Article By DWGP Summer Associate Alec Peters - University of Colorado Law School 2024
An Oregon jury found the State’s second largest electric utility, PacifiCorp, responsible for four large wildfires that erupted over Labor Day weekend in 2020. The groundbreaking verdict—which the plaintiffs’ lawyers said they believed to be “the first time a jury has found a utility company liable to property owners in a wildfire case”—has implications for utilities and asset owners around the country. The Labor Day fires damaged approximately 2,400 properties and forced over 500,000 people to evacuate their homes, and the jury determined that the utility acted with gross negligence in failing to shut down its power lines—while other utilities did—and to manage vegetation near the lines. The jury came to its verdict despite no official determination of the cause of the fires—all four remain officially “under investigation” by state and federal agencies.
Not only did the jury find PacifiCorp liable for over $90 million in damages—$72 million for compensatory damages plus an additional 25% in punitive damages—to the 17 plaintiffs in the case, but it also found the utility had been negligent to the entire class of people whose property had been damaged by the four fires. A forthcoming court proceeding will allow any member of the class to bring a claim for damages from PacifiCorp, potentially increasing its total financial liability well over $1 billion.
In a statement following the verdict, PacifiCorp emphasized how climate change, government forest management, and population growth have contributed to growing wildfire risk, portraying the problem as a systemic issue “larger than any single utility.” It said it intends to appeal the verdict.
The verdict against PacifiCorp comes as its neighbor to the south in California, Pacific Gas & Electric (PG&E), continues to deal with ongoing proceedings from its own wildfire culpability. Several large wildfires in the State led the utility to declare bankruptcy in 2019 before it eventually settled claims for $13.5 billion for its role in the fires. PG&E is currently looking to raise capital by transferring its non-nuclear generating assets to a new subsidiary, Pacific Generation LLC, and selling a minority stake in the subsidiary. A variety of stakeholders have filed objections with both the Federal Energy Regulatory Commission (FERC) and the California Public Utilities Commission (CPUC), which have been each overseeing proceedings concerning PG&E’s proposed transfer, arguing among other things that it could hinder regulatory oversight, impede investment in the safety and reliability of the assets, and violate contractual obligations.
While PG&E’s settlement was consequential for California, the verdict in Oregon has potentially broader implications beyond state borders. PG&E’s liability under California law did not require a finding of unreasonable conduct on the part of the utility because of the state’s inverse condemnation law, which effectively creates strict liability for wildfire damage. In contrast, the claims against PacifiCorp were based on standard tort actions that could apply in many jurisdictions. The verdict signals the willingness of juries to find negligence and hold utilities accountable, even in the absence of any official determinations of cause by governmental agencies or other trusted entities. The circumstances in Oregon demonstrate how wildfire liability could play out around the country, giving utilities and other asset owners a sense of how they need to plan for wildfire risk in the evolving context of climate change and public expectations.
For more information on navigating the changing landscape of wildfire risk management, including compliance (including reliability), contracting, line safety, and vegetation management, please contact Bhaveeta Mody, Lisa Gast, or Sean Neal.
PacifiCorp’s statement following the jury verdict can be found here.
More details on the verdict can be found here and here.
