Part 168: The “last resort” in California – Wildfire Litigation and Risk Management Strategies

Published April 20, 2025.

Apr 21, 2025

Photo of smoke from the Eaton Fire rising above Altadena in the afternoon of January 8, 2025 after a night of tremendous destruction by author (iPhone 15 Pro).

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By Zachary Ellison, Independent Journalist

On Easter Sunday the stakes in California have never been higher in the Golden State, a land known for its precious coastline, towering mountains, and forever deserts. What’s supposed to be a land of dreams and opportunity has instead turned into an economic trap for so many. Is it any wonder that many have left a place that once offered so many riches and that now offers them little if not nothing in return?

Since last January 7, when the state suffered two quite deadly wildfires, the question of who should pay and when, much less who is eligible for both public and private support, has never become so complicated and increasingly litigious. Thursday featured a press conference organized by the Eaton Fire Survivors Network demanding the end of a 17% (formerly 22%) rate hike for State Farm approved by California Insurance Commissioner Ricardo Lara. The insurance commissioner himself is under increasing scrutiny over his political careerism and relationships.

Now non-profit Consumer Watchdog is taking on the insurance industry over alleged “collusion” in a Saturday filing in Los Angeles Superior Court. Proving that claim in court won’t be easy. This new filing comes on top of pre-existing litigation against Southern California Edison by a multitude of firms alleging that the electric utility was responsible for the Eaton Fire that struck Altadena and other nearby neighborhoods.

Meanwhile, those affected by the Palisades Fire are targeting the Los Angeles Department of Water and Power, alleging that a second ignition was caused by their power lines and that a lack of water for fire hydrants exacerbated the destruction. Meanwhile, Southern California Edison seems to be weakening their position that the Eaton Fire had nothing to do with their power lines, which remained energized despite a major windstorm for which there was ample time and warning.

Edison President and CEO Pedro Pizarro told Los Angeles Times journalist Sammy Roth that it was “certainly possible” their power lines were the cause of the Eaton Fire in Altadena. The matter remains under investigation by authorities, and the cause of the Palisades Fire remains more shrouded and less indicative of negligence. A feeble concession that comes after attorneys for Edison previously shamelessly tried to blame the conflagration on a homelessness encampment hundreds of yards away from where the blaze is believed to have started that evening. Wildfire and insurance litigation are separate but interrelated legal causes of action.

The real losers here most certainly won’t be the insurance companies, or the utilities, or even the government. The lawyers might win no matter what, but the victims of these blazes will be the real losers yet, even if they win their cases after prolonged litigation. Court can’t replace homes, and it can’t replace communities, even as the cleanup effort goes on. What happened was frustrating, but it shouldn’t have come as a surprise. Perhaps the most elusive question is what will occur between this fire season and the next. Governor Gavin Newsom recently announced $170 million in mitigation funds, and CalFire has issued new risk maps, but there are few signs that it will be enough to stop future disasters. Climate change wasn’t mentioned.

Edison’s leader, Pedro Pizarro, even in accepting that climate change is a factor, wouldn’t commit to future power shutoffs in dangerous conditions, describing such actions as “a tool of last resort.” Does someone need to tell Pizarro and other power utility leaders that they’re going to have to get better at turning off the power? Should that person be Governor Newsom? Most assuredly, there are consequences to normalizing shutoffs, but next to brush clearance, that’s our best bet for mitigating future wildfire disasters as we continue into the increasingly dangerous 21st century.

It wasn’t just that climate change caused an overgrowth of brush and then sapped us of rain through the normal winter storm season, or that the windstorm that followed was widely forecast; it’s that we simply can’t afford to go on like this, underinvesting in mitigation and failing to re-strategize for what to do going forward. The Los Angeles Times recently highlighted that all 5 members of the California Public Utility Commissioners are Northern Californians: Alice Busching Reynolds, Matthew Baker, Darcie L. Houck, John Reynolds, and Karen Douglas. Geography shouldn’t matter in making this strategy change.

Even more appalling than Edison’s the homeless did it argument was that they tried to contest that they didn’t know conditions were going to be bad enough to keep their network deenergized despite power being knocked out widely across Altadena that morning. Edison has argued that even local power shutoffs risk surging their lines and, in fact, has accused the Los Angeles Times of “misinformation,” making the argument that they didn’t need to implement a key project to enable what are known as “Public Safety Power Shutoffs.”

Edison argued that Times reporter Connor Sheets was wrong in observing that a $17.3 million reconductoring project could have safely allowed the utility to safely de-energize its lines across Eaton Canyon. The utility stated on February 14 that “the premise that potential fire risk from Eaton Canyon lines being overloaded due to other lines being de-energized is irrelevant.” Pizarro claimed to Roth in his April 3 Times interview that Edison has cut its risk “85% to 90% compared to pre-2017,” but that “However, we’ve always known the risk can never be zero.” Is that good enough, though?

Since 2012, the California Public Utilities Commission (CPUC) has sought to regulate such shutoffs in the interest of wildfire prevention. Its webpage for this states that utilities “may proactively cut power to electrical lines as a measure of last resort if the utility reasonably believes that there is an imminent and significant risk that strong winds may topple power lines or cause major vegetation-related issues leading to increased risk of wildfires.” The webpage hasn’t been updated since August 2024, before a prior round of wildfires struck Southern California, none of which were caused by power companies. The agency conducted a contingent safety review meeting at that time, but no similar action has been taken since January 7. What was common between the two most recent episodes destructive phases were events of high winds. The issue isn’t just the toppling of towers, but severely increasing danger.

Most strangely for our family, after evacuating from Altadena, we went to another area of Southern California where a shutoff was in effect. Moreover, even more strangely, despite the power being out for two weeks, there was little noticeable difference in Edison’s bill compared to prior months. Others too have received such bills, which can be difficult to decipher. Edison didn’t respond to a request for comment on its billing practices post-wildfire, but the utility has promised to work with those who were affected. Both the CPUC and Edison owe the public answers. If Edison can’t safely turn off the power in advance of high-wind events, then that’s a problem worthy of additional regulation, and it’s not just spending to be passed on to ratepayers.

President Donald Trump was invited to visit Altadena after the fires, yet amidst a massive cost-cutting campaign led by Elon Musk himself, a former Californian, there are few signs that federal authorities intend to intervene even as the Eaton Fire affected the Angeles National Forest and the cleanup is being led by the U.S. Army Corps of Engineers and the Environmental Protection Agency.

Litigation might get some answers, but it seems unlikely that litigation itself can improve public policy in this area. The type of funding needed to ensure that the system can protect itself from disasters is likely only possible with federal assistance. Edison is vowing to underground new construction of power lines, but there are few signs that a rapid overhaul of their system, much less other utilities statewide, is on the immediate horizon.

Leaving Californians to beg insurers, who arguably don’t have their best interest in the wake of a disaster fueled by a changing climate and creaky utility infrastructure, shouldn’t be our end game. The California FAIR Plan at the heart of the new collusive litigation is the product of private insurers refusing to take on higher-risk policyholders. That the insurance industry may ultimately be required to bail out this public plan suggests that in the world of public-private partnership, the real sin of omission is a lack of leadership.

If keeping people’s homes from burning down in the first place isn’t a cheaper option than bailing them out, then that’s a real problem of recognition. After nearly 5 years of increasing market value, the price of Edison International stock took a big hit as a result of the disaster. Tariffs aren’t likely to help, and without a growing housing market to expand reach, Edison is forced to rely on its existing customer base even more to stay afloat. Nothing great is going to come out of this dynamic!

Speaking for the Eaton Fire Survivors Network, business consultant and former Los Angeles Deputy Mayor Joy Chen said, “Exactly 100 days ago this morning, the Eaton Fire was burning out of control across Altadena; the home of every single person standing here was damaged or destroyed.” She added, “I know that none of us can ever unsee the images of Altadena on fire.” Edison CEO Pizarro noted that the utility had installed “high definition cameras.” It’s unknown if any of these captured the start of the fire; footage released by law firms has suggested close proximity to the transmission towers over Eaton Canyon, with the leading theory being that old, dormant transmission lines somehow became reenergized, causing what’s known as arcing to create sparks. The business of wildfires has never become so complicated or quite so usual.

Law firms have descended on the Eaton Fire faster than even those in the Palisade Fire, in no small part because the cause was so readily observable. Standing in the yard in Altadena, we could see the flames spreading fast along the San Gabriel mountside, what’s known as the Front Face. All I could do was hope that it would burn up towards Mount Wilson, even as I feared what was about to happen. The sounds of sirens could be heard heading toward Eaton Canyon, and warm ash and embers flew down into the neighborhoods. It was clear no aviation assets could come to the rescue like we had seen so many times on television over the years. Close air support wasn’t coming with a wind like that; it simply wasn’t possible to fly safely.

Even the New York Times has gotten in on the action on March 26, reviewing sensor data to determine what was obvious: “Wind speeds at the time were sustained at 60 miles per hour, with gusts as high as 79 m.p.h. — strong enough for engineers to consider cutting power.” On the record, Edison denied they had an obligation to shut off the power, with a spokeswoman telling the paper, “We did not meet the P.S.P.S. threshold, based on wind speed and fire threat.” The craziest part about it all just might be that not only was it forecast, but that morning the wind was so strong my partner immediately woke up and told me, “I know what happens next; the power goes off.” It had only been a decade plus since 2011 when a major windstorm had decked numerous trees, knocking out power for over a week. Windstorms were nothing new.

Those who lost everything are rightfully outraged that not only did their power company fail them, but now their home insurers are too. Lawyers for at least one firm have gone as far as to label the alleged business practices to be not just “violations of California’s antitrust and unfair competition laws” but also “a conspiracy which eliminated existing and standard property policies and forced homeowners to accept, as their only available coverage, the state’s insurance plan of last resort, the California FAIR Plan.”

It’s worth understanding here that in this usage, as in that of the CPUC and Edison, “last resort” is used in its business context as opposed to its legal meaning. It stands for a final option for operation of the market, as opposed to a final appeal to the highest possible court; colloquially it all means the same. Whether continuing the song and dance will benefit Edison, much less an insurance company like State Farm, remains to be seen, but clearly in both sectors the powerful don’t intend to sustain losses.

The reality may be that by dragging out the process as long as possible, the utility, rather than seeking a quick rebound from a speedy settlement, opts for an attrition strategy. In a military context, wearing down your opponent in the hopes that they will simply give up their claim. The longer the litigation goes on, the better the chance that they’ll come out on top in the court battle. The fires have often been compared to the wildfire that struck Lahaina in August 2023, causing 103 deaths, for which the Hawaiian Electric Company (HECO) was blamed. HECO supplies 95% of the State of Hawaii’s power, a virtual monopoly.

After losing 40% of its stock value, HECO agreed to a $4 billion settlement, of which it would contribute $1.99 billion, with the State of Hawaii, Maui County, and Kamehameha Schools also making contributions along with landowners and communications firms. The July 2024 tentative deal was approved by the Hawaii State Supreme Court in February 2025, and Hawaii Governor Josh Green announced the first disbursements of $1.5 million for 26 “wrongful death claims” to “qualified” victims. The terms of the agreement are a relatively speedy and necessary resolution.

Perhaps we should be sending the lawyers to Hawaii to figure out how to get those done sooner, which would be a useful break compared to the popular legislative junkets so often taken by lawmakers. The truth is that resolving these matters quickly and fairly is in everyone’s best interests. That’s true even if there might be some understandable hesitation by those involved in the litigation on all sides of the matter to resolve claims that are emotionally charged.

Doing so not only allows people to get funds to recover but also moves the markets along toward renewed investment that in the end just might protect more people. Newsom and Green aren’t unacquainted. With Newsom disclosing in a widely mocked television appearance due to his swaggering that he had discussed an executive order against land speculation with Green prior to his announcement last January. California and Hawaii should have a quick huddle.

There is a fundamental governmental interest in ensuring that the causes of destructive wildfires don’t go unaddressed, just as there’s an interest in assuring appropriate response. The sad part is that so many feel abandoned in these times. Meanwhile, scientific studies continue to find that the disaster spread intolerable amounts of lead even beyond the immediate burn zone.

Pasadena recently was forced to close two baseball fields after discovering the problem was worse than expected. Los Angeles County is now offering free blood testing for lead for fire victims and others, such as first responders. Lead is a treatable health risk that can be managed through established protocols. And in full disclosure: I’ve signed up to sue Edison too for the Eaton Fire. While I don’t believe that litigation is an option of first resort, the excuses are thin, and the best chance Altadena has for recovery goes beyond what charity has provided.

Link: Eaton fire victims call for investigation into State Farm for delays, violations

Link: Eaton Fire Survivors Network

Link: Property owners sue California insurance companies over alleged ‘collusion’ following wildfires

Link: Lawsuit alleges DWP power lines played role in Palisades fire

Link: Edison CEO: It’s ‘certainly possible’ utility sparked Eaton fire. But climate change made it worse

Link: Edison says encampment found near area where Eaton fire started; critics doubt it sparked fire

Link: Governor Newsom signs legislation investing additional $170 million to prevent catastrophic wildfires, issues executive order to fast-track projects

Link: Newsom shuns Southern California in public utilities commission appointments

Link: Edison knew before Eaton fire that cutting power risked igniting blaze, records show

Link: Correcting Misinformation in the LA Times

Link: Public Safety Power Shutoffs (PSPS)

Link: Edison Disaster Recovery