SAN FRANCISCO — After a succession of devastating wildfires in the last four years, tens of thousands of Californians — many with broken spirits, many homeless — may now lose out on compensation from the company that was to blame.
A deadline for victims to file claims is less than three weeks away. About 30,000 have done so with the help of lawyers, along with 1,500 acting on their own. But the deadline could pass without claims from as many as 70,000 others eligible for compensation.
They include Steve Kane, who fears he would take away money from those needing it more, and Kelly Boyer, who says he can’t prove the value of all his losses when the town of Paradise was destroyed last year.
The filing deadline, part of the bankruptcy case of Pacific Gas & Electric, California’s biggest utility, is the victims’ chance to piece together at least parts of their shattered lives. The stakes are high: If people like Mr. Kane and Mr. Boyer do not file claims, investors in the utility — whose equipment has been blamed for several major fires — will retain that much more.
PG&E filed for bankruptcy protection in January as it amassed billions of dollars in potential liability for years of wildfires. It has set a target of $8.4 billion for payouts to wildfire victims, while pledging that all court-approved claims from victims will be honored.
“PG&E remains focused on doing right by the customers and communities we serve,” Andrew Castagnola, a PG&E spokesman, said in a statement. The utility says it has mailed 6.2 million claim forms to possible victims of about two dozen fires, calling attention to the process through websites, email, social media, and radio and television ads.
But some lawyers for wildfire victims say the utility’s bankruptcy proceeding has been used to prevent as many people as possible from filing a claim.
“They wanted to use the bankruptcy rules to their benefit to limit their liability to victims,” said Mike Danko, a lawyer in the Bay Area who represents about 4,000 victims from fires in 2015, 2017 and 2018. He said the Oct. 21 deadline for claims was unduly rigid and was meant by PG&E “to end up with a smaller number.”
Many wildfire victims are still displaced, sometimes living in tent cities or on the streets, often confused about the convoluted claims process and traumatized by their losses. Their failure to come forward could benefit PG&E and its investors.
“There are probably thousands, if not tens of thousands, that have had some impact from these Northern California fires that are not going to seek anything from PG&E,” said Cecily Dumas, a lawyer for the Official Committee of Tort Claimants, a group appointed by the court to represent all wildfire victims in the bankruptcy.
“If people choose not to file claims in the PG&E bankruptcy case,” she added, “at least they know they can.”
Weighing a ‘Moral Dilemma’
Eleven months after a 100-year-old utility tower is suspected of sparking California’s most devastating wildfire, known as the Camp Fire, Mr. Kane barely recognizes his quiet corner of Paradise in the Sierra Nevada foothills north of Sacramento.
The beauty of the roomy lots and old-growth pine trees that lured the retired contractor and his wife from the high desert outside Los Angeles have been replaced by trailers, scorched basketball hoops and the skeleton of a former hospital.
After a long week in limbo last November with other evacuated members of their family, the couple learned that a guesthouse, a workshop and nine other structures on the property had burned — and that insurance covered less than half the approximately $250,000 in damage. But the main house survived, and after a brief attempt at selling the property, Mr. Kane, 61, threw himself into scrubbing away ash, installing a water purification system and salvaging the property.
He did not, however, file a claim against PG&E for the roughly $150,000 in uninsured losses.
“Every time I’ve got to deal with it, it just brings me back to what I don’t really want to think about anyway, you know?” Mr. Kane said. “When I’m working on my house, I’m not thinking about those problems.”
Before he was asked whether he planned to file a claim, Mr. Kane said he was unaware he could do so without a lawyer. He said he was unsure whether he had received forms from PG&E to file a claim by mail.
But even if he had a claim form to file, Mr. Kane fears that it would take away from those who suffered more profound losses, like neighbors who lost relatives, pets, homes or businesses.
“That is where I wrestle with the moral dilemma,” said Mr. Kane, who is housing some of those whose properties burned. “It’s like if I join the club and then seek recovery, they’re going to get less, when they need more than I need.”
Such views trouble lawyers arguing for victims’ interests, who have argued in court and in legal filings that victims often believe there is a lack of money to pay them because of PG&E’s bankruptcy. They also say many do not understand that they can collect compensation from PG&E even if insurance companies have covered some losses, and that the payments would not force them to rebuild where they formerly lived if they had moved away or wanted to start over.
In addition, one of the lawyers said, it is a common misconception that people who do not have proof cannot file a claim. Just having to flee the fire enables a claim, the lawyer said.
California Wildfires: How PG&E Ignored Risks in Favor of Profits
Pacific Gas & Electric, California’s largest utility, has been responsible for wildfires in recent years that destroyed hundreds of thousands of acres. Several proved fatal.
“The legacy of this bankruptcy should not be that tens of thousands of underinformed, displaced and traumatized fire victims have their substantial claims precluded,” Steven Skikos, one of the court-appointed lawyers representing victims’ interests, said by email. “Thousands of fire victims have lost everything and now, without their knowledge or informed consent, are about to lose their opportunity to recover anything.”
From interviews with wildfire victims, confusion about what is available to them appears widespread.
Helen Sedwick and her husband lost their home in Santa Rosa, near the state’s wine country, in a 2017 fire. PG&E was not found responsible for the fire, but the court has allowed victims to pursue a lawsuit against the utility for damage based on evidence that suggests that the power company was at fault.
Ms. Sedwick, a lawyer, said she was filing a claim and urging other victims to do so. But she said many did not understand the process or were simply too traumatized to focus on it.
“Losing your home is profoundly disorienting,” Ms. Sedwick said. “A lot of people are not filing because they are intimidated by the process. They think that because PG&E filed bankruptcy, they’re broke.”
‘I Don’t Really Have Any Proof’
Mr. Boyer, 49, a former construction worker whose rented trailer in Paradise was destroyed in the Camp Fire, spent the first week afterward in a tent city outside the Walmart in Chico, a nearby town. For the next 10 months, he shuffled among an organic farm, a refugee camp at the county fairgrounds and encampments along rural highways.
Life outside finally took its toll. Mr. Boyer had settled into a campsite near Butte Creek, serene but a steep 15-mile hike to and from the convenience store where he stocked up on 100 pounds of food twice a month. A cut on his toe became badly infected, and Mr. Boyer was admitted to a hospital for an amputation in August. After a few days, wary of losing his few remaining belongings, he left.
“The nurses down there are probably cussing me out, because when I left it was still an open wound,” Mr. Boyer said. “I told them: ‘I’ve got to go. I’ve got to get up there and check my camp. If I’m not careful, everything I own is going to be gone again.’”
After the medical scare, with his foot still in thick bandages, Mr. Boyer sought help from an old friend and a few Facebook groups for fire survivors. He soon had a 1980s-vintage recreational vehicle and a three-month offer to stay on a parcel where the owners are finishing building plans. He considers himself lucky to have shelter and hopes to take advantage of aid programs to channel his love of guitar into sound-engineering classes at Butte College.
Mr. Boyer said he did not have a lawyer and had not filed a claim against PG&E for his belongings or expensive musical equipment lost in the fire.
“See, I don’t really have any proof of anything I had there,” he said. “I’m wondering if it’s worth the effort.”
A Looming Deadline
Any doubts, anxieties or crossed signals that limit the number of claims could benefit PG&E and its investors.
Before the 2017 wildfires, PG&E stock was trading above $70 a share, a five-year high. But with the bankruptcy and investigators’ determination that the utility was responsible for the Camp Fire and several others, the stock price is barely above $10.
PG&E has proposed terms in the bankruptcy that would put its overall payments for wildfire-related losses at $20.4 billion. In addition to earmarking $8.4 billion for victims, it has committed $11 billion to insurers and $1 billion to public agencies, subject to court approval.
It is pushing to complete the Chapter 11 bankruptcy process by June 30 so it can qualify for a newly created state program that will provide utilities with a backstop against liability in future fires.
Ahead of the Oct. 21 cutoff for claims, a series of critical hearings is scheduled, starting Monday. Frank Pitre, a lawyer who represents wildfire victims, has signaled a possible move to push the deadline farther out.
“We may be coming before you and asking for an extension of time for the claims process,” Mr. Pitre told the court last month. “I’m very concerned that we are not getting in the requisite claims that should come in based on what we believed, in good faith, are the number of people who have been impacted.”
He said the total number, including those who had already filed claims, could be 75,000 to 100,000.
“PG&E’s game is to cut the time period for victims’ compensation way down,” Mr. Pitre said in an interview. “That works to the advantage of PG&E and their shareholders. They want to game the system.”
Asked to address the assertion, Mr. Castagnola, the company spokesman, said, “PG&E believes the Chapter 11 process will support the orderly, fair and expeditious resolution of claims, including wildfire claims.”
Victims like Ms. Sedwick said that with the trauma of dealing with their losses, filing a claim was not on a lot of victims’ minds. Many assumed the 13-page claim package that PG&E sent was junk mail and threw it away, she said. Others, like Mr. Kane, aren’t sure they ever got it.
Mr. Kane is unsure whether he will stay in Paradise in the long term. He worries that it will remain a “trailer city,” and that businesses won’t return. He empathizes with those who lost everything, he said, but he hopes that the town will move forward with stricter rules for rebuilding, and he is wary of high costs for insurance, taxes and utilities.
“Life is messy,” he said, “and it’s not necessarily fair.”
Ivan Penn reported from San Francisco, and Lauren Hepler from Paradise, Calif.
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