$117 Million Settlement Against Former PG&E Officers and Directors for Wildfire Deaths

In the years leading up to 2018, Pacific Gas and Electric's aging transmission lines and inadequate inspection practices contributed to a series of catastrophic wildfires across Northern California. The 2017 North Bay fires killed dozens of people and destroyed thousands of homes. The 2018 Camp Fire was worse: it leveled the town of Paradise, killed 85 residents, and remains California's deadliest wildfire on record. State investigators attributed both events, along with the 2015 Butte Fire, to PG&E equipment failures.

When PG&E filed for Chapter 11 bankruptcy in January 2019, it created a Fire Victim Trust to compensate survivors and the families of those killed. As part of the bankruptcy reorganization plan, the Trust received an assignment of claims against PG&E's former directors and officers, including the right to pursue breach-of-fiduciary-duty allegations. The theory was straightforward: the executives who ran the company had a duty to ensure that equipment was maintained and that basic safety safeguards were in place. They failed.

The Trust retained a coalition of firms to pursue those assigned claims. Steven Campora of Dreyer Babich Buccola Wood Campora joined Michael A. Kelly of Walkup, Melodia, Kelly and Schoenberger, Frank M. Pitre of Cotchett, Pitre and McCarthy, and others on the litigation team. The defendants included approximately 20 former PG&E officers and directors, among them former CEOs Anthony Earley and Geisha Williams.

The claims were funded entirely through D&O insurance policies, which meant neither PG&E as a reorganized entity nor the individual defendants would pay out of personal assets. What made the case legally unusual was the assignment mechanism itself: plaintiffs' counsel argued that wildfire victims, through the Trust, could stand in the shoes of PG&E to enforce governance duties that the company's own leadership had neglected.

The parties reached a settlement in principle in May 2022, executed the settlement agreement on July 26, 2022, and the Trust publicly reported the resolution on September 29, 2022. The $117 million total resolved the Trust's claims arising from all three wildfire events. No reduction on appeal has been reported. The settlement represented one of the largest D&O liability recoveries tied to utility-caused wildfire losses in California history.