, among other conditions.128 

417. On May 7, 2019, Judge Alsup conducted a sentencing hearing for PG&E’s 

violation of probation. In a colloquy with PG&E’s new CEO William D. Johnson, the Court 

stated: “one of the biggest problems we’ve had is that PG&E has been starting a lot of fires, and 

they had that horrible explosion in San Bruno, and I just don’t think PG&E has put safety 

first.” He further reminded the new CEO: “your company admitted that it started 17 of those 

fires in 2017 just in the Wine Country.”129 

 128 Order Adopting New Conditions of Probation, PG&E Criminal Proceedings (N.D. Cal. 

Apr. 3, 2019), ECF No. 1040. 

129 Transcript of Proceedings at 11, PG&E Criminal Proceedings, (N.D. Cal. May 7, 2019), 

ECF No. 1061. 

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418. During the sentencing hearing, Judge Alsup also observed that while there are 

other causes of fire, “no one has started more fires than PG&E.” 

419. The magnitude of PG&E’s failures show that the Company and Exchange Act 

Individual Defendants either knew these facts, or were deliberately reckless in not knowing 

them. The inference of scienter is made even stronger when combined with the fact that safety 

was a core operation of PG&E’s, as discussed in Section X.B., supra. 

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 

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

Sophisticated Database, Readily Accessible by the Exchange Act 

Individual Defendants 

420. PG&E maintained a database of inspection data to document the condition of its 

power lines, which provided its personnel with ready access to information about instances of 

noncompliance with state safety regulations. In a November 8, 2017 article about its pole 

management and maintenance efforts, PG&E stated that it “uses a comprehensive database to 

manage these multiple patrol and inspection schedules of our 2.4 million poles.”

130

421. This information was used to develop the company’s Mobile Asset Inspection

application that provided “electric power inspectors in the field with real-time information 

including maps, customer information, safety and access information.”131 The system was 

developed in 2016 and had become sophisticated enough by 2017 to win InformationWeek’s IT 

Excellence Award in the Data and Analytics category.132 The article further states that 

“[s]atellite maps were layered with the location of PG&E’s two million electric poles along 

with decades’ worth of data on each individual pole.”

133 PG&E’s 2016 Corporate 

 130 Facts about PG&E Pole Management and Maintenance, Currents, PG&E (Nov. 8, 2017), 

http://www.pgecurrents.com/2017/11/08/facts-about-pge-pole-management-and-maintenance/. 

131 Press Release, PG&E, Innovative App for PGE Field Crews Earns InformationWeek IT 

Excellence Award (May 22, 2017), http://investor.pgecorp.com/news-events/pressreleases/press-release-details/2017/Innovative-App-for-PGE-Field-Crews-EarnsInformationWeek-IT-Excellence-Award/default.aspx. 

132 Id. 133 Id. 

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Responsibility and Sustainability Report announced that a Margaret Mooney Award for 

Innovation was awarded to its “Data Visualization—Google Earth SAP team, which created a 

new technology that provides work crews with a dramatically enhanced data visualization of 

work in progress.” The report further mentioned “[t]he development of an SAP-based 

compliance tool that can analyze trends and inform [PG&E’s] risk management efforts.” Thus, 

PG&E used sophisticated software that kept track of its safety regulation noncompliance for its 

powerlines and poles in real time. 

422. PG&E assigns a unique “pole SAP ID number” that corresponds to each pole’s 

data.134 According to an InformationWeek article about PG&E’s mobile application, “[t]he 

status of a pole’s inspection is tracked in SAP [database technology] so the inspection team 

knows when it’s time to inspect each pole. That information flows into the enterprise platform 

PG&E built, which pushes electronic lists to inspectors’ iPad Pros.”135 The data collected is 

extensive enough to enable “an enterprise data and analytics organization that is using advanced 

analytics to predict when poles will fail.”136 And by 2017, the PG&E Corporate Responsibility 

and Sustainability Report mentions that the company’s “SAP-based tool” was used to analyze 

trends in environmental compliance. Thus, PG&E’s records of safety regulation violations were 

stored in a readily accessible database. Defendants Earley, Williams, Stavropoulos, Kane, Johns, 

and Hogan each had easy access to this database. 

423. Furthermore, in its submissions to Judge Alsup in the Company’s criminal 

probation, PG&E represented that it conducts quality assurance audits to obtain “real time” 

assessments of its vegetation management compliance: 

PG&E has also implemented checks on its contractors’ vegetation 

management work as another way to monitor compliance. For 

example, PG&E conducts audits and reviews of its vegetation 

 134 PG&E Pole Data Request Form, PG&E (Aug. 9, 2017), 

https://www.pge.com/pge_global/common/pdfs/safety/yard-safety/powerlines-and-trees/poledata-request-form.pdf. 

135 Lisa Morgan, PG&E’s Winning Recipe for a Mobile Asset Inspection App, 

InformationWeek (June 29, 2017), https://www.informationweek.com/big-data/pgandeswinning-recipe-for-a-mobile-asset-inspection-app/d/d-id/1329251. 

136 Id. 

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management program to assess the quality of contractors’ work 

and compliance with PG&E’s standards and legal requirements, 

including Public Resource Code § 4293. PG&E’s audit and review 

process consists primarily of two programs, Quality Control 

(“QC”) and Quality Assurance (“QA”). . . . . 

PG&E’s QA audits are designed to obtain a “real-time” 

assessment of PG&E’s vegetation management program and 

whether the conditions in its service territory are consistent 

with PG&E’s legal obligations. To ascertain a true “real-time” 

condition of the program, audits are performed throughout the 

year. . . . The audits indicate whether any identified issues pose 

compliance violations or potential violations (e.g., potential 

violation may occur within 90 days).137

424. Further, in those same criminal probation proceedings, Judge Alsup found that 

PG&E has admitted “that as of June 2017, there were 3,962 unworked trees which PG&E had 

identified in 2016 as hazardous with the potential to ‘fall into or otherwise impact the 

conductors, towers or guy wires before the next inspection cycle.’” Such a precise admission 

confirms the existence of such a database, awareness of its contents showing that vegetation 

management violations were widespread during the Class Period, and access to that information 

by the highest levels. 

425. Consequently, it is clear that PG&E was noncompliant with safety regulations 

concerning vegetation management and pole integrity, and that such facts would have been 

documented electronically, stored in an accessible SAP database, and available to PG&E 

personnel throughout the Company in real-time. Defendants Earley, Williams, Stavropoulos, 

Kane, Johns, and Hogan each had easy access to this database. 

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 

426. PG&E repeatedly touted the culture among its lower-level employees that 

encouraged reporting safety problems up the chain of management. Further, the Exchange Act 

Individual Defendants touted their knowledge and familiarity with this practice at the Company, 

 137 PG&E Response to Request for Information at 12, PG&E Criminal Proceedings (N.D. Cal. 

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

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indicating either they personally received information of safety violations this way, or they knew 

where to find such information but deliberately avoided it. 

427. On August 18, 2016, PG&E issued a press release titled “PG&E Becomes First 

Natural Gas Utility to Receive Process Safety.” It contained a description of an internal 

Company policy termed “The Corrective Action Program, a program that empowers 

employees at all levels of PG&E to speak up and identify issues that are in need of 

improvement.” 

428. On November 4, 2016, PG&E hosted a conference call with analysts to discuss its 

financial results for the third quarter of 2016. In his prepared remarks, Earley elaborated on 

PG&E’s culture of encouraging “every employee” to report safety violations up the chain of 

command, as follows: 

We also wanted to make sure that every employee felt 

comfortable raising concerns, no matter how big or small, so 

we made a number of changes to encourage all employees to 

speak up when something doesn’t seem right. For example, we 

worked with our unions to develop a non-punitive selfreporting policy. 

We’ve also adapted the nuclear industry’s corrective action 

program across the Company, to make it easy for employees to 

report things that need to be fixed. In fact, employees can now 

report corrective action items through a simple app on their 

smart devices. And we’ve created a number of awards to 

publicly recognize employees when they do speak up, so that 

we are encouraging and reinforcing that behavior. 

* * * 

The improvements we have made in safety and reliability over 

the last six years have put us in a position to deliver strong 

financial results going forward. 

Earlier this year, we announced our first dividend increase in 

six years, and we have committed to achieving a roughly 60% 

payout ratio by 2019. Combined with our expected rate based 

growth, we are confident we can deliver a strong overall return for 

our shareholders.

429. Thus, PG&E went significantly beyond making employees feel safe “report[ing] 

things that need to be fixed.” The CEO himself took credit for “mak[ing] sure that every 

employee felt comfortable raising concerns” and “encourag[ing] all employees to speak up” 

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“across the Company” – i.e., not just at the lower levels. Further, by virtue of the fact that the 

CEO personally took credit for this phenomenon within the company, it indicates his awareness 

of what employees actually reported. Indeed, he stated that he was involved in “publicly 

recogniz[ing] employees when they do speak up.” 

430. As a result, the persistence of safety violations cannot be attributed to their being 

unknown. Rather, such problems persisted because of what the Exchange Act Individual 

Defendants did – or failed to do – to mitigate safety problems once they were reported. Indeed, 

PG&E’s inadequate safety compliance did not stem from a lack of information but rather a lack 

of willingness to devote sufficient Company funds to remediate problems, as detailed above (see 

Sections VI.B.-J., supra). 

431. Earley’s statement also affirms the direct connection between PG&E’s treatment 

of safety issues, the Company’s long-term financial results, and the size of its dividend. Indeed, 

as the truth emerged regarding PG&E’s insufficient safety compliance during the Class Period 

(as alleged above, see Section IX, supra), the market understood the connection between the 

Company’s safety violations and the foreseeable, material detriment they would have on the 

Company’s financial results and dividend. 

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

Were Made under Her Ultimate Authority 

432. Defendant Kane, in her capacity as PG&E’s Chief Ethics and Compliance Officer 

(“CECO”), controlled and authorized all of PG&E’s statements regarding compliance during the 

Class Period. These statements were approved and made under her ultimate authority as CECO. 

433. PG&E established the CECO role on March 24, 2015 “to strengthen its ethics and 

compliance program and performance,”138 a role which Kane assumed on May 18, 2015 and held 

 138 Press Release, PG&E, PG&E Appoints Julie M. Kane to New Position as Senior Vice 

President and Chief Ethics and Compliance Officer; Company Takes Next Step Toward Goal of 

Establishing a Best-in-Class Corporate Ethics Program (Mar. 25, 2015), 

https://www.pge.com/en/about/newsroom/newsdetails/index.page?title=20150324_pge_appoints

_julie_m_kane_to_new_position_as_senior_vice_president_and_chief_ethics_and_compliance_

officer_company_takes_next_step_toward_goal_of_establishing_a_best-inclass_corporate_ethics_program. 

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through the end of the Class Period. As CECO, she was responsible for both managing 

implementation of PG&E’s legal compliance efforts as well as overseeing compliance 

monitoring and reporting during almost the entirety of the Class Period. When PG&E was being 

sentenced for its criminal negligence in causing the San Bruno explosion, it admitted in its 

January 9, 2017 sentencing memorandum that “Ms. Kane is responsible for overseeing the 

Company-wide compliance and ethics program, including compliance management, riskmitigation and reporting; overseeing employee-investigatory processes; and reinforcing 

PG&E’s ethics and compliance culture, among many other compliance and ethics program 

elements.” The same filing confirmed that “The CECO, Julie Kane, reports directly to PG&E 

Corporation’s Chairman and CEO, and is accountable to PG&E Corporation’s and PG&E’s 

Boards of Directors, with additional reporting responsibility to the Compliance and Public Policy 

Committee of PG&E Corporation’s Board and the Audit Committees of PG&E Corporation’s 

and PG&E’s Boards.” 

434. Accordingly, Kane was apprised of any compliance violations reported within the 

Company, including violations reported by PG&E’s lower-level employees and logged in 

PG&E’s central database detailed supra, at all times when PG&E misrepresented to investors 

that it was in compliance (e.g., ¶197 (Misstatement No. 2, October 16, 2015); ¶211 

(Misstatement No. 4, October 6, 2016); ¶222 (Misstatement No. 5, August 9, 2017); ¶249 

(Misstatement No. 9, October 31, 2017); ¶270 (Misstatement No. 12, November 5, 2017); ¶280 

(Misstatement No. 13, May 25, 2018); ¶¶287, 296 (Misstatement Nos. 14 & 15, June 8, 2016); 

¶300 (Misstatement No. 16, September 27, 2018); ¶¶303, 309 (Misstatement Nos. 17-18, 

October 9, 2018); and ¶314 (Misstatement No. 19, November 8, 2018)). 

435. The CECO position was sufficiently senior such that Kane’s scienter can be 

imputed to the Company regarding knowledge of legal compliance with California vegetation 

management and safety regulations. 

436. Additionally, because Kane reported directly to the CEO in her capacity as 

CECO, her knowledge of safety violations can be imputed to both CEOs, Earley and 

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Williams.139 Because Kane was institutionally installed to advise the CEO of PG&E’s 

compliance and safety, Kane would have told Earley and Williams what she knew regarding the 

Company’s noncompliance with vegetation management regulations, or Earley and Williams 

would have been deliberately reckless in speaking on the subjects of compliance and safety 

without input from their CECO. 

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

Mislead Investors 

437. PG&E is currently facing approximately $17 billion in liability over the North 

Bay Fires and $13 billion for the Camp Fire, of which the Company has already recorded 

anticipated losses totaling over $14 billion. This immense exposure dwarfs the $1.6 billion that 

the Company reported it earned in the full year 2017—a performance not likely to be repeated 

given the substantial increase in PG&E’s required vegetation management and other safety 

compliance expenditures. 

438. Once the North Bay Fires began, it was clear to Defendants that PG&E’s liability 

could have severe repercussions for the Company’s financial condition, and for the careers of the 

Exchange Act Individual Defendants. This was true even before the flight of PG&E’s officers 

and directors and the Company’s bankruptcy. 

439. One California legislator reported on June 15, 2018 that “[i]n this Capitol, they 

[PG&E] keep talking about the sky is falling, that they’re going to go bankrupt and what are we 

going to do, and they’re creating a lot of fear in the Capitol.” On July 31, 2018, Reuters further 

reported that an anonymous source had leaked that PG&E hired a prominent law firm to “explore 

debt restructuring options,” as well as the possibility of “breaking up the company.” On August 

1, 2018, California Governor Jerry Brown even cautioned the public that “there is concern that 

we could lose our utilities.” 

440. The reason for these dire warnings was simple: PG&E wanted to rush through 

legislation that would grant it additional defenses and a lower bar to be reimbursed for their part 

 139 Further, she reported directly to the Company’s Chairman of the Board, a position which 

was also occupied by Earley during the Class Period. 

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in causing the North Bay Fires. After the North Bay Fires had erupted, the threat of bankruptcy 

and the narrow possibility of a legislative bail-out gave PG&E and the Exchange Act Individual 

Defendants had an unusual motivation to hide their culpability. 

441. It was within this context that PG&E falsely and misleadingly told investors, inter 

alia, that “PG&E meets or exceeds all applicable federal and state vegetation clearance 

requirements,” and that “we’ve doubled the amount that we’ve invested in veg[etation] 

management.” PG&E had an unusual motive to make these and other statements after the North 

Bay Fires erupted: to conceal its wrongdoing long enough to secure the liability bailout it was 

seeking from the California legislature. 

442. Indeed, this would not be the first time that a large potential liability caused 

PG&E to act unethically. When PG&E faced a substantially lower liability for its role in the 

deadly San Bruno explosion, the Company engaged in improper “back-channel” 

communications with its regulators that ultimately resulted in a $97.5 million fine that was 

imposed in April 2018. A federal jury also found PG&E to be guilty of six criminal charges, 

including obstruction of justice, related to that blast that killed eight people. 

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

Camp Fire, PG&E Attempted to Cover It Up 

443. As noted above, the public learned after the Camp Fire erupted that PG&E did not 

shut down its Caribou-Palermo transmission line that ignited the Camp Fire, despite the 

Company’s ESRB-8 Shutoff Protocol. As further detailed above, PG&E faced criticism from a 

variety of sources for that decision, as well as significant decreases to its share price. See 

Section IX.D.6, supra. 

444. While the Camp Fire continued to burn, the Company insisted that its ESRB-8 

Shutoff Protocol would not have included the Caribou-Palermo transmission line. 

445. For example, in a November 16, 2018 statement reported by KQED News, PG&E 

spokeswoman Deanna Contreras stated in an email to the reporter: “However, in light of the 

potential public safety issues resulting from de-energizing higher voltage transmission lines, 

including the potential to impact millions of people and create larger system stability issues for 

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the grid, PG&E has not extended the (shutoff) program to transmission lines that operate at 

115kV or above.”140

446. Similarly, in a November 22, 2018 statement reported by Mercury News, PG&E 

spokeswoman Lynsey Paulo said to the reporter: “In light of the potential public safety issues 

resulting from de-energizing higher voltage transmission lines, including the potential to impact 

millions of people and create larger system stability issues for the grid, PG&E has not extended 

the (shutoff) program to transmission lines that operate at 115kV or above.”141 Spokeswoman 

Paulo “added that the Federal Energy Regulatory Commission (FERC) regulates transmission 

lines and such an emergency shutdown would need to be coordinated with the California 

Independent System Operator, which oversees the state’s power grid.” But as the article further 

reported: 

But state and federal regulators say PG&E can shut down 

transmission lines of any size at its own discretion. 

“The transmission owners are solely responsible for operating their 

transmission and distribution lines and they can de-energize 

transmission and distribution lines without seeking approval from 

the ISO, with or without prior notice,” Cal ISO spokesman Steven 

Greenlee said. “The transmission owner tells us that they are deenergizing a line and if a 230kV or 500kV line is de-energized it 

may require (us) to re-dispatch generation if the remaining lines 

become heavily loaded. This is a practice we perform every day 

with scheduled work and unplanned outages.” 

CPUC spokeswoman Terrie Prosper also said the decision is up to 

the individual utility. 

“Utilities can de-energize whatever lines and voltage they deem 

appropriate,” Prosper said. “They typically de-energize distribution 

lines because those lines are more localized than transmission 

lines.” 

FERC Spokesman Craig Cano said PG&E would not need its 

approval to cut power to high-voltage lines for safety reasons. 

 140 Dan Brekke, PG&E: High-Voltage Transmission Lines Not Covered by Fire Safety 

Shutdown Plan, KQED (Nov. 16, 2018), https://www.kqed.org/news/11706846/pge-highvoltage-transmission-lines-not-covered-by-fire-safety-shutdown-plan. 

141 Matthias Gafni, Camp Fire: Map Shows Where PG&E Had Planned to Shut Down Power 

Ahead of Blaze, Mercury News (Nov. 22, 2018), 

https://www.mercurynews.com/2018/11/22/maps-show-where-pge-had-planned-to-shut-downpower-ahead-of-camp-fire/. 

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“FERC-approved standards address transmission system reliability 

and explicitly exclude safety matters, which could be the reason 

for shutting down a power line in response to wildfires or to 

mitigate the risk of fires,” he said. 

447. PG&E’s entire response, including its denial that its ESRB-8 Shutoff Protocol 

would not have included the Caribou-Palermo transmission line, was not true. 

448. First, PG&E’s published ESRB-8 Shutoff Protocol never mentioned a limitation 

on 115-kilovolt transmission lines or in fact any transmission lines.142 However, pursuant to 

CPUC’s Resolution ESRB-8, PG&E was required to both “Make available and post a summary 

of de-energization policies and procedures on its website” and “Provide its de-energization and 

restoration policy in full, and in summary form, to the affected community officials before deenergizing its circuits.”143 Because a limitation on transmission lines was never mentioned in 

PG&E’s ESRB-8 Shutoff Protocol, it did not exist. 

449. Second, PG&E had never mentioned this exclusion for 115-kilovolt transmission 

lines, even unofficially, until after it faced criticism for deciding not to shut down its CaribouPalermo transmission line and causing the Camp Fire. 

450. Third, when PG&E first shut off electricity under its ESRB-8 Shutoff Protocol on 

October 14 through 17, 2018, by its own admission, PG&E shut off both transmission and 

distribution lines. Specifically, PG&E shut off eight transmission power line circuits and thirtythree distribution power line circuits, as detailed in its later filing to CPUC.144 This admission 

confirms that PG&E’s ESRB-8 Shutoff Protocol did not include a limitation on shutting down 

transmission lines. 

 142 See generally PG&E Public Safety Power Shutoff Policies and Procedures, PG&E website 

(Sept. 2018), https://www.pge.com/pge_global/common/pdfs/safety/emergencypreparedness/natural-disaster/wildfires/Public-Safety-Power-Shutoff-Policies-and-ProceduresSeptember-2018.pdf. 

143 Resolution Extending De-Energization Reasonableness, Notification, Mitigation And 

Reporting Requirements In Decision 12-04-024 To All Electric Investor Owned Utilities, (Cal. 

Public Utilities Commission July 16, 2018), 

http://docs.cpuc.ca.gov/publisheddocs/published/g000/m218/k186/218186823.pdf. 

144 Letter from PG&E to CPUC re: compliance report (Oct. 31, 2018), 

http://cpuc.ca.gov/uploadedFiles/CPUC_Public_Website/Content/Utilities_and_Industries/Energ

y_-_Electricity_and_Natural_Gas/PGE%20PSPS%20Report%20Letter%2020181031.pdf. 

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451. The same conclusion is confirmed by a telling revision PG&E made to otherwise 

identical text in two succeeding reports to the CPUC—the first being its October “Public Safety 

Power Shutoff Report” regarding the October shutoff,145 and the second being its November 

“Public Safety Power Shutoff Report” after the Camp Fire. Therein, PG&E made the 

following revelatory insertion: 

[PG&E has] reached out to more than 570,000 homes and 

businesses that are served by our electric lines, operating at 70kV 

and lower, that run through extreme fire-threat areas. We have 

communicated to these customers through several formats (letter, 

email, TV and print ads, social media and news stories) that, if 

extreme fire danger conditions were forecasted, it might be 

necessary to temporarily turn off power to their neighborhood or 

community for safety. 

(Underlining added to signify PG&E’s addition.) The absence of such language in its October 

2018 shutoff report, in an otherwise identical paragraph, confirms that an exclusion for 115-

kilovolt transmission lines was never part of PG&E’s ESRB-8 Shutoff Protocol. 

452. Finally, PG&E was required to answer questions posed by the CPUC’s Safety and 

Enforcement Division after the North Bay Fires, which PG&E submitted on October 17, 2017.146 

The Safety and Enforcement Division asked: “Has PG&E proactively de-energized power lines 

in the last 10 days without being requested to do so by CAL FIRE? If so, please provide 

information about location, duration and reasons for doing so.” In response, PG&E stated that it 

had de-energized two 115-kilovolt lines in 2017 to prevent wildfires: 

PG&E de-energized multiple transmission lines as described below 

without the direction of CAL FIRE: 

. . . 

3. On 10/9 at 0644, PG&E de-energized the Fulton-Santa Rosa 

#1-115kV line due to fire in the area. The line was returned to 

service on 10/9 at 1455. 

 145 Letter from PG&E to CPUC re: compliance report (Oct. 31, 2018), 

http://cpuc.ca.gov/uploadedFiles/CPUC_Public_Website/Content/Utilities_and_Industries/Energ

y_-_Electricity_and_Natural_Gas/PGE%20PSPS%20Report%20Letter%2020181031.pdf. 

146 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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4. On 10/9 at 0644, PG&E de-energized the Fulton-Santa Rosa #2-

115kV line due to fire in the area. The line was returned to service 

on 10/14 at 1044. 

453. As such, it was affirmatively false that PG&E’s ESRB-8 Shutoff Protocol 

excluded transmission lines of any kind. It was also false that PG&E’s ESRB-8 Shutoff Protocol 

excluded 115-kilovolt transmission lines in particular. 

454. PG&E’s representations after the Camp Fire that such exclusions existed – when 

they did not exist – amount to a cover-up, and evidence the Company’s scienter. It is a 

continuation of PG&E’s deliberate efforts to conceal the unsafe operations of its utilities, as 

further exposed by CPUC’s allegations that the Company falsified records and data concerning 

the safety of its utilities from 2012 through 2017. See ¶99, supra. 

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

Inference of Scienter 

455. On January 13, 2019, PG&E announced the abrupt departure of its CEO and 

President, Defendant Williams.147 To explain Williams’s unceremonious departure—less than 

two years after she became CEO in March 2017—PG&E’s May 17, 2019, preliminary proxy 

statement began with a letter to shareholders from the PG&E Board of Directors, stating: 

“The tragic events of the past few years have made clear that the 

energy system status quo is no longer working for California. We 

have heard the calls for change and are committed to answering 

them with strong actions that will help us re-earn the trust of all 

our stakeholders. This starts at the top. We replaced PG&E 

Corporation’s CEO and the vast majority of our Boards of 

Directors with experienced people with the commitment and 

expertise necessary to redirect our safety culture and navigate 

one of the most complex corporate reorganizations ever.” 

456. Thus, shortly after Williams’s departure, PG&E admitted that she lacked the 

commitment and expertise necessary for safety. In the same letter, PG&E argued its Chapter 11 

bankruptcy would ultimately provide “a reorganized enterprise with refreshed management and 

Board members who are committed to safety and reliability in all aspects of our business.” 

 147 J.D. Morris, PG&E CEO Geisha Williams Out Amid Utility’s Widening Financial Crisis, 

San Francisco Chronicle (Jan, 13, 2019), https://www.sfchronicle.com/business/article/PG-ECEO-Geisha-Williams-out-amid-utility-s-13530807.php. 

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457. In addition to Williams’s departure, three senior executives in PG&E’s electric 

division also left the Company after the 2017 or 2018 fires. Earley left his position as Executive 

Chairman of the Company in December 2017, Stavropoulos left his position as COO in 

September 2018, and Hogan left his position as Senior Vice President of Electric Operations in 

January 2019. As a consequence, it may be inferred that the Company had widespread 

dissatisfaction with its officers’ and directors’ commitment and expertise necessary for safety 

beyond just Williams. 

458. Indeed, on February 11, 2019, PG&E issued a press release stating that it would 

be replacing the majority of its Boards. As of today, only two Board members out of 13 have not 

been replaced. In a further expression of lack of support for the Company’s previous leadership, 

the release acknowledged “that PG&E must re-earn trust and credibility with its customers, 

regulators, the communities it serves and all of its stakeholders . . . .” 

XI. APPLICABILITY OF THE PRESUMPTION OF RELIANCE AND FRAUD ON 

THE MARKET FOR THE EXCHANGE ACT CLAIMS 

459. For the Exchange Act claims, Lead Plaintiff will rely upon the presumption of 

reliance established by the fraud-on-the-market doctrine in that, among other things: 

(a) Defendants made public misrepresentations or failed to disclose material 

facts during the Class Period; 

(b) The omissions and misrepresentations were material; 

(c) The Company’s securities traded in an efficient market; 

(d) The misrepresentations alleged would tend to induce a reasonable investor 

to misjudge the value of the Company’s securities; and 

(e) Lead Plaintiff and other members of the Class purchased PG&E securities 

between the time Defendants misrepresented or failed to disclose material facts and the time the 

true facts were disclosed, without knowledge of the misrepresented or omitted facts. 

460. At all relevant times, the market for PG&E securities was efficient for the 

following reasons, among others: 

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(a) PG&E stock met the requirements for listing, and was listed and actively 

traded on the NYSE, a highly efficient and automated market; 

(b) As a regulated issuer, PG&E filed periodic public reports with the SEC 

and the NYSE; 

(c) PG&E regularly communicated with public investors via established 

market communication mechanisms, including through the regular dissemination of press 

releases on the major newswire services and through other wide-ranging public disclosures, such 

as communications with the financial press, securities analysts and other similar reporting 

services; and 

(d) PG&E was followed by numerous securities analysts employed by major 

brokerage firms who wrote reports that were distributed to the sales forces and certain customers 

of their respective brokerage firms. Each of those reports was publically available and entered 

the public marketplace. 

461. As a result of the foregoing, the market for PG&E securities promptly digested 

current information regarding PG&E from publicly available sources and reflected such 

information in PG&E’s stock price. Under these circumstances, all purchasers of PG&E 

securities during the Class Period suffered similar injury because of their purchases of securities 

at artificially inflated prices and a presumption of reliance applies. 

462. Lead Plaintiff is also entitled to a presumption of reliance under the Supreme 

Court’s decision in Affiliated Ute Citizens of Utah v. U.S., 406 U.S. 128 (1972), and its progeny, 

as Defendants’ misstatements throughout the Class Period included omissions, in that they failed 

to inform investors of PG&E’s safety and regulatory failures. 

XII. CLASS ACTION ALLEGATIONS FOR THE EXCHANGE ACT CLAIMS 

463. Lead Plaintiff brings this action as a class action pursuant to Federal Rule of Civil 

Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased or 

otherwise acquired PG&E securities traded on the NYSE during the Class Period (the “Class”) 

and were damaged thereby. Excluded from the Class are the excluded persons defined in ¶11, 

supra. 

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464. The members of the Class are so numerous that joinder of all members is 

impracticable. Throughout the Class Period, PG&E securities were actively traded on the NYSE. 

While the exact number of Class members is unknown to Lead Plaintiff at this time and can be 

ascertained only through appropriate discovery, Lead Plaintiff believes that there are hundreds or 

thousands of members in the proposed Class. Record owners and other members of the Class 

may be identified from records maintained by PG&E or its transfer agent and may be notified of 

the pendency of this action by mail, using the form of notice similar to that customarily used in 

securities class actions. 

465. Lead Plaintiff’s claims are typical of the claims of the members of the Class as all 

members of the Class are similarly affected by Defendants’ wrongful conduct in violation of 

federal law that is complained of herein. 

466. Lead Plaintiff will fairly and adequately protect the interests of the members of 

the Class and has retained counsel competent and experienced in class and securities litigation. 

Lead Plaintiff has no interests antagonistic to or in conflict with those of the Class. 

467. Common questions of law and fact exist as to all members of the Class and 

predominate over any questions solely affecting individual members of the Class. Among the 

questions of law and fact common to the Class are: 

• whether the federal securities laws were violated by Defendants’ acts as 

alleged herein; 

• whether statements made by Defendants to the investing public during the 

Class Period misrepresented material facts about the financial condition, 

business, operations, and safety of PG&E; 

• whether Defendants caused PG&E to issue false and misleading financial 

statements during the Class Period; 

• whether Defendants acted with actual knowledge of falsity or recklessly in 

issuing false and misleading financial statements; 

• whether the prices of PG&E securities during the Class Period were 

artificially inflated because of Defendants’ conduct complained of herein; 

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• whether some or all of Defendants’ false and misleading misstatements or 

omissions served to maintain PG&E’s inflated securities prices; and 

• whether the members of the Class have sustained damages and, if so, what is 

the proper measure of damages. 

468. A class action is superior to all other available methods for the fair and efficient 

adjudication of this controversy since joinder of all members is impracticable. Furthermore, as 

the damages suffered by individual Class members may be relatively small, the expense and 

burden of individual litigation make it impossible for members of the Class to individually 

redress the wrongs done to them. There will be no difficulty in the management of this action as 

a class action. 

469. Lead Plaintiff will rely, in part, upon the presumption of reliance established by 

the fraud-on-the-market doctrine, as discussed above in ¶¶459-462. 

470. Based upon the foregoing, Lead Plaintiff and the members of the Class are 

entitled to a presumption of reliance upon the integrity of the market. 

XIII. CLAIMS FOR RELIEF UNDER THE EXCHANGE ACT 

FIRST CLAIM 

For Violation of Section 10(b) of The Exchange Act and Rule 10b-5 

Against PG&E and the Exchange Act Individual Defendants 

471. Lead Plaintiff repeats and realleges each and every allegation contained above as 

if fully set forth herein. 

472. This Count is asserted against PG&E and the Exchange Act Individual 

Defendants and is based upon Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 

10b-5 promulgated thereunder by the SEC. 

473. During the Class Period, PG&E and the Exchange Act Individual Defendants, 

individually and in concert, directly or indirectly, disseminated or approved the false statements 

specified above, which they knew or deliberately disregarded were misleading in that they 

contained misrepresentations and failed to disclose material facts necessary in order to make the 

statements made, in light of the circumstances under which they were made, not misleading. 

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474. PG&E and the Exchange Act Individual Defendants violated §10(b) of the 

Exchange Act and Rule 10b-5 in that they: 

• employed devices, schemes and artifices to defraud; 

• made untrue statements of material facts or omitted to state material facts 

necessary in order to make the statements made, in light of the circumstances 

under which they were made, not misleading; or 

• engaged in acts, practices and a course of business that operated as a fraud or 

deceit upon plaintiff and others similarly situated in connection with their 

purchases of PG&E securities during the Class Period. 

475. PG&E and the Exchange Act Individual Defendants acted with scienter in that 

they knew that the public documents and statements issued or disseminated in the name of 

PG&E were materially false and/or misleading; knew that such statements or documents would 

be issued or disseminated to the investing public; and knowingly and substantially participated, 

or acquiesced in the issuance or dissemination of such statements or documents as primary 

violations of the securities laws. These Defendants by virtue of their receipt of information 

reflecting the true facts of PG&E, their control over, and/or receipt and/or modification of 

PG&E’s allegedly materially misleading statements, and/or their associations with the Company 

which made them privy to confidential proprietary information concerning PG&E, participated 

in the fraudulent scheme alleged herein. 

476. Exchange Act Individual Defendants, who are the senior officers and/or directors 

of the Company, had actual knowledge of the material omissions and/or the falsity of the 

material statements set forth above, and intended to deceive Lead Plaintiff and the other 

members of the Class, or, in the alternative, acted with reckless disregard for the truth when they 

failed to ascertain and disclose the true facts in the statements made by them or other PG&E 

personnel to members of the investing public, including Lead Plaintiff and the Class. 

477. As a result of the foregoing, the market price of PG&E securities was artificially 

inflated during the Class Period. In ignorance of the falsity of PG&E’s and the Exchange Act 

Individual Defendants’ statements, Lead Plaintiff and the other members of the Class relied on 

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the statements described above and/or the integrity of the market price of PG&E securities 

during the Class Period in purchasing PG&E securities at prices that were artificially inflated as 

a result of PG&E’s and the Exchange Act Individual Defendants’ false and misleading 

statements. 

478. Had Lead Plaintiff and the other members of the Class been aware that the market 

price of PG&E securities had been artificially and falsely inflated by PG&E’s and the Exchange 

Act Individual Defendants’ misleading statements and by the material adverse information which 

PG&E’s and the Exchange Act Individual Defendants did not disclose, they would not have 

purchased PG&E’s securities at the artificially inflated prices that they did, or at all. 

479. As a result of the wrongful conduct alleged herein, Lead Plaintiff and other 

members of the Class have suffered damages in an amount to be established at trial. 

480. By reason of the foregoing, PG&E and the Exchange Act Individual Defendants 

have violated Section 10(b) of the 1934 Act and Rule 10b-5 promulgated thereunder and are 

liable to the plaintiff and the other members of the Class for substantial damages which they 

suffered in connection with their purchase of PG&E securities during the Class Period. 

SECOND CLAIM 

For Violation of Section 20(a) of 

The Exchange Act Against PG&E Corporation 

481. Lead Plaintiff repeats and realleges each and every allegation contained in the 

foregoing paragraphs as if fully set forth herein. 

482. This Count is asserted pursuant to Section 20(a) of the Exchange Act against 

Defendant PG&E Corporation. 

483. During the Class Period, PG&E Corporation participated in the operation and 

management of the Utility. PG&E Corporation conducted and participated, directly and 

indirectly, in the conduct of the Utility’s business affairs. For the years of 2015-2017, 100% of 

PG&E Corporation’s directors also sat on the board of the Utility, and over 90% of the Utility’s 

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directors also sat on the board of PG&E Corporation.148 Further, both companies filed joint 

annual reports on Form 10-K with the SEC throughout the Class Period, the entirety of which 

filings were certified pursuant to the Sarbanes-Oxley Act of 2002 (“SOX”) by officers of both

Companies. Further, because of its 100% ownership and authority, PG&E Corporation knew the 

adverse non-public information regarding the Company’s financial condition and noncompliance 

with relevant laws and regulations. 

484. Through its position as sole owner of the Utility and placement of its own 

Independent Directors on the Utility’s Board of Directors, PG&E Corporation had a duty to 

disseminate accurate and truthful information with respect to the Utility’s financial condition and 

results of operations, and to correct promptly any public statements issued by the Utility which 

had become materially false or misleading. 

485. Because of its position as sole owner of the Utility and placement of its own 

Independent Directors on the Utility’s Board of Directors, PG&E Corporation was able to, and 

did, control the contents of the various reports, press releases and public filings which the Utility 

disseminated in the marketplace during the Class Period. Throughout the Class Period, PG&E 

Corporation exercised its power and authority to cause the Utility to engage in the wrongful acts 

complained of herein. PG&E Corporation, therefore, was a “controlling person” of the Utility 

within the meaning of Section 20(a) of the Exchange Act. In this capacity, it participated in the 

unlawful conduct alleged which artificially inflated the market price of PG&E securities. 

 148 2015: Lewis Chew, Earley, Fred J. Fowler, Maryellen C. Herringer, Richard C. Kelly, 

Roger H. Kimmel, Richard A. Meserve, Forrest E. Miller, Rosendo G. Parra, Barbara L. Rambo, 

Anne Shen Smith, and Barry Lawson Williams were directors of both PG&E Corporation and 

the Utility, whereas Johns was a director of the Utility only. 

2016: Lewis Chew, Earley, Fred J. Fowler, Maryellen C. Herringer, Richard C. Kelly, Roger 

H. Kimmel, Richard A. Meserve, Forrest E. Miller, Rosendo G. Parra, Barbara L. Rambo, Anne 

Shen Smith, and Barry Lawson Williams were directors of both PG&E Corporation and the 

Utility, whereas Stavropoulos and Williams were directors of the Utility only. 

2017: Lewis Chew, Earley, Fred J. Fowler, Maryellen C. Herringer, Jeh C. Johnson, Richard 

C. Kelly, Roger H. Kimmel, Richard A. Meserve, Forrest E. Miller, Eric D. Mullins, Rosendo G. 

Parra, Barbara L. Rambo, Anne Shen Smith, Barry Lawson Williams, and Williams were 

directors of both PG&E Corporation and the Utility, whereas Stavropoulos was director of the 

Utility only. 

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486. By reason of the above conduct, PG&E Corporation is liable pursuant to Section 

20(a) of the Exchange Act for the violations committed by the Utility. 

THIRD CLAIM 

For Violation of Section 20(a) of The Exchange Act 

Against The Exchange Act Individual Defendants 

487. Lead Plaintiff repeats and realleges each and every allegation contained in the 

foregoing paragraphs as if fully set forth herein. 

488. During the Class Period, the Exchange Act Individual Defendants participated in 

the operation and management of PG&E. The Exchange Act Individual Defendants conducted 

and participated, directly and indirectly, in the conduct of PG&E’s business affairs. Because of 

their senior positions, they knew the adverse non-public information regarding the Company’s 

financial condition and noncompliance with relevant laws and regulations. 

489. As officers and/or directors of a publicly owned company, the Exchange Act 

Individual Defendants had a duty to disseminate accurate and truthful information with respect to 

PG&E’s financial condition and results of operations, and to correct promptly any public 

statements issued by PG&E which had become materially false or misleading. 

490. Because of their positions of control and authority as senior officers, the 

Exchange Act Individual Defendants were able to, and did, control the contents of the various 

reports, press releases and public filings which PG&E disseminated in the marketplace during 

the Class Period. Throughout the Class Period, the Exchange Act Individual Defendants 

exercised their power and authority to cause PG&E to engage in the wrongful acts complained of 

herein. The Exchange Act Individual Defendants therefore, were “controlling persons” of PG&E 

within the meaning of Section 20(a) of the Exchange Act. In this capacity, they participated in 

the unlawful conduct alleged which artificially inflated the market price of PG&E securities. 

491. By reason of the above conduct, the Exchange Act Individual Defendants are 

liable pursuant to Section 20(a) of the Exchange Act for the violations committed by PG&E. 

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FOURTH CLAIM 

Alter Ego Liability for Violation of Section 10(b) of 

The Exchange Act and Rule 10b-5 Against PG&E Corporation 

492. Lead Plaintiff repeats and realleges each and every allegation contained in the 

foregoing paragraphs as if fully set forth herein. 

493. PG&E Corporation is jointly and severally liable for the misstatements and 

omissions of the Utility, insofar as: 

(a) PG&E Corporation and the Utility operate as a single business enterprise 

operating out of the same building located at 77 Beale Street, San Francisco, California, for the 

purpose of effectuating and carrying out PG&E Corporation’s business and operations and/or for 

the benefit of PG&E Corporation; 

(b) PG&E Corporation and the Utility do not operate as completely separate 

entities, but rather integrate their resources to achieve a common business purpose; 

(c) the Utility is so organized and controlled, and its decisions, affairs, and 

business are so conducted as to make it a mere instrumentality, agent, conduit, or adjunct of 

PG&E Corporation; 

(d) PG&E Corporation’s and the Utility’s officers and management are 

intertwined and do not act completely independently of one another; 

(e) PG&E Corporation has control and authority to choose and appoint the 

Utility’s board members as well as its other top officers and managers; 

(f) PG&E Corporation and the Utility are insured by the same carriers and 

provide uniform or similar pension, health, life, and disability insurance plans for employees; 

(g) PG&E Corporation and the Utility have unified 401(k) Plans, pension and 

investment plans, bonus programs, vacation policies, and paid time off from work schedules and 

policies; 

(h) PG&E Corporation and the Utility have unified personnel policies and 

practices and/or a consolidated personnel organization or structure; 

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(i) PG&E Corporation and the Utility are represented by common legal 

counsel; 

(j) PG&E Corporation and the Utility acknowledged in their joint 10-K 

statement for the year 2015 that eight separate officers were “executive officers of both PG&E 

Corporation and the Utility;” 

(k) PG&E Corporation and the Utility acknowledged in their joint 10-K 

statement for the year 2016 that nine separate officers were “executive officers of both PG&E 

Corporation and the Utility;” 

(l) PG&E Corporation’s officers, directors, and other management make 

policies and decisions to be effectuated by the Utility and/or otherwise play roles in providing 

directions and making decisions for the Utility; 

(m) PG&E Corporation’s officers, directors, and other management direct 

certain financial decisions for the Utility including the amount and nature of capital outlays; 

(n) PG&E Corporation’s written guidelines, policies, and procedures control 

the Utility’s employees, policies, and practices; 

(o) PG&E Corporation files consolidated earnings statements factoring in all 

revenue and losses from the Utility, as well as consolidated tax returns, including those seeking 

tax relief; and 

(p) PG&E Corporation generally directs and controls the Utility’s relationship 

with, requests to, and responses to inquiries from, the CPUC and uses such direction and control 

for the benefit of PG&E Corporation. 

494. For purposes of this litigation, it would be inequitable to treat the misstatements 

and actions of the Utility as those of the Utility only, and not also of PG&E Corporation. 

495. By reason of the above allegations, any misstatements made by the Utility – 

including, but not limited to, Misstatement Nos. 1 and 3 – were made by an “alter ego” of PG&E 

Corporation, and PG&E Corporation is therefore equally liable for violations of Section 10(b) of 

the 1934 Act and Rule 10b-5 promulgated thereunder and are liable to the plaintiff and the other 

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members of the Class for substantial damages which they suffered in connection with their 

purchase of PG&E securities during the Class Period. 

XIV. NATURE OF THE SECURITIES ACT CLAIMS 

496. Securities Act Plaintiffs (defined below) bring claims for violations of the 

Securities Act, individually and on behalf of all persons or entities that acquired PG&E senior 

notes in or traceable to the Company’s Notes Offerings, as detailed herein, against certain of the 

Company’s officers and directors, and the underwriters of the Notes Offerings.149 Since 

March 2016, PG&E has issued over $4 billion worth of senior notes registered with the SEC. 

According to a PG&E filing in the United States District Court for the Northern District of 

California, “PG&E consistently spends more cash than it generates through its operations and 

cannot fund all its infrastructure investments without external financing from the debt and equity 

markets.”150

497. The Securities Act claims set forth herein are based on strict liability and 

negligence and are not based on any allegation that any defendant engaged in fraud or intentional 

misconduct. The Securities Act Plaintiffs specifically disclaim any reference to or reliance on 

allegations of fraud. 

XV. OVERVIEW OF THE SECURITIES ACT VIOLATIONS 

498. PG&E’s failure to follow safety requirements and prudent practices, including 

regulations and laws, resulted in numerous devastating wildfires in 2015, 2017 and 2018, causing 

catastrophic loss of life and destruction of property. 

 149 “Notes Offerings” refers to the Company’s March 2016 public offering of senior notes 

(the “March 2016 Notes Offering”), the Company’s December 2016 public offering of senior 

notes (the “December 2016 Notes Offering”), the Company’s March 2017 public offering of 

senior notes (the “March 2017 Notes Offering”), and the Company’s April 2018 public offering 

of senior notes (the “April 2018 Notes Offering”). The “Offering Documents” refers to the 

Registration Statement and Prospectus (to include all amendments and supplements thereto for 

each offering, together with all documents incorporated by reference in each Registration 

Statement and Prospectus). See ¶ 630(a)-(d). 

150 Response to Second Order to Show Cause Why PG&E’s Conditions of Probation Should 

Not Be Modified at 11, PG&E Criminal Proceedings, (N.D. Cal. Mar. 22, 2019), ECF No. 1032. 

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499. In all, the Company has been implicated in causing more than 1,500 fires 

between June 2014 and November 2018,151 including some of the most widespread and 

destructive wildfires in California history. PG&E failed to implement required safety 

precautions even as the risk of wildfires increased. The Company has filed Chapter 11 

bankruptcy, as it faces a host of regulatory investigations, criminal probes, and civil lawsuits. 

PG&E estimates it could be liable for more than $30 billion in costs, expenses and other losses 

from the North Bay and Camp Fires excluding any penalties, fines, or punitive damages. 

500. In addition to liability for causing destructive wildfires, PG&E recently 

announced in the Company’s May 2, 2019 Form 10-Q that the SEC is “conducting an 

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

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

Fire.” 

501. At the same time that PG&E’s equipment and operations were posing an 

unreasonable risk to the lives and property of California residents – indeed, even as the 

Company’s equipment was in the midst of setting hundreds of wildfires – PG&E raised billions 

of dollars from investors through the sale of senior notes. From March 2016 to May 2018, 

PG&E offered and sold approximately $4.35 billion worth of senior notes that it registered with 

the SEC to ensure that the notes could be widely sold and distributed to the investing public. 

502. Specifically, PG&E offered and sold: (i) $600 million worth of 2.95% PG&E 

senior notes due March 1, 2026 pursuant to the March 2016 Notes Offering; (ii) $250 million 

worth of floating rate PG&E senior notes due November 30, 2017 and $400 million worth of 

4.00% PG&E senior notes due December 1, 2046 pursuant to the December 2016 Notes 

Offering; (iii) $400 million worth of 3.30% PG&E senior notes due March 15, 2027 and $200 

million worth of 4.00% PG&E senior notes due December 1, 2046 pursuant to the March 2017 

Notes Offering; and (iv) up to $500 million worth of floating rate PG&E senior notes due 

 151 The Wall Street Journal reported on January 13, 2019 that PG&E started more than 1,500 

fires between June 2014 and December 2017. In November 2018, PG&E also caused the Camp 

Fire. See Fn 168, infra. 

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November 28, 2018, $1.15 billion worth of 3.30% PG&E senior notes due December 1, 2027, 

and $850 million worth of 3.95% PG&E senior notes due December 1, 2047 pursuant to the 

April 2018 Notes Offering. 

503. PG&E’s Offering Documents to the Notes Offerings materially misled investors 

as to inter alia: (i) the safety of the Company’s equipment by highlighting its commitment to 

safety and touting upgrades and investments; (ii) the real risk of wildfires by emphasizing the 

important role of the Company’s vegetation management activities; (iii) the risks associated with 

and impact of wildfires on PG&E; (iv) the sufficiency of the Company’s investments in safety to 

prevent wildfires; (v) the Company’s liability with respect to wildfires; and (vi) the known 

adverse trends impacting PG&E. 

504. PG&E’s conduct has subsequently been revealed to contradict the representations 

made to investors in the Offering Documents, and now poses an existential threat to the 

Company. Subsequent to, and due to, Defendants’ omission of the true state of PG&E’s business 

and operations and the risks posed by the Company’s lax wildfire safety practices and inadequate 

investment in safety, the value of the senior notes associated with the Notes Offerings has 

substantially declined. 

505. For example, subsequent to the Notes Offerings, on November 13, 2018, the price 

of the 2.95% note sold in the March 2016 Notes Offering closed at $86.46 per unit, or more than 

13% below par; the price of the 4.00% note sold in the December 2016 Notes Offering closed at 

$72.26 per unit, or more than 27% below par; the price of the 3.3% note sold in the March 2017 

Notes Offering closed at $82.82 per unit, or more than 17% below par; the price of the 3.3% 

note sold in the April 2018 Notes Offering closed at $81.38 per unit, or more than 18% below 

par; and the price of the 3.95% note sold in the April 2018 Notes Offering closed at $72.23 per 

unit, or more than 27% below par. 

XVI. THE SECURITIES ACT PARTIES 

A. Securities Act Named Plaintiffs 

506. Plaintiff York County on behalf of the County of York Retirement Fund acquired 

PG&E senior notes issued in the March 2016 Notes Offering and the April 2018 Notes Offering 

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as described in the Certification attached hereto (as “Attachment B”) and incorporated by 

reference, and has been damaged thereby. 

507. Plaintiff City of Warren Police and Fire Retirement System acquired PG&E 

senior notes issued in the April 2018 Notes Offering as described in the Certification attached 

hereto (as “Attachment C”) and incorporated by reference, and has been damaged thereby. 

508. Plaintiff Mid-Jersey Trucking Industry & Local No. 701 Pension Fund acquired 

PG&E senior notes issued in the December 2016 Notes Offering and the March 2017 Notes 

Offering as described in the Certification attached hereto (as “Attachment D”) and incorporated 

by reference, and has been damaged thereby. 

B. Bankrupt Entities 

509. Pacific Gas and Electric Company is a California public utility operating in 

northern and central California, with headquarters in San Francisco. The Utility is the registrant 

and issuer of the PG&E senior notes issued in the Notes Offerings. The Utility has declared 

bankruptcy and is therefore not named as a defendant in this action due to the automatic stay of 

proceedings under the federal bankruptcy laws. But for the automatic stay of proceedings, the 

Utility would be named as a defendant for all counts asserted herein. 

510. PG&E Corporation is a holding company whose primary operating subsidiary is 

Pacific Gas and Electric Company. PG&E Corporation is headquartered in the same San 

Francisco building as the Utility, and it shared an overlapping board of directors with the Utility. 

As the parent and owner of the Utility, PG&E Corporation also issued and sold the PG&E senior 

notes issued in the Notes Offerings. Like the Utility, PG&E Corporation has declared bankruptcy 

and is therefore not named as a defendant in this action due to the automatic stay of proceedings 

under the federal bankruptcy laws. But for the automatic stay of proceedings, PG&E Corporation 

would be named as a defendant for all counts asserted herein. 

C. Securities Act Individual Defendants 

511. The following current or former directors and/or officers are named as Defendants 

for the Securities Act claims. 

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512. Defendant Anthony F. Earley, Jr. (“Earley”) served as PG&E Corporation’s 

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

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

Earley was a director of the Utility at the time of the March 2016 Notes Offering, the December 

2016 Notes Offering and the March 2017 Notes Offering. Earley signed the registration 

statement for the March 2016 Notes Offering and the December 2016 Notes Offering and the 

registration statement for the March 2017 Notes Offering. 

513. Defendant Geisha J. Williams (“Williams”) served as PG&E Corporation’s CEO 

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

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

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

from June 1, 2011 to August 16, 2015. Williams was a director of the Utility at the time of the 

March 2016 Notes Offering, the December 2016 Notes Offering, the March 2017 Notes Offering 

and the April 2018 Notes Offering. Williams signed the registration statement for the March 

2017 Notes Offering and the registration statement for the April 2018 Notes Offering. 

514. Defendant Nickolas Stavropoulos (“Stavropoulos”) served as the President and 

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

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

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

August 16, 2015. Stavropolous was a director of the Utility at the time of the March 2016 Notes 

Offering, the December 2016 Notes Offering, the March 2017 Notes Offering and the April 2018 

Notes Offering. Stavropolous signed the registration statement for the March 2017 Notes 

Offering and the registration statement for the April 2018 Notes Offering. 

515. Defendant Barbara L. Rambo (“Rambo”) was a director of the Utility at the time 

of the March 2016 Notes Offering, the December 2016 Notes Offering, the March 2017 Notes 

Offering and the April 2018 Notes Offering. Rambo signed the registration statement for the 

March 2016 Notes Offering, the registration statement for the December 2016 Notes Offering, 

the registration statement for the March 2017 Notes Offering, and the registration statement for 

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the April 2018 Notes Offering. Rambo was appointed a director of PG&E in 2005. On April 3, 

2019, PG&E announced that Rambo would be replaced at the next Board meeting. As of May 2, 

2019, Rambo was no longer a director. 

516. Defendant David S. Thomason (“Thomason”) was the Vice President, Chief 

Financial Officer (“CFO”) and Controller of the Utility at the time of the December 2016 Notes 

Offering, the March 2017 Notes Offering and the April 2018 Notes Offering. Thomason signed 

the registration statement for the March 2017 Notes Offering and the registration statement for 

the April 2018 Notes Offering. Thomason has worked in various roles at PG&E since 2001, and 

as CFO, VP and controller since June 2016. 

517. Defendant Dinyar B. Mistry (“Mistry”) was the Vice President, CFO and 

Controller of the Utility at the time of the March 2016 Notes Offering, and PG&E’s Senior Vice 

President of Human Resources during the December 2016 Notes Offering, the March 2017 Notes 

Offering and the April 2018 Notes Offering. Mistry signed the registration statement for the 

March 2016 Notes Offering and the December 2016 Notes Offering. According to PG&E, 

Mistry joined Pacific Gas and Electric Company in 1994 and has held various positions since 

then, including Vice President and Controller of Pacific Gas and Electric Company; as Vice 

President, Regulation and Rates; as Vice President, Internal Audit and Compliance; and most 

recently as Vice President and Chief Risk and Audit Officer. 

518. Defendant Lewis Chew (“Chew”) was a director of the Utility at the time of the 

March 2016 Notes Offering, the December 2016 Notes Offering, the March 2017 Notes Offering 

and the April 2018 Notes Offering. Chew signed the registration statement for the March 2016 

Notes Offering, the registration statement for the December 2016 Notes Offering, the registration 

statement for the March 2017 Notes Offering and the registration statement for the April 2018 

Notes Offering. Chew was appointed a director of PG&E in 2009. On April 3, 2019, PG&E 

announced that Chew would be replaced at the next Board meeting. As of May 2, 2019, Chew 

was no longer a director. 

519. Defendant Fred J. Fowler (“Fowler”) was a director of the Utility at the time of 

the March 2016 Notes Offering, the December 2016 Notes Offering, the March 2017 Notes 

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Offering and the April 2018 Notes Offering. Fowler signed the registration statement for the 

March 2016 Notes Offering, the registration statement for the December 2016 Notes Offering, 

the registration statement for the March 2017 Notes Offering, and the registration statement for 

the April 2018 Notes Offering. Fowler has been a PG&E director since 2012. 

520. Defendant Maryellen C. Herringer (“Herringer”) was a director of the Utility at 

the time of the March 2016 Notes Offering and the December 2016 Notes Offering. Herringer 

signed the registration statement for the March 2016 Notes Offering, the registration statement 

for the December 2016 Notes Offering and the registration statement for the March 2017 Notes 

Offering. Herringer was appointed a director of PG&E in 2009. On April 3, 2019, PG&E 

announced that Herringer would be replaced at the next Board meeting. As of May 2, 2019, 

Herringer was no longer a director. 

521. Defendant Richard C. Kelly (“Kelly”) was a director of the Utility at the time of 

the March 2016 Notes Offering, the December 2016 Notes Offering, the March 2017 Notes 

Offering and the April 2018 Notes Offering. He was also Chairman of the Board of PG&E 

Corporation beginning in December 2017. Kelly signed the registration statement for the March 

2016 Notes Offering, the registration statement for the December 2016 Notes Offering, the 

registration statement for the March 2017 Notes Offering, and the registration statement for the 

April 2018 Notes Offering. Kelly has been a PG&E director from 2013 until his resignation 

from the Board as announced by PG&E on April 22, 2019. 

522. Defendant Roger H. Kimmel (“Kimmel”) was a director of the Utility at the time 

of the March 2016 Notes Offering, the December 2016 Notes Offering, the March 2017 Notes 

Offering and the April 2018 Notes Offering. Kimmel signed the registration statement for the 

March 2016 Notes Offering, the registration statement for the December 2016 Notes Offering, 

the registration statement for the March 2017 Notes Offering, and the registration statement for 

the April 2018 Notes Offering. Kimmel was appointed a director of PG&E in 2009. On April 3, 

2019, PG&E announced that Kimmel would be replaced at the next Board meeting. As of May 

2, 2019, Kimmel was no longer a director. 

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523. Defendant Richard A. Meserve (“Meserve”) was a director of the Utility at the 

time of the March 2016 Notes Offering, the December 2016 Notes Offering, the March 2017 

Notes Offering and the April 2018 Notes Offering. Meserve signed the registration statement for 

the March 2016 Notes Offering, the registration statement for the December 2016 Notes 

Offering, the registration statement for the March 2017 Notes Offering, and the registration 

statement for the April 2018 Notes Offering. Meserve was appointed a director of PG&E in 

2006. On April 3, 2019, PG&E announced that Meserve would be replaced at the next Board 

meeting. As of May 2, 2019, Meserve was no longer a director. 

524. Defendant Forrest E. Miller (“Miller”) was a director of the Utility at the time of 

the March 2016 Notes Offering, the December 2016 Notes Offering, the March 2017 Notes 

Offering and the April 2018 Notes Offering, and Chairman of the Utility’s Board since May 

2017. Miller signed the registration statement for the March 2016 Notes Offering, the 

registration statement for the December 2016 Notes Offering, the registration statement for the 

March 2017 Notes Offering, and the registration statement for the April 2018 Notes Offering. 

Miller was appointed a director of PG&E in 2009. On April 3, 2019, PG&E announced that 

Miller would be replaced at the next Board meeting. As of May 2, 2019, Miller was no longer a 

director. 

525. Defendant Barry Lawson Williams (“B. Williams”) was a director of the Utility at 

the time of the March 2016 Notes Offering and the December 2016 Notes Offering, during 

which time he served as Chairman of the Utility’s Board of Directors. B. Williams signed the 

registration statement for the March 2016 Notes Offering, the registration statement for the 

December 2016 Notes Offering and the registration statement for the March 2017 Notes 

Offering. B. Williams was appointed a director of PG&E in 1996. On April 3, 2019, PG&E 

announced that B. Williams would be replaced at the next Board meeting. As of May 2, 2019, 

B. Williams was no longer a director. 

526. Defendant Rosendo G. Parra (“Parra”) was a director of the Utility at the time of 

the March 2016 Notes Offering, the December 2016 Notes Offering, the March 2017 Notes 

Offering and the April 2018 Notes Offering. Parra signed the registration statement for the 

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March 2017 Notes Offering and the registration statement for the April 2018 Notes Offering. 

Parra was appointed a director of PG&E in 2009. On April 3, 2019, PG&E announced that Parra 

would be replaced at the next Board meeting. As of May 2, 2019, Parra was no longer a director. 

527. Defendant Anne Shen Smith (“Smith”) was a director of the Utility at the time of 

the March 2016 Notes Offering, the December 2016 Notes Offering, the March 2017 Notes 

Offering and the April 2018 Notes Offering. Smith signed the registration statement for the 

March 2017 Notes Offering and the registration statement for the April 2018 Notes Offering. 

Smith was appointed a director of PG&E in 2015. On April 3, 2019, PG&E announced that 

Smith would be replaced at the next Board meeting. As of May 2, 2019, Smith was no longer a 

director. 

528. Defendant Eric D. Mullins (“Mullins”) was a director of the Utility at the time of 

the December 2016 Notes Offering, the March 2017 Notes Offering and the April 2018 Notes 

Offering. Mullins signed the registration statement for the March 2017 Notes Offering and the 

registration statement for the April 2018 Notes Offering. Mullins has been a PG&E director 

since 2016. 

529. The defendants identified in ¶¶512-28 are referred to herein as the “Securities Act 

Individual Defendants.” The Individual Securities Act Defendants signed the registration 

statements for one or more of the Notes Offerings as detailed herein, and, as directors and/or 

executive officers of the Company, participated in the solicitation and sale of PG&E senior notes 

to investors in the Notes Offerings for their own benefit and the benefit of PG&E. 

D. Underwriter Defendants 

530. In addition to the above, the following underwriters are named as defendants for 

the Securities Act claims for the Notes Offerings for which they served as underwriters. 

531. Defendant Barclays Capital Inc. served as a lead underwriter for the March 2016 

Notes Offering. 

532. Defendant BNP Paribas Securities Corp. served as a lead underwriter for the 

March 2016 Notes Offering and the March 2017 Notes Offering. 

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533. Defendant Morgan Stanley & Co. LLC served as a lead underwriter for the March 

2016 Notes Offering. 

534. Defendant MUFG Securities Americas, Inc. f/k/a Mitsubishi UFJ Securities 

(USA), Inc. served as a lead underwriter for the March 2016 Notes Offering. 

535. Defendant The Williams Capital Group, L.P. served as a lead underwriter for the 

March 2016 Notes Offering. 

536. Defendant Citigroup Global Markets Inc. served as a lead underwriter for the 

December 2016 Notes Offering. 

537. Defendant J.P. Morgan Securities LLC served as a lead underwriter for the 

December 2016 Notes Offering. 

538. Defendant Merrill Lynch, Pierce, Fenner & Smith Incorporated served as a lead 

underwriter for the December 2016 Notes Offering. 

539. Defendant Mizuho Securities USA LLC served as a lead underwriter for the 

December 2016 Notes Offering. 

540. Defendant Goldman, Sachs & Co., LLC served as a lead underwriter for the 

March 2017 Notes Offering. 

541. Defendant RBC Capital Markets, LLC served as a lead underwriter for the March 

2017 Notes Offering. 

542. Defendant Wells Fargo Securities, LLC served as a lead underwriter for the 

March 2017 Notes Offering. 

543. Defendant BNY Mellon Capital Markets, LLC served as an underwriter for the 

March 2016 Notes Offering and the March 2017 Notes Offering. 

544. Defendant TD Securities (USA) LLC served as an underwriter for the March 

2016 Notes Offering and the March 2017 Notes Offering. 

545. Defendant C.L. King & Associates, Inc. served as an underwriter for the March 

2016 Notes Offering. 

546. Defendant Great Pacific Securities served as an underwriter for the March 2016 

Notes Offering. 

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547. Defendant CIBC World Markets Corp. served as an underwriter for the December 

2016 Notes Offering. 

548. Defendant SMBC Nikko Securities America, Inc. served as an underwriter for the 

December 2016 Notes Offering. 

549. Defendant U.S. Bancorp Investments, Inc. served as an underwriter for the 

December 2016 Notes Offering. 

550. Defendant Lebenthal & Co., LLC served as an underwriter for the December 

2016 Notes Offering. 

551. Defendant Mischler Financial Group, Inc. served as an underwriter for the 

December 2016 Notes Offering. 

552. Defendant Blaylock Van, LLC served as an underwriter for the March 2017 Notes 

Offering. 

553. Defendant Samuel A. Ramirez & Company, Inc. served as an underwriter for the 

December 2016 Notes Offering. 

554. Defendant MFR Securities, Inc. served as an underwriter for the March 2017 

Notes Offering. 

555. The defendants identified in ¶¶531-554 are referred to herein as the “Underwriter 

Defendants.” The Underwriter Defendants served as underwriters for the Notes Offerings and 

sold billions of dollars’ worth of PG&E senior notes in the Note Offerings, for which they 

collectively received tens of millions of dollars in fees and commissions. The Underwriter 

Defendants drafted and disseminated the offering documents used to effectuate each of the Note 

Offerings for which they served as underwriters. The Underwriter Defendants’ failure to 

conduct an adequate due diligence investigation was a substantial factor leading to the harm 

complained of herein with respect to the Securities Act claims. The Underwriter Defendants are 

not alleged to be defendants for the April 2018 Notes Offering at this time. 

556. The Individual Securities Act Defendants, together with the Underwriter 

Defendants, are collectively referred to as the “Securities Act Defendants” and are named as 

defendants with respect to the Securities Act Claims alleged herein. 

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XVII. SUBSTANTIVE ALLEGATIONS SUPPORTING THE SECURITIES ACT 

CLAIMS 

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

Violations 

557. PG&E engaged in a pattern and practice of ignoring laws and California safety 

regulations and failed to take appropriate measures to mitigate wildfire hazards. Results of 

government investigations, media coverage, analyst coverage, SEC filings, court filings, 

admissions before and findings of the Honorable William Alsup of the United States District 

Court for the Northern District of California, and other public information regarding PG&E and 

the Securities Act Defendants, all demonstrate that each of the Offering Documents for the Notes 

Offerings contained materially false and/or misleading statements. 

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

558. PG&E’s ability to maintain safe electrical equipment that complies with state 

regulations and minimizes the risk of causing wildfires is critical to the Company’s business and 

prospects. California law includes a doctrine of inverse condemnation as explained in detail in 

§VI.A.5. Inverse condemnation imposes strict liability for damages and takings as a result of the 

design, construction and maintenance of utility facilities, including its electric transmission and 

distribution lines. If a utility such as PG&E affirmatively proves “that it reasonably and 

prudently operated and managed its system” it can recover payments made to property owners 

for damages caused by a wildfire from the CPUC. In other words proof “that at a particular time 

any of the practices, methods, and acts engaged in by a utility follows the exercise of reasonable 

judgment in light of facts known or which should have been known at the time the decision was 

made.” This would include proof that it complied with the following laws and CPUC 

regulations. 

559. California Law. As explained in detail in §V.A.1-2, PG&E was required by 

California law, including California Public Utilities Code §702 and §2106, to adequately 

maintain its equipment and infrastructure, including electrical towers and poles, to prevent fires 

from being caused by its equipment or infrastructure, and was liable to property owners for 

damage caused for failure to do so. For example, California law required PG&E to: (i) maintain 

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equipment that promotes the safety and health of the public pursuant to California Public 

Utilities Code §451; and (ii) regularly service and maintain its equipment, including by clearing 

vegetation away from its power lines pursuant to California law, including California Public 

Resources Codes §4292 and §4293. And PG&E was liable to the owners of property for any 

damages to the property caused by fire for negligently or in violation of law setting a fire or 

allowing a fire to be set pursuant to California Health & Safety Code §13007. 

560. CPUC Regulations. PG&E was also required by law to adhere to CPUC 

regulations as explained in detail in §VI.A.3. These regulations include the requirements under 

General Order 95 that PG&E: (i) “establish necessary and reasonable clearances” between 

overhead conductors and nearby vegetation, with certain “minimum clearances”; and (ii) ensure 

that 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,” which in turn prohibits the use of poles, 

towers and structures “with a safety factor less than one.” The regulations also include the 

requirement under General Order 165 that PG&E “shall conduct inspections of its distribution 

facilities, as necessary, to ensure reliable, high-quality, and safe operation.” As explained in 

detail in §VI.A.3(b), as of July 2018, another California safety regulation, CPUC Resolution 

ESRB-8, also required PG&E to temporarily shut off its power lines when certain dangerous 

conditions are present that make an area susceptible to wildfires, including high wind speed and 

low humidity. On September 27, 2018 PG&E indicated that it had implemented measures in 

response to ESRB-8.

561. PG&E violated California laws and CPUC regulations with respect to maintaining 

the Company’s equipment, engaging in adequate vegetation management practices and shutting 

down power when weather conditions warrant such a safety precaution to prevent wildfires.

562. Federal Regulations. PG&E is also required by law to adhere to a number of 

federal laws and regulations as explained in detail in §VI.A.6. FERC Electric Reliability 

Standard FAC-003-4, for example, “requires that trees and other vegetation growing in or 

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adjacent to the power line right-of-way be trimmed to prevent power outages caused by tree 

contact with a transmission line.”152 PG&E failed to comply with this requirement.

2. PG&E’s Lax Safety Practices, Safety Violations and Resulting 

Wildfires 

563. On September 9, 2015, the 2015 Butte Fire was started when a tree came into 

contact with a power line. The fire, which killed two people, destroyed more than 500 homes 

and more than 400 other properties and structures, and scorched more than 70,000 acres over 22 

days, is described in more detail supra. ¶¶100-102.

564. Cal Fire, which is authorized to make fire cause and origin determinations for 

wildfires as explained in §VI.A.4 above, launched an investigation “as part of the initial response 

to the Butte Fire” at which time its investigators “immediately began working to determine the 

origin and cause of the fire.”153 

565. On March 1, 2016, PG&E issued and delivered the notes offered in the March 

2016 Notes Offering. The notes were offered pursuant to a shelf registration, with the prospectus 

supplement filed on February 23, 2016 with the SEC and the final prospectus supplement filed 

February 24, 2016. 

566. On April 28, 2016, Cal Fire issued a press release announcing its conclusion that 

the 2015 Butte Fire was caused by PG&E’s safety violations, including evidence of negligence. 

Cal Fire has indicated it would seek $90 million for costs of suppressing the 2015 Butte Fire and 

PG&E called that estimate reasonable in a May 2, 2016 Form 8-K filing.154 Cal Fire also 

referred its investigation to the two relevant district attorneys for the counties in which the 2015 

 152 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?csrt=10652948532787038938. 

153 Press Release, Cal Fire, Cal Fire Investigators Determine Cause of Destructive Butte Fire

(Apr. 28, 2016), 

calfire.ca.gov/communications/downloads/newsreleases/2016/ButteFireCause.pdf. 

154 See also Press Release, CAL FIRE, Cal Fire Investigators Determine Cause of 

Destructive Butte Fire (Apr. 28, 2016), 

calfire.ca.gov/communications/downloads/newsreleases/2016/ButteFireCause.pdf. 

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Butte Fire burned. On June 22, 2017, California Superior Court Judge Allen Sumner found 

PG&E liable in Inverse Condemnation for damages for the 2015 Butte Fire.155 

567. Part of the evidence regarding the 2015 Butte Fire includes an internal PG&E 

May 8, 2008 slide presentation filed in the Butte Fire Cases, No. JCCP 4853 (Cal. Super. Ct. 

Sacramento Cty. Nov. 2, 2018) titled “2008 Utility Offsite Strategy Discussion.” The slide 

presentation was for a meeting which PG&E’s CEO Williams testified in deposition on July 7, 

2017 that she recalled attending. It includes a slide which asks, “What is up for debate?” and the 

response includes among less than ten items, “Safety.” It also asks, “What is not up for debate?” 

and the response includes “8% EPS growth”: 

 155 Butte Fire Cases, No. JCCP 4853, Ruling on Submitted Matter: Inverse Condemnation 

Motions (Cal. Super. Ct. Sacramento Cty. June 22, 2017). 

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568. Similarly, other evidence indicates that PG&E did not provide adequate resources 

for safety. According to the October 15, 2018 deposition testimony of Janaize Markland, filed in 

the PG&E Criminal Proceedings before Judge Alsup, the director of PG&E’s Enterprise and 

Operational Risk and Insurance Department testified regarding prepared testimony dated May 1, 

2015. According to the prepared testimony referred to in the deposition and Ms. Markland’s 

deposition it was possible to improve tree-related outages “but that would require a level of 

investment greater than what PG&E is making today.”156 The prepared testimony went on to 

indicate “[w]ith limited resources, PG&E cannot do everything and must decide at what point 

it’s okay not to mitigate the risk further. Tradeoff decisions must be made,” which Ms. 

Markland testified was “a true statement.” She further testified that a tradeoff decision “has to 

do with at what point can you reduce risk further and at what cost.”157 

569. Evidence submitted in the Butte Fire Cases also includes the depositions of 

contractors who worked for PG&E and who described incentives PG&E provided to not clear as 

much vegetation as was required for safety purposes so as to save PG&E money.158 For 

example, Robert Urban was deposed on May 16, 2017 as the person most qualified to testify on 

behalf of a PG&E contractor, ACRT, that worked on PG&E’s behalf to, among other services, 

clear vegetation. According to Mr. Urban’s testimony, PG&E paid its contractors bonuses if 

they identified and cleared fewer trees as well as other vegetation, incentivizing contractors to 

clear less vegetation than is safe: 

Q. And under the VMII [bonus] program – correct me if I’m 

wrong – the way it was set up is if ACRT listed fewer trees than 

the target number and it ended up fewer trees than the target 

number were worked, there would be a bonus provided ACRT met 

certain other metrics; right? 

Urban: That is correct. 

 156 Excerpts of Deposition Transcript of Janaize Markland, PG&E Criminal Proceedings 

(N.D. Cal. Feb. 6, 2019), ECF No. 1008-1; PG&E Response to Request for Information, PG&E 

Criminal Proceedings (N.D. Cal. Feb. 22, 2019), ECF No. 1016. 

157 Excerpts of Deposition Transcript of Janaize Markland, PG&E Criminal Proceedings, 

(N.D. Cal. Feb. 6, 2019), ECF No. 1008-1. 

158 See generally Declaration of Kristine K. Meredith , Butte Fire Cases, No. JCCP 4853, 

(Cal. Super. Ct. Sacramento Cty. Dec. 21, 2018). 

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Q. All right. And if ACRT met those certain other metrics, then 

there would be an amount per tree not worked that would be paid 

to ACRT; true? 

Urban: There would be an incentive paid for trees that came – for 

unit count that came in under target. That is correct. 

* * * 

Q. So for every tree underneath – or every tree less than the VMII 

target, assuming the other metrics had been met, ACRT would 

receive seven bucks per tree; correct? 

Urban: That is correct. Seven bucks per unit. 

Q. Okay. That’s right. Because a unit might be a brush, for 

example; right? 

Urban: It may. 

* * * 

Q. Did you ever harbor that belief yourself that, hey, this bonus 

system kind of incentivizes my people to not do their job? 

Urban: That is a concern. 

570. Additional evidence regarding PG&E’s insufficient safety practices includes 

PG&E quality assurance audits of the Jackson District where the 2015 Butte Fire occurred. 

Those audits showed a trend from 2012 through 2015 of an extremely high concentration of 

potentially hazardous non-compliant trees in that District. For example, PG&E conducted an 

audit in the summer of 2015 (June 8, 2015 to July 10, 2015) which identified in a sample of 

48.71 line miles, 15 non-compliant trees, 87% of those trees were in the Jackson District. 

571. PG&E employee Kelly O’Flinn, deposed on November 3, 2016 pursuant to the 

Butte Fire Cases, No. JCCP 4853 (Cal. Super. Ct. Sacramento Cty. Jan. 17, 2019), was asked 

about the same audit and incidence of noncompliant trees in Jackson. O’Flinn confirmed that the 

vegetation issues were a negative trend affecting PG&E: 

Q: There is a paragraph there [in the audit] that says, “Regulatory 

compliance has declined slightly for the last three consecutive 

SRA audits and fallen below 99.50 percent for the first time since 

2009.” . . . Would you consider that to be a trend? 

O’Flinn: I would say, yes, it’s a trend. 

Q: And that is a trend in the wrong direction, right? 

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* * * 

O’Flinn: Slight – slight downward trend. 159

572. On December 1, 2016, PG&E issued and delivered the notes offered in the 

December 2016 Notes Offering. The notes were offered pursuant to a shelf registration, with the 

prospectus supplement filed with the SEC on November 28, 2016, and final prospectus 

supplement filed November 29, 2016. 

573. And on March 10, 2017, PG&E issued and delivered the notes offered in the 

March 2017 Notes Offering. The notes were offered pursuant to the Registration Statement filed 

with the SEC on January 4, 2017 (and as amended on January 19, 2017), and the prospectus 

supplement and final prospectus supplement filed with the SEC March 7 and March 8, 2017, 

respectively. 

574. Then, in October 2017, a series of devastating fires, which became known as the 

North Bay Fires, ravaged at least 245,000 acres of land and killed 44 people. At the time, the 

fires were the most destructive in California history and are responsible for billions in damages. 

575. Many sources pointed to the cause of the deadly North Bay Fires. According to a 

report from NBC reporter Jaxon Van Derbeken published on November 6, 2017, 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 and “cheated” when too many violations 

were found: 

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. 

* * * 

 159 Butte Fire Cases, No. JCCP 4853, Exhibit G to the Declaration of Kristine K. Meredith, 

at 45:12-24 (Cal. Super. Ct. Sacramento Cty. Dec. 21, 2018); see also at 124:3-12. 

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. . .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. 

“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.” 

576. Shortly thereafter, in a press release on December 20, 2017, PG&E announced 

that its “Board of Directors has determined to suspend the quarterly cash dividend on the 

Corporation’s common stock, beginning with the fourth quarter of 2017, citing uncertainty 

related to causes and potential liabilities associated with the extraordinary October 2017 

Northern California wildfires.” 

577. With respect to the wildfires, on January 3, 2018, State Senator Jerry Hill was 

quoted by NBC 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 – a type of “smart” 

switch that can automatically turn power back on – 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 

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 

of years ago that may have prevented these fires in October.” 

578. On April 2, 2018, PG&E filed with the SEC the registration statement for the 

April 2018 Notes Offering. On April 13, 2018, PG&E filed the prospectus for the offering. The 

exchange offer under the April 2018 Notes Offering ran until 5pm ET on May 14, 2018. 

579. On May 25, 2018, Cal Fire issued a press release announcing the results of its 

investigation into four of the North Bay Fires. The agency found that all four had begun as a 

result of downed vegetation disrupting PG&E power lines, and that three of the four were 

due to PG&E’s apparent violations of California safety regulations regarding the necessary 

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clearance between trees and power lines. The violations were of such a nature that Cal Fire 

referred these incidents to the appropriate district attorneys’ offices for further review.

580. Less than a month later, on June 8, 2018, Cal Fire issued a press release 

announcing the results of its investigation into 12 additional wildfires that occurred during the 

North Bay Fires. The agency determined that all 12 wildfires were caused by PG&E 

equipment. The agency also stated that eight of the 12 had been referred to the appropriate 

district attorneys’ offices for further review “due to evidence of alleged violations of state law.” 

581. The next day, on June 9, 2018, Bloomberg published an article titled “PG&E May 

Face Criminal Charges After Probe of Deadly Wildfires.” The article stated that PG&E was 

exposed to potential criminal liability due to Cal Fire’s finding that PG&E’s failure to follow the 

law had led to a majority of the North Bay Fires investigated to date.

582. On June 10, 2018, analysts at Guggenheim issued a research report on PG&E that 

recommended investors sell PG&E securities. The report stated: “At this point, we question 

whether the applicability of inverse condemnation even matters when all signs seem to point to 

PCG being imprudent operators in the majority of instances, which would therefore mean 

it should assume liability.”

583. On June 21, 2018, PG&E announced that it would take an estimated pre-tax 

charge in the amount of $2.5 billion for the quarter ending June 30, 2018, for claims related to 

the North Bay Fires.

584. On October 9, 2018, Cal Fire issued a press release announcing the results of its 

investigation into the Cascade Fire, part of the North Bay Fires. Again, PG&E equipment was 

found to be the cause of the fire.

585. PG&E’s admitted exposure for the North Bay Fires continued to increase. On 

February 28, 2019, PG&E issued a press release indicating the Company was taking an 

additional $1 billion charge for the quarter ending December 31, 2018 for the North Bay Fires. 

Accordingly, a total of $3.5 billion in charges for the North Bay Fires had been taken to date.

586. By the time PG&E filed its quarterly report on Form 10-Q on May 2, 2019, 

PG&E would report that “Cal Fire has issued its determination on the causes of 19 of the 2017 

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Northern California wildfires, and alleged that all of these fires, with the exception of the Tubbs 

fire, involved [PG&E’s] equipment. Cal Fire has not publicly announced any determination of 

cause on the remaining wildfires.” PG&E has also indicated in this latest Form 10-Q, filed with 

the SEC on May 2, 2019, that “[i]n light of the current state of the law on inverse condemnation 

and the information currently available to the Utility, including, among other things, the Cal Fire 

determinations of cause as stated in Cal Fire’s press releases and their released reports, PG&E 

Corporation and the Utility have determined that it is probable they will incur a loss for claims in 

connection with 17 of the 2017 Northern California wildfires.”

587. Following the North Bay Fires, on November 8, 2018, the Camp Fire began near 

the town of Paradise, Butte County. The fire would grow to surpass the North Bay Fires – which 

PG&E equipment had played a central role in igniting nearly all only one year previously. 

The 2018 Camp Fire is the most destructive and fatal wildfire in California history. The fire 

burned 153,336 acres, caused at least 85 fatalities, with total damages estimated on the low-end 

at $16.5 billion. The fire was considered the costliest natural disaster in the world in 2018. 

588. Cal Fire, as it did with the 2015 Butte Fire and North Bay Fires, conducted an 

investigation. PG&E equipment was implicated as the cause of the Camp Fire. Specifically, Cal 

Fire identified the location of the fire as near a PG&E transmission line, which the Company 

revealed in a December 11, 2018 electric incident report had relayed and de-energized shortly 

before the fire began. A PG&E employee also reported a fire in the vicinity of the transmission 

line to 911 the morning the Camp Fire started, and an aerial patrol identified a suspension 

insulator supporting a transposition jump at the transmission tower that had separated. 

589. On November 13, 2018, PG&E filed a report on Form 8-K with the SEC stating 

that PG&E had submitted an electric incident report to the CPUC suggesting that PG&E’s 

equipment was at fault for the Camp Fire, and that PG&E had significantly increased their 

liability insurance, as follows: 

The cause of the Camp Fire is under investigation. On November 

8, 2018, the Utility submitted an electric incident report to the 

California Public Utilities Commission (the “CPUC”) indicating 

that “on November 8, 2018 at approximately 0615 hours, PG&E 

experienced an outage on the Caribou-Palermo 115 kV 

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Transmission line in Butte County. In the afternoon of 

November 8, PG&E observed by aerial patrol damage to a 

transmission tower on the Caribou-Palermo 115 kV 

Transmission line, approximately one mile north-east of the town 

of Pulga, in the area of the Camp Fire. This information is 

preliminary.” Also on November 8, 2018, acting governor Gavin 

Newsom issued an emergency proclamation for Butte County, due 

to the effect of the Camp Fire. 

As previously reported, during the third quarter of 2018, PG&E 

Corporation and the Utility renewed their liability insurance 

coverage for wildfire events in an aggregate amount of 

approximately $1.4 billion for the period from August 1, 2018 

through July 31, 2019. 

590. PG&E has also acknowledged (¶190) that another ignition point for the Camp 

Fire had exhibited damaged and downed poles, vegetation on top of downed wires, and other 

signs of safety violations. At times approximately 30 minutes apart, vegetation underneath the 

lines ignited at two ignition points. At the same time, despite PG&E’s ESRB-8 Shutoff Protocol, 

PG&E had canceled plans to shut off power as a precaution against fires in parts of Butte 

County, where the fire ignited. Additionally, media reports (¶375) have indicated that a PG&E 

crew was planning to address sparking transmission lines in a location near the origin of the 

Camp Fire. 

591. On November 14, 2018, Reuters published an article describing the market’s 

reaction to the news about PG&E’s liability for wildfires, titled “UPDATE 3-PG&E shares and 

bonds plunge as California wildfire risks mount.”160 

592. On November 15, 2018, Moody’s downgraded PG&E’s debt. As Bloomberg 

described in a November 15, 2018 article titled “PG&E Credit Cut to Brink of Junk by Moody's 

on Wildfire Risk”: 

PG&E Corp.’s credit rating was cut to the brink of junk amid 

doubt about its ability to manage liabilities from the California 

wildfires. 

Moody’s Investors Service lowered the rating to Baa3 from Baa2, 

the second-lowest level of investment grade, with the possibility of 

 160 Dan Burns, UPDATE 3-PG&E Shares and Bonds Plunge as California Wildfire Risks 

Mount, Reuters (Nov. 14, 2018), https://www.reuters.com/article/california-wildfirespge/update-3-pge-shares-and-bonds-plunge-as-california-wildfire-risks-mountidUSL2N1XP0UP. 

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further downgrade, according to a statement. PG&E’s grade 

reflects an exposure of about $10 billion to the 2017 wildfires, and 

uncertainty around 2018 liabilities, said Moody’s, which also 

reduced the utility’s Pacific Gas & Electric Co. subsidiary to Baa2. 

“The rating downgrade reflects the material exposure to new 

potential liabilities associated with the Camp Fire and the 

uncertainties associated with how the fire-related liabilities will be 

recovered,” Moody’s analyst Jeff Cassella said in the statement. 

California’s biggest utility said this week it exhausted its credit 

facilities to boost cash, a move that was widely seen to be in 

anticipation of a credit rating downgrade, and raising concerns it 

may have to eventually file for bankruptcy. 

593. On November 27, 2018, Judge Alsup ordered PG&E to provide written answers 

to several questions regarding the Company’s role in starting the Camp Fire and any other fires 

in the last three years.161 Judge Alsup is presiding over PG&E’s probation proceedings 

following its 2016 conviction related to the explosion of a PG&E gas pipeline in San Bruno, 

California, that killed eight people and destroyed 38 homes. 

594. Despite the 2015 Butte Fire and North Bay Fires, on December 10, 2018, The San 

Diego Union-Tribune reported that PG&E had never produced a report for wildfire mitigation 

risks two years after the law requiring the production of such a report was enacted. Under 

California Senate Bill 1028 (“SB 1028”) – enacted in September 2016 – PG&E and other 

California utilities were required to produce an annual report detailing efforts to limit the risks 

from wildfires and specifying who was responsible for implementing safety provisions in the 

plans. State Senator Jerry Hill, who introduced SB 1028, said of utility regulators’ failure to 

oversee PG&E’s implementation of the report: “They have done absolutely nothing in those 

two years.” In part to rectify this delinquency, the California State Legislature passed California 

Senate Bill 901 (“SB 901”) in the Fall of 2018 in order to force California utilities to develop and 

submit their wildfire mitigation plans no later than February 2019. According to a submission of 

 161 See Notice re California Wilfires, PG&E Criminal Proceedings (N.D. Cal. Nov. 27, 2018), 

ECF No. 951. 

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the CPUC in the probation proceedings pending before Judge Alsup, on February 6, 2019, 

PG&E finally submitted said plan.162

595. In addition to not producing a plan for wildfire mitigation risks, PG&E is alleged 

to have falsified safety data and records for five years. As PG&E noted in a press release, filed 

on January 14, 2019 with the SEC on a Form 8-K, the CPUC announced on December 14, 2018 

that it had opened a case against PG&E for allegedly falsifying its data and safety records. 

While the documented violations related to the intentional falsification of pipeline data, the 

agency stated that the findings were an example of why it was “investigating PG&E’s safety 

culture” and considering the forced implementation of measures that “address systemic safety 

issues at PG&E.” In other words, according to the CPUC, the Company’s falsification of 

pipeline safety data implicated the Company’s entire operations and approach to safety. 

According to the CPUC’s annual report for 2018, PG&E falsified records from 2012 through 

2017.163 

596. Thereafter, on December 21, 2018, the CPUC issued a Scoping Memo and Ruling 

(the “Ruling”) regarding its efforts to reform PG&E’s corporate safety culture. The Ruling 

found that “PG&E has had serious safety problems with both its gas and electric operations for 

many years” and stated that, despite these shortcomings, the Company had failed “to develop a 

comprehensive enterprise-wide approach to address safety.” The Ruling stated that the 

CPUC “was, and remains, concerned that the safety problems being experienced by PG&E were 

not just one-off situations or bad luck, but indicated a deeper and more systemic problem.” 

597. On December 28, 2018, the Attorney General of California filed an amicus brief 

in connection with PG&E’s probation proceedings before Judge Alsup. The brief stated that 

PG&E’s actions or failures to act could constitute a range of criminal violations if the Utility was 

 162 Comments of the CPUC in Response to Second Order to Show Cause at 1, PG&E 

Criminal Proceedings (N.D. Cal. Mar. 22, 2019), ECF No. 1033. 

163 See CPUC 2018 Annual Report at 9, 

http://www.cpuc.ca.gov/uploadedFiles/CPUCWebsite/Content/About_Us/Organization/

Divisions/Office_of_Governmental_Affairs/Legislation/2019/CPUC%20Annual%20Report%20

2019%20-%20page%20view%20only.pdf. 

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found to be “reckless” in causing California wildfires.164 The listed potential offenses ranged 

from misdemeanors to implied-malice murder. 

598. On January 9, 2019, in PG&E’s probation proceedings before Judge Alsup, a U.S. 

probation officer filed a Petition for Summons for Offender Under Supervision, which: (i) found 

“probable cause to believe that Pacific Gas and Electric Company violated the conditions of their 

Probation” stemming from the San Bruno pipeline explosion;165 (ii) cited the Company’s failure 

to report the investigation by the Butte County District Attorney’s Office into PG&E’s role in 

starting several fires that formed part of the North Bay Fires; and (iii) cited PG&E’s failure to 

report Cal Fire’s findings of responsibility for the Honey Fire (part of the North Bay Fires), that 

there was the possibility of criminal prosecution stemming from PG&E’s role in starting this fire, 

or that the Company had entered into a settlement agreement with Butte County to avoid such 

criminal prosecution. 

599. On January 9, 2019, Judge Alsup also issued an order to show cause as to why the 

terms of PG&E’s probation should not be modified “[i]n order to protect the public from further 

wrongs by the offender, to deter similar wrongs by other utilities, and to promote the 

rehabilitation of the offender.”166 The order cited Cal Fire’s finding that PG&E had caused 18 

wildfires in 2017, 12 of which it had referred to criminal prosecution, and suggested the 

Company significantly bolster its vegetation management activities and re-inspect its entire 

electrical grid in “light of PG&E’s history of falsification of inspection reports,” among other 

proposed modifications to the terms of the Company’s probation.167

 164 Attorney General’s Amicus Brief Regarding PG&E’s Potential Criminal Liability, PG&E 

Criminal Proceedings (N.D. Cal. Dec. 28, 2018), ECF No. 954. 

165 Petition for Summons for Offender Under Supervision at 4, PG&E Criminal Proceedings 

(N.D. Cal. Dec. 28, 2018), ECF No. 960. 

166 Order to Show Cause Why PG&E’s Conditions of Probation Should Not Be Modified at 1, 

PG&E Criminal Proceedings (N.D. Cal. Jan. 9, 2019), ECF No. 961. 

167 PG&E has been found responsible by Cal Fire for at least 18 of the 19 major fires 

stemming from the 2017 Northern California wildfires that Cal Fire had investigated up until that 

point. Only the Tubbs Fire had not been found to have been PG&E’s fault. 

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600. On January 13, 2019, The Wall Street Journal reported that PG&E had started 

more than 1,500 fires between June 2014 and December 2017, or more than one a day on 

average.168 The newspaper provided the following graphic, which illustrates the shocking extent 

of PG&E’s contribution to fires throughout California with incidents reported across essentially 

all of the Utility’s service area: 

 168 Russell Gold et al., PG&E Sparked at Least 1,500 California Fires. Now the Utility Faces 

Collapse, Wall Street J. (Jan. 13, 2019), https://www.wsj.com/articles/pg-e-sparked-at-least-1-

500-california-fires-now-the-utility-faces-collapse-11547410768. 

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601. On January 14, 2019, PG&E filed with the SEC a report on Form 8-K stating that 

the Company expected to file for Chapter 11 bankruptcy on or about January 29, 2019. The 

reason the Company provided for the expected bankruptcy filing was the “series of catastrophic 

wildfires that occurred in Northern California in 2017 and 2018.” 

602. On January 15, 2019, MarketWatch reported in an article titled “PG&E’s slide 

into bankruptcy would mark third largest investment-grade default since 1998,”169 that PG&E 

faced a significant risk of defaulting on its bonds: 

If Pacific Gas & Electric Co. follows through with its bankruptcy 

announcement, the country’s largest utility would record the third 

largest default in the U.S. investment-grade corporate bond market 

since 1998. 

PG&E announced it would file for bankruptcy by Jan. 29 after 

devastating California wildfires in 2017 and 2018 left it facing 

billions in potential liabilities. The company also said it would not 

pay an interest payment due on bonds maturing in 2040 on 

Wednesday, which would also trigger a default. 

* * * 

PG&E’s bankruptcy would mark a dramatic collapse for a 

company that was once seen as an attractive bet among hedge 

funds. More than $17 billion of its bonds would be facing default, 

according to analysts at Bank of America Merrill Lynch. 

* * * 

In terms of sheer scale of a default from an investment-grade 

issuer, BAML found only Lehman Bros. and WorldCom would 

rank above the PG&E. 

603. On January 17, 2019, Judge Alsup issued a request for comment on his tentative 

finding that “the single most recurring cause of the large 2017 and 2018 wildfires 

attributable to PG&E’s equipment has been the susceptibility of PG&E’s distribution lines 

to trees or limbs falling onto them during high-wind events.” 

 169 Sunny Oh, PG&E’s Slide Into Bankruptcy Would Mark Third Largest Investment-Grade 

Default Since 1998, MarketWatch (Jan. 15, 2019), https://www.marketwatch.com/story/pgesslide-into-bankruptcy-would-mark-third-largest-investment-grade-default-since-1998-2019-01-

15. 

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604. On January 29, 2019, PG&E declared Chapter 11 bankruptcy. The Company’s 

bankruptcy filings stated that it was facing $51.7 billion in liabilities, including more than $30 

billion in possible liabilities tied to the Camp Fire and the North Bay Fires. 

605. On January 30, 2019, Judge Alsup, during a probationary hearing, stated: 

“[T]here is one very clear-cut pattern here: That PG&E is starting these fires.”170 Judge 

Alsup continued, “what do we do[?] Does the judge just turn a blind eye and say, ‘PG&E, 

continue your business as usual. Kill more people by starting more fires’?” On the subject of 

whether PG&E had made safety a priority, Judge Alsup reportedly stated: “[I]t’s not really true. 

Safety is not your number one thing.” 

606. On February 6, 2019, PG&E finally filed a wildfire mitigation plan as required by 

SB 901. PG&E’s wildfire plan stated that the Company would significantly expand its publicsafety power shutoff program, from about 570,000 affected consumers to as many as 5.4 million 

customers, substantially increase its tree-clearing practices, beef up inspections of its equipment 

and install more weather stations and cameras for earlier risk detection. 

607. Accordingly, the expanded scope of PG&E’s 2019 wildfire plan further 

demonstrates the inadequacy of PG&E’s prior safety practices and investment in safety, showing 

that PG&E did far less than it should have previously done. 

608. Similarly, the 2019 wildfire mitigation plan provided for more $2 billion in new 

expenditures and significant increases in inspections and other measures over what PG&E had 

done in 2018. Those new measures included the following: 

• remove 375,000 trees in 2019, after cutting down 160,000 

in 2018; 

• 2,450 miles of Enhanced Vegetation Management in 2019, 

a 320% increase from the 760 miles of assorted related 

practices in 2018; 

• increase enhanced transmission structure inspections from 

9,400 in 2018 to 40,600 in 2019; and 

 170 Transcript of Proceedings at 12-13, 24, PG&E Criminal Proceedings (N.D. Cal. Jan. 31, 

2019), ECF No. 999. 

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• enhanced inspections of 685,000 distribution poles, 

including climbing of all transmission towers, after making 

517,500 routine inspections of distribution poles in 2018. 

609. Following the plan’s release, the Associated Press summarized the general 

reaction, “Lawyers, industry watchdogs and a federal judge alike wonder: What took so long?” 

However, at the hearing on the second order to show cause in PG&E’s probation proceedings 

before Judge Alsup, counsel for PG&E stated that the plan was not final. He explained, “the 

wildfire mitigation plan is still in the process of being reviewed and there isn't a final one . . . that 

plan is still in flux.”171

610. Also on February 6, 2019, attorneys for fire victims provided a submission to 

Judge Alsup in response to the January 30, 2019 probationary hearing.172 The submission 

compiled data from PG&E’s regulators which demonstrated that the Company posed a far 

greater risk to the public than its peers. For example, according to the submission, Southern 

California Edison (“SoCalEd”) serves 15 million people across approximately 50,000 squaremiles, operating and maintaining 91,375 miles of distribution lines and 1,433,336 electric poles. 

By comparison, PG&E services approximately 16 million people throughout a 70,000-squaremile service area, operating and maintaining between 81,000 miles and 115,000 miles of 

distribution lines and 2,400,000 electric poles. Yet, despite these similarities in service size and 

miles of distribution lines, PG&E’s electrical equipment caused 1,208 more wildfires than 

SoCalEd’s equipment between 2014 to 2017 as self-reported to the CPUC. In total, PG&E’s 

equipment caused 1,552 wildfires, while SoCalEd only caused 344 fires over the same time 

period. Put differently, PG&E’s equipment caused 4.5 times more wildfires than SoCalEd. 

PG&E’s equipment was also responsible for more large-scale fires, including 43 more fires than 

SoCalEd that burned between 10-99 acres, three more between 100-299 acres, and two more 

between 300-999 acres. Similarly, since 2014, the electrical equipment of San Diego Gas & 

 171 Transcript of Proceedings at 10, PG&E Criminal Proceedings (N.D. Cal. Apr. 2, 2019), 

ECF No. 1047. To date, PG&E has filed two amended plans, on February 12, 2019 and April 25, 

2019. 

172 Submission of Attorneys Pitre and Campora in Response to Order dated Jan. 30, 2019, 

PG&E Criminal Proceedings (N.D. Cal. Feb. 6, 2019), ECF No. 1005. 

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Electric (“SDG&E”) caused 109 wildfires with only one wildfire burning over 10 acres. By 

contrast, PG&E caused 1,552 wildfires during that same timeframe with 68 of those fires burning 

over 10 acres. 

611. On February 11, 2019, PG&E issued a press release stating that it would be 

replacing the majority of its Board. As of today, only two Board members out of 13 have not 

been replaced. This announcement followed the departure of several Company executives, 

including PG&E’s CEO defendant Williams and three senior executives in PG&E’s electric 

division. The release acknowledged “that PG&E must re-earn trust and credibility with its 

customers, regulators, the communities it serves and all of its stakeholders . . . .” 

612. On February 27, 2019, The Wall Street Journal published an article titled, “PG&E 

Delayed Safety Work on Power Line That Is Prime Suspect in California Wildfire.” The article 

stated that the Company had delayed for several years needed repairs to its high-voltage CaribouPalermo transmission line, the likely source of the Camp Fire. PG&E had failed to fix the 100-

year old line despite informing federal regulators of its plans to repair and replace damaged 

sections of the line as early as 2013. Similarly, in a July 2017 federal filing, PG&E proposed 

overhauling the line, noting that more than one in four wire spans between towers were too 

close to vegetation. The plan involved swapping 61 lattice towers with modern tubular-steel 

poles, and replacing wire and hardware connecting it to the towers. But PG&E never began the 

work. The article also detailed PG&E’s antiquated safety monitoring procedures and lack of 

transparency in transmission line spending. According to the article, “An internal PG&E audit 

from 2013 found that the company focused mainly on spending its allotted budget, not ensuring 

expenditures were prudent and effective, and that it lacked performance data and other records 

for many projects.” 

613. Also on February 26, 2019, The Mercury News published an article titled, “PG&E 

knew for years that repairs were needed on transmission lines in area of fatal Camp Fire.” 

According to the article, energy officials had been warning PG&E about its fast-aging system of 

transmission lines for the better part of a decade. For example, according to a May 2017 CPUC 

filing, “In 2010 and again in 2015, the California Independent System Operator transmission 

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plan identified the need to improve and upgrade this system to address potential overloads and 

power outages that would affect customers in the service area.” 

614. PG&E likewise stated in a July 2017 filing to FERC that it would embark on 

numerous repairs of the Caribou-Palermo system. The planned repairs and maintenance 

included new tower frames, steel poles, improved line tension and hardware upgrades. As 

PG&E stated in the filing: “The project has a forecasted capital expenditure of $30.3 million.” 

615. PG&E also proposed in July 2017 considerable work for the Caribou-Palermo 

line as part of the Company’s annual request to FERC for rate changes. “The Caribou-Palermo 

115 kilovolt circuit was analyzed as part of the 2013 NERC Assessment,” PG&E stated, 

referring to an analysis by the North American Electric Reliability Corporation. The filing 

indicated the 2013 NERC study determined that well over 100 transmission line spans were 

perilously close to vegetation or trees. “The completed analysis identified 127 spans with 

clearance issues out of the 455 spans on the electric transmission line,” PG&E stated in its 2017 

FERC filing. PG&E never fixed the identified issues from the time it learned about them in 2013 

as reflected in the July 2017 filing. PG&E’s Caribou-Palermo transmission system would later 

be implicated in the 2018 Camp Fire. 

616. On February 28, 2019, PG&E issued a press release providing an update on the 

financial impact of the Camp Fire and the North Bay Fires, along with the Company’s fourth 

quarter and full-year 2018 financial results. The release stated that PG&E “believes it is 

probable that its equipment will be determined to be an ignition point of the 2018 Camp Fire.” It 

also stated that the Company would be taking a $10.5 billion charge related to the Camp Fire. 

As set forth in ¶¶583 & 585, the Company also stated that it expected a $1 billion charge related 

to the North Bay Fires, which was on top of the prior $2.5 billion charge that the Company had 

previously taken in connection with the fires. According to the Company, primarily due to the 

large number of third-party claims against PG&E, the Company reported full-year net losses of 

$6.9 billion, compared to 2017 net income of $1.6 billion. As a result of the “extraordinary 

challenges” caused by the wildfires, the release stated that PG&E may not be able to continue 

as a going concern. 

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617. On March 5, 2019, Judge Alsup issued a revised order to show cause as to why 

the court should not modify the terms of PG&E’s probation in light of subsequent 

submissions.173 In the order, Judge Alsup found that PG&E’s “unsafe conduct led to a deadly 

pipeline explosion and to six felony convictions” and had now “led to recurring deadly 

wildfires caused by its electrical system.” 

618. Judge Alsup’s order noted that in its submissions, PG&E had made several 

admissions including that: (i) vegetation contact was the primary risk driver with respect to 

ignitions along PG&E’s distribution lines; (ii) PG&E agreed “that vegetation presents an acute 

risk of wildfire ignition across PG&E’s service territory”; (iii) in 2016 alone, PG&E had 

experienced approximately 1,400 downed wires caused by vegetation contact; (iv) during 2015 

and 2016, PG&E had reported to the CPUC that vegetation contact with conductors was the 

leading cause of the 486 fire ignitions associated with PG&E facilities, causing 37% of such 

fires; (v) as of June 2017, there remained 3,962 unworked trees which PG&E had identified in 

2016 as hazardous with the potential to “fall into or otherwise impact the conductors, towers or 

guy wires before the next inspection cycle”; and (vi) the Company believed its equipment caused 

the Camp Fire. 

619. Judge Alsup further found that the “record demonstrates that PG&E’s 

performance with respect to vegetation management has been dismal.” As a result, the court 

modified the terms of PG&E’s probation to require it to comply with state laws regarding 

vegetation management and its wildfire prevention plan, among other remedial measures, and 

suspended PG&E’s dividend until it could demonstrate that the Company had complied with the 

modified probation terms. 

620. On March 18, 2019, a coalition of law firms representing fire victims published 

excerpts of internal PG&E emails demonstrating that PG&E had identified the transmission lines 

 173 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. 

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implicated in the Camp Fire as unsafe long before the fire started.174 For example, internal 

Company documents showed that in December 2012 five aging towers along the CaribouPalermo transmission line had collapsed, and a 2014 internal Company email stated that 

“the likelihood of failed structures happening is high.” Similarly, a November 1, 2016 PG&E 

document detailed the failure of necessary hardware along the transmission line, with a support 

hook snapping off during routine painting. PG&E documents internally acknowledged that the 

supports “had been compromised through corrosion.”175 Despite the internal acknowledgment 

that the Caribou-Palermo lines were in need of repair and posed a significant risk of collapse, 

PG&E never had the lines fixed. Instead, the Company reasoned that any collapse would not 

impact a sufficient number of customers to warrant the repairs and that the risks would be 

mitigated because any fire may be extinguished by rain. Tragically, needed repairs were never 

undertaken, and the Caribou-Palermo line became the devastating source of the Camp Fire

later that year. 

621. Also on March 18, 2019, The New York Times published an exposé on PG&E 

titled, “How PG&E Ignored California Fire Risks in Favor of Profits.” The article portrayed a 

corporate culture at PG&E which disregarded safety risks and neglected necessary fire 

prevention precautions in favor of short-term operating results. For example, an internal PG&E 

email had noted that the transmission tower implicated in the Camp Fire, tower 27/222, was at 

risk of collapse long before the blaze was ignited. The Company’s own guidelines also warned 

that the tower was a quarter-century past its useful life, yet PG&E did not repair or replace 

the aging tower. The article quoted Mike Florio, a former California utilities commissioner, who 

observed, “There was very much a focus on the bottom line over everything [at PG&E]: ‘What 

are the earnings we can report this quarter? . . . And things really got squeezed on the 

maintenance side.” The article also quoted California’s Governor Gavin Newsom, who 

 174Northern California Fire Lawyers Obtain Documents That Show PG&E Knew About Risk 

of Caribou-Palermo Line Failure, MarketWatch (Mar. 18, 2019), 

https://www.marketwatch.com/press-release/northern-california-fire-lawyers-obtain-documentsthat-show-pge-knew-about-risk-of-caribou-palermo-line-failure-2019-03-18. 

175Id.

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expressed a similar sentiment: “[PG&E] have simply been caught red-handed over and over 

again, lying, manipulating or misleading the public. . . They cannot be trusted.” The article 

contrasted the lack of safety focus at the Company with the approach taken by another California 

utility facing similar risks, SDG&E, that had significantly revamped its safety protocols to 

respond to increased wildfire dangers. According to one industry expert quoted in the article, if 

PG&E had followed the lead of SDG&E its equipment would have caused far fewer destructive 

fires. This expert concluded that “[PG&E’s] culture of a lack of safety is unique” amongst 

utilities. 

622. On April 2, 2019, Judge Alsup held a hearing on his second order to show cause 

in PG&E’s probation proceedings. At the hearing, Judge Alsup stated: “PG&E over several 

years allowed the trees that needed to be removed to be built up and did not remove them, 

did not trim them so that we wound up with a large number of trees that should have been 

removed by PG&E but weren’t. And that was a major contributing factor, maybe the singlebiggest factor, in causing the fires in 2017 and 2018 in Northern California.” 176 Judge Alsup 

also explained “as we've gotten into the evidence, and I've studied quite a lot of it, again I want 

to say it's quite clear that PG&E pumped out $4.5 billion in the last five years in dividends and 

let the tree budget wither so that a lot of trees that should have been taken down were not.” 

As Judge Alsup concluded, “[t]his is a crisis, a crisis that California faces on these wildfires, and 

PG&E is the single-most culpable entity in the mix. . . . PG&E has started more than – way 

more than its share of these fires. . . This is a problem of your own making. A lot of money 

went out in dividends that should have gone to the tree budget.” 

623. On April 12, 2019, NBC Bay Area published an article titled “PG&E Inspectors 

Find Hundreds of Safety Issues on Electrical Towers.” The article indicated that “PG&E’s 

 176 Transcript of Proceedings at 6-7, PG&E Criminal Proceedings (N.D. Cal. Apr. 4, 2019), 

ECF No. 1047. 

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inspections of thousands of transmission towers since the deadly Camp Fire in Butte County 

found more than 450 safety violations, including 59 that posed serious safety hazards.”177

624. On May 2, 2019, PG&E filed its Q1 2019 Form 10-Q with the SEC wherein, 

PG&E reinforced that “PG&E Corporation and the Utility are facing extraordinary challenges 

relating to a series of catastrophic wildfires that occurred in Northern California in 2017 and 

2018. . . . Uncertainty regarding these matters raises substantial doubt about PG&E 

Corporation’s and the Utility’s abilities to continue as going concerns.” 

625. According to PG&E’s Q1 2019 Form 10-Q, it estimates that its liabilities for 

wildfire-related claims remains at over $14.2 billion, including the 2015 Butte Fire ($212 

million), the North Bay Fires ($3.5 billion) and the Camp Fire ($10.5 billion). These estimated 

liabilities do not include liabilities for the Camp Fire or North Bay Fires for, among other things, 

“potential penalties or fines that may be imposed by governmental entities on PG&E Corporation 

or the Utility, or punitive damages, if any, or any losses related to future claims for damages that 

have not manifested yet, each of which could be significant.” As reported in the same Form 10-

Q, PG&E’s “liability could exceed $30 billion” if it were found to be liable for the Camp Fire 

and the North Bay Fires. 

626. PG&E also remains subject to criminal liability. According to PG&E’s Q1 2019 

Form 10-Q, the Butte County District Attorney’s Office and the California Attorney General are 

investigating the Camp Fire and that a grand jury has been empaneled in Butte County. 

627. PG&E also reported in its Q1 2019 Form 10-Q that its operating and maintenance 

expenses had increased by $443 million, or 35%, over the same quarter the prior year “primarily 

due to $210 million related to enhanced and accelerated inspections and repairs of transmission 

and distribution assets and $179 million for clean-up and repair costs relating to the 2018 Camp 

Fire.” 

 177 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-Find-Hundreds-of-Safety-Issues-on-Electrical-Towers-508344011.html. 

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628. On May 7, 2019, Judge Alsup conducted a sentencing hearing for PG&E’s 

violation of probation. When speaking to PG&E’s new CEO Johnson he noted that PG&E 

“admitted that it started 17 of those fires in 2017 just in the Wine Country.”178 He further 

exclaimed that here in California “We have six to seven months of no rain. And you can’t 

blame it on global warming because I have been here a long time and it’s been that way every 

summer.” During the sentencing hearing, Judge Alsup also observed that while there are other 

causes of fire, “no one has started more fires than PG&E.” 

629. On May 15, 2019, Cal Fire issued a release finding PG&E at fault for the Camp 

Fire: “[a]fter a very meticulous and thorough investigation, Cal Fire has determined that the 

Camp Fire was caused by electrical transmission lines owned and operated by [PG&E]

located in the Pulga area.” As to the second ignition site of the Camp Fire Cal Fire found: “[t]he 

cause of the second fire was determined to be vegetation into electrical distribution lines 

owned and operated by PG&E.” PG&E issued a press release the following day accepting the 

determination that PG&E electrical lines located near Pulga were a cause of the Camp Fire. On 

May 22, 2019, PG&E acknowledged in a Schedule 14A filing with the SEC that “[t]he tragic 

wildfires of the past two years have been extraordinarily challenging, and have made clear that 

the energy status quo is no longer working for California.” 

XVIII.THE SECURITIES ACT DEFENDANTS’ MATERIALLY FALSE AND 

MISLEADING STATEMENTS IN THE OFFERING DOCUMENTS FOR THE 

NOTES OFFERINGS 

630. Each of PG&E’s Prospectuses filed on February 24, 2016, November 29, 2016, 

March 8, 2017, and April 13, 2018, incorporated by reference the corresponding registration 

statement (hereinafter, “Offering Documents”), as well as a number of other PG&E filings and 

reports including the following: 

 178 Transcript of Proceedings at 11, PG&E Criminal Proceedings (N.D. Cal. May 7, 2019), 

ECF No. 1061. 

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(a) The February 24, 2016 Offering Documents for the March 2016 Notes 

Offering incorporated by reference PG&E’s: Annual Report on Form 10-K for FY15 filed with 

the SEC on February 18, 2016; 

(b) The November 29, 2016 Offering Documents for the December 2016 

Notes Offering incorporated by reference PG&E’s: Annual Report on Form 10-K for FY15 filed 

with the SEC on February 18, 2016; 

(c) The March 8, 2017 Offering Documents for the March 2017 Notes 

Offering incorporated by reference PG&E’s: Annual Report on Form 10-K for FY15 filed with 

the SEC on February 18, 2016; Annual Report on Form 10-K for FY16 filed with the SEC on 

February 16, 2017; and Press release, filed on Form 8-K with the SEC on May 23, 2016; and 

(d) The April 13, 2018 Offering Documents for the April 2018 Notes Offering 

incorporated by reference PG&E’s: Annual Report on Form 10-K for FY17 filed with the SEC 

on February 9, 2018. 

631. The statements in or incorporated by the Offering Documents alleged to be 

materially false and/or misleading for purposes of the Securities Act Claims alleged herein are 

set out in Exhibit A attached hereto.179 

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

Practices, Policies and Compliance 

632. The Offering Documents, including the documents incorporated by reference 

therein, omitted material adverse information from investors regarding PG&E’s deficient safety 

practices and policies while simultaneously falsely assuring investors that PG&E complied with 

safety laws and regulations, sufficiently invested in safety, and provided for public safety by 

clearing vegetation around its equipment, updating equipment, and inspecting its equipment. In 

contrast to what investors were led to believe in the Offering Documents, PG&E’s “unsafe 

 179 For purposes of this complaint not all of the statements alleged to be materially false and 

misleading are set forth in the text of the complaint as many are repetitive and are false and 

misleading for the same reasons as nearly identical statements. They are however, alleged in 

Exhibit A and incorporated by reference herein. References to Exhibit A are referred to herein 

as “Ex. A.” 

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conduct” led to deadly wildfires and “PG&E’s performance with respect to vegetation 

management has been dismal.” Nor had PG&E expended sufficient resources to reasonably 

prevent wildfires. 

1. The Offering Documents Omitted PG&E’s Widespread Safety 

Failures and the Existing Risks Associated with Its Inadequate Safety 

Practices 

633. Each of the Offering Documents referenced risk factors, including warnings that 

droughts, climate change, wildfires and other events could cause a material impact on PG&E’s 

financial results. These statements were materially misleading because they did not disclose the 

already existing negative impact on PG&E as a result of PG&E’s subpar safety practices that 

caused wildfires resulting in death, destruction and liability. PG&E faces more than $30 billion 

in potential liability and has filed bankruptcy as a result. Cal Fire has found PG&E caused 

wildfires in 2015, 2017 and 2018. 

634. The Offering Documents for each of the Notes Offerings did not disclose the true 

existing risks facing PG&E as a result of its deficient safety practices and policies, including the 

extent of the risks or that they had already come to fruition. For example, the prospectus filed on 

February 24, 2016, pursuant to the March 2016 Notes Offering, stated: 

Some of the factors that could cause future results to differ 

materially from those expressed or implied by the forwardlooking statements, or from historical results, include . . . 

* * * 

• the impact of droughts or other weather-related 

conditions or events, wildfires (including the Butte fire in 

September 2015, which affected portions of Amador and 

Calaveras counties), climate change, natural disasters, acts 

of terrorism, war, or vandalism (including cyber-attacks), 

and other events, that can cause unplanned outages, reduce 

generating output, disrupt the our [sic] service to 

customers, or damage or disrupt the facilities, operations, 

or information technology and systems owned by us, our 

customers, or third parties on which we rely; whether we 

incur liability to third parties for property damage or 

personal injury caused by such events; and whether the 

we [sic] are subject to civil, criminal, or regulatory 

penalties in connection with such events. See Ex. A, 

Stmt. No. 1. 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 189 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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635. The Offering Documents for the December 2016 Notes Offering, the March 2017 

Notes Offering and the April 2018 Notes Offering each repeated in substantially similar 

language the same purported warning. See Ex. A, Stmt. Nos. 10-11, 20. So too did the FY15 

Form 10-K, FY16 Form 10-K, and FY17 Form 10-K. See Ex. A, Stmt. Nos. 2, 23, 24. 

636. Similarly, PG&E’s annual report for FY17 filed with the SEC on Form 10-K 

incorporated by the Offering Documents for the April 2018 Notes Offering misleadingly 

purported to warn that: 

Severe weather conditions, extended drought and shifting climate 

patterns could materially affect PG&E Corporation’s and the 

Utility’s business, financial condition, results of operations, 

liquidity, and cash flows. 

Extreme weather, extended drought and shifting climate patterns 

have intensified the challenges associated with wildfire 

management in California. Environmental extremes, such as 

drought conditions followed by periods of wet weather, can drive 

additional vegetation growth (which then fuel any fires) and 

influence both the likelihood and severity of extraordinary wildfire 

events. In California, over the past five years, inconsistent and 

extreme precipitation, coupled with more hot summer days, have 

increased the wildfire risk and made wildfire outbreaks 

increasingly difficult to manage. In particular, the risk posed by 

wildfires has increased in the Utility’s service area (the Utility 

has approximately 82,000 distribution overhead circuit miles and 

18,000 transmission overhead circuit miles) as a result of an 

extended period of drought, bark beetle infestations in the 

California forest and wildfire fuel increases due to record 

rainfall following the drought, among other environmental 

factors. Other contributing factors include local land use policies 

and historical forestry management practices. The combined 

effects of extreme weather and climate change also impact this 

risk. See Ex. A, Stmt. No. 26. 

637. In addition, each of the Company’s Forms 10-K referenced by the Offering 

Documents also represented climate change as a risk to the Company’s financial condition while 

omitting the real risks stemming from PG&E’s woefully inadequate safety practices. For 

example, the “Risk Factors” section of PG&E’s FY15 and FY16 annual reports on Forms 10-K 

purported to warn that “The Utility’s future operations may be affected by climate change that 

may have a material impact on PG&E Corporation’s and the Utility’s financial condition, 

results of operations, and cash flows,” and that climate change could “increase the occurrence 

of wildfires.” Ex. A, Stmt. Nos. 5, 13. 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 190 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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638. The same FY15 and FY16 Forms 10-K, along with PG&E’s FY17 Form 10-K, 

went on to falsely reassure investors, in substantially similar language, that PG&E had studied 

climate change but omitted the negative impact and risk of PG&E’s safety violations and 

deficient safety practices: 

The Utility has been studying the potential effects of climate 

change (increased temperatures, changing precipitation patterns, 

rising sea levels) on the Utility’s operations and is developing 

contingency plans to adapt to those events and conditions that the 

Utility believes are most significant. Scientists project that climate 

change will increase electricity demand due to more extreme, 

persistent and hot weather. Increasing temperatures and changing 

levels of precipitation in the Utility’s service territory would 

reduce snowpack in the Sierra Mountains. If the levels of 

snowpack were reduced, the Utility’s hydroelectric generation 

would decrease and the Utility would need to acquire additional 

generation from other sources at a greater cost. 

If the Utility increases its reliance on conventional generation 

resources to replace hydroelectric generation and to meet increased 

customer demand, it may become more costly for the Utility to 

comply with GHG emissions limits. In addition, increasing 

temperatures and lower levels of precipitation could increase the 

occurrence of wildfires in the Utility’s service territory causing 

damage to the Utility’s facilities or the facilities of third parties 

on which the Utility relies to provide service, damage to third 

parties for loss of property, personal injury, or loss of life. In 

addition, flooding caused by rising sea levels could damage the 

Utility’s facilities, including hydroelectric assets such as dams and 

canals, and the electric transmission and distribution assets. The 

Utility could incur substantial costs to repair or replace facilities, 

restore service, compensate customers and other third parties for 

damages or injuries. The Utility anticipates that the increased 

costs would be recovered through rates, but as rate pressures 

increase, the likelihood of disallowance or non-recovery may 

increase. See Ex. A, Stmt. Nos. 6, 14, 27. 

639. The foregoing statements in ¶¶634-638 were materially false and misleading 

because contrary to the impression created by the Offering Documents, PG&E’s safety practices 

were deficient and the Company’s deficient safety practices had already caused wildfires. The 

Offering Documents’ repeatedly represented that: (i) PG&E’s financial results could be impacted 

by weather-related conditions, wildfires, climate change or other events, or that they could incur 

liability caused by such events; and (ii) the climate change, increasing temperatures, or other 

events could increase the occurrence of wildfires which could result in substantial costs or 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 191 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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damages. These representations were contradicted by material adverse facts that existed at the 

time of the statements, including, inter alia, that: 

(a) PG&E’s widespread safety deficiencies and violations had already 

increased the risk of wildfires, caused wildfires and liability for those wildfires (see generally

§XVII.A.2.); 

(b) PG&E had caused hundreds or thousands of fires across California since 

June 2014, averaging more than one fire a day – significantly more than, SoCalEd, for example, 

a utility operating under similar conditions and legal and regulatory framework (¶¶600, 610, 628; 

see also ¶621); 

(c) Rather than weather related events, the real risk of wildfires (and in fact 

the cause of many) were a result of PG&E not sufficiently investing in providing its services in a 

safe manner. For example, PG&E’s “dismal” vegetation management practices resulted in 

wildfires (¶619). As Judge Alsup noted, PG&E has admitted that: (i) vegetation contact was the 

primary risk driver with respect to ignitions along PG&E’s distribution lines; (ii) in 2016 alone, 

PG&E had experienced approximately 1,400 downed wires caused by vegetation contact; and 

(iii) during 2015 and 2016, PG&E had reported to the CPUC that vegetation contact with 

conductors was the leading cause of the 486 fire ignitions associated with PG&E facilities, 

causing 37% of such fires. (¶618). Further, as PG&E Vegetation Program Manager Richard 

Yarnell testified, for the entire period from September 2015 to April 10, 2017, “PG&E—to the 

best of my knowledge, we have not made any changes” to improve safety. (¶22); 

(d) In addition, PG&E’s lax tree clearing practices threatened the safety of 

PG&E’s operations. For example, PG&E auditors had given PG&E a passing grade despite too 

many trees found to violate state regulations by improperly expanding the area under review to 

artificially increase PG&E’s compliance rate (¶575). Similarly, an internal PG&E audit, 

conducted in the summer of 2015 revealed a negative trend of non-compliant trees in the same 

district in which the Butte Fire started (¶570). And, as Judge Alsup observed, PG&E has 

admitted that as late as June 2017, there remained 3,962 unworked trees which PG&E had 

identified in 2016 as hazardous with the potential to “fall into or otherwise impact the 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 192 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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conductors, towers or guy wires before the next inspection cycle” (¶618). Judge Alsup also 

indicated that “PG&E over several years allowed the trees that needed to be removed to be built 

up and did not remove them, did not trim them so that we wound up with a large number of trees 

that should have been removed by PG&E but weren’t” which was a contributing factor to the 

causes of wildfires (¶622); 

(e) PG&E had incentivized its contractors to identify and clear fewer trees 

and vegetation by paying them for reporting under the target number (¶569); 

(f) Outdated PG&E equipment was not replaced or updated – for example, 

the Company had never, as planned, addressed dangerously encroaching vegetation by replacing 

old lattice towers with modern tubular steel poles or replacing wire and hardware connecting 

those to towers, or updated the 100 year-old Caribou-Palermo transmission line that presented a 

high likelihood of failure (¶¶612, 620; see also ¶613-615). Likewise, despite assurances in 2015 

that the Company would be able to shut down reclosers in high risk fire areas, they did not have 

the system in place to do so causing wildfires (¶¶577, 606); 

(g) PG&E did not sufficiently invest in wildfire safety. For example, Judge 

Alsup observed, PG&E “let the tree budget wither so that a lot of trees that should have been 

taken down were not” (¶622). And PG&E internal documents show that tree-related outages 

could have been reduced if PG&E was willing to invest more (¶¶620-622). Likewise, safety was 

up for debate at the Company but not earnings growth (¶¶567, 606); 

(h) At the time of the issuance of each of the Offering Documents, PG&E’s 

warning of weather-related conditions or climate change potentially impacting PG&E did not 

disclose the then existing risks as a result of the safety violations and deficient practices (¶¶568, 

570-571, 575, 577, 594-596, 598-599, 603, 605, 607-608, 610, 612-618, 620-623). As Judge 

Alsup indicated, you can’t blame the fires “on global warming because I have been here a long 

time and it's been that way every summer” (¶628); 

(i) As a result of the extent and nature of PG&E’s safety deficiencies and 

numerous violations, PG&E was unable to prove “it reasonably and prudently operated and 

managed its system” rendering it liable for the wildfires that it had already caused (¶558); 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 193 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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(j) At the time of the issuance of the March 2016, December 2016 and March 

2017 Notes Offerings’ Offering Documents, rather than the risk of wildfires (including the 2015 

Butte Fire) potentially impacting PG&E (see ¶¶566, 579, 584, 588, 599, 600, 617, 628, 629), the 

true facts were that PG&E’s safety deficiencies and violations caused wildfires. The Offering 

Documents failed to disclose the then existing risk to PG&E’s financial condition as a result of 

the Company’s widespread safety violations. For example, the 2015 Butte Fire – which killed 

two people and destroyed more than 500 homes – was caused by PG&E’s safety violations 

(¶566). Additionally, the Offering Documents omitted the existing risk of wildfires from the 

already identified problems with PG&E’s equipment along the Caribou-Palermo transmission 

line, the likely source of the Camp Fire and PG&E’s overall dismal vegetation management 

practices (¶¶619-622). PG&E’s own inspections of transmission towers showed 450 safety 

violations, with 59 posing a serious safety hazard (¶623). When speaking on risks relating to 

wildfires, the Securities Act Defendants did not disclose the extent of PG&E’s wildfire inducing 

safety deficiencies and violations (¶¶568, 570-571, 575, 577, 594-596, 598-599, 603, 605, 607-

608, 610, 612-618, 620-623); and 

(k) At the time of the issuance of the April 2018 Notes Offerings’ Offering 

Documents, the Securities Act Defendants warned of conditions that could impact PG&E’s 

financial results (¶¶582, 583, 685-686, 601-602, 604, 616, 625; see also ¶624; ¶667) without 

disclosing the then existing widespread safety violations and insufficient safety practices (¶¶568, 

570-571, 575, 577, 594-596, 598-599, 603, 605, 607-608, 610, 612-618, 620-623). Nor did the 

Offering Documents disclose what PG&E has now admitted to Judge Alsup– “that it started 17 

of those fires in 2017 just in the Wine Country” (¶628). At the time of the issuance of the 

Offering Documents for the April 2018 Notes Offering, the Securities Act Defendants’ misled 

investors regarding the then existing risks as a result of adverse facts, including the likelihood of 

failed structures, use of a transmission tower a quarter-century past its useful life, or the “dismal” 

vegetation practices of the Company (¶¶619-621). When speaking on the risks related to 

wildfires, the Securities Act Defendants did not disclose PG&E’s widespread safety lapses and 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 194 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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violations (¶¶568, 570-571, 575, 577, 594-596, 598-599, 603, 605, 607-608, 610, 612-618, 620-

623). 

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

Commitment to, and Practices Related to Safety Were Inadequate 

640. PG&E’s Forms 10-K incorporated by reference in the Offering Documents falsely 

emphasized PG&E’s safety efforts by investing in its energy distribution system, in particular by 

clearing vegetation to prevent wildfires. For example, the annual reports for FY15 and FY16 

filed with the SEC on Forms 10-K incorporated in the Offering Documents for the March 2016, 

December 2016 and March 2017 Notes Offerings misleadingly stated as follows: 

With respect to electric operations, climate scientists project that, 

sometime in the next several decades, climate change will lead to 

increased electricity demand due to more extreme, persistent, and 

frequent hot weather. The Utility believes its strategies to reduce 

GHG emissions through energy efficiency and demand response 

programs, infrastructure improvements, and the use of renewable 

energy and energy storage are effective strategies for adapting to 

the expected increase [changes] in demand for electricity. The 

Utility is making substantial investments to build a more modern 

and resilient system that can better withstand extreme weather 

and related emergencies. The Utility’s vegetation management 

activities also reduce the risk of wildfire impacts on electric and 

gas facilities. Over the long-term, the Utility also faces the risk of 

higher flooding and inundation potential at coastal and low 

elevation facilities due to sea level rise combined with high tides, 

storm runoff and storm surges. See Ex. A, Stmt. Nos. 4, 12. 

641. The Company’s FY17 Form 10-K, incorporated in the Offering Documents for 

the April 2018 Notes Offering contained similarly false language: 

With respect to electric operations, climate scientists project that, 

sometime in the next several decades, climate change will lead to 

increased electricity demand due to more extreme, persistent, and 

frequent hot weather. The Utility believes its strategies to reduce 

GHG emissions through energy efficiency and demand response 

programs, infrastructure improvements, and the use of renewable 

energy and energy storage are effective strategies for adapting to 

the expected changes in demand for electricity. The Utility is 

making substantial investments to build a more modern and 

resilient system that can better withstand extreme weather and 

related emergencies. Over the long-term, the Utility also faces the 

risk of higher flooding and inundation potential at coastal and low 

elevation facilities due to sea level rise combined with high tides, 

storm runoff and storm surges. As the state continues to face 

increased risk of wildfire, the Utility’s vegetation management 

activities will continue to play an important role to help reduce 

the risk of wildfire and its impact on electric and gas facilities. 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 195 

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See Ex. A, Stmt. No. 29. 

642. PG&E’s FY15 and FY16 Forms 10-K referenced in the Offering Documents for 

the March 2016, December 2016 and March 2017 Notes Offerings also misleadingly emphasized 

that PG&E had developed plans and strategies to mitigate the impact of climate change and 

respond effectively to emergencies as well as prioritizing infrastructure investments minimizing 

the real risks PG&E faced with respect to wildfires as a result of dismal safety practices and 

insufficient funding to prevent wildfires: 

Climate Change Mitigation and Adaptation Strategies. During 

2015 [2016], the Utility continued its programs to develop 

strategies to mitigate the impact of the Utility’s operations 

(including customer energy usage) on the environment and to plan 

for the actions that it will need to take to adapt to the likely impacts 

of climate change on the Utility’s future operations. The Utility 

regularly reviews the most relevant scientific literature on climate 

change such as sea level rise, temperature changes, rainfall and 

runoff patterns, and wildfire risk, to help the Utility identify and 

evaluate climate change-related risks and develop the necessary 

adaptation strategies. The Utility maintains emergency response 

plans and procedures to address a range of near-term risks, 

including extreme storms, heat waves and wildfires and uses its 

risk-assessment process to prioritize infrastructure investments

for longer-term risks associated with climate change. The Utility 

also engages with leaders from business, government, academia, 

and non-profit organizations to share information and plan for the 

future. See Ex. A, Stmt. Nos. 3, 15. 

643. Following the 2017 North Bay Fires, the Company’s 2017 Form 10-K 

incorporated in the Offering Documents for the April 2018 Notes Offering misleadingly 

represented that PG&E had developed “resilience strategies” to mitigate the impacts of climate 

change on PG&E: 

Climate Change Resilience Strategies 

During 2017, the Utility continued its programs to mitigate the 

impact of the Utility’s operations (including customer energy 

usage) on the environment and to plan for the actions that it will 

need to take to increase its resilience in light of the likely impacts 

of climate change on the Utility’s operations. The Utility 

regularly reviews the most relevant scientific literature on climate 

change such as rising sea levels, major storm events, increasing 

temperatures and heatwaves, wildfires, drought and land 

subsidence, to help the Utility identify and evaluate climate 

change-related risks and develop the necessary resilience 

strategies. The Utility maintains emergency response plans and 

procedures to address a range of near-term risks, including 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 196 

CIVIL ACTION NO. 3:18-CV-03509-EJD 

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wildfires, extreme storms, and heat waves and uses its riskassessment process to prioritize infrastructure investments for 

longer-term risks associated with climate change. The Utility also 

engages with leaders from business, government, academia, and 

non-profit organizations to share information and plan for the 

future. See Ex. A, Stmt. No. 28. 

644. Similarly, each of PG&E’s Forms 10-K incorporated by the Offering Documents 

also materially misled investors by regarding the safety of its operations emphasizing the 

Company’s upgrades to its equipment. For example, the Company’s FY15, FY16 and FY17 

Forms 10-K stated: 

At December 31, 2015 [2016; 2017], the Utility owned 

approximately 18,400 [19,200] circuit miles of interconnected 

transmission lines operating at voltages ranging from 60 kV to 500 

kV. The Utility also operated 91 [92] electric transmission 

substations with a capacity of approximately 63,400 [64,600; 

64,700] MVA. 

* * * 

Throughout 2015 [2016; 2017], the Utility upgraded several 

critical substations and re-conductored a number of transmission 

lines to improve maintenance and system flexibility, reliability 

and safety. The Utility expects to undertake various additional 

transmission projects over the next several years to upgrade and 

expand the capacity of its transmission system to accommodate 

system load growth, secure access to renewable generation 

resources, replace aging or obsolete equipment and improve 

system reliability. The Utility also has taken steps to improve the 

physical security of its transmission substations and equipment. 

See Ex. A, Stmt. Nos. 7, 16, 30. 

645. The same electricity distribution passage from each of PG&E’s Forms 10-K for 

FY15, FY16, and FY17 thereafter concluded with the following materially misleading statement, 

which did not disclose that PG&E did not have adequate systems or policies in place to shut 

down reclosers to prevent wildfires: 

In 2015 [2016; 2017], the Utility continued to deploy its Fault 

Location, Isolation, and Service Restoration circuit technology 

which involves the rapid operation of smart switches to reduce 

the duration of customer outages. Another 83 [89; 92] circuits 

were outfitted with this equipment, bringing the total deployment 

to 700 [789; 882] of the Utility’s 3,200 distribution circuits. [The 

Utility also installed or replaced 20 distribution substation 

transformer banks to improve reliability and provide capacity to 

accommodate growing demand.] The Utility plans to continue 

performing work to improve the reliability and safety of its 

electricity distribution operations in 2016 [2017; 2018]. See Ex. 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 197 

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A, Stmt. Nos. 8, 17, 31. 

646. In addition, each of PG&E’s Forms 10-K incorporated by the Offering 

Documents materially misled investors by warning that the Company’s equipment might fail, a 

risk falsely described as “beyond the Utility’s control.” For example, PG&E’s Forms 10-K for 

FY15 and FY16, as well as PG&E’s Form 10-K for FY17, misleadingly purported to warn 

investors as follows: 

Utility’s ability to safely and reliably operate, maintain, construct 

and decommission its facilities is subject to numerous risks, many 

of which are beyond the Utility’s control, including those that 

arise from: 

• the breakdown or failure of equipment, electric 

transmission or distribution lines, or natural gas 

transmission and distribution pipelines, that can cause 

explosions, fires, or other catastrophic events;[180] 

* * * 

• the failure to take expeditious or sufficient action to 

mitigate operating conditions, facilities, or equipment, 

that the Utility has identified, or reasonably should have 

identified, as unsafe, which failure then leads to a 

catastrophic event (such as a wild land fire or natural gas 

explosion), [and the failure to respond effectively to a 

catastrophic event.]181 See Ex. A, Stmt. Nos. 9, 18, 32. 

647. PG&E’s 2017 Form 10-K incorporated by reference in the Offering Documents 

for the April 2018 Notes Offering added false assurances to investors that PG&E had taken steps 

to safely operate and maintain its equipment: 

On April 12, 2017, the Utility retained a third-party monitor at the 

Utility’s expense as part of its compliance with the sentencing 

terms of the Utility’s January 27, 2017 federal criminal conviction, 

which sentenced the Utility to, among other things, a five-year 

corporate probation period and oversight by a third-party monitor 

for a period of five years, with the ability to apply for early 

termination after three years. The goal of the monitor is to help 

ensure that the Utility takes reasonable and appropriate steps to 

maintain the safety of its gas and electric operations and 

maintains effective ethics, compliance, and safety related 

 180 This language is included in each of PG&E’s Forms 10-K incorporated in the Offering 

Documents, and similar language is also included in the registration statement for the April 2018 

Notes Offering. See Ex. A, Stmt. Nos. 9, 18, 21, 22, 32. 

181 The Form 10-K for FY 2017 removed the part of the sentence ending “and the failure to 

respond effectively to a catastrophic event.” 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 198 

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incentive programs on a Utility-wide basis. See Ex. A, Stmt. No. 

33. 

648. In addition to PG&E’s annual reports, the Company’s May 23, 2016 press release 

filed with the SEC on a Form 8-K (and as incorporated by the March 2017 Offering Documents), 

also falsely represented that PG&E “‘continued to demonstrate leadership and commitment on 

safety’”: 

PG&E Corporation (NYSE: PCG) today announced that it is 

raising its quarterly common stock dividend to 49 cents per share, 

an increase of 3.5 cents per share, beginning with dividends for the 

second quarter of 2016. 

* * * 

The increase, which is the company’s first in six years, is a 

meaningful step toward gradually returning the company’s 

dividend payout to levels that are comparable with those of similar 

utilities. 

* * * 

[Earley:] “We’ve continued to demonstrate leadership and 

commitment on safety. We’re delivering the most reliable service 

in our company’s history.” See Ex. A, Stmt. No. 19. 

649. The foregoing statements in ¶¶640-648 were materially false and misleading 

because contrary to the impression created by the Offering Documents, PG&E was not making 

substantial investments in its systems, its safety practices were deficient and the Company’s 

deficient safety practices had already caused wildfires. The Offering Documents repeatedly 

represented that: (i) PG&E was making “substantial investments” in its system; (ii) the Utility 

had a risk-assessment process to prioritize infrastructure investments for risks associated with 

climate change; (iii) the Utility’s vegetation management activities were adequate and reduced 

the risk of wildfire impact; (iv) the Utility had the programs and strategies to address wildfire 

risks as a result of climate change; (v) the Utility had upgraded critical substations and improved 

a number of transmission lines; (vi) the Utility continued to deploy technology related to its 

reclosers to improve reliability and safety; (vii) the risk of equipment failures or the failure to 

sufficiently mitigate operating conditions could have an adverse material impact of the Company 

implying that such adverse events were “beyond the Utility’s control”; and (viii) that PG&E 

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“demonstrated leadership and commitment on safety.” These representations misled investors 

because they omitted the true state of PG&E’s operations related to safety – namely, PG&E’s 

systemic safety deficiencies. 

650. At the time the issuance of each of the Offering Documents for each of the Note 

Offerings material adverse facts existed that contradicted the representations made therein, 

including that: (i) PG&E had committed widespread safety violations including violations of 

California law and regulations as well as federal law (¶¶571, 595, 599; 618; see generally ¶¶568, 

570-571, 575, 577, 594-596, 598-599, 603, 605, 607-608, 610, 612-618, 620-623 for safety 

violations); (ii) PG&E’s vegetation management programs were deficient (¶¶568, 570-571, 575, 

577, 594-596, 598-599, 603, 605, 607-608, 610, 612-618, 620-623); (iii) compared to the 

industry in California, PG&E’s electrical equipment caused far more wildfires (¶¶610, 628); (iv) 

PG&E had not updated its outdated equipment (¶¶599, 605, 612-616, 618-623); and (v) PG&E 

had not sufficiently invested in safety and had not made safety a priority (¶¶582, 583, 585-586, 

601-602, 604, 616, 625; see also ¶624; ¶667). 

651. Contrary to assurances in the Offering Documents for the March 2016, December 

2016, March 2017 and April 2018 Notes Offerings that PG&E’s vegetation management 

practices reduced the risk of wildfire impact, PG&E’s practices were dismal and increased, not 

reduced, wildfire impact and caused wildfires (¶619; see generally ¶¶568, 570-571, 575, 577, 

594-596, 598-599, 603, 605, 607-608, 610, 612-618, 620-629). As Judge Alsup noted, PG&E 

has admitted that: (i) vegetation contact was the primary risk driver with respect to ignitions 

along PG&E’s distribution lines; (ii) in 2016 alone, PG&E had experienced approximately 1,400 

downed wires caused by vegetation contact; and (iii) during 2015 and 2016, PG&E had reported 

to the CPUC that vegetation contact with conductors was the leading cause of the 486 fire 

ignitions associated with PG&E facilities, causing 37% of such fires. A 2013 NERC study also 

determined that that well over 100 transmission line spans, out of 455 total spans, were 

perilously close to vegetation or trees (¶615). Further, PG&E had incentivized its contractors to 

identify and clear fewer trees and vegetation by paying them for reporting under the target 

number (¶569). And, as PG&E Vegetation Program Manager Richard Yarnell testified, for the 

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entire period from September 2015 to April 10, 2017, “PG&E—to the best of my knowledge, we 

have not made any changes” to improve safety (¶22). 

652. Contrary to the impression the Offering Documents for the March 2016, 

December 2016, March 2017 and April 2018 Notes Offerings gave investors by emphasizing the 

substantial investments PG&E was purportedly making with respect to the Utility’s system, 

PG&E was not sufficiently investing in safety, and any risk-assessment process it had to 

prioritize infrastructure investments was inadequate. Instead, PG&E had: “let the tree budget 

wither so that a lot of trees that should have been taken down were not” (¶622); engaged in 

dismal vegetation management practices (¶619); did not have a sufficient system in place to 

shutdown reclosers (¶¶577, 606); failed to update equipment known to be outdated (¶¶599, 605, 

612-616, 618-623); “focused mainly on spending its allotted budget, not ensuring expenditures 

were prudent and effective” (¶612); failed, according to the CPUC, “to develop a comprehensive 

enterprise-wide approach to address safety” (¶596); and had not engaged in a level of 

investment that would promote safety (¶22, 78, 568-569, 571, 594-595, 599, 605, 607-608, 612-

616, 618-623). In addition, PG&E’s 2019 wildfire plan illustrates that a dramatic increase in 

resources to mitigate wildfires was needed; it calls for more than doubling tree removal, and 

increasing vegetation management by 320% and inspections from 9,400 transmission structures 

to 40,600 (¶608). 

653. For the same reasons as ¶652 above, the representations in the Offering 

Documents for the March 2016, December 2016 and March 2017 Notes Offerings that PG&E 

had: (i) the necessary adaption strategies with respect to wildfire risk; and (ii) procedures to 

address wildfires were materially false and misleading. These representations omitted that 

PG&E was plagued with safety deficiencies. And rather than prioritizing infrastructure 

investments, PG&E had not committed sufficient resources for safety. 

654. For the same reasons as ¶651 above, the similar representations in the Offering 

Documents for the April 2018 Notes Offering regarding procedures to address wildfires, 

prioritizing infrastructure and mitigation programs were materially false and misleading. In 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 201 

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addition, rather than prioritizing infrastructure in 2017, PG&E spent only $201,456,193 on 

vegetation management in 2017, failing to keep pace with inflation (¶78); 

655. Contrary to the representations in the Offering Documents for the March 2016, 

December 2016, March 2017 and April 2018 Notes Offerings that PG&E had “re-conductored a 

number of transmission lines to improve . . . safety” and made other upgrades, PG&E’s 

equipment was outdated and hazardous. For example, there was significant damage to and other 

problems with PG&E’s equipment along the Caribou-Palermo transmission line, the likely 

source of the Camp Fire including: (i) the collapse of aging towers in 2012; (ii) the 

acknowledgment in 2014 that “the likelihood of failed structures happening is high”; (iii) the 

identification of failed hardware in 2016; and (iv) the acknowledgement that the transmission 

tower implicated in the Camp Fire was at risk of collapse long before the blaze was ignited and 

that it was a quarter-century past its useful life (¶¶612-615, 619-622). In addition, contrary to the 

Utility’s technology improving safety, PG&E did not have adequate systems in place to shut 

down reclosers (¶¶577, 606). 

656. Purported warnings in the Offering Documents for the March 2016, December 

2016, March 2017 and April 2018 Notes Offerings that equipment might fail or that the failure 

to sufficiently mitigate operating conditions could impact the Company, while implying that 

such adverse events were “beyond the Utility’s control,” were materially false and misleading. 

The Securities Act Defendants omitted that these risks had, in fact, already materialized as a 

result of the Utility’s conduct – including inadequate vegetation management programs and tree 

clearing practices and the failure to update PG&E’s system as described above. The Utility’s 

choice not to provide adequate resources towards safety or, for example, to incentivize its 

contractors to not report or clear hazardous trees was within its control (¶569). 

657. In addition, investors were misled by the representation in PG&E’s May 23, 2016 

press release specifically incorporated by reference in the Offering Documents for the March 

2017 Offering that PG&E “continued to demonstrate leadership and commitment on safety”. 

Rather than being a leader with respect to safety, PG&E’s electrical equipment caused far more 

wildfires than industry peers in California (¶¶610, 621, 628). And rather than being committed 

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to safety the truth was that PG&E was plagued with safety deficiencies and did not sufficiently 

invest in fire mitigation. For example, the following contradicts that PG&E was committed to 

safety: 

(a) Judge Alsup has observed that: “There is one very clear-cut pattern here: 

That PG&E is starting these fires.” He continued, “What do we do[?] Does the judge just turn a 

blind eye and say, ‘PG&E, continue your business as usual. Kill more people by starting more 

fires’?” When Company representatives stated that PG&E had made safety a priority, Judge 

Alsup reportedly responded: “It’s not really true. Safety is not your number one thing.” Judge 

Alsup has also found that the “record demonstrates that PG&E’s performance with respect to 

vegetation management has been dismal.” (¶619); 

(b) Judge Alsup has also observed in January 2019 that “PG&E pumped out 

$4.5 billion in the last five years in dividends and let the tree budget wither so that a lot of trees 

that should have been taken down were not” (¶622); 

(c) PG&E had not, according to PG&E Vegetation Manager Richard Yarnell, 

made any changes to improve safety from September 2015 to April 10, 2017 (¶22); and 

(d) The CPUC ruled in December 2018: “PG&E has had serious safety 

problems with both its gas and electric operations for many years” and the Company had failed 

“to develop a comprehensive enterprise-wide approach to address safety.” The Ruling stated that 

the CPUC “was, and remains, concerned that the safety problems being experienced by PG&E 

were not just one-off situations or bad luck, but indicated a deeper and more systemic problem” 

(¶596). 

658. For the same reasons as set forth in ¶¶650-652 above, the representation in the 

Offering Documents for the April 2018 Notes Offering that assured investors that PG&E had 

taken steps to safely operate and maintain its equipment when explaining the role of third-party 

monitor “to help ensure” such steps were taken was materially false and misleading. Contrary to 

this statement, PG&E had systemic failures with respect to wildfire safety and failed to update or 

maintain its equipment as explained above. In addition, the representation misled investors with 

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regard to its “safety related incentive programs” by not disclosing that it had incentivized its 

contractors to not report or clear hazardous trees (¶569). 

B. The Securities Act Defendants Materially Misled Investors Regarding 

PG&E’s Liability for Wildfires 

659. The Offering Documents for the April 2018 Notes Offering, including the 

documents incorporated by reference therein, misled investors by insinuating that PG&E may 

not have caused and might not be liable for the destruction of life and property resulting from 

fires that PG&E caused, or the costs associated with wildfires. 

660. PG&E’s Offering Documents for the April 2018 Notes Offering (including the 

registration statement for the offering and PG&E’s FY17 Form 10-K incorporated by reference), 

misleadingly represented that it was only a possibility that PG&E caused or would face liability 

for the fires following investigations, stating: 

[T]he impact of the Northern California wildfires, including the 

costs of restoration of service to customers and repairs to the 

[Company] facilities, and whether the [Company] is able to 

recover such costs through a [Catastrophic Event Memorandum 

Account]; the timing and outcome of the wildfire investigations, 

including into the causes of the wildfires; whether the 

[Company] may have liability associated with these fires; if liable 

for one or more fires, whether the [Company] would be able to 

recover all or part of such costs through insurance or through 

regulatory mechanisms, to the extent insurance is not available or 

exhausted; and potential liabilities in connection with fines or 

penalties that could be imposed on the [Company] if the 

[California Department of Forestry and Fire Protection and the 

California Public Utilities Commission] (“CPUC”) or any other 

law enforcement agency brought an enforcement action and 

determined that the [Company] failed to comply with applicable 

laws and regulations. See Ex. A, Stmt. Nos. 24, 34. 

661. The same Form 10-K for FY17 incorporated into the April 2018 Offering 

Documents also misleadingly claimed that it was not “probable” that PG&E would face liability 

for the fires, stating that PG&E “could be liable for property damage, interest, and attorneys’ 

fees without having been found negligent... [i]f the Utility’s facilities, such as its electric 

distribution and transmission lines, are determined to be the cause of one or more fires, and the 

doctrine of inverse condemnation applies.” The Form 10-K for FY17 also stressed that “[g]iven 

the preliminary stages of investigations and the uncertainty as to the causes of the fires, 

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PG&E Corporation and the Utility do not believe a loss is probable at this time.” See Ex. A, 

Stmt. No. 25.182

662. PG&E’s 10-K for FY17 further misleadingly claimed that even if PG&E were 

found liable for the fires, PG&E’s liability insurance and ability to recover through regulatory 

mechanisms would mitigate any costs to PG&E arising from its liability for the fires. As stated 

in PG&E’s Form 10-K, while additional facts “could emerge” rendering a loss probable, “[t]he 

Utility has liability insurance from various insurers, which provides coverage for third-party 

liability attributable to the Northern California Fires in an aggregate amount of approximately 

$800 million” and could also “apply for cost recovery.” See Ex. A, Stmt. No. 25. 

663. The foregoing statements in ¶¶660-662 were materially false and misleading 

because contrary to the impression created by the Offering Documents for the April 2018 Notes 

Offering regarding PG&E’s liability for the North Bay Fires, the Company’s deficient safety 

practices had caused the majority of those wildfires and liability for those wildfires. There was 

no reasonable basis for the Securities Act Individual Defendants to claim that there was 

“uncertainty as to the causes of the fires” or that additional facts were necessary to render a loss 

probable. Given PG&E’s safety deficiencies and the facts known at the time, it was probable 

that PG&E caused many of the North Bay Fires. 

664. Sufficient facts pertaining to the causes of the Northern California wildfires 

existed to properly conclude that a loss was probable as of December 31, 2017, in accordance 

with Generally Accepted Accounting Principles (“GAAP”), Accounting Standards Codification 

(“ASC”) 450, Loss Contingencies.

183 As a result, PG&E materially understated operating 

 182 PG&E’s consolidated balance sheet as of December 31, 2017 filed with the SEC on 

PG&E’s FY17 Form 10-K materially understated operating expenses (reported ~$14.2 billion) 

and pretax income (reported ~$2.2 billion) by $10.0 billion, and materially understated total 

liabilities (reported ~$48.5 billion) and overstated total equity (reported ~$13 billion) by $10.0 

billion. 

183 GAAP are the principles established by the Financial Accounting Standards Board that 

are recognized by the accounting profession as the conventions, rules, and procedures necessary 

to define accepted accounting practice at a particular time. SEC Regulation S-X (17 C.F.R. 

§210.4-01(a)(1)) states that financial statements filed with the SEC that are not prepared in 

compliance with GAAP are presumed to be misleading and inaccurate, despite footnotes and 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 205 

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expenses and pretax income by $10.0 billion on PG&E’s consolidated statement of income for 

FY 2017, and materially understated total liabilities and overstated total equity by $10.0 billion 

on PG&E’s consolidated balance sheet as of December 31, 2017. 

665. According to GAAP, an estimated loss from a loss contingency shall be accrued 

by a charge to income and by the establishment of a liability when both of the following 

conditions are met: 

a. Information available before the financial statements are issued 

or are available to be issued [] indicates that it is probable that an 

asset had been impaired or a liability had been incurred at the date 

of the financial statements 

b. The amount of loss can be reasonably estimated.184

ASC 450-20-25-2.185

666. GAAP also provided specific instructions to the Company on assessing the 

probability of the occurrence (ASC 450-20-55-12) and required PG&E to assess whether the 

events were probable, reasonably possible or remote (ASC-450-20-55-14). 

667. PG&E was obligated to report and properly disclose wildfire-related operating 

expenses and wildfire-related liabilities as of December 31, 2017 because both requirements of 

 

(continued) 

other disclosure. Regulation S-X requires that interim financial statements must also comply 

with GAAP, with the exception that interim financial statements need not include disclosures 

that would be duplicative of disclosures accompanying annual disclosures, pursuant to 17 C.F.R. 

§210.10-01(a). 

184 GAAP states regarding this second provision that the “requirement shall not delay accrual 

of a loss until only a single amount can be reasonably estimated.” ASC 450-20-25-5. “To the 

contrary, when the condition in [ASC] 450-20-25-2(a) is met and information available indicates 

that the estimated amount of loss is within a range of amounts, it follow that some amount of loss 

has occurred and can be reasonably estimated.” Id. GAAP further instructs that “[i]f some 

amount within a range of loss appears at the time to be a better estimate than any other amount 

within the range, that amount shall be accrued.” ASC 450-20-30-1. “When no amount within 

the range is a better estimate than any other amount, however, the minimum amount in the range 

shall be accrued.” Id.

185 In assessing ASC 450’s requirements, Defendants were also required by ASC 855 to 

consider “subsequent events” that occurred after the December 31, 2017 balance sheet date, but 

before PG&E filed the FY17 Form 10-K on February 9, 2018, including, subsequent events that 

provide additional evidence about conditions that existed at the balance sheet date that should be 

recognized in the financial statements. 

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ASC 450 were met when PG&E issued its FY17 Form 10-K incorporated into the Offering 

Documents for the April 2018 Notes Offering; specifically that: (i) the wildfire-related expenses 

and liabilities were probable as a result of the Northern California wildfires; and (ii) the 

minimum amount of the potential damages in connection with the Northern California wildfires 

was estimable. 

668. A loss was probable because: (i) PG&E had for years before the North Bay Fires 

engaged in a pattern and practice of ignoring laws and California safety regulations and failed to 

take appropriate measures to mitigate or prevent wildfire hazards from occurring; (ii) the facts, 

evidence, and circumstances that existed strongly supported that PG&E’s liability for damages in 

connection with the 2017 wildfires was probable as of December 31, 2017; and (iii) “inverse 

condemnation” liability laws applied to the 2017 North Bay Fires. 

669. PG&E did not properly maintain its power lines (including the Utility’s failure to 

maintain and repair distribution and transmission lines), and had failed to properly perform 

vegetation management in the regions affected by the 2017 North Bay Fires (¶¶579-580). In 

addition, in November 2017 it was reported that PG&E auditors permitted one out of 100 trees 

checked to violate clearance standards (¶575) and in January 2018 that PG&E had only engaged 

in a limited recloser shutdown (¶¶577, 606). “The conditions [pertaining to the recognition of 

loss contingencies] are not intended to be so rigid that they required virtual certainty before a 

loss is accrued.” ASC 450-20-25-3. GAAP did not permit PG&E to wait until the ongoing 

investigations by the California Department of Forestry and Fire Protection and the California 

Public Utilities Commission made it a “virtual certainty” that PG&E would be held liable before 

recognizing that a loss was probable. As one analyst observed, when signs pointed to PG&E 

being “imprudent operators in the majority of instances...it should assume liability.” (¶582). 

670. The loss also could have been reasonably estimated under ASC 450-20-25-2(b). 

First, On January 31, 2018, the California Department of Insurance issued a press release 

announcing an update on property losses in connection with the October and December 2017 

wildfires in California, stating that, as of such date, “insurers have received nearly 45,000 

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insurance claims totaling more than $11.79 billion in losses,” of which approximately $10.0 

billion related to statewide claims from the October 2017 wildfires.186 

671. Second, PG&E admitted that the magnitude of the loss from the North Bay Fires 

could be greater than $10.0 billion in its FY17 Form 10-K. 

If the Utility were to be found liable for certain or all of such other 

costs and expenses, the amount of PG&E Corporation’s and the 

Utility’s liability could be higher than the approximately $10 

billion estimated in respect of the wildfires that occurred in 

October 2017, depending on the extent of the damage in 

connection with such fire or fires. 

672. The Offering Documents were false and misleading because they claimed further 

investigation was needed and uncertainty surrounding PG&E’s liability for the 2017 North Bay 

wildfires was such that a loss was not probable at the time. There was no reasonable basis for 

these representations based on the adverse facts existing at the time or reasonably available to the 

issuers of the Offering Documents. 

673. In addition to the above, the foregoing statements in ¶672 were contradicted by 

adverse facts that existed at the time of the statements including, inter alia, that: 

(a) PG&E started and was at fault for the vast majority of the 2017 North Bay 

Fires. (¶¶579-580, 584, 586). Cal Fire investigations have confirmed that PG&E equipment 

caused at least the significant majority of these fires. Cal Fire has referred the cases of many of 

the individual fires to the appropriate District Attorneys’ offices, and the Company faced 

potential criminal liability as well, for offenses ranging from misdemeanors to implied-malice 

murder. (¶¶582, 583, 585-586, 601-602, 604, 616, 625; see also ¶624; ¶667); 

(b) PG&E – unlike other utilities – did not shut off reclosers, increasing the 

danger and likelihood of wildfires in cases where vegetation has fallen onto power lines, 

including in 132 high risk areas in 2017 (¶¶577, 606); 

 186 The press release does not account for uninsured losses, interest, attorneys’ fees, fire 

suppression costs, evacuation costs, medical expenses, personal injury and wrongful death 

damages or other costs. 

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(c) In the two years prior to the Camp Fire, including roughly the year before 

the 2017 North Bay Fires, PG&E did “absolutely nothing” to produce an annual wildfire safety 

plan, as required by state law (¶594), and indeed failed to develop any “comprehensive 

enterprise-wide approach to address safety,” a sign of “systemic problem[s]” at the Company 

(¶596); 

(d) PG&E Vegetation Program Manager, Richard Yarnell, testified that for 

the entire period from September 2015 to April 10, 2017, “PG&E—to the best of my knowledge, 

we have not made any changes” to improve safety (¶22); and 

(e) As demonstrated by admissions made by PG&E in PG&E’s probation 

proceedings before Judge Alsup, in 2016 alone, PG&E had experienced approximately 1,400 

downed wires caused by vegetation contact, and, as of June 2017, there remained 3,962 

unworked trees which PG&E had identified in 2016 as hazardous with the potential to “fall into 

or otherwise impact the conductors, towers or guy wires before the next inspection cycle” (¶618). 

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

Item 303’s Disclosure Requirements and Disclosure Safety Violations 

674. Item 303 of SEC Regulation S-K requires the Management’s Discussion & 

Analysis (“MD&A”) section of registration statements to “[d]escribe any unusual or infrequent 

events or transactions . . . that materially affected the amount of reported income from continuing 

operations and, in each case, indicate the extent to which income was so affected” and 

“[d]escribe any known trends or uncertainties that have had or that the registrant reasonably 

expects will have a material favorable or unfavorable impact on net sales or revenues or income 

from continuing operations.” 17 C.F.R. §229.303(a)(3)(i)-(ii). 

675. The SEC has provided guidance concerning the MD&A requirements, including 

Item 303: 

The purpose of MD&A is not complicated. It is to provide readers 

information “necessary to an understanding of [a company’s] 

financial condition, changes in financial condition and results of 

operations.” The MD&A requirements are intended to satisfy 

three principal objectives: 

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• to provide a narrative explanation of a company’s financial 

statements that enables investors to see the company 

through the eyes of management; 

• to enhance the overall financial disclosure and provide the 

context within which financial information should be 

analyzed; and 

• to provide information about the quality of, and potential 

variability of, a company’s earnings and cash flow, so that 

investors can ascertain the likelihood that past performance 

is indicative of future performance. 

676. To effectuate that purpose, Item 303 requires “companies to provide investors and 

other users with material information that is necessary to an understanding of the company’s 

financial condition and operating performance, as well as its prospects for the future.” 

677. The Offering Documents (including the registration statements) for the Notes 

Offerings failed to provide the information required by Item 303, including the omission of 

information necessary to understand the Company’s financial condition, changes in financial 

condition, and results of operations. 

678. The March 2016, December 2016, March 2017, and April 2018 Notes Offering’ 

Offering Documents (specifically the registration statements associated with each of the Notes 

Offerings) failed to disclose that PG&E had systematically violated California regulations 

regarding fire prevention and failed to take reasonable steps or investments to mitigate fire 

dangers. They also violated 17 C.F.R. §229.303(a)(3)(ii),187 because they did not disclose facts 

that were known to PG&E and would (and did) have an unfavorable impact on the Company’s 

earnings and income from continuing operations. This failure also violated 17 C.F.R. 

§229.503(c), because specific risks were not adequately disclosed, or disclosed at all, even 

 187 Item 303 of SEC Regulation S-K, 17 C.F.R. §229.303(a)(3)(ii) (“Item 303”), requires 

Defendants to “[d]escribe any known trends or uncertainties that have had or that the registrant 

reasonably expects will have a material favorable or unfavorable impact on net sales or revenues 

or income from continuing operations.” Similarly, Item 503 of SEC Regulation S-K, 17 C.F.R. 

§229.503(c) (“Item 503”), requires, in the “Risk Factors” section of registration statements and 

prospectuses, “a discussion of the most significant factors that make . . . the offering speculative 

or risky” and requires each risk factor to “adequately describe[] the risk.” 

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though they were some of the most significant factors that made an investment in PG&E notes 

speculative or risky. 

679. At the time of the issuance of the Offering Documents for each of the Notes 

Offerings (including the registration statements for each offering) the known trends adversely 

impacting PG&E included: (i) the fact that despite suffering from serious safety problems for 

years, the Company had failed to develop a comprehensive approach to address safety (¶22, 594, 

596); (ii) the Company’s deficient safety practices related to wildfire safety and widespread 

safety violations, including the systemic failure to clear vegetation and trees as required by 

regulations (¶¶568, 570-571, 575, 577, 594-596, 598-599, 603, 605, 607-608, 610, 612-618, 620-

623); (iii) PG&E’s failure to update outdated equipment or flawed systems (¶¶599, 605, 612-

616, 618-623); and (iv) the Company’s failure to allocate sufficient resources or investments in 

safety (¶¶22, 78, 568-569, 571, 594-595, 599, 605, 607-608, 612-618, 618-623). Each of these 

adverse trends increased the risk of wildfires and liability which the Offering Documents 

(including the registration statements) did not sufficiently disclose so that investors understood 

the true state of PG&E’s financial condition (including the quality of its earnings) or operations. 

680. These known trends impacting PG&E’s financial condition, operations and future 

performance were not disclosed when the Offering Documents for the March 2016 and 

December 2016 Notes Offerings (including the registration statements) were filed with the SEC 

despite adverse facts existing at the time including, inter alia, that: (i) PG&E had caused 

hundreds or thousands of fires across California since June 2014, averaging more than one fire a 

day (¶600); (ii) its vegetation management practices were deficient (¶¶568, 570-571, 575, 577, 

594-596, 598-599, 603, 605, 607-608, 610, 612-618, 620-623;); (iii) in 2014 the Company had 

documented that the “likelihood of failed structures happening [was] high” with respect to the 

transmission line at the center of the subsequent Camp Fire (¶620); and (iv) as PG&E Vegetation 

Program Manager Richard Yarnell testified, for the entire period from September 2015 to April 

10, 2017, “PG&E—to the best of my knowledge, we have not made any changes” to improve 

safety (¶22). 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 211 

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681. These known trends were similarly not disclosed when the Offering Documents 

for the March 2017 Notes Offering (including the registration statement) were filed with the SEC 

despite adverse facts existing at the time including those above (¶¶679-680) and inter alia, that: 

(i) the Company had never, as planned, addressed dangerously encroaching vegetation or 

replaced old lattice towers with modern tubular steel poles or replaced wire and hardware 

connecting those to towers (¶612); (ii) there remained 3,962 unworked trees which PG&E had 

identified in 2016 as hazardous with the potential to “fall into or otherwise impact the 

conductors, towers or guy wires before the next inspection cycle” (¶618); and (iii) the 

Company’s vegetation management was dismal, inadequate, and it had allowed its tree budget to 

wither (¶¶619, 622). The March 2017 registration statement failed to disclose the known adverse 

safety trends that were unfavorably impacting PG&E. 

682. Likewise, at the time the Offering Documents for the April 2018 Notes Offering 

(including the registration statement), these known trends were not disclosed despite adverse 

facts existing at the time include those above (¶¶679-681) and inter alia, that the Company still 

had failed to create a “comprehensive enterprise-wide approach to address safety” or address the 

“systemic problem[s]” at the Company, with the result that a “very clear-cut pattern” had 

established itself by 2018: “PG&E is starting these fires” (¶¶596, 605). The April 2018 

registration statement failed to disclose PG&E’s known adverse safety trends that were 

unfavorably impacting PG&E. 

XIX. NO SAFE HARBOR FOR THE SECURITIES ACT CLAIMS 

683. The statutory safe harbor and/or bespeaks caution doctrine applicable to forwardlooking statements under certain circumstances do not apply to any of the false or misleading 

statements or material omissions pleaded with respect to the Securities Act claims. 

684. First, none of the misstatements complained of herein were forward-looking 

statements. Rather, they were misstatements concerning current facts and conditions existing at 

the time the statements were made. None of the historic or present tense statements made by the 

Securities Act Defendants were assumptions underlying or relating to any plan, projection or 

statement of future economic performance, as they were not stated to be such assumptions 

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underlying or relating to any projection or statement of future economic performance when 

made, nor were any of the projections or forecasts made by the Securities Act Defendants 

expressly related to or stated to be dependent on those historic or present tense statements when 

made. 

685. Second, to the extent that any statements may be construed as forward-looking, 

those statements were not accompanied by meaningful cautionary language identifying important 

facts that could cause actual results to differ materially from those in the statements. As set forth 

in detail above, then-existing facts contradicted the Securities Act Defendants’ statements. 

Given the then-existing facts contradicting the Securities Act Defendants’ statements, the 

generalized risk disclosures made by the Securities Act Defendants were not sufficient to 

insulate the Securities Act Defendants from liability for their materially false or misleading 

statements and material omissions. 

686. Third, to the extent any statement that may be construed as a false or misleading 

forward-looking statement, at the time each forward-looking statement was purportedly made, 

the speaker also knew the forward-looking statement was false or misleading and the forwardlooking statement was authorized and/or approved by an executive officer of PG&E who knew 

that the forward-looking statement was false. 

XX. CLASS ACTION ALLEGATIONS FOR THE SECURITIES ACT CLAIMS 

687. The Securities Act Plaintiffs bring the Securities Act claims on behalf of 

themselves and as a class action pursuant to Rule 23 of the Federal Rules of Civil Procedure 

consisting of all persons or entities that acquired PG&E senior notes in or traceable to one or 

more of the Notes Offerings and corresponding Offering Documents, and who were damaged 

thereby (the “Securities Act Subclass”). Excluded from the Securities Act Subclass are: (i) all 

defendants in the Action; (ii) members of the immediate family of any individual defendant; (iii) 

any person who is or was an officer or director of PG&E during or after the Class Period; (iv) 

any firm, trust, corporation, or other entity in which any defendant has or had a controlling 

interest; (v) PG&E’s employee retirement and benefit plan(s) and their participants or 

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beneficiaries, to the extent they made purchases through such plan(s); and (vi) the legal 

representatives, affiliates, heirs, successors-in-interest, or assigns of any such excluded person. 

688. The members of the Securities Act Subclass are so numerous that joinder of all 

members is impracticable. PG&E notes are traded on the New York Stock Exchange (“NYSE”), 

and over $4 billion worth of PG&E notes were sold in the Notes Offerings. While the exact 

number of the Securities Act Subclass members is unknown to the Securities Act Plaintiffs at 

this time and can only be ascertained through appropriate discovery, the Securities Act Plaintiffs 

believe that there are hundreds of members in the proposed Securities Act Subclass. Record 

owners and other members of the Subclass may be identified from records maintained by PG&E 

or its transfer agent and may be notified of the pendency of this action by mail, using the form of 

notice similar to that customarily used in securities class actions. 

689. Securities Act Plaintiffs’ claims are typical of the claims of the members of the 

Securities Act Subclass, as all members of the Securities Act Subclass are similarly affected by 

Securities Act Defendants’ conduct in violation of the Securities Act that is complained of 

herein. 

690. Securities Act Plaintiffs will fairly and adequately protect the interests of the 

members of the Securities Act Subclass and have retained counsel competent and experienced in 

class and securities litigation. 

691. Common questions of law and fact exist as to all members of the Securities Act 

Subclass and predominate over any questions solely affecting individual members of the 

Securities Act Subclass. Among the questions of law and fact common to the Securities Act 

subclass are: 

(a) whether the Securities Act Defendants violated the Securities Act; 

(b) whether statements made by the Securities Act Defendants to the investing 

public in the Offering Documents for the Notes Offerings misrepresented or omitted material 

facts about the business and operations of PG&E; and 

(c) to what extent the members of the Securities Act Subclass have sustained 

damages and the proper measure of damages. 

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692. A class action is superior to all other available methods for the fair and efficient 

adjudication of this controversy since joinder of all members is impracticable. Furthermore, as 

the damages suffered by individual Securities Act Subclass members may be relatively small, the 

expense and burden of individual litigation make it impossible for members of the Securities Act 

Subclass to individually redress the wrongs done to them. There will be no difficulty in the 

management of the Securities Act Subclass as a class in this action. 

XXI. CLAIMS FOR RELIEF UNDER THE SECURITIES ACT 

FIFTH CLAIM 

For Violations of §11 of the Securities Act 

Against All Securities Act Defendants 

693. This Claim is brought pursuant to §11 of the Securities Act, 15 U.S.C. §77k, on 

behalf of the Securities Act Subclass, against all Securities Act Defendants. 

694. This Claim does not sound in fraud. Securities Act Plaintiffs do not allege that 

the Securities Act Individual Defendants or the Underwriter Defendants had scienter or 

fraudulent intent for this Claim, which are not elements of a §11 claim. This Claim is based 

solely on negligence. Securities Act Plaintiffs specifically disclaim any allegation of fraud, 

scienter or recklessness in this §11 claim. 

695. Securities Act Plaintiffs repeat and reallege ¶¶12-15 & 496-694 by reference. 

696. The registration statements for the Notes Offerings were inaccurate and 

misleading, contained untrue statements of material fact, omitted to state other facts necessary to 

make the statements made not misleading, and omitted to state material facts required to be 

stated therein. 

697. The Utility, a subsidiary of PG&E Corporation, is the registrant for the senior 

notes sold in the Notes Offerings. The Utility and PG&E Corporation would be named as 

defendants herein for this Claim but for their declaration of bankruptcy and the imposition of the 

automatic bankruptcy stay under federal law. 

698. The Securities Act Defendants named herein were responsible for the contents 

and dissemination of the registration statements for the Notes Offerings. None of the Securities 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 215 

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Act Defendants named herein made a reasonable investigation or possessed reasonable grounds 

for the belief that the statements contained in the registration statements for the Notes Offerings 

were true and without omissions of any material facts and were not misleading. 

699. By reason of the conduct alleged herein, each Securities Act Defendant violated, 

and/or controlled a person who violated, §11 of the Securities Act. 

700. Securities Act Plaintiffs acquired PG&E senior notes sold in the Notes Offerings 

traceable to the registration statements for the Notes Offerings. 

701. Securities Act Plaintiffs and the Securities Act Subclass have sustained damages. 

702. At the time of their purchases of the PG&E notes sold in the Notes Offerings, 

Securities Act Plaintiffs and other members of the Securities Act Subclass were without 

knowledge of the facts concerning the wrongful conduct alleged herein. Less than one year has 

elapsed from the time that Securities Act Plaintiffs discovered or reasonably could have 

discovered the facts upon which this Complaint is based to the time that Securities Act Plaintiffs 

filed their initial complaint on February 22, 2019. Less than three years elapsed between the 

time that the securities upon which this Count is brought were offered to the public and the time 

Securities Act Plaintiffs filed their initial complaint. 

SIXTH CLAIM 

For Violation of §15 of the Securities Act 

Against the Securities Act Individual Defendants 

703. This Claim is brought pursuant to §15 of the Securities Act, 15 U.S.C. §77o, on 

behalf of all members of the Securities Act Subclass against the Securities Act Individual 

Defendants. 

704. This Claim does not sound in fraud. Securities Act Plaintiffs do not allege that 

the Securities Act Individual Defendants had scienter or fraudulent intent, which are not 

elements of a §15 claim. This Claim is based solely on negligence. Securities Act Plaintiffs 

specifically disclaim any allegation of fraud, scienter or recklessness in this §15 claim. 

705. Securities Act Plaintiffs repeat and reallege ¶¶12-15 & 496-704 by reference. 

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 216 

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706. The Securities Act Individual Defendants each were control persons of PG&E by 

virtue of their positions as directors and/or senior officers of PG&E. The Individual Securities 

Act Defendants oversaw the Notes Offerings, including the preparation and dissemination of the 

registration statements for the Notes Offerings, and took steps to ensure that the Notes Offerings 

were successfully completed, including, for example, by signing the registration statements for 

the Notes Offerings. 

XXII. PRAYER FOR RELIEF 

WHEREFORE, Plaintiffs demand judgment against Defendants as follows: 

A. Determining that this action may be maintained as a class action under Rule 23 of 

the Federal Rules of Civil Procedure, and certifying Lead Plaintiff as the Class representative 

and the Securities Act Plaintiffs as representatives of the Securities Act Subclass; 

B. Requiring Defendants to pay damages sustained by Plaintiffs and the Class by 

reason of the acts and transactions alleged herein; 

C. Awarding Plaintiffs and the other members of the Class prejudgment and postjudgment interest, as well as their reasonable attorneys’ fees, expert fees and other costs; and 

D. Awarding such other and further relief as this Court may deem just and proper.

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THIRD AMENDED CONSOLIDATED CLASS ACTION COMPLAINT 217 

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DEMAND FOR TRIAL BY JURY 

Plaintiffs hereby demand a trial by jury. 

DATED: May 28, 2019 /s/ Thomas A. Dubbs 

THOMAS A. DUBBS (pro hac vice) 

LOUIS GOTTLIEB (pro hac vice) 

JEFFREY A. DUBBIN (#287199) 

ARAM BOGHOSIAN (pro hac vice)

LABATON SUCHAROW LLP 

140 Broadway 

New York, NY 10005 

Telephone: (212) 907-0700 

Facsimile: (212) 818-0477 

Email: tdubbs@labaton.com 

lgottlieb@labaton.com 

jdubbin@labaton.com 

aboghosian@labaton.com 

Counsel for Lead Plaintiff the Public 

Employees Retirement Association of New 

Mexico and Lead Counsel for the Class 

WAGSTAFFE, VON LOEWENFELDT, 

 BUSCH & RADWICK, LLP 

JAMES M. WAGSTAFFE (#95535) 

FRANK BUSCH (#258288) 

100 Pine Street, Suite 725 

San Francisco, California 94111 

Telephone: (415) 357-8900 

Facsimile: (415) 371-0500 

Email: wagstaffe@wvbrlaw.com 

busch@wvbrlaw.com 

Liaison Counsel for the Class 

ROBBINS GELLER RUDMAN 

 & DOWD LLP 

DARREN J. ROBBINS (#168593) 

BRIAN E. COCHRAN (#286202) 

655 West Broadway, Suite 1900 

San Diego, CA 92101 

Telephone: (619) 231-1058 

Facsimile: (619) 231-7423 

Email:darrenr@rgrdlaw.com 

bcochran@rgrdlaw.com 

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ROBBINS GELLER RUDMAN 

 & DOWD LLP 

WILLOW E. RADCLIFFE (#200087) 

KENNETH J. BLACK (#291871) 

Post Montgomery Center 

One Montgomery Street, Suite 1800 

San Francisco, CA 94104 

Telephone: (415) 288-4545 

Facsimile: (415) 288-4534 

Email: willowr@rgrdlaw.com 

kennyb@rgrdlaw.com 

Counsel for the Securities Act Plaintiffs 

VANOVERBEKE, MICHAUD & 

 TIMMONY, P.C. 

THOMAS C. MICHAUD 

79 Alfred Street 

Detroit, MI 48201 

Telephone: (313) 578-1200 

Facsimile: (313) 578-1201 

Email: tmichaud@vmtlaw.com 

Additional Counsel for the Securities Act 

Plaintiffs 

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CERTIFICATE OF SERVICE CIVIL ACTION NO. 3:18-CV-03509-EJD 

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CERTIFICATE OF SERVICE 

I HEREBY CERTIFY that on May 28, 2019, I electronically filed the foregoing with the 

Clerk of Court using the CM/ECF system, which will send a Notice of Electronic Filing to all 

counsel of record. 

/s/ Thomas A. Dubbs 

THOMAS A. DUBBS 

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Attachment A 

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CERTIFICATION 

I, Susan G. Pittard, as Chief of Staff and General Counsel of the Public Employees 

Retirement Association of New Mexico ("PERA"), hereby certify as follows: 

1. I am fully authorized to enter into and execute this Certification on behalf of PERA. 

I have reviewed a Third Amended Consolidated Class Action Complaint prepared against PG&E 

Corporation ("PG&E") alleging violations of the federal securities laws; 

2. PERA did not purchase securities of PG&E at the direction of counsel or in order to 

participate in any private action under the federal securities laws; 

3. PERA is willing to serve as a lead plaintiff and representative party in this matter, 

including providing testimony at deposition and trial, if necessary; 

4. PERA's transactions in PG&E securities during the Class Period are reflected in 

Exhibit A, attached hereto; 

5. PERA sought to serve as a lead plaintiff in the following class actions filed under the 

federal securities laws during the last three years: 

Govem111ent E111pl'!)'ees' Retire/lien! Systelll of the Vi,gin Islands v. IVageWorks, Inc., 

No. 4:18-cv-1523 (N.D. Cal.) 

In re PG&E Co,poration Semrities Litigation, No. 3:18-cv-3509 (N.D. Cal.) 

6. Beyond its pro rata share of any recovery, PERA will not accept payment for serving 

as a lead plaintiff and representative party on behalf of the Class, except the reimbursement of such 

reasonable costs and expenses (including lost wages) as ordered or approved by the Court. 

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I declare under penalty of perjuI'), under the laws of the United States, that the foregoing is 

true and correct this day of May, 2019. 

/s&:t!J:F~ 

2 

Chief of Staff/ General Counsel 

P11blic Entployees Retirentent Association of 

Ne111Mexico 

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EXHIBIT A 

TRANSACTIONS IN PG&E CORPORATION 

Shares / Price Per Share 

Transaction T e Trade Date Par Value / Par Value Cost / Proceeds 

Purchase 06/03/15 1,000.00 $51.97 $51,970.00 

Purchase 06/03/15 2,000.00 $51.97 $103,940.00 

Purchase 07/13/15 2,500.00 $51.15 $127,872.75 

Purchase 03/10/16 1,100.00 $56.95 $62,645.99 

Purchase 06/24/16 3,200.00 $62.66 $200,512.00 

Purchase 08/09/16 94,400.00 $63.60 $6,004,113.76 

Sale 08/25/16 -54.00 $63.56 $3,432.41 

Sale 08/25/16 -1,691.00 $63.58 $107,512.43 

Purchase 08/25/16 11,768.00 $63.66 $749,143.82 

Sale 08/26/16 -1,315.00 $62.99 $82,826.06 

Sale 08/26/16 -1,503.00 $63.08 $94,803.98 

Sale 08/29/16 -376.00 $62.50 $23,500.00 

Sale 08/29/16 -1,865.00 $62.55 $116,646.98 

Sale 08/30/16 -1,878.00 $62.04 $116,508.87 

Sale 08/31/16 -126.00 $61.80 $7,786.99 

Purchase 08/31/16 74,700.00 $61.94 $4,627,052.46 

Purchase 09/27/16 6,153.00 $63.80 $392,539.25 

Purchase 10/20/16 8,307.00 $60.96 $506,386.41 

Purchase 11/08/16 700.00 $62.02 $43,414.00 

Sale 11/17/16 -8,258.00 $58.72 $484,925.45 

Sale 11/17/16 -227.00 $58.96 $13,383.38 

Sale 11/17/16 -7,285.00 $59.03 $430,058.32 

Sale 11/18/16 -4,630.00 $58.40 $270,409.59 

Purchase 11/22/16 6,224.00 $59.28 $368,962.45 

Sale 11/29/16 -4,519.00 $60.69 $274,260.37 

Sale 11/30/16 -2,288.00 $59.21 $135,469.51 

Sale 12/01/16 -1,197.00 $57.90 $69,308.57 

Sale 12/02/16 -796.00 $58.32 $46,424.55 

Purchase 12/13/16 7,217.00 $60.40 $435,937.11 

Sale 01/06/17 -3,108.00 $60.84 $189,090.72 

Sale 01/06/17 -8,392.00 $60.97 $511,683.74 

Purchase 01/20/17 10,349.00 $61.41 $635,532.09 

Purchase 02/13/17 400.00 $63.69 $25,476.00 

Purchase 02/24/17 7,378.00 $65.95 $486,588.69 

Sale 03/08/17 -4,763.00 $65.24 $310,739.07 

Sale 03/09/17 -1,809.00 $65.29 $118,105.63 

Sale 03/10/17 -928.00 $65.35 $60,648.33 

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Price Per Share 

Transaction T e Trade Date Par Value / Par Value Cost / Proceeds 

Purchase 03/22/17 1,010.00 $67.57 $68,241.56 

Sale 04/07 /17 -8,900.00 $67.11 $597,294.13 

Purchase 04/10/17 50,200.00 $66.93 $3,359,735.40 

Purchase 05/25/17 5,600.00 $66.80 ($374,085.04 

Sale 05/31/17 -427.00 $68.38 $29,198.26 

Sale 05/31/17 -1,710.00 $68.38 $116,929.80 

Purchase 06/06/17 2,323.00 $68.74 $159,680.93 

Purchase 06/30/17 11,240.00 $66.61 $748,694.15 

Purchase 07/24/17 1,168.00 $67.90 $79,307.20 

Purchase 08/31/17 1,700.00 $70.30 $119,510.51 

Sale 10/10/17 -8,637.00 $69.16 $597,294.33 

Sale 10/11/17 -977.00 $69.08 $67,494.38 

Sale 10/11/17 -4,936.00 $69.30 $342,064.80 

Purchase 10/30/17 4,180.00 $57.23 $239,222.65 

Sale 11/20/17 -2,900.00 $52.65 $152,685.00 

Sale 11/30/17 -13,862.00 $54.24 $751 ,874.88 

Sale 11/30/17 -41 ,586.00 $54.24 $2,255,624.64 

Sale 11/30/17 -7,887.00 $54.25 $427,869.75 

Sale 12/01/17 -15,727.00 $54.28 $853,636.40 

Sale 12/04/17 -9,743.00 $54.13 $527,404.18 

Sale 12/05/17 -12,339.00 $53.54 $660,590.58 

Sale 12/06/17 -2,135.00 $53.53 $114,282.07 

Sale 12/07/17 -4.00 $53.01 $212.03 

Sale 12/08/17 -665.00 $53.19 $35,369.69 

Sale 12/15/17 -5,000.00 $53.05 $265,250.00 

Sale 01/31/18 -2,040.00 $41.79 $85,260.37 

Sale 02/21/18 -500.00 $39.79 $19,895.00 

Purchase 04/16/18 5,859.00 $45.08 $264,123.72 

Purchase 04/16/18 94.00 $45.30 $4,257.97) 

Purchase 04/16/18 40,480.00 $45.50 $1,842,026.21 

Purchase 04/17/18 3,307.00 $45.91 $151,838.92 

Sale 05/31/18 -24,012.00 $43.33 $1,040,439.96 

Purchase 06/25/18 1,100.00 $42.10 $46,307.03 

Sale 06/20/18 -22,400.00 $40.00 $896,000.00 

Sale 06/20/18 -1,600.00 $40.00 $64,000.00 

Purchase 08/20/18 1,700.00 $44.80 $76,163.23) 

Sale 08/21/18 -42,400.00 $44.83 $1,900,81 7.44 

Purchase 10/11/18 5,228.00 $46.93 $245,358.93 

Purchase 10/11/18 14,772.00 $47.09 $695,682.91 

Sale 10/22/18 -17,750.00 $47.87 $849,747.53 

Sale 10/23/18 -17,750.00 $47.47 $842,539.25 

2 

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234 of 261
Trade Date 

11/30/17 

Trade Date 

12/29/17 

02/20/18 

Transaction T e Trade Date 

Sales 03/31/17 

Transaction T e Trade Date 

Purchase 05/11/16 

Transaction T e Trade Date 

Purchase 08/02/18 

Sale 11/15/18 

Transaction T e Trade Date 

Purchase 06/03/15 

Sales 08/14/15 

Shares/ 

Par Value 

-750,000.00 

Shares/ 

Par Value 

-500,000.00 

-500,000.00 

Shares/ 

Par Value 

-250,000.00 

Shares/ 

Par Value 

850,000.00 

Shares/ 

Par Value 

1,405,000.00 

-220,000.00 

Shares/ 

Par Value 

125,000.00 

-875,000.00 

3 

Price Per Share 

/ Par Value 

$100.00 

Price Per Share 

/ Par Value 

$104.71 

$103.79 

Price Per Share 

/ Par Value 

$94.87 

Price Per Share 

/ Par Value 

$132.53 

Price Per Share 

/ Par Value 

$99.77 

$89.00 

Price Per Share 

/ Par Value 

$101.50 

$103.58 

Cost / Proceeds 

$750,000.00 

Cost/ Proceeds 

$523,568.99 

$518,935.16 

Cost / Proceeds 

$237,182.50 

Cost / Proceeds 

$1,126,471.00 

Cost / Proceeds 

$1,401,698.25 

$195,800.00 

Cost / Proceeds 

$126,875.00 

$906,298.75 

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Transaction T e Trade Date 

Purchases 03/07 /17 

Shares/ 

Par Value 

95,000.00 

4 

Price Per Share 

/ Par Value 

$99.65 

Cost / Proceeds 

$94,662.75 

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Attachment B 

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CERTIFICATION OF NAMED PLAINTIFF 

PURSUANT TO FEDERAL SECURITIES LAWS 

York County on behalf of the County of York Retirement Fund ("Plaintiff') 

declares: 

1. Plaintiff has reviewed a complaint and authorized its filing. 

2. Plaintiff did not acquire the security that is the subject of this action at the 

direction of plaintiff's counsel or in order to participate in this private action or any other 

litigation under the federal securities laws. 

3. Plaintiff is willing to serve as a representative party on behalf of the class, 

including providing testimony at deposition and trial, if necessary. 

4. Plaintiff has made the following transaction(s) during the Class Period in 

the securities that are the subject of this action: 

Security Transaction Price Per Share 

See attached Schedule A. 

5. Plaintiff has not sought to serve or served as a representative party in a 

class action that was filed under the federal securities laws within the three-year period 

prior to the date of this Certification except as detailed below: 

None. 

6. Plaintiff will not accept any payment for serving as a representative party 

on behalf of the class beyond the Plaintiffs pro rata share of any recovery, except such 

reasonable costs and expenses (including lost wages) directly relating to the 

representation of the class as ordered or approved by the court. 

I declare under penalty of perjury that the foregoing is true and correct. Executed 

this}Lli.. day of May, 2019. 

York County on behalf of the County of York 

Retirement Fund 

By: 

PG&E 

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SCHEDULE A 

SECURITIES TRANSACTIONS 

Bonds 

Date Type of Face 

Acquired Debt Amount Price 

05/03/2018 2.95% due 03/01/2026 112,000 $92.16 

05/30/2018 2.95% due 03/01/2026 212,000 $91.95 

11/27/2017 3.3% due 12/01/2027 162,000 $99.70 

11/27/2017 3.3% due 12/01/2027 162,000 $99.99 

05/14/2018° 3.3% due 12/01/2027 212,000 $92.51 

Date Type of Face 

Sold Debt Amount Price 

11/15/2018 2.95% due 03/01/2026 25,000 $80.00 

11/15/2018 2.95% due 03/01/2026 25,000 $81.00 

11/15/2018 2.95% due 03/01/2026 46,000 $79.92 

11/15/2018 2.95% due 03/01/2026 64,000 $81.63 

11/15/2018 2.95% due 03/01/2026 64,000 $82.25 

11/16/2018 2.95% due 03/01/2026 38,000 $87.00 

01/09/2019 2.95% due 03/01/2026 62,000 $79.00 

05/03/2018 3.3% due 12/01/2027 112,000 $92.92 

05/14/2018° 3.3% due 12/01/2027 212,000 $92.51 

05/30/2018 3.3% due 12/01/2027 212,000 $92.73 

0

Debt exchange offer. 

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Attachment C 

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PG&E

CERTIFICATION OF NAMED PLAINTIFF

PURSUANT TO FEDERAL SECURITIES LAWS

CITY OF WARREN POLICE AND FIRE RETIREMENT SYSTEM

(“Plaintiff”) declares:

1. Plaintiff has reviewed a complaint and authorized its filing.

2. Plaintiff did not acquire the security that is the subject of this action at 

the direction of plaintiff’s counsel or in order to participate in this private action or 

any other litigation under the federal securities laws.

3. Plaintiff is willing to serve as a representative party on behalf of the 

class, including providing testimony at deposition and trial, if necessary.

4. Plaintiff has made the following transaction(s) during the Class Period 

in the securities that are the subject of this action:

Security Transaction Date Price Per Share

See attached Schedule A.

5. (a) Plaintiff has been appointed to serve as a representative party 

for a class in the following actions filed under the federal securities laws within the

three-year period prior to the date of this Certification:

None.

(b) Plaintiff is seeking to serve as a representative party for a class 

in the following actions filed under the federal securities laws:

None.

(c) Plaintiff initially sought to serve as a representative party for a 

class in the following actions filed under the federal securities laws within the 

three-year period prior to the date of this Certification:

City of Warren Police and Fire Retirement System v. Zebra Technologies, No. 2:17-cv-4412 (E.D.N.Y.)

City of Warren Police and Fire Retirement System v. TransDigm Group, No. 1:17-cv-01677 (N.D. Ohio)

City of Warren Police and Fire Retirement System v. Foot Locker, Inc., No. 1:18-cv-01492 (E.D.N.Y.)

City of Warren Police and Fire Retirement System v. Hasbro, Inc., No. 1:18-cv-00543 (D.R.I.)

City of Warren Police and Fire Retirement System v. DXC Technology, No. 1:18-cv-01599 (E.D. Va.)

Atansio v. Tenaris S.A., et al., No. 1:18-cv-07059 (E.D.N.Y.)

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6. Plaintiff will not accept any payment for serving as a representative 

except such reasonable costs and expenses (including lost wages) directly relating 

to the representation of the class .as ordered or approved by the court. __ 

I declare under penalty of perjury that the foregoing is true and correct. 

Executed this2i+Aday ofMay, 2019. 

CITY OF WARREN POLICE AND FIRE 

RETIREMENT SYSTEM 

By: ~d.~ 

Its: 

- 2 - PG&E 

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Common Stock

Date

Acquired Price

05/29/2015 21 $53.47

12/18/2015 19 $53.11

02/29/2016 15 $56.73

03/31/2016 9 $59.72

05/05/2016 956 $59.15

05/31/2016 16 $60.08

06/24/2016 65 $62.66

07/06/2016 18 $65.39

09/14/2016 23 $61.43

12/16/2016 23 $61.04

02/28/2017 19 $66.75

03/31/2017 19 $66.36

09/15/2017 29 $70.28

12/15/2017 27 $53.05

03/16/2018 25 $45.08

Date

Sold Price

07/08/2016 6 $64.83

03/01/2017 8 $65.85

03/27/2017 142 $67.19

06/23/2017 27 $68.03

06/22/2018 125 $42.92

09/21/2018 223 $46.79

10/15/2018 1,170 $47.84

*Opening position of 1,081 shares for common stock.

Bonds

Date Face

Acquired Amount Price

12/21/2017 3.3% due 12/01/2027 75,000 $98.89

05/01/2018 3.3% due 12/01/2027 25,000 $93.09

 05/14/2018e 3.3% due 12/01/2027 100,000 $92.51

Date Face

Sold Amount Price

 05/14/2018e 3.3% due 12/01/2027 100,000 $92.51

01/14/2019 3.3% due 12/01/2027 100,000 $78.00

e

Debt exchange offer.

Type of

Debt

Type of

Debt

SCHEDULE A

SECURITIES TRANSACTIONS

Amount of

Shares Acquired

Amount of

Shares Sold

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Attachment D 

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EXHIBIT A 

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Exhibit A: Securities Act Claims – False and Misleading Statements

No. Source Referenced Statement

1. 424B2 (Prosp. 

Supp.)

(2/24/2016) 

March 2016 Reg. Stmt.1

(2/11/2014) and Prosp. 

Supp. (2/24/2016)

Some of the factors that could cause future results to differ materially from those expressed or 

implied by the forward-looking statements, or from historical results, include . . . 

* * *

● the impact of droughts or other weather-related conditions or events, wildfires (including the 

Butte fire in September 2015, which affected portions of Amador and Calaveras counties), climate 

change, natural disasters, acts of terrorism, war, or vandalism (including cyber-attacks), and other 

events, that can cause unplanned outages, reduce generating output, disrupt the our [sic] service to 

customers, or damage or disrupt the facilities, operations, or information technology and systems 

owned by us, our customers, or third parties on which we rely; whether we incur liability to third 

parties for property damage or personal injury caused by such events; and whether the we [sic] are 

subject to civil, criminal, or regulatory penalties in connection with such events.

2. FY15 10-K

(2/18/2016)

March 2016 Reg. Stmt. 

(2/11/2014) and Prosp. 

Supp. (2/24/2016); 

March 2016 Reg. Stmt. 

(2/11/2014) and Prosp. 

Supp. (11/29/2016); 

March 2017 Reg. Stmts. 

(1/4/17; 1/19/17) and 

Prosp. Supp. (3/8/2017). 

Some of the factors that could cause future results to differ materially from those expressed or 

implied by the forward-looking statements, or from historical results, include . . .

* * *

● the impact of droughts or other weather-related conditions or events, wildfires (such as the Butte 

fire), climate change, natural disasters, acts of terrorism, war, or vandalism (including cyber-attacks), 

and other events, that can cause unplanned outages, reduce generating output, disrupt the Utility’s 

service to customers, or damage or disrupt the facilities, operations, or information technology and 

systems owned by the Utility, its customers, or third parties on which the Utility relies; whether the 

Utility incurs liability to third parties for property damage or personal injury caused by such events; 

and whether the Utility is subject to civil, criminal, or regulatory penalties in connection with such 

events.

 1 “Reg. Stmt.” refers to the registration statement filed with the SEC as part of the Offering Documents for the Notes Offerings as 

defined in the Third Amended Consolidated Class Action Complaint for Violation of the Federal Securities Laws. “Prosp. Supp.” 

refers to the prospectus supplement filed with the SEC as part of the Offering Documents for the Notes Offerings as defined in the 

Third Amended Consolidated Class Action Complaint for Violation of the Federal Securities Laws. 

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2

No. Source Referenced Statement

3. FY15 10-K 

(2/18/2016)

March 2016 Reg. Stmt. 

(2/11/2014) and Prosp. 

Supp. (2/24/2016); 

March 2016 Reg. Stmt. 

(2/11/2014) and Prosp. 

Supp. (11/29/2016); 

March 2017 Reg. Stmts. 

(1/4/17; 1/19/17) and 

Prosp. Supp. (3/8/2017).

Climate Change Mitigation and Adaptation Strategies. During 2015, the Utility continued its 

programs to develop strategies to mitigate the impact of the Utility’s operations (including customer 

energy usage) on the environment and to plan for the actions that it will need to take to adapt to the 

likely impacts of climate change on the Utility’s future operations. The Utility regularly reviews the 

most relevant scientific literature on climate change such as sea level rise, temperature changes, 

rainfall and runoff patterns, and wildfire risk, to help the Utility identify and evaluate climate 

change-related risks and develop the necessary adaptation strategies. The Utility maintains 

emergency response plans and procedures to address a range of near-term risks, including extreme 

storms, heat waves and wildfires and uses its risk-assessment process to prioritize infrastructure 

investments for longer-term risks associated with climate change. The Utility also engages with 

leaders from business, government, academia, and non-profit organizations to share information and 

plan for the future.

4. FY15 10-K 

(2/18/2016)

March 2016 Reg. Stmt. 

(2/11/2014) and Prosp. 

Supp. (2/24/2016); 

March 2016 Reg. Stmt. 

(2/11/2014) and Prosp. 

Supp. (11/29/2016); 

March 2017 Reg. Stmts. 

(1/4/17; 1/19/17) and 

Prosp. Supp. (3/8/2017),

With respect to electric operations, climate scientists project that, sometime in the next several 

decades, climate change will lead to increased electricity demand due to more extreme, persistent, and 

frequent hot weather. The Utility believes its strategies to reduce GHG emissions through energy 

efficiency and demand response programs, infrastructure improvements, and the use of renewable 

energy and energy storage are effective strategies for adapting to the expected increase in demand for 

electricity. The Utility is making substantial investments to build a more modern and resilient 

system that can better withstand extreme weather and related emergencies. The Utility’s vegetation 

management activities also reduce the risk of wildfire impacts on electric and gas facilities. Over the 

long-term, the Utility also faces the risk of higher flooding and inundation potential at coastal and low 

elevation facilities due to sea level rise combined with high tides, storm runoff and storm surges.

5. FY15 10-K 

(2/18/2016)

March 2016 Reg. Stmt. 

(2/11/2014) and Prosp. 

Supp. (2/24/2016); 

March 2016 Reg. Stmt. 

(2/11/2014) and Prosp. 

Supp. (11/29/2016); 

March 2017 Reg. Stmts. 

(1/4/17; 1/19/17) and 

Prosp. Supp. (3/8/2017).

The Utility’s future operations may be affected by climate change that may have a material 

impact on PG&E Corporation’s and the Utility’s financial condition, results of operations, and 

cash flows.

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3

No. Source Referenced Statement

6. FY15 10-K 

(2/18/2016)

March 2016 Reg. Stmt. 

(2/11/2014) and Prosp. 

Supp. (2/24/2016); 

March 2016 Reg. Stmt. 

(2/11/2014) and Prosp. 

Supp. (11/29/2016); 

March 2017 Reg. Stmts. 

(1/4/17; 1/19/17) and 

Prosp. Supp. (3/8/2017).

The Utility has been studying the potential effects of climate change (increased temperatures, 

changing precipitation patterns, rising sea levels) on the Utility’s operations and is developing 

contingency plans to adapt to those events and conditions that the Utility believes are most significant. 

Scientists project that climate change will increase electricity demand due to more extreme, persistent 

and hot weather. Increasing temperatures and changing levels of precipitation in the Utility’s service 

territory would reduce snowpack in the Sierra Mountains. If the levels of snowpack were reduced, the 

Utility’s hydroelectric generation would decrease and the Utility would need to acquire additional 

generation from other sources at a greater cost. If the Utility increases its reliance on conventional 

generation resources to replace hydroelectric generation and to meet increased customer demand, it 

may become more costly for the Utility to comply with GHG emissions limits. In addition, 

increasing temperatures and lower levels of precipitation could increase the occurrence of wildfires 

in the Utility’s service territory causing damage to the Utility’s facilities or the facilities of third 

parties on which the Utility relies to provide service, damage to third parties for loss of property, 

personal injury, or loss of life. In addition, flooding caused by rising sea levels could damage the 

Utility’s facilities, including hydroelectric assets such as dams and canals, and the electric 

transmission and distribution assets. The Utility could incur substantial costs to repair or replace 

facilities, restore service, compensate customers and other third parties for damages or injuries. The 

Utility anticipates that the increased costs would be recovered through rates, but as rate pressures 

increase, the likelihood of disallowance or non-recovery may increase.

7. FY15 10-K 

(2/18/2016)

March 2016 Reg. Stmt. 

(2/11/2014) and Prosp. 

Supp. (2/24/2016); 

March 2016 Reg. Stmt. 

(2/11/2014) and Prosp. 

Supp. (11/29/2016); 

March 2017 Reg. Stmts. 

(1/4/17; 1/19/17) and 

Prosp. Supp. (3/8/2017).

At December 31, 2015, the Utility owned approximately 18,400 circuit miles of interconnected 

transmission lines operating at voltages ranging from 60 kV to 500 kV. The Utility also operated 91 

electric transmission substations with a capacity of approximately 63,400 MVA.

* * *

Throughout 2015, the Utility upgraded several critical substations and re-conductored a 

number of transmission lines to improve maintenance and system flexibility, reliability and safety. 

The Utility expects to undertake various additional transmission projects over the next several years to 

upgrade and expand the capacity of its transmission system to accommodate system load growth, 

secure access to renewable generation resources, replace aging or obsolete equipment and improve 

system reliability. The Utility also has taken steps to improve the physical security of its transmission 

substations and equipment.

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4

No. Source Referenced Statement

8. FY15 10-K 

(2/18/2016)

March 2016 Reg. Stmt. 

(2/11/2014) and Prosp. 

Supp. (2/24/2016); 

March 2016 Reg. Stmt. 

(2/11/2014) and Prosp. 

Supp. (11/29/2016); 

March 2017 Reg. Stmts. 

(1/4/17; 1/19/17) and 

Prosp. Supp. (3/8/2017).

In 2015, the Utility continued to deploy its Fault Location, Isolation, and Service 

Restoration circuit technology which involves the rapid operation of smart switches to reduce the 

duration of customer outages. Another 83 circuits were outfitted with this equipment, bringing the 

total deployment to 700 of the Utility’s 3200 distribution circuits. The Utility also installed or 

replaced 20 distribution substation transformer banks to improve reliability and provide capacity to 

accommodate growing demand. The Utility plans to continue performing work to improve the 

reliability and safety of its electricity distribution operations in 2016.

9. FY15 10-K 

(2/18/2016)

March 2016 Reg. Stmt. 

(2/11/2014) and Prosp. 

Supp. (2/24/2016); 

March 2016 Reg. Stmt. 

(2/11/2014) and Prosp. 

Supp. (11/29/2016); 

March 2017 Reg. Stmts. 

(1/4/17; 1/19/17) and 

Prosp. Supp. (3/8/2017).

Utility’s ability to safely and reliably operate, maintain, construct and decommission its facilities is 

subject to numerous risks, many of which are beyond the Utility’s control, including those that arise 

from: 

• the breakdown or failure of equipment, electric transmission or distribution lines, or 

natural gas transmission and distribution pipelines, that can cause explosions, fires, or other 

catastrophic events

* * *

• the failure to take expeditious or sufficient action to mitigate operating conditions, 

facilities, or equipment, that the Utility has identified, or reasonably should have identified, 

as unsafe, which failure then leads to a catastrophic event (such as a wild land fire or 

natural gas explosion), and the failure to respond effectively to a catastrophic event.

10. 424B2 (Prosp. 

Supp.)

(11/29/2016)

March 2016 Reg. Stmt. 

(2/11/2014) and Prosp. 

Supp. (11/29/2016).

Some of the factors that could cause future results to differ materially from those expressed or 

implied by the forward-looking statements, or from historical results, include . . .

* * *

● the impact of droughts or other weather-related conditions or events, wildfires (such as the Butte 

fire), climate change, natural disasters, acts of terrorism, war, vandalism (including cyber-attacks), 

and other events, that can cause unplanned outages, reduce generating output, disrupt our service to 

customers, or damage or disrupt the facilities, operations, or information technology and systems 

owned by us, our customers, or third parties on which we rely; whether we incur liability to third 

parties for property damage or personal injury caused by such events; and whether we are subject 

to civil, criminal, or regulatory penalties in connection with such events; and whether our insurance 

coverage is available for these types of claims and sufficient to cover our liability.

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5

No. Source Referenced Statement

11. S-3 (Reg. 

Stmt.) 

(1/4/2017)

March 2017 Reg. Stmt. 

(3/8/2017)

Some of the factors that could cause future results to differ materially from those expressed or 

implied by the forward-looking statements, or from historical results, include . . .

* * *

●the impact of droughts or other weather-related conditions or events, wildfires (such as the Butte 

fire), climate change, natural disasters, acts of terrorism, war, vandalism (including cyber-attacks), 

and other events, that can cause unplanned outages, reduce generating output, disrupt the Utility’s 

service to customers, or damage or disrupt the facilities, operations, or information technology and 

systems owned by the Utility, its customers, or third parties on which the Utility relies; whether the 

Utility incurs liability to third parties for property damage or personal injury caused by such events; 

whether the Utility is subject to civil, criminal, or regulatory penalties in connection with such 

events; and whether the Utility’s insurance coverage is available for these types of claims and 

sufficient to cover the Utility’s liability.

12. FY16 10-K 

(2/16/2017)

March 2017 Reg. Stmts. 

(1/4/17; 1/19/17) and 

Prosp. Supp. (3/8/2017)

With respect to electric operations, climate scientists project that, sometime in the next several 

decades, climate change will lead to increased electricity demand due to more extreme, persistent, and 

frequent hot weather. The Utility believes its strategies to reduce GHG emissions through energy 

efficiency and demand response programs, infrastructure improvements, and the use of renewable 

energy and energy storage are effective strategies for adapting to the expected [increase] in demand 

for electricity. The Utility is making substantial investments to build a more modern and resilient 

system that can better withstand extreme weather and related emergencies. The Utility’s vegetation 

management activities also reduce the risk of wildfire impacts on electric and gas facilities. Over the 

long-term, the Utility also faces the risk of higher flooding and inundation potential at coastal and low 

elevation facilities due to sea level rise combined with high tides, storm runoff and storm surges.

13. FY16 10-K 

(2/16/2017)

March 2017 Reg. Stmts. 

(1/4/17; 1/19/17) and 

Prosp. Supp. (3/8/2017)

The Utility’s future operations may be affected by climate change that may have a material 

impact on PG&E Corporation’s and the Utility’s financial condition, results of operations, and 

cash flows.

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6

No. Source Referenced Statement

14. FY16 10-K 

(2/16/2017)

March 2017 Reg. Stmts. 

(1/4/17; 1/19/17) and 

Prosp. Supp. (3/8/2017)

The Utility has been studying the potential effects of climate change (increased temperatures, 

changing precipitation patterns, rising sea levels) on the Utility’s operations and is developing 

contingency plans to adapt to those events and conditions that the Utility believes are most significant. 

Scientists project that climate change will increase electricity demand due to more extreme, persistent 

and hot weather. Increasing temperatures and changing levels of precipitation in the Utility’s service 

territory would reduce snowpack in the Sierra Mountains. If the levels of snowpack were reduced, the 

Utility’s hydroelectric generation would decrease and the Utility would need to acquire additional 

generation from other sources at a greater cost.

If the Utility increases its reliance on conventional generation resources to replace hydroelectric 

generation and to meet increased customer demand, it may become more costly for the Utility to 

comply with GHG emissions limits. In addition, increasing temperatures and lower levels of 

precipitation could increase the occurrence of wildfires in the Utility’s service territory causing 

damage to the Utility’s facilities or the facilities of third parties on which the Utility relies to provide 

service, damage to third parties for loss of property, personal injury, or loss of life. In addition, 

flooding caused by rising sea levels could damage the Utility’s facilities, including hydroelectric 

assets such as dams and canals, and the electric transmission and distribution assets. The Utility could 

incur substantial costs to repair or replace facilities, restore service, compensate customers and 

other third parties for damages or injuries. The Utility anticipates that the increased costs would be 

recovered through rates, but as rate pressures increase, the likelihood of disallowance or non-recovery 

may increase.

15. FY16 10-K 

(2/16/2017)

March 2017 Reg. Stmts. 

(1/4/17; 1/19/17) and 

Prosp. Supp. (3/8/2017)

Climate Change Mitigation and Adaptation Strategies. During 2016, the Utility continued its 

programs to develop strategies to mitigate the impact of the Utility’s operations (including customer 

energy usage) on the environment and to plan for the actions that it will need to take to adapt to the 

likely impacts of climate change on the Utility’s future operations, including forming an officer-level 

coordinating committee to govern and oversee the Utility’s activities. The Utility regularly reviews 

the most relevant scientific literature on climate change such as sea level rise, temperature changes, 

rainfall and runoff patterns, and wildfire risk, to help the Utility identify and evaluate climate 

change-related risks and develop the necessary adaptation strategies. The Utility maintains 

emergency response plans and procedures to address a range of near-term risks, including extreme 

storms, heat waves and wildfires and uses its risk-assessment process to prioritize infrastructure 

investments for longer-term risks associated with climate change. The Utility also engages with 

leaders from business, government, academia, and non-profit organizations to share information and 

plan for the future.

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7

No. Source Referenced Statement

16. FY16 10-K 

(2/16/2017)

March 2017 Reg. Stmts. 

(1/4/17; 1/19/17) and 

Prosp. Supp. (3/8/2017)

At December 31, 2016, the Utility owned approximately 18,400 circuit miles of interconnected 

transmission lines operating at voltages ranging from 60 kV to 500 kV. The Utility also operated 92 

electric transmission substations with a capacity of approximately 64,600 MVA. The Utility’s electric 

transmission system is interconnected with electric power systems in the Western Electricity 

Coordinating Council, which includes many western states, Alberta and British Columbia, and parts of 

Mexico.

* * *

Throughout 2016, the Utility upgraded several critical substations and re-conductored a 

number of transmission lines to improve maintenance and system flexibility, reliability and safety. 

The Utility expects to undertake various additional transmission projects over the next several years to 

upgrade and expand the capacity of its transmission system to secure access to renewable generation 

resources and replace aging or obsolete equipment and improve system reliability. The Utility also 

has taken steps to improve the physical security of its transmission substations and equipment.

17. FY16 10-K 

(2/16/2017)

March 2017 Reg. Stmts. 

(1/4/17; 1/19/17) and 

Prosp. Supp. (3/8/2017)

In 2016, the Utility continued to deploy its Fault Location, Isolation, and Service 

Restoration circuit technology which involves the rapid operation of smart switches to reduce the 

duration of customer outages. Another 89 circuits were outfitted with this equipment, bringing the 

total deployment to 789 of the Utility’s 3,200 distribution circuits. The Utility plans to continue

performing work to improve the reliability and safety of its electricity distribution operations in 

2017.

18. FY16 10-K 

(2/16/2017)

March 2017 Reg. Stmts. 

(1/4/17; 1/19/17) and 

Prosp. Supp. (3/8/2017)

Utility’s ability to safely and reliably operate, maintain, construct and decommission its facilities is 

subject to numerous risks, many of which are beyond the Utility’s control, including those that arise 

from:

• the breakdown or failure of equipment, electric transmission or distribution lines, or 

natural gas transmission and distribution pipelines, that can cause explosions, fires, or other 

catastrophic events;

* * *

• the failure to take expeditious or sufficient action to mitigate operating conditions, 

facilities, or equipment, that the Utility has identified, or reasonably should have identified, 

as unsafe, which failure then leads to a catastrophic event (such as a wild land fire or 

natural gas explosion), and the failure to respond effectively to a catastrophic event.

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8

No. Source Referenced Statement

19. 8-K (Press 

Release)

(5/23/2016)

March 2017 Reg. Stmts. 

(1/4/17; 1/19/17) and 

Prosp. Supp. (3/8/2017)

PG&E Corporation (NYSE: PCG) today announced that it is raising its quarterly common stock 

dividend to 49 cents per share, an increase of 3.5 cents per share, beginning with dividends for the 

second quarter of 2016.

* * *

The increase, which is the company’s first in six years, is a meaningful step toward gradually 

returning the company’s dividend payout to levels that are comparable with those of similar utilities.

* * *

[Earley]: “We’ve continued to demonstrate leadership and commitment on safety. We’re delivering 

the most reliable service in our company’s history.”

20. S-4 (Reg. 

Stmt.) 

(4/2/2018)

April 2018 Reg. Stmt. 

(4/2/2018) and Prosp. 

Supp. (4/13/2018)

Some of the factors that could cause future results to differ materially from those expressed or 

implied by the forward-looking statements, or from historical results, include . . .

* * *

● the impact of wildfires, droughts, floods, or other weather-related conditions or events, climate 

change, natural disasters, acts of terrorism, war, vandalism (including cyber-attacks), downed power 

lines, and other events, that can cause unplanned outages, reduce generating output, disrupt the 

Company’s service to customers, or damage or disrupt the facilities, operations, or information 

technology and systems owned by the Company, its customers, or third parties on which the Company 

relies, and the reparation and other costs that the Company may incur in connection with such 

conditions or events; the impact of the adequacy of the Company’s emergency preparedness; whether 

the Company incurs liability to third parties for property damage or personal injury caused by such 

events; whether the Company is subject to civil, criminal, or regulatory penalties in connection with 

such events; and whether the Company’s insurance coverage is available for these types of claims and 

sufficient to cover the Company’s liability;

21. S-4 (Reg. 

Stmt.) 

(4/2/2018)

April 2018 Reg. Stmt. 

(4/2/2018) and Prosp. 

Supp. (4/13/2018)

Some of the factors that could cause future results to differ materially from those expressed or 

implied by the forward-looking statements, or from historical results, include . . .

* * *

● the breakdown or failure of equipment that can cause fires and unplanned outages; and whether 

the Company will be subject to investigations, penalties, and other costs in connection with such 

events;

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9

No. Source Referenced Statement

22. FY17 10-K 

(2/9/2018)

April 2018 Reg. Stmt. 

(4/2/2018) and Prosp. 

Supp. (4/13/2018)

Some of the factors that could cause future results to differ materially from those expressed or 

implied by the forward-looking statements, or from historical results, include . . .

* * *

● the breakdown or failure of equipment that can cause fires and unplanned outages; and whether 

the Utility will be subject to investigations, penalties, and other costs in connection with such 

events;

23. FY17 10-K 

(2/9/2018)

April 2018 Reg. Stmt. 

(4/2/2018) and Prosp. 

Supp. (4/13/2018)

Some of the factors that could cause future results to differ materially from those expressed or 

implied by the forward-looking statements, or from historical results, include . . .

* * *

● the impact of wildfires, droughts, floods, or other weather-related conditions or events, climate 

change, natural disasters, acts of terrorism, war, vandalism (including cyber-attacks), downed power 

lines, and other events, that can cause unplanned outages, reduce generating output, disrupt the 

Utility’s service to customers, or damage or disrupt the facilities, operations, or information 

technology and systems owned by the Utility, its customers, or third parties on which the Utility relies, 

and the reparation and other costs that the Utility may incur in connection with such conditions or 

events; the impact of the adequacy of the Utility’s emergency preparedness; whether the Utility incurs 

liability to third parties for property damage or personal injury caused by such events; whether the 

Utility is subject to civil, criminal, or regulatory penalties in connection with such events; and 

whether the Utility’s insurance coverage is available for these types of claims and sufficient to cover 

the Utility’s liability;

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No. Source Referenced Statement

24. FY17 10-K 

(2/9/2018)

April 2018 Reg. Stmt. 

(4/2/2018) and Prosp. 

Supp. (4/13/2018)

Some of the factors that could cause future results to differ materially from those expressed or 

implied by the forward-looking statements, or from historical results, include . . .

● the impact of the Northern California wildfires, including the costs of restoration of service to 

customers and repairs to the Utility’s facilities, and whether the Utility is able to recover such costs 

through CEMA; the timing and outcome of the wildfire investigations, including into the causes of 

the wildfires; whether the Utility may have liability associated with these fires; if liable for one or 

more fires, whether the Utility would be able to recover all or part of such costs through insurance or 

through regulatory mechanisms, to the extent insurance is not available or exhausted; and potential 

liabilities in connection with fines or penalties that could be imposed on the Utility if the CPUC or any 

other law enforcement agency brought an enforcement action and determined that the Utility failed to 

comply with applicable laws and regulations;

25. FY17 10-K 

(2/9/2018)

April 2018 Reg. Stmt. 

(4/2/2018) and Prosp. 

Supp. (4/13/2018)

If the Utility’s facilities, such as its electric distribution and transmission lines, are determined to be 

the cause of one or more fires, and the doctrine of inverse condemnation applies, the Utility could be 

liable for property damage, interest, and attorneys’ fees without having been found negligent . . . the 

Utility could be liable for fire suppression costs, evacuation costs, medical expenses, personal injury 

damages, and other damages under other theories of liability, including if the Utility were found to 

have been negligent, which liability, in the aggregate, could be substantial and have a material adverse 

effect on PG&E Corporation and the Utility. Further, the Utility could be subject to material fines or 

penalties if the CPUC or any other law enforcement agency brought an enforcement action and 

determined that the Utility failed to comply with applicable laws and regulations.

Given the preliminary stages of investigations and the uncertainty as to the causes of the fires, 

PG&E Corporation and the Utility do not believe a loss is probable at this time. However, it is 

reasonably possible that facts could emerge through the course of the various investigations that lead 

PG&E Corporation and the Utility to believe that a loss is probable, resulting in an accrued liability in 

the future, the amount of which could be material. 

* * *

The Utility has liability insurance from various insurers, which provides coverage for third-party 

liability attributable to the Northern California wildfires in an aggregate amount of approximately 

$800 million.

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No. Source Referenced Statement

26. FY17 10-K 

(2/9/2018)

April 2018 Reg. Stmt. 

(4/2/2018) and Prosp. 

Supp. (4/13/2018)

Severe weather conditions, extended drought and shifting climate patterns could materially 

affect PG&E Corporation’s and the Utility’s business, financial condition, results of operations, 

liquidity, and cash flows.

Extreme weather, extended drought and shifting climate patterns have intensified the challenges 

associated with wildfire management in California. Environmental extremes, such as drought 

conditions followed by periods of wet weather, can drive additional vegetation growth (which then 

fuel any fires) and influence both the likelihood and severity of extraordinary wildfire events. In 

California, over the past five years, inconsistent and extreme precipitation, coupled with more hot 

summer days, have increased the wildfire risk and made wildfire outbreaks increasingly difficult to 

manage. In particular, the risk posed by wildfires has increased in the Utility’s service area (the 

Utility has approximately 82,000 distribution overhead circuit miles and 18,000 transmission 

overhead circuit miles) as a result of an extended period of drought, bark beetle infestations in the 

California forest and wildfire fuel increases due to record rainfall following the drought, among 

other environmental factors. Other contributing factors include local land use policies and historical 

forestry management practices. The combined effects of extreme weather and climate change also 

impact this risk.

27. FY17 10-K 

(2/9/2018)

April 2018 Reg. Stmt. 

(4/2/2018) and Prosp. 

Supp. (4/13/2018)

Further, the Utility has been studying the potential effects of climate change (increased 

temperatures, changing precipitation patterns, rising sea levels) on the Utility’s operations and is 

developing contingency plans to adapt to those events and conditions that the Utility believes are most 

significant. Scientists project that climate change will increase electricity demand due to more 

extreme, persistent and hot weather. As a result, the Utility’s hydroelectric generation could change 

and the Utility would need to consider managing or acquiring additional generation. If the Utility 

increases its reliance on conventional generation resources to replace hydroelectric generation and to 

meet increased customer demand, it may become more costly for the Utility to comply with GHG 

emissions limits. In addition, flooding caused by rising sea levels could damage the Utility’s facilities, 

including generation and electric transmission and distribution assets. The Utility could incur 

substantial costs to repair or replace facilities, restore service, or compensate customers and other 

third parties for damages or injuries. The Utility anticipates that the increased costs would be 

recovered through rates, but as rate pressures increase, the likelihood of disallowance or non-recovery 

may increase.

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12

No. Source Referenced Statement

28. FY17 10-K 

(2/9/2018)

April 2018 Reg. Stmt. 

(4/2/2018) and Prosp. 

Supp. (4/13/2018)

Climate Change Resilience Strategies

During 2017, the Utility continued its programs to mitigate the impact of the Utility’s 

operations (including customer energy usage) on the environment and to plan for the actions that it 

will need to take to increase its resilience in light of the likely impacts of climate change on the 

Utility’s operations. The Utility regularly reviews the most relevant scientific literature on climate 

change such as rising sea levels, major storm events, increasing temperatures and heatwaves, 

wildfires, drought and land subsidence, to help the Utility identify and evaluate climate changerelated risks and develop the necessary resilience strategies. The Utility maintains emergency 

response plans and procedures to address a range of near-term risks, including wildfires, extreme 

storms, and heat waves and uses its risk-assessment process to prioritize infrastructure investments

for longer-term risks associated with climate change. The Utility also engages with leaders from 

business, government, academia, and non-profit organizations to share information and plan for the 

future.

29. FY17 10-K 

(2/9/2018)

April 2018 Reg. Stmt. 

(4/2/2018) and Prosp. 

Supp. (4/13/2018)

With respect to electric operations, climate scientists project that, sometime in the next several 

decades, climate change will lead to increased electricity demand due to more extreme, persistent, and 

frequent hot weather. The Utility believes its strategies to reduce GHG emissions through energy 

efficiency and demand response programs, infrastructure improvements, and the use of renewable 

energy and energy storage are effective strategies for adapting to the expected changes in demand for 

electricity. The Utility is making substantial investments to build a more modern and resilient 

system that can better withstand extreme weather and related emergencies. Over the long-term, the 

Utility also faces the risk of higher flooding and inundation potential at coastal and low elevation 

facilities due to sea level rise combined with high tides, storm runoff and storm surges. As the state 

continues to face increased risk of wildfire, the Utility’s vegetation management activities will 

continue to play an important role to help reduce the risk of wildfire and its impact on electric and 

gas facilities.

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13

No. Source Referenced Statement

30. FY17 10-K 

(2/9/2018)

April 2018 Reg. Stmt. 

(4/2/2018) and Prosp. 

Supp. (4/13/2018)

At December 31, 2017, the Utility owned approximately 19,200 circuit miles of interconnected 

transmission lines operating at voltages ranging from 60 kV to 500 kV. The Utility also operated 92 

electric transmission substations with a capacity of approximately 64,700 MVA.

* * *

Throughout 2017, the Utility upgraded several substations and re-conductored a number of 

transmission lines to improve maintenance and system flexibility, reliability and safety. The Utility 

expects to undertake various additional transmission projects over the next several years to upgrade 

and expand the capacity of its transmission system to secure access to renewable generation resources 

and replace aging or obsolete equipment and improve system reliability. The Utility also has taken 

steps to improve the physical security of its transmission substations and equipment.

31. FY17 10-K 

(2/9/2018)

April 2018 Reg. Stmt. 

(4/2/2018) and Prosp. 

Supp. (4/13/2018)

In 2017, the Utility continued to deploy its fault location, isolation, and service restoration 

circuit technology that involves the rapid operation of smart switches to reduce the duration of 

customer outages. Another 92 circuits were outfitted with this equipment, bringing the total 

deployment to 882 of the Utility’s 3,200 distribution circuits. The Utility plans to continue

performing work to improve the reliability and safety of its electric distribution operations in 2018.

32. FY17 10-K 

(2/9/2018)

April 2018 Reg. Stmt. 

(4/2/2018) and Prosp. 

Supp. (4/13/2018)

Utility’s ability to safely and reliably operate, maintain, construct and decommission its 

facilities is subject to numerous risks, many of which are beyond the Utility’s control, 

including those that arise from:

• the breakdown or failure of equipment, electric transmission or distribution lines, or 

natural gas transmission and distribution pipelines, that can cause explosions, fires, or other 

catastrophic events;

* * *

• the failure to take expeditious or sufficient action to mitigate operating conditions, 

facilities, or equipment, that the Utility has identified, or reasonably should have identified, 

as unsafe, which failure then leads to a catastrophic event (such as a wild land fire or 

natural gas explosion);

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No. Source Referenced Statement

33. FY17 10-K 

(2/9/2018)

April 2018 Reg. Stmt. 

(4/2/2018) and Prosp. 

Supp. (4/13/2018)

On April 12, 2017, the Utility retained a third-party monitor at the Utility’s expense as part of its 

compliance with the sentencing terms of the Utility’s January 27, 2017 federal criminal conviction, 

which sentenced the Utility to, among other things, a five-year corporate probation period and 

oversight by a third-party monitor for a period of five years, with the ability to apply for early 

termination after three years. The goal of the monitor is to help ensure that the Utility takes 

reasonable and appropriate steps to maintain the safety of its gas and electric operations and 

maintains effective ethics, compliance, and safety related incentive programs on a Utility-wide 

basis.

34. S-4 (Reg. 

Stmt.) 

(4/2/2018)

April 2018 Reg. Stmt. 

(4/2/2018) and Prosp. 

Supp. (4/13/2018)

Some of the factors that could cause future results to differ materially from those expressed or 

implied by the forward-looking statements, or from historical results, include...

● the impact of the Northern California wildfires, including the costs of restoration of service to 

customers and repairs to the Company facilities, and whether the Company is able to recover such 

costs through a Catastrophic Event Memorandum Account; the timing and outcome of the wildfire 

investigations, including into the causes of the wildfires; whether the Company may have liability 

associated with these fires; if liable for one or more fires, whether the Company would be able to 

recover all or part of such costs through insurance or through regulatory mechanisms, to the extent 

insurance is not available or exhausted; and potential liabilities in connection with fines or penalties 

that could be imposed on the Company if the California Department of Forestry and Fire Protection 

and the California Public Utilities Commission (“CPUC”) or any other law enforcement agency 

brought an enforcement action and determined that the Company failed to comply with applicable 

laws and regulations;

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