California water utilities seek relief from fire lawsuits
SACRAMENTO - Facing more wildfires and the lawsuits that come with them, a group of public and private California water systems want lawmakers to shield them from having to pay damages caused by fires they did not start but failed to help put out.
While wildfire lawsuits have typically targeted electric utilities and their downed powerlines that ignite the blaze, some recent lawsuits have also focused on the water systems that are supposed to provide the water for firefighters to put out the flames.
The group, known as the Coalition for Fire Protection and Accountability, wants to be included in legislative efforts to reduce utilities' liability, a prime topic of discussion this year following Pacific Gas & Electric Corp.'s bankruptcy filing in January.
While Democratic Gov. Gavin Newsom has urged lawmakers to discuss changing the strict legal standard that makes utilities pay for damages from wildfires caused by their equipment regardless of whether they acted negligently, lawmakers have not begun a serious conversation on the topic.
The group points to two lawsuits against water districts to make their case. One stemmed from the 2008 "Freeway fire" in Orange County. That fire started when a car's exhaust system ignited some vegetation along a highway that would later destroy 275 structures, including 12 homes.
Firefighters might have been able to save those homes, but a pump station in the Yorba Linda Water District was damaged in the fire and stopped working. Homeowners sued, arguing the water system was liable for the damages even though it did not start the fire. A judge agreed and awarded the homeowners nearly $70 million.
More recently, homeowners sued the City of Ventura related to the Thomas fire in 2017 in Southern California. One lawsuit says Ventura pumping stations lost power during the fire, which prevented the water pressure needed to operate hydrants in some neighborhoods. The lawsuit notes the water utility did not have backup generators.
Justin Skarb, director of government relations for California Water Service, which has about 2 million customers statewide, called it an "untenable situation" for water agencies.
"The water utility was a victim of the fire and held responsible for that same fire," he said. "That seems pretty far removed from anything remotely fair."
But that strict standard for water utilities is "part of the burden they suffer for the benefit of having a monopoly," said Brian Kabateck, a Los Angeles-based attorney who is representing homeowners against the City of Ventura water system. In that case, Kabateck notes the water system did not have backup generators to keep the pumps working when the power went out because of the fire.
"If (utilities) did something which caused damage, whether it was intentional or not intentional, they should be held responsible for the costs to their customers," Kabateck said.
The ruling said the utility had installed a wire on a control panel about four months before the fire to help them monitor pressure problems. A judge noted the utility did not remove the wire or protect it, which caught fire and caused a short in the electrical panel that shut down the pumps.
The group includes 28 water districts and labor unions. They have already had meetings with Newsom's administration and state lawmakers, spokesman Mike Roth said.
Lawmakers declined to make changes to the legal standard, known as "inverse condemnation," for utilities last year despite a push from former Gov. Jerry Brown. Changing the standard drew staunch opposition from insurers, wildfire victims and trial lawyers. Altering the liability for water districts was not a part of that discussion.
The group got a boost Wednesday when the California Commission on Catastrophic Wildfire Cost and Recovery issued its preliminary report, recommending the state move away from the strict liability standard of inverse condemnation and adopt a fault-based negligence standard instead.
While there is no pending legislation to change the standard, lawmakers are considering a variety of options to ease the financial burden on utilities by spreading costs among utility shareholders and ratepayers.
Roth said the water group is monitoring that legislation, but said "the best solution is to adopt common sense reforms that prevent water suppliers from being held responsible for fires they don't start."
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