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PG&E: Lawsuits Should Move to Court

January 4, 2002

SAN FRANCISCO (AP) _ Pacific Gas and Electric Thursday urged a federal judge to detour lawsuits alleging the utility’s operations contaminated the water in three California counties _ a request that spurred allegations the company is trying to use its bankruptcy case to stonewall hundreds of suffering people.

The San Francisco-based utility wants U.S. Bankruptcy Judge Dennis Montali to transfer 15 lawsuits representing 1,250 people in Kings, Riverside and San Bernardino counties from the state courts to the federal courts.

The stakes are high. The lawyers suing PG&E estimate the claims will yield about $500 million in damages. The utility has estimated its potential liability at $160 million in government filings made by its parent company.

Most of the allegations center on whether PG&E contaminated the water at a Kettleman Hills facility in western Kings County. The utility has denied wrongdoing.

PG&E believes it stands a better chance of winning a quick dismissal of about two-thirds of the claims if the suits are moved to federal court, utility attorney Michael S. Lurey told Montali in a hearing Thursday.

Transferring the suits from Los Angeles Superior Court would be an unfair setback to the people alleging PG&E made them sick, according to the lawyers opposing the utility.

Besides bogging down a process that began in state courts nearly a decade ago, shifting the claims to a federal court in San Francisco would make it difficult for the alleged victims to attend the trial, the lawyers said.

After hearing Thursday’s final arguments, Montali told attorneys he will issue a ruling by early next week.

A business operating under federal bankruptcy protection is generally protected from other lawsuits, but the attorneys for the alleged victims contend they should be able to pursue their claims because the allegations revolve around events that occurred long before PG&E’s April 2000 bankruptcy filing.

The fate of the personal injury lawsuits represents just one of the issues in PG&E’s 9-month-old bankruptcy case

The suits claim that PG&E’s operations in Kettleman Hills exposed neighboring homes to water contaminated with chromium 6, a possible carcinogen.

The allegations echo claims of a similar case made famous in the movie ``Erin Brockovich,″ based on the true story of a woman whose legal crusade ended with PG&E agreeing to a $333 million settlement.

Two of the attorneys handling the current case, Girardi and Walter Lack, also played a pivotal role in the settlement featured in the movie.


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