Earlier this week, we reported that a San Francisco trial court had heard arguments that Pacific Gas and Electric could not be liable for damages resulting from the Northern California wildfires under an inverse condemnation theory.
Well, here's the court's written Order Overruling PG&E's Demurrers which the court made available yesterday. The crux of the court's rationale is that PG&E hasn't shown that it will not be able to spread any damage judgment to the (its) public:
Even if PG&E were right that a privately-owned public utility will be unable to recoup its losses through rate increases eviscerates a plaintiff's right to inverse condemnation, I would overrule the demurrer. Taking the PUC decision at face value, the loss spreading rationale may be satisfied in this case so long as PG&E acted as a "prudent manager." Whether PG&E acted as a "prudent manager" is disputed -- PG&E of course contends it will eventually show that it met that standard. I cannot say that as a matter of law that there will be no loss spreading in this case. Cf. Pacific Bell, 208 Cal.App.4th at 1407 (noting absence of any evidence that the commission would not allow SCE to pass on its damages liability).
Slip op. at 5-6 (emphasis original).
The court also denied PG&E's argument that to hold it liable for inverse condemnation would be a taking (we're feeling a bit like Inception here, with takings-within-takings). We'll let you read that part of the Order for the reason why. (Hint: this is on demurrer.)
Actually, just go read the court's entire order -- it isn't very long (only 9 beautiful pleading paper pages) -- and it's a good read.
More from Courthouse News on the decision here ("PG&E Must Face Claims in Wine Country Wildfires").