US judge nixes challenge to wildfire fund

A federal judge in San Francisco dismissed a challenge to the state's wildfire fund, ruling that he had no jurisdiction over a rate-setting matter authorized by a state agency.

Citing the government's sovereign immunity defense and the Johnson Act of 1934, U.S. District Judge James Donato of the Northern District of California said he was barred from presiding over a lawsuit filed by ratepayers.

Customers of Pacific Gas & Electric Co. sued the California Public Utilities Commission and several other state agencies that helped draft and enact Assembly Bill 1054, which created a fund for utilities to dip into if they are found liable for wildfires. Cannara et al v. Dept. of Water Resources director Karla Nemeth, et al 19CV04171 (N.D. Cal., filed Jul. 19, 2019)

The CPUC imposed a charge on ratepayers to fund AB 1054, which was enacted last year in response to multiple wildfires caused by PG&E and other utilities.

Ratepayers argued the charge was imposed without proper evidentiary hearings and alleged violations of the 14th Amendment due process and 5th Amendment takings clause.

While Donato said Johnson Act was intended to keep constitutional challenges affecting rates out of federal courts, he noted the plaintiffs' claims weren't dismissed on the merits, and could pursue their claims in state court.

Michael J. Aguirre, partner at Aguirre & Severson LLP who represents the ratepayers, contended the case is purely a constitutional challenge, which should be decided by Donato, not the state court. Aguirre immediately filed a notice to appeal of Donato's ruling.

-- Gina Kim