A $1 billion PG&E lawsuit settlement has been reached to compensate 14 local governments for damages sustained in the 2018 California wildfires.

According to CBS News, a spokesman for PG&E said that the $1 billion settlement represents “an important first step toward an orderly, fair and expeditious resolution of wildfire claims. We remain focused on supporting our customers and communities impacted by wildfires and helping them recover and rebuild.”

Of the $1 billion to be paid by the San Francisco based utility company, over half of the PG&E lawsuit settlement will go to four local governments.

$270 million will go towards the California town of Paradise which was almost entirely demolished by a 2018 California wildfire that destroyed 14,000 homes and killed 85 people. Before the wildfire, around 26,000 people lived in Paradise. After the fires, the population has dwindled to only 3,000 – costing Paradise over 90 percent of its revenue from taxes.

“There is some relief and hope in knowing that we will have some financial stability,” Paradise Town Manager Lauren Gill said, according to CBS News. “We can’t do disaster recovery and rebuild the town if we don’t have people to do it.”

The settlement will also resolve liability for a 2015 wildfire in Calaveras County and several fires in wine country that started in 2017.

According to New York Times statistics, PG&E has been implicated in several California wildfires over the last few years. In 2015, a tree reportedly hit one of the PG&E’s power lines after the company failed to maintain the tree. The resulting fire reportedly covered over 70,000 acres and killed two people in Calaveras County.

In 2017, four fires started in the Napa area after trees reportedly hit power lines – resulting in the burning of over 100,000 acres and 1,475 structures.

In 2018, a live wire reportedly broke free of a 99 year old PG&E tower near Paradise which caused the massive fire that destroyed the town and killed 85 people.

As a result of the company’s role in California wildfires, PG&E allegedly faces $30 billion in potential liability. In the face of their multibillion dollar liability, PG&E declared bankruptcy in January 2019.

Declaring bankruptcy does not mean that the company is no longer liable for lawsuits against them. Instead, one bankruptcy judge will be appointed to oversee these suits. This helps to avoid large, unreasonable jury verdicts.

An experienced bankruptcy lawyer told CBS News that the Chapter 11 filing help Pacific Gas and Electric maintain its ongoing operations without being unreasonably burdened by their liability in the recent California wildfires.

“The liability is too great. It’s too many claims, the aggregate amount is too great, and it looks at first blush to be indefensible because PG&E knew of this risk and didn’t clear the line areas as it should have,” the attorney said.

Although the recent PG&E lawsuit settlement stands to resolve $1 billion of the liability, the deal will still need to be approved by the bankruptcy court overseeing the company’s proceedings. This reportedly will not happen until resolutions are reached in lawsuits from property owners and insurance companies.

This article is not legal advice. It is presented
for informational purposes only.