Before the dockless electric scooter company Bird pulled out of San Diego last November, it had agreed as part of its operating contract to indemnify and insure the city for injury claims related to its rentals. But just before Bird filed for Chapter 11 bankruptcy last December, it stopped paying the attorneys it had retained to defend the city. That meant San Diego and its taxpayers, who should have been protected from paying any settlements or judgments from 20 injury lawsuits related to Bird scooters, were instead potentially on the hook for more than $46 million, according to a report from City Attorney Mara Elliott’s office. Instead, the city will pay just a tiny fraction of that amount. As part of Bird’s bankruptcy proceedings in Florida, the company agreed to resolve all nationwide legal claims and lawsuits against it by way of a $19.2 million tort claims trust, and San Diego agreed to contribute $750,000 to that trust. On Tuesday, the City Council voted unanimously to approve the contribution from one of the city’s public liability funds and thereby protect the city from potentially paying tens of millions of dollars in individual legal settlements and judgments. “I think that taxpayers expect the City Attorney to fight for them and get the best deal possible,” Elliot told the Union-Tribune on Tuesday. “This was not a good situation for us … (but) this is an exceptional result.” Not everyone is as satisfied with the deal, which was approved in August by a bankruptcy judge in Miami federal court. Plaintiffs across the country who have sued Bird and the city or county governments where they were injured as a result of Bird’s scooters have appealed Bird’s liquidation plan. That group includes several San Diego plaintiffs, who argue the $19.2 million trust is not nearly enough to satisfy what Bird truly owes. They say there are more than 200 lawsuits nationwide asserting claims of more than $384 million. Bird, Lime and other dockless scooter and bicycle companies first began operating in San Diego in early 2018, initially without many regulations. While such devices drew criticism from some elected leaders and community groups, especially in beach neighborhoods, other officials said the mobility devices are crucial to fighting climate change and reducing congestion as neighborhoods become more densely populated. The San Diego City Council passed an ordinance in July 2019 to establish fees that operators owed the city and regulate how many devices each company could operate and the speed at which the devices could travel. Part of that ordinance also required Bird and the other companies to defend the city against injury lawsuits brought in connection with their devices. According to the city attorney’s office, there were 20 such lawsuits involving Bird scooters pending against the city when the company stopped defending the city last year ahead of its bankruptcy claim. City officials said San Diego had the second-most Bird-related lawsuits against it of any municipality nationwide. For that reason, the city “took a leadership role amongst the municipalities to ensure (Bird’s liquidation) plan would result in extinguishing all injury lawsuits against all participating municipalities,” Assistant City Attorney Travis Phelps wrote in a staff report prepared for the City Council. Bird’s insurers agreed to contribute $16.2 million of the $19.2 million trust, while San Diego and other cities and counties agreed to contribute the remaining $3 million. “The City also took a leadership role to fairly allocate that amount amongst the municipalities and then secure commitments from the other municipalities to fund their allocated shares,” Phelps wrote in the report. Elliott said that she and the other attorneys in her office had little experience with bankruptcy cases, so this kind of deal was new to them. Elliott said she spoke directly with the leaders of other local governments, as did other attorneys in her office, to find similarly situated municipalities that were supposed to be defended by Bird but instead were “all left holding the bag.” The plaintiffs who have sued Bird and local governments around the country hold a far less favorable view of Bird’s liquidation plan and the effort by the municipalities to settle all pending litigation. Plaintiffs from San Diego and other parts of California have been joined by plaintiffs around the country in appealing the Miami judge’s approval of the plan. They argue the $19.2 million tort claims trust is not nearly enough to resolve and provide full payment of every plaintiff’s claim. But the bankruptcy judge concluded that it was enough and later ruled that she wouldn’t issue an emergency stay while the appeal moved forward, concluding that “the California Plaintiffs have not established that they are likely to prevail on the merits of the appeal.” An appeals judge also rejected a request for an emergency stay on the same grounds. If the appeal fails and Bird’s liquidation plan moves forward as expected, the injury lawsuits filed in San Diego Superior Court and other local courts will “go away,” said Samuel Hess, a Florida attorney representing the San Diego plaintiffs in the bankruptcy case and appeal. What happens next is technical and complex, but essentially the legal claims will instead be channeled against the tort claims trust. A trustee will then decide how much of those funds will be distributed to each plaintiff. Hess said there are several ways for the trustee to decide distribution amounts, but it’s most commonly determined through mediation and depends on the strength of a claim.