As California deals with the most devastating wildfires in its history, PG&E, one of the state’s biggest utility companies, is facing scrutiny (and an early round of lawsuits) over its potential role in causing the largest blaze. Let's take a look at how families, property owners, and others affected by the Camp Fire are seeking to hold PG&E liable, the kinds of losses PG&E could be on the legal hook for, and whether the utility giant could opt for bankruptcy.
Did PG&E’s Negligence Cause the Camp Fire?
In November 2018, a number of lawsuits were quickly filed against PG&E on behalf of families affected by the Camp Fire, including a class action in Butte County Superior Court, which alleged that PG&E “has a history of disregarding safety regulations to maximize corporate profits.”
In the Butte County case, law firms representing families and other property owners claimed that PG&E failed to take proper precautions to guard the community against a preventable fire. Specifically, the suit claimed, the utility should have trimmed trees growing near power lines and shut power off in areas where the risk of fire was obvious.
One legal argument here is that PG&E’s negligence was the cause of the Camp Fire and the resulting loss of life and property. Negligence is the liability theory underlying most personal injury cases; the driver who runs the red light is said to be negligent in a car accident case, as is the store owner who fails to clean up the spilled soda in a slip-and-fall claim.
But it’s not clear that those suing PG&E will even need to establish the company’s negligence. That’s because while utility companies have the right to access and utilize private property in California, they also can be subject to a higher standard of care (“strict liability”) when their equipment ends up damaging that private property. In other words, if strict liability is the standard by which courts assess PG&E’s action (or inaction) in connection with the Camp Fire, the company’s carelessness is irrelevant, and negligence need not be established.
What Losses Could PG&E Need to Pay For?
The lawsuits filed against PG&E (and the lawsuits that are certain to come) are bound to seek monetary compensation for a variety of kinds of losses.
For cases involving loss of life—at least 81 people have died as a result of the fire as of November 21, 2018, with hundreds still missing—surviving family members and other “personal representatives” could sue PG&E for the wrongful death of their loved ones. To learn more about who can file this kind of lawsuit, and the kinds of losses that are compensable, get the details on California’s wrongful death laws.
For lawsuits involving injuries and health problems triggered by the fire, PG&E could face liability for the plaintiffs’ medical bills, inability to work, and “pain and suffering." (Learn more about personal injury damages.)
When it comes to the massive amounts of property loss stemming from the Camp Fire—which is said to have destroyed more than 12,000 homes and over 4,000 other buildings—PG&E’s liability for property damage could reach into the billions of dollars. (Learn more about property damage lawsuits in California.)
Could PG&E File for Bankruptcy?
When a problem on a PG&E transmission line was first identified as a potential cause of the Camp Fire, a number of media outlets speculated that the utility could file bankruptcy as a result of its massive liability exposure. But soon the company was thrown a lifeline of sorts: the head of the California Public Utilities Commission (which oversees PG&E) announced that any financial responsibility pinned on the company (via settlements or court judgments) could be passed on to the utility’s customers in the form of rate hikes. This kind of pass-through won’t be an option for any criminal penalties handed down to PG&E, however.
PG&E is no stranger to lawsuits like those already filed over the Camp Fire, and those sure to come. The company is still facing legal action over its potential role in triggering wildfires in 2017 (also in northern California), and it agreed to a $90 million settlement over losses stemming from a 2010 natural gas explosion in San Bruno, California.