Irvine Eminent Domain Legal Blog
PG&E was responsible for sparking at least some of the 2017 wildfires in Northern California, according to preliminary results from the California Department of Forestry and Fire Protection (Cal Fire). If the fires can be tied to the utility's actions, inaction or equipment, PG&E could be held liable for billions in property damage under a legal theory called "inverse condemnation." Under current law, claimants need not show that a utility was negligent.
The idea behind this strict liability rule is to place the burden on the party most likely to have been responsible and which is in the best position to cover the losses -- the utilities. Unfortunately, PG&E was apparently underinsured for the 2017 wildfires and claims it cannot withstand the probable losses, which are estimated at over $17 billion.
Under California law, utilities like PG&E and Southern California Edison are legally responsible for damage caused by their equipment even when there is no showing of negligence. This is called "inverse condemnation." The idea is that when government entities or utilities cause major damage to private property, their actions are in essence a taking of that property. Property takings are regulated by the federal and California constitutions, both of which mandate that any taking be justly compensated.
In practical terms, what that means is that PG&E, Edison and other utilities could be on the hook for all the damage caused by the 2017 California wildfires if those wildfires can be shown to have been caused by their equipment.
Eminent domain is a complicated legal concept that provokes many questions from property owners.We thought we would take some time in this blog to discuss the most basic questions people have when they have been approached by a local government entity about the required sale of their property.
Earlier this month, Governor Jerry Brown announced the creation of a special committee to reassess state policy on financial responsibility for wildfires. Under current law, utilities like PG&E and California Edison can be held liable for wildfires sparked by their equipment even if they're not found negligent. This is called "inverse condemnation," and it's a big issue for the utilities.
Last October's wildfires in Northern California forced the evacuation of over 100,000, destroyed 8,800 buildings and resulted in the deaths of 44 people. Financially, the fires resulted in an estimated $10 billion in insurance claims alone.
Like all coastal beaches in California, picturesque Martins Beach is public. That is because California's Coastal Act holds that all of California's coasts are a public resource.
Unfortunately, accessing Martins Beach requires using a private road. That didn't used to be a problem. Until 2008, the road's owners didn't object to the public using the road to reach the beach, and often left the gate open.
Pacific Gas & Electric Corp (PG&E) recently released an estimate of its expected losses from last year's Northern California wildfires. In a filing with the Securities and Exchange Commission, PG&E said it planned to take a $2.5-billion charge against its profits for the quarter ending June 30.
However, the utility admitted that charge represented the low end of the reasonable estimate of its losses and that it was unable to give a high-end estimate. This is because it is the subject of a state investigation and more than 200 private lawsuits in connection with the fires. The state has said the total property damage from the fires could top $10 billion.
The San Diego Association of Governments (SANDAG) has been pursuing the possibility of taking a downtown city block through eminent domain in order to replace its current, rented, headquarters.
Although building a new tower could cost over $112 million, the idea offers two advantages. First, compared with renting space, owning its headquarters could save SANDAG about $26 million over 40 years. Second, the agency could gain a new revenue stream by renting space to tenants.
Officials from the California Department of Forestry and Fire Protection (Cal Fire) recently released a report tying Pacific Gas and Electric to 12 Northern California fires last fall. Those fires resulted in the deaths of 18 people and caused billions of dollars in damage. Many of them were reportedly sparked when trees or tree parts fell onto PG&E lines, or when the lines were downed. An earlier investigation blamed PG&E for three wildfires, alleging the utility failed to trim trees near power lines.
According to the new report, Cal Fire's investigations have been referred to local authorities because violations of state law have been alleged. As we have discussed before on this blog, however, the California Constitution allows property owners to hold utilities liable for losses caused by their equipment, even when the utility was not negligent.
At a recent city council meeting in Palo Alto, residents learned that all 10 of the alternatives for a major rail redesign could potentially involve properties being taken by eminent domain. More than two dozen people addressed the council, many of them concerned that the project could result in their properties being taken by the city. Others expressed concerns that the project will worsen traffic conditions for nearby properties.
It was a spirited debate, but we won't try to reproduce it fully here. If you would like a detailed view, please read this article by the Palo Alto Weekly.
As we discussed in our last post, the California constitution gives property owners the right to hold utility companies financially responsible for losses caused by their equipment, even if the utility followed state safety rules. Property owners can bring inverse condemnation claims against the utility for the losses they incurred.
Inverse condemnation is part of eminent domain law. In California, governments and utilities can take private property for the public good, but they must pay just compensation. In a traditional eminent domain case, the government or utility proposes to take a piece of real estate and then makes an offer of compensation, which the property owner can negotiate.