Law Review: PG&E dodges bullet from Butte Fire
July 26, 2018
The Butte Fire started on September 9, 2015, near Butte Mountain Road in Jackson, California, spreading rapidly through drought-stricken Amador and Calaveras Counties.
By the time the blaze was contained three weeks later, the fire had consumed more than 70,000 acres, destroyed 1,000 structures and claimed two lives.
The fire started when a pine tree came into contact with one of PG&E's powerlines.
More than two thousand plaintiffs sued PG&E and other defendants, with the cases being consolidated in Sacramento County Superior Court.
The Complaints argued PG&E and tree cutting contractors it hired failed to maintain vegetation around powerlines which resulted in ignition of the wildfire.
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The legal claims against PG&E were for negligence, wrongful death, nuisance, premises liability, trespass and a few other claims, but most importantly for our column, the plaintiffs asked for punitive damages.
PG&E unsuccessfully tried to get the punitive damage claim dismissed, and appealed.
The importance of the Butte Fire case is especially critical. The ruling on the Butte Fire will be precedent for the Wine Country cases, with lawsuits being filed as we speak. Last summer's catastrophic fires in the wine country killed 44 people, over 56,000 acres were burned and thousands of homes were destroyed.
For a plaintiff to prevail on a punitive damage claim, he or she must establish "malice, oppression or fraud by clear and convincing evidence." Evidence "so clear as to leave no substantial doubt … and … sufficiently strong to command the unhesitating assent of every reasonable mind."
Malice is sometimes defined as "conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscience disregard of the rights or safety of others"… "despicable conduct" is conduct "so vile, base, contemptable, miserable, wretched or loathsome that it would be looked down upon and despised by most ordinary decent people." That is a colorful and high standard.
In its analysis the Third District Court of Appeal noted that because punitive damages are imposed for the sake of example and by way of punishing a defendant, they are typically awarded for intentional torts in contrast to mere negligence.
The plaintiffs put on evidence that PG&E essentially hired unqualified tree cutters and other contractors to protect their lines, in particular a gray pine that came into contact with PG&E's powerlines.
PG&E countered with evidence that it devotes substantial resources to vegetation management programs intended to mitigate the risk of wildfire, and hires contractors to conduct routine patrols.
The Court of Appeal ultimately ruled the evidence was inadequate to impose punitive damages on PG&E whose acts were not found to be "reprehensible, fraudulent or in blatant violation of law or policy…punitive damages are proper only when the tortious conduct rises to levels of extreme indifference to the plaintiff's rights."
"There is no evidence that PG&E acted maliciously in setting policies designed to minimize the risk of wildfire or engaging contractors to assist in the company's fire mitigation efforts."
The claims against PG&E did not amount to clear and convincing proof that PG&E acted with malice, rather at most "mere carelessness or ignorance."
The impact of the Butte Fire punitive damage decision on the Wine Country fire cases, which will likely be appealed to the California Supreme Court, cannot be understated.
Jim Porter is an attorney with Porter Simon licensed in California and Nevada, with offices in Truckee and Tahoe City, California, and Reno, Nevada. Jim's practice areas include: real estate, development, construction, business, HOA's, contracts, personal injury, accidents, mediation and other transactional matters. He may be reached at email@example.com or http://www.portersimon.com.