Mikal C. Watts Leads Charge in Historic $13.5 Billion PG&E Wildfire Settlement

Mikal C. Watts, founder of Watts Law Firm LLP, played an instrumental role in securing a monumental $13.5 billion settlement for the victims of California wildfires. This achievement showcases how he and the law firm use the power of the law and an unwavering stance against corporate negligence to help wildfire survivors rebuild their lives after catastrophic destruction.

While this story ends with holding the negligent utility company accountable for its actions that caused the wildfires and the survivors’ claims being paid out of the resulting $13.5 billion settlement, corporate negligence in utility companies continues to plague the nation. Watts Law Firm LLP is committed to fire victims and serving communities turned upside down due to catastrophic environmental disasters.

The Background:  A Series of Wildfires Upend Thousands of California Families 

A series of wildfires tore through California communities in 2017 and 2018, upending entire communities. These fires resulted in over 100 deaths of innocent people; they left thousands of families homeless and without any personal possessions. The fires destroyed treasured family heirlooms and upended entire businesses that people had spent their lives building. When wildfires spread rapidly, people have little to no warning and are forced to evacuate at a moment’s notice. 

In these chaotic and horrific conditions, not only are homes destroyed, but entire families are displaced and seek shelter while frantically concerned about the locations of loved ones. Pets often go missing or are otherwise displaced. People who survive may suffer post traumatic stress disorder and other anxiety and psychological disorders for years to come. The extreme emotional distress of wildfire survivors cannot be overstated. 

The North Bay fires, which began in early October 2017, consisted of a series of 250 wildfires that affected regions like Napa, Lake, Sonoma, and Mendocino counties. Among them, the Tubbs Fire stood out as the most destructive wildfire in California’s history until surpassed in 2018. Resulting in $14.5 billion in damages, these fires were the costliest at the time, leading to the evacuation of 90,000 residents and claiming 44 lives, making it one of the deadliest wildfire events in the U.S. in the past century.

In November 2018, Butte County, California, a wildfire known as the Camp Fire blazed a devastating trail, particularly decimating the town of Paradise. The wildfire resulted in 85 lives lost, and a staggering 18,000 structures burned down. Beyond its title as the deadliest wildfire in California’s history, the Camp Fire’s devastation also marked it as 2018’s costliest global disaster.

Early investigations started and demonstrated the origins of these fires were not a natural cause. Pacific Gas & Electric (PG&E), one of the largest gas and electricity companies in the United States, experienced equipment failures and downed power lines that started these wildfires. At this time of these fires, there was a prolonged drought in the area and strong wind gusts, which were well-documented risks of wildfires. However, in the midst of these conditions, PG&E should have been on high alert, and taken certain actions to mitigate the risk of wildfires to protect their vulnerable customers and communities. Instead of taking action to prevent the known risk of wildfire, the power equipment failed and ignited the inferno. Moreover, there was abundant dry vegetation due to the ongoing droughts which fueled and helped to quickly spread the devastating fires.

As fire seasons around the globe grow more intense, the narrative underscores the necessity of understanding and mitigating both natural and human-contributed risks. These types of wildfires, sparked by utility company negligence, have since been seen in the McBride fire in New Mexico, the Archie Creek, French Creek and Slater fires in Oregon and most recently, in Lahaina, Maui, Hawai’i. 

The Mission: Compensation for Fire Victims to Rebuild Their Homes and Lives

In the aftermath of these combined wildfire catastrophes, there were approximately 70,000 people who suffered extensive losses to their homes, businesses and property. Mikal C. Watts and the law firm of Watts represented over 16,000 plaintiffs, or 23% of the total number of claimants. This tally included 4,000 victims of the 2017 North Bay fires in Sonoma County and 12,000 victims of the 2018 Camp Fire in Butte County.

To serve their clients, the firm established in-person offices in Santa Rosa and Chico, California, where they regularly held town hall meetings to speak with clients and to answer all questions directly. The law firm also enlisted environmental activist Erin Brockovich, famed for her 90s legal battle with PG&E over water contamination. Echoing the sentiments of many, Watts lauded Brockovich, and humorously added, “She’s a rock star in California… As much as I like Julia Roberts, Erin Brockovich is better. She is just amazing.” 

Brockovich assisted with client outreach, ongoing client communications and spoke truth to power about the importance of utility companies prioritizing safety for its workers and its customers. Due to her historic battle with PG&E in the famous water contamination case, she found the ongoing practices of the utility company to be falling far below the standards: “We’ve just gotta have some better parameters with this company… that has proven itself through no one’s fault but their own that they’re not running their company correctly.”

Watts and other law firms representing wildfire victims prepared to prove liability on behalf of PG&E. However, PG&E filed for Chapter 11 Bankruptcy, seeking reorganization of its debts, including the claims of wildfire victims. This set the stage for a complex negotiation with the many interested parties involved, including the bankruptcy court and trustees. 

Mikal C. Watts, an esteemed litigator with extensive wildfire litigation experience, played a pivotal role as a lead attorney representing wildfire victims in their negotiations with PG&E. These discussions were vital to settle wildfire claims, enabling PG&E to navigate their bankruptcy reorganization and continue functioning as a utility provider, while also ensuring full compensation to the fire victims. Watts devoted six rigorous weeks in San Francisco, the base of PG&E Corp., to secure a settlement that earned the nod from both the utility’s board and the claimant committee. Mikal negotiated a $13.5 billion settlement to be paid to the wildfire victims. This $13.5 billion was in addition to a $1 billion agreement with cities, counties, and other public entities, as well as an $11 billion deal with insurers who had already covered claims for the 2017 and 2018 wildfires. 

As this was in bankruptcy court, the fire victims as creditors were able to vote on the Chapter 11 plan, which included the $13.1 billion settlement. There was a last minute attempt to upend the vote alleging a possible conflict of interest, but the judge considered the results of this vote and entered the plan and the settlement agreement. 

“This ensures tens of thousands can rebuild homes lost in these heartrending fires”

Mikal C. Watts

Reflecting on the historic settlement, Watts commented, “This ensures tens of thousands can rebuild homes lost in these heartrending fires,” emphasizing the comprehensive compensation to clients for their immense losses. Beyond compensation, the settlement’s broader vision included a pivotal revamp of PG&E’s board. This overhaul aims to pivot the company’s primary emphasis from profit to safety, implementing rigorous standards, policies, and practices to prevent such devastating wildfires in the future.

The Aftermath: Fire Victim Trust Sues Former PG&E Officers and Directors  

Following the $13.5 billion settlement, the PG&E Fire Victim Trust was established under the utility company’s Chapter 11 reorganization plan. In the subsequent year, this trust sued 20 former officers and directors of PG&E, alleging their negligence led to the fires. The lawsuit underscored the utility’s lapses in maintaining electrical equipment surroundings and modernizing outdated gear. This legal action casts a spotlight on the oversights of the utility’s management. The new board placed blame directly on those whose greed and negligence jeopardized thousands and upended entire communities.

The fires also resulted in the deadliest US corporate crime ever prosecuted. PG&E admitted responsibility for the deaths of 84 victims of the Camp Fire in Butte County Superior Court in 2020, many of whom were elderly or disabled. In the hearing, pictures of each victim were shown as the judge read the names of each person aloud to the chief executive, who acknowledged and apologized for the criminal wrongdoing on behalf of PG&E. The company pleaded guilty to 84 counts of involuntary manslaughter. 

As the Fire Victims Trust progresses with its payouts and PG&E having admitted liability as well as criminal wrongdoing, the broader legal fight persists: utility companies across the nation potentially prioritizing profits over safety. While PG&E has begun to reform its ways, many utility providers nationwide seem slow to take heed. Watts Law Firm LLP remains committed to standing by fire victims and will persistently hold these companies accountable. We believe in pushing these corporations to recognize that upholding safety standards isn’t just morally right but also financially prudent. Failing to do so will come at a hefty price.