Fire-ravaged California is no stranger to the devastating loss of life and property at the hands of wildfires. This summer, a series of large wildfires erupted across California, mostly in the northern part of the state, including the destructive Carr Fire and the Mendocino Complex Fire. On August 4, 2018, a national disaster was declared. This year has been the deadliest and most destructive wildfire season on record in California, with a total of 7,579 fires burning an area of 1,667,855 acres, the largest amount of burned acreage recorded in a fire season, according to the California Department of Forestry and Fire Protection (Cal Fire) and the National Interagency Fire Center (NIFC). These fires have been so prevalent that the grim searching of fire-ravaged homes and property for what nobody wants to find—the charred remains of fire victims—has become an area of expertise, complete with cadaver dogs, anthropologists, and forensic dental experts.
So far this year, the fires have caused nearly $3 billion in damages, including $1.366 billion in fire-fighting costs. Through the end of August, the California Department of Forestry and Fire Protection (Cal Fire) alone spent $432 million on operations. In Butte County in Northern California, the Camp Fire, which erupted Nov. 8, has burned 153,000 acres, killed 85 people and destroyed 13,972 homes as of November 27, according to Cal Fire.
While insurance companies are certainly aware of the mounting claims and damages resulting from this northern California fire, many are unaware that on November 13, 2018, a group of law firms known as the “Northern California Fire Lawyers” filed a class-action lawsuit against Pacific Gas & Electric (PG&E), a utility company in Northern California. PG&E provides natural gas and electric services to approximately ten million people throughout a 70,000 square mile service area. The lawsuit allegations, if true, are quite shocking.
A recent regulatory filing by PG&E reveals that a week after reporting a power-line outage near where the Camp Fire is suspected of starting, it suffered a second problem with a high-voltage line the same morning the devastating fire ignited. The incident report says that a high-voltage line near the rural Concow area in Butte County suffered an outage at 6:45 a.m. on Thursday, Nov. 8. Previously, PG&E had notified the Public Utilities Commission about another high-voltage line outage a few miles away near Pulga, around 6:15 a.m. that same morning. That outage occurred mere minutes before Cal Fire received their first reports of a wildfire in that area, which would later develop into the Camp Fire.
The class action alleges , and various news outlets are reporting, that PG&E failed to take proper precautions to prevent wildfires, has a long history of safety lapses, and in particular, blames the Pulga fire for starting everything. The apparent transmission line failure was the potential spark which started the fire according to firefighters’ radio transmissions.
It is far too early in the litigation to determine the validity of these allegations or the merits of the lawsuit, as the fire was only recently contained, and claims continue to mount. Insurers should understand that any damages caused by the Northern California fire may not have been caused by an “act of God.” Instead, insurers should identify these claims as having potential subrogation. Even if it subsequently turns out that the class-action has no merit, or that there is no subrogation, the astronomical dollars involved dictate that the prudent insurer proceed as though there is subrogation. As Wayne Gretzy famously put it, “You miss 100% of the shots you don’t take.”
If you have any questions about the Northern California Camp Fire litigation, or wish to discuss possible subrogation of these losses, please contact Timothy Pagel at tpagel@mwl-law.com.
