{"id":352,"date":"2026-01-05T12:00:00","date_gmt":"2026-01-05T12:00:00","guid":{"rendered":"https:\/\/california.shuster.info\/?p=352"},"modified":"2026-01-05T12:00:00","modified_gmt":"2026-01-05T12:00:00","slug":"pge-pslra-discovery-stay-bankruptcy-interlocutory-appeal-denied","status":"publish","type":"post","link":"https:\/\/california.shuster.info\/?p=352","title":{"rendered":"In re PG&E Corporation \u2014 N.D. Cal. denies interlocutory appeal of bankruptcy ruling that PSLRA discovery stay does not apply"},"content":{"rendered":"
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Case<\/dt>\n
In re PG&E Corporation and Pacific Gas and Electric Company<\/dd>\n
Court<\/dt>\n
U.S. District Court \u2014 Northern District of California<\/dd>\n
Date Decided<\/dt>\n
2026-01-05<\/dd>\n
Docket No.<\/dt>\n
4:25-cv-05609<\/dd>\n
Status<\/dt>\n
Unreported \/ Non-Citable<\/dd>\n
Topics<\/dt>\n
Bankruptcy interlocutory appeal; 28 U.S.C. \u00a7 158(a)(3); Private Securities Litigation Reform Act (PSLRA) discovery stay; third-party subpoenas; bankruptcy claimants; PG&E securities litigation<\/dd>\n<\/dl>\n<\/div>\n

Background<\/h2>\n

The PG&E bankruptcy and its long-running parallel federal securities class action \u2014 In re PG&E Corporation Securities Litigation<\/em>, Case No. 18-cv-03509-EJD (N.D. Cal.) \u2014 have generated complex litigation across two forums for years. In the securities case, certain Directors and Underwriters of PG&E are defendants. In the bankruptcy, certain claimants served them with Rule 45 third-party subpoenas seeking discovery related to claims being adjudicated in the bankruptcy.<\/p>\n

The Directors and Underwriters moved in Bankruptcy Court for a protective order, arguing that the subpoenas violated the Private Securities Litigation Reform Act\u2019s automatic discovery stay (15 U.S.C. \u00a7 78u-4(b)(3)(B)) and were really an end-run around that stay in the parallel securities case. Bankruptcy Judge denied the motion, holding that the PSLRA\u2019s discovery stay does not provide a \u201csafe harbor from third-party discovery from non-parties in the bankruptcy case, regardless of their status as defendants in district court litigation.\u201d The Directors and Underwriters then sought interlocutory review in the District Court under 28 U.S.C. \u00a7 158(a)(3).<\/p>\n

The Court’s Holding<\/h2>\n

Judge Haywood S. Gilliam, Jr. denied the motion for leave to appeal and closed the case.<\/p>\n

Under \u00a7 158(a)(3) and the analogous \u00a7 1292(b) framework, the District Court applies the Ninth Circuit\u2019s Cement Antitrust<\/em> standard: interlocutory appeals are allowed sparingly, and only where there is a controlling question of law, a substantial ground for difference of opinion, and an immediate appeal could materially advance the ultimate termination of the litigation.<\/p>\n

While the court acknowledged the unusual posture \u2014 securities claims pending in two different forums before two different judges at two different procedural stages \u2014 it found no basis for interlocutory review. Even resolving in the Directors and Underwriters\u2019 favor whether the PSLRA stay applies to the bankruptcy proceeding would not materially advance the bankruptcy litigation. As the Bankruptcy Court had pointed out, even if the Directors and Underwriters were dismissed from the parallel federal securities case, they would still need to respond to the bankruptcy claimants\u2019 discovery in the bankruptcy proceeding itself. The Directors and Underwriters offered no explanation as to how applying the PSLRA stay would streamline the bankruptcy litigation.<\/p>\n

The court added that if the Directors and Underwriters believe the discovery is overly burdensome or disproportionate, the proper remedy is a renewed motion before the Bankruptcy Court for a narrower order, not an interlocutory appeal in the District Court.<\/p>\n

Key Takeaways<\/h2>\n