SoCal Edison reaches $2.2B settlement with insurers

Southern California Edison Co. agreed to pay $2.2 billion to resolve insurance subrogation claims arising out of the 2018 Woolsey Fire that ravaged Ventura and Los Angeles counties.

The settlement is not an admission of liability or wrongdoing by Edison. More than 100 insurance carriers will share the lump sum within 90 days, plus receive reimbursement for future payments up to an agreed cap by July 2023.

"We have made another significant step toward resolving pending wildfire-related litigation," said Pedro J. Pizzaro, president and chief executive officer of Edison International, the parent company of SoCal Edison. "This settlement is with all insurance subrogation plaintiffs in the 2018 Woolsey Fire litigation. Combined with the settlement announced on Sept. 23, 2020 in the Thomas and Koenigstein litigation, Edison has resolved all subrogation plaintiff claims for the 2017 and 2018 wildfire/mudslide events. The company continues to explore reasonable settlement opportunities with other parties."

Edison was facing thousands of lawsuits from plaintiffs, which included homeowners, public entities, agricultural businesses and insurance policyholders who said they were affected by the Woolsey Fire, which burned more than 98,000 acres. Edison also faced lawsuits arising out of the 2017 Thomas Fire and the subsequent January 2018 Montecito debris flow. The claims are consolidated and coordinated in Los Angeles County Superior Court. So far, Edison has reached settlements with approximately 1,000 individual plaintiffs in the three events.

The Woolsey Fire was consolidated and coordinated into a single proceeding presided over by Los Angeles County Superior Court Judge William F. Highberger. JCCP 5000.

"This result was brought about by the superior management of the case by Judge Highberger, and the time and attention of mediator Peter Lichtman, who was able to guide both sides to a fair resolution," said Craig S. Simon, managing partner of Berger Kahn, co-lead counsel for subrogation plaintiffs and one of the key negotiators for the insurance companies. "This settlement is a result of a group effort of talented subrogation attorneys, and talented attorneys representing individual plaintiffs. The subrogation group had an incredibly smooth working relationship with the individual lawyers and the individual leadership, which allowed us to advance the rights of our clients."

Simon helped broker the deal with other co-leads, who included Maura Walsh Ochoa and Waylon J. Pickett of Grotefeld Hoffman, sole practitioner Shawn E. Caine and Howard D. Maycon of Cozen O'Connor. The same team is also co-lead subrogation counsel in the Thomas mass tort, JCCP 4965, which reached a deal last fall for $1.16 billion.

Edison said as of September 2020, the company's best estimate of expected potential losses for current and future claims for the Thomas and Woolsey fires and the Montecito mudslide was $4.6 billion. The utility said it has roughly $700 million remaining in expected recoveries from insurance for the Woolsey litigation. Edison said it plans to try and recoup uninsured costs through raised electricity rates, which would be subject to the approval of the California Public Utilities Commission.

"Our thoughts are with communities across the state that are suffering losses due to the wildfire. At SCE, safety remains our first and highest priority," Edison said in a statement. "SCE continues to implement measures to reduce wildfire risk as outlined in its latest Wildfire Mitigation Plan, approved by the California Public Utilities Commission on June 11, 2020."