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PG&E Suffers Setback in Battle Over Lawsuits

Courts: Utility, which is under bankruptcy protection, tried to move cases alleging injury to the federal level.


SAN FRANCISCO — In a victory for lawsuits spawned by the Erin Brockovich case, a federal bankruptcy judge has rebuffed an attempt by Pacific Gas & Electric Co. to halt and move state court cases involving 1,250 people who say they were injured by chromium from the utility's facilities.

The 14 lawsuits, many alleging that the plaintiffs contracted cancer from contaminated ground water, have been wending their way through state court, some for years. One was scheduled to go to trial in July. But the cases were automatically suspended when PG&E filed for Chapter 11 protection from creditors in April.

Facing $500 million in bankruptcy claims from the plaintiffs, PG&E wanted to move the cases from San Bernardino County and Los Angeles to U.S. District Court in San Francisco. The company contended that the transfer was required by bankruptcy law and said consolidating the cases made sense.

But the claimants disputed that and said introducing a new set of courtrooms and judges would be unjust, costly and inefficient.

Judge Dennis Montali on Tuesday ruled that the cases should proceed in state court. Even though the amount of the claims is great, he said the outcome will not affect PG&E's multibillion-dollar reorganization plan.

Montali noted that sending 1,250 claims to a federal district court would "severely and detrimentally" affect that court's docket, but he declined to speculate whether the cases would be adjudicated faster in state or federal court.

PG&E spokesman John Nelson said that the judge's decision was being reviewed and that the company would have no immediate comment.

Plaintiffs' attorneys said they expect the utility to file an appeal.

"We hope we can finally force PG&E to a day of reckoning. They appealed everything else, so I assume they will this," said Edward Masry, who represents many of the plaintiffs and who helped win a $33-million judgment against PG&E in a now-famous 1993 case.

The heroine in the case, onetime file clerk Erin Brockovich, is now a legal investigator for Masry and is heavily involved in the current cases. Her role in the 1993 case inspired the movie starring Academy Award winner Julia Roberts.

Most of the plaintiffs are people who lived in Kettleman, Hinckley and Topock, where the ground water was contaminated with chromium 6 used in PG&E cooling towers.

They claimed that a wide variety of illnesses, including cancer, resulted from drinking the water. But PG&E argued that the plaintiffs would be unable to prove that the water was the cause of their ailments and disputed whether ingesting chromium could cause such diseases.

Masry said the lawsuits would have been delayed if Montali had moved them to San Francisco.

"Some federal court judges would have to reanalyze what state courts have done for years," he said. "They would have started from scratch ... and that would have been a tremendous waste of judicial energy. There are hundreds of thousands of pages of motions."

J. Scott Belden, who represents plaintiffs in three San Bernardino County cases, said most of the plaintiffs and expert witnesses are in Southern California. Not only would they have the extra expense of a trial in San Francisco, he said, but they also would have to conduct a second trial for PG&E's co-defendants in the Southland.

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