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Law in Contemporary Society
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Wildfires, Public Utilities, & Plaintiff's Bar-- By RafaelMiranda - 29 May 2024Wildfire Litigation:Modern Wildfire litigation, in the American context, is a form of personal injury litigation mostly composed of mass torts with smaller subsets of class action claims. Defendants are typically public utility companies whereas plaintiffs are split into two categories: subrogation plaintiffs (insurance companies) and individual plaintiffs (i.e.anything or anyone else). The role for public entities is outside the scope of this paper however it is enough to note that public entities are often defendants and/or cross-claimants. Liability for wildfires generally falls to the investor-owned public utility companies who fight tooth and nail to avoid strict liability . At the ground level wildfire litigation is simple, plaintiffs’ attorneys unite against a larger entity—and once proceedings are initiated and after the discovery process has matured—there is often a mediation protocol through which most claims settle.[1] A less addressed concern is at what point could insurance companies and real estate development companies become much more liable for wildfire damage? In other words, what are the implications of expanding liability to the entities who create residential developments in high-risk fire zone.A New Defendant & Defense Practices?Historically, wildfire risk maps created by public entities were used by insurance companies in conjunction with other metrics for purposes of calculating fire coverage in specific areas. As wildfires became much more common, the risk perimeters increased faster than new maps could be created, combined with external pressures such as rising housing costs, created a scenario where a large percentage of residences in California live in zones at risk for damage from wildfires.[2] Currently, most defendants in wildfire litigation are related to investor-owned utility companies but I believe as financial exposure stemming from wildfires increase–homeowners, businesses, tort attorneys should begin to ask themselves, why shouldn’t one target the entities which placed the homes in fire zones in the first place?Avenues For LawsuitsI believe when confronted with the question as to whether plaintiff resource capital should pivot to targeting insurance and residential development companies, the decision ought to be made in the affirmative. This isn’t to say, this type of defendant would be easy or necessarily guaranteed to earn an attorney more money—rather targeting insurance & development companies for their liability in developing residential complexes within high-risk fire zones has the potential to create a more substantive changes in both land-use policy and wildfire mitigation policies since the defendants are much broader in scope as opposed to investor-owned utility companies.HurdlesThe most significant hurdle in winning against this new form of defendant is establishing a chain of decisions, routines, and practices that showcase the existence and extent of negligence on part of insurance companies when creating fire-risk assessment maps and furthermore illustrating how the ignorance and/or dismissal of these maps by residential development companies contributed significantly to the damage brought on by wildfires. I believe that the history of tobacco litigation in the United States can be quite instructive here. Referencing the recitals of the Master Settlement Agreement (MSA), we see the “bite”(bite as in the background of the agreement which made it so large) of the settlement in my view stems from the 40+ lawsuits by State against the tobacco companies–put alternatively, the settlement came not from the influx of numerous tort claims (though private lawsuits played a role) but rather from public entities themselves. However, it is fair to say that there is nothing necessarily insightful about proclaiming that the avenue towards a more fundamental battle related to wildfire litigation should stem from government bodies in the same way that tobacco litigation went forward. In other words what am I saying here? Well, I believe that unique to wildfire litigation is the robust community and ecosystem of plaintiffs’ attorneys make adjudicating wildfire claims on a more fundamental level (that is against developers and insurance companies) much more collaborative. In essence, I believe that the “bite” from wildfire could stem from the collaborative opportunities available precisely because the environment unique to wildfire litigation. --+Complications and way forward? Attorneys representing plaintiffs in wildfire proceedings often work on contingency, meaning they are not paid until the cases settle. The upside is a low barrier to entry for plaintiffs regardless of income, when you factor in something financially destabilizing, such as a wildfire burning down your house, the low barrier to entry is appealing. I believe more research specifically on the potential for negligence claims against development companies and insurance companies is needed. Nonetheless, I do believe in 10 or 20 years we are likely to see a surge in claims regarding liability around the built environments made available to people.Citations:1. Inverse Condemnation FactSheet? See https://www.counties.org/sites/main/files/file-attachments/inverse_condemnation_fact_sheet_league__csac.pdf 2. See Statement from Ricardo Lara, Insurance Commissioner in CA re: Moratorium on Insurance Coverage Drops following multiple seasons of wildfires in California URL: https://www.insurance.ca.gov/01-consumers/140-catastrophes/MandatoryOneYearMoratoriumNonRenewals.cfm. As mentioned in the essay, the moratorium on insurance coverage drops due to wildfire risk highlights the relationship between fire assessment maps and underwriting for homes in fire-zone areas.Other Resources Referenced:1. MASS TORT CLASS ACTIONS – PAST, PRESENT, AND FUTURE in NYU Law Review- Lahav, Alexandra D 1. Titles - H.R.7462 - 118th Congress (2023-2024): Wildfire Insurance Coverage Study Act of 2023-Rep. Waters Maxine [D-CA-43 1. Understanding Mass Personal Injury Litigation | RAND URL: https://www.rand.org/pubs/research_briefs/RB9021.html 1. Examining the existing definitions of wildland-urban interface for California-Kumar, Mukesh and OthersYou are entitled to restrict access to your paper if you want to. But we all derive immense benefit from reading one another's work, and I hope you won't feel the need unless the subject matter is personal and its disclosure would be harmful or undesirable. To restrict access to your paper simply delete the "#" character on the next two lines:
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