By Tom Hals
(Reuters) – Victims of the Los Angeles wildfires, likely the costliest in U.S. history, are seizing upon a unique California legal doctrine that allows them to collect from their power utility if its equipment caused the blaze — even if the company did nothing wrong.
Numerous lawsuits were filed this week by victims of the Eaton fire, which broke out east of the city, against Southern California Edison, a unit of Edison International. The lawsuits allege that the company’s high-voltage transmission towers were the source of the devastating blaze, which was driven by dangerous high winds and lower humidity.
Edison has said that it did not detect any operating anomalies on its transmission wires in the 12 hours before the fire or up to an hour after its ignition.
“Typically when you have a fire caused by electrical infrastructure you do see a signature voltage drop or current increasing and we have not seen that in our study,” Edison CEO Pedro Pizarro told Bloomberg TV. He said the company followed protocols for wildfire mitigation approved by regulators.
Authorities have said that the cause of the various fires are under investigation.
If those power lines were a substantial cause of the fire, that could be enough to recover billions of dollars in damages from the utility, even if it complied with regulations, legal experts said.
That’s because in California, a legal doctrine known as “inverse condemnation,” which has traditionally been used by property owners to seek compensation from the government for taking private land, has been extended by state courts to utility companies.
The courts have held that utilities that damage private property while providing public services such as electricity are liable, even if the there is no finding of negligence.
“California is very unusual in that normally this doctrine only applies to government entities,” said Daniel Farber, a professor at the University of California Berkeley School of Law, where he specializes in energy and the environment.
“The plaintiffs won’t have to prove (the utility) poorly maintained these transmission wires or did a shoddy job,” Farber said.
Most of the destruction has been the result of two blazes — the Palisades Fire and the Eaton Fire — which have destroyed more than 6,000 structures and killed at least 24 people.
The cost of the disaster is expected to run into the tens of billions of dollars.
California lawmakers have created a wildfire insurance fund with access to $21 billion that is meant to ensure that Southern California Edison remains solvent and victims’ claims are paid in full. Pizarro told Bloomberg TV that the fund will cap the company’s exposure at $3.9 billion.
Most of the lawsuits have been brought in state court in Los Angeles by victims of the Eaton Fire, who cited eyewitness accounts of flames near the transmission towers for the source of the blaze and its alleged link to Southern California Edison, a defendant with significant assets. Reuters has not confirmed the eyewitness accounts.
The lawsuits alleged that Edison was negligent for failing to properly maintain its transmission and distribution lines but also brought a claim for inverse condemnation.
The lawsuits seek damages for lost wages, costs to rebuild and other losses that cannot be currently calculated, which will likely vastly outstrip insurance coverage. The cases will likely take years to resolve.
“The price tag of these wildfires will be something we’ve never seen before,” said plaintiffs lawyer Mikal Watts, who has previously represented wildfire victims.
Edison will review the complaints when it receives them, a company spokesman said . The company said it remains committed to supporting the communities affected and restoring power.
If the company’s equipment is found to be the substantial cause of the Eaton Fire, Edison would be liable for economic losses. If plaintiffs can prove negligence then they can get damages for personal injuries and wrongful death as well, according to Gerald Singleton, who filed one of the first lawsuits.
“There are times where a utility will say that their equipment started it, but they weren’t negligent. That’s very rare,” Singleton said.
(Reporting by Tom Hals in Wilmington, Delaware; Additional reporting by Mike Scarcella; Editing by Noeleen Walder and Mark Porter)
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