PG&E Wins Appeal Affirming Dismissal of $2.5 Billion Class Action Suit
March 31, 2021
On March 26, 2021, the United States District Court for the Northern District of California issued a decision affirming the bankruptcy court’s dismissal with prejudice of putative class action litigation related to Cravath client PG&E’s 2019 public safety power shutoff (“PSPS”) events. Appellant Anthony Gantner alleged that PG&E’s October and November 2019 PSPS events were necessitated by PG&E’s alleged historical negligence in maintaining its electrical equipment and sought $2.5 billion in damages for a putative class of California residents and business owners affected by the power shutoffs.
In January 2020, Cravath filed a motion on behalf of PG&E in the bankruptcy court to dismiss the Complaint with prejudice. The bankruptcy court granted the motion in March 2020. In dismissing the Complaint, the bankruptcy court held that it was preempted by California Public Utilities Code s. 1759, which divests courts (other than the California Supreme Court) of jurisdiction over actions that interfere with the CPUC’s regulatory authority. The bankruptcy court also found that Plaintiffs failed to plead a causal connection between PG&E’s alleged negligence and the PSPS events.
Plaintiffs appealed the bankruptcy court’s decision to the district court, raising the same arguments made in the lower court, including that the action “aids and complements” the CPUC’s policies with respect to equipment maintenance and vegetation management. The district court affirmed the bankruptcy court’s decision, holding that Plaintiffs’ action interferes with the CPUC’s authority to regulate PSPS events and is therefore preempted by CPUC s. 1759. The court noted that “Appellant’s theory of liability would create a powerful incentive for [PG&E] to avoid PSPS events, even if the PSPS events are warranted under CPUC regulations”.
The Cravath team included partner Omid H. Nasab and associates Michael J. Zaken, Monica D. Kozycz and Sara R. Bodner.
The case is Gantner v. PG&E Corporation, et al., No. 20‑cv‑02584‑HSG.
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November 27, 2023
PG&E Secures California Supreme Court Victory Shielding Company from Liability for Public Safety Power Shutoffs
On November 20, 2023, the California Supreme Court held that Cravath client PG&E, the country’s largest utility, cannot be sued for losses incurred by customers during public safety power shutoffs that complied with the guidelines set forth by its regulator, the California Public Utilities Commission (“PUC”). In a unanimous decision, the Court held that such claims are barred because their adjudication would interfere with the PUC’s comprehensive supervision and regulation of safety shutoffs.
