1st suit over Camp Fire filed against PG&E

While the first of potentially thousands of lawsuits related to the recent wildfires has been filed against Pacific Gas & Electric Co., legal observers are keeping an eye on whether recent legislation absolving utilities from paying all of wildfire damage costs would cover this year's incidents if any utilities were found responsible.

The Northern California Camp Fire has already been called the deadliest wildfire in the state's history, torching 135,000 acres and killing 48. A negligence lawsuit filed against the utility this week said PG&E neglected infrastructure upgrades, leading to the failure of a high-voltage transmission line that sparked the Creek Fire.

PG&E noted in a statement that the cause of the fire has not been determined.

The complaint was filed Tuesday by attorneys from Danko Meredith; Corey, Luzaich, De Ghetaldi & Riddle LLP; and Gibbs Law Group. Quammen v. PG&E Corporation, CGC-18-571281 (S.F. Super. Ct., filed Nov. 13, 2018).

The utility said in filings with the Securities & Exchange Commission Tuesday that it reported an "electric incident" just prior to the fire breaking out on Nov. 8, and that it could be subject to liability exceeding insurance coverage.

That could pave the way for the utility to seek the protection of a new state law passed in September that limits the amount utilities pay in settlements related to wildfires. The legislation, passed easily and signed into law by Gov. Jerry Brown, allows utilities to raise rates via bonds if threatened by bankruptcy.

Supporters of the bill said customers would pay less than if the utility paid any settlements outright. The company said payers would spend an extra $5 per year on every $1 billion of bonds issued.

Consumer attorney Brian Kabateck in Los Angeles doubted customers would be on the hook for that amount.

"I have real doubts it's going to be that low. There is a big question whether the legislation will cover the 2018 fires," said Kabateck, founder of Kabateck LLP, who said the law is a bailout to utility companies.

In an email, PG&E said the bill ensures victims of the fires will be compensated and protects customers from higher rates.

"Under SB 901, securitization is available for 2017 fires and fires that may occur in 2019 and future years," said Andrea Menniti, a spokesperson for the utility.

Michael Danko, a Danko Meredith attorney who filed the Camp Fire lawsuit, said PG&E is at fault. "What more evidence do we need? We want the Legislature to see that we are real people who lost their homes. We don't want PG&E off the hook."

The suit cited a 2013 report by a consulting group recommending that "PG&E treat aging infrastructure as an enterprise-level risk."

"Rather than spend the money it obtains from customers for infrastructure maintenance and safety, PG&E funnels this funding to boost its own corporate profits and compensation," the lawsuit states.

Asked about the issue of liability during a press conference about the fires Wednesday, the governor declined to get into detail, saying instead: "We have the most expensive lawyers in the world that will argue it out in exquisite detail."