Utility companies have a lot of responsibility, especially considering the well-being of their customers, nearby residents, and the environment. We’ve seen what can happen when a utility acts negligently for the sake of a profit – like the wildfires caused by PG&E’s lack of attention to power lines and rogue wires, which destroyed hundreds of thousands of acres in California and led to injuries and deaths. California recently faced another disaster, this one involving the largest-known natural gas leak in U.S. history that happened under the watch of Southern California Gas Co. in Aliso Canyon. This week, 35,000 plaintiffs reached a $1.8 billion settlement with SoCalGas and its parent company, Sempra Energy. The settlement will compensate them for illness, property damage, and temporary relocation costs.
When a case involves tens of thousands of plaintiffs, proper settlement organization is of paramount importance. If they have not already done so, attorneys should consider establishing a qualified settlement fund as soon as possible. Each plaintiff will have different financial planning needs before settlement arrives, and the attorneys involved in the case should have adequate time to plan for their fees. A QSF helps make it all happen smoothly and without haste.
A qualified settlement fund is a 468b trust that accepts the defendants’ payment of the full settlement amount and then holds it after litigation concludes. As long as the money stays within a QSF, there is no constructive receipt of the funds. Each of the 35,000 plaintiffs can consider their own unique settlement planning needs. The attorneys involved can plan for their incoming fees and consider structuring them to better strategize their tax burden. Using a QSF has become the standard of care in large cases like this one, as it removes the pressure to hurry up in the planning phase of litigation.
If you’re involved in the Aliso Canyon/SoCalGas case and are interested in learning more about a QSF, plaintiff settlement planning, or attorney fee structure, give Milestone a call at 716-883-1833.
A West Point graduate where he served as captain and military aviator, John Bair continues his commitment to our country through his efforts within the settlement planning industry. He has represented families of victims lost in the Flight 3407 crash, offered pro bono services to the families of 9/11 victims and drafted the first consumer protection bill for plaintiffs (H.R. 3699).