Back in 2017 and 2018, devastating wildfires ripped through Northern and Central California. These fires resulted in nearly 100 deaths and destroyed more than 14,000 homes and businesses. One of the nation’s largest utility providers, Pacific Gas & Electric, was found liable for these losses under California law and is therefore responsible for compensating victims of these deadly wildfires.
Many people question why PG&E was found culpable, given the fact that weather was a contributing factor to the damage of these wildfires. We spoke with a personal injury law firm, Kohan & Bablove, LLP to get a better understanding of how the law works in California.
It turns out that nearly 90 percent of all wildfires are actually caused by humans! Improperly disposed of smoking materials, arson, and faulty power lines are some of the most common ways that wildfires originate. So, even though the dry weather in North Bay certainly increased the amount of damage, ultimately, PG&E is liable due to the fact that they did not properly maintain the safety and integrity of their utility poles.
The electricity poles must be engineered in a way that allows them to deliver electricity safely. But when PG&E failed to ensure their poles could withstand heavy winds and that any vegetation and trees that could possibly bring the poles down were trimmed, they became liable for the damage the wildfires caused. To make matters worse, PG&E has a history of failing to shut off power in an attempt to slow or prevent the spread of wildfires.
In early 2019, PG&E went so far as to declare Chapter 11 bankruptcy due to the multi-billion dollar financial responsibility to wildfire victims. However, that doesn’t mean the victims will not be able to get their money.
PG&E set up a trust as part of their bankruptcy case that amounted to nearly $13.5 billion. Individuals and companies who suffered serious financial and emotional losses were expected to file claims by the end of 2019 in order to be awarded compensation from this trust.
Unfortunately, as of April 2020, this deal with wildfire victims seems to have taken a turn for the worse, as the $13.5 billion trust was not what it seemed. Nearly half of the trust was going to be given to victims in the form of PG&E market shares, which have decreased exponentially, in part due to the coronavirus pandemic.
If the wildfire victims are unable to get the majority to agree to the deal, PG&E may not be able to emerge from bankruptcy in late June 2020, leaving the company ineligible for state funds which could provide compensation to current and future wildfire victims.