In Pacific Gas and Electric Co. v. Superior Court, No. C085308 (July 2, 2018), there’s no discussion of the inverse condemnation claims brought by property owners against Pacific Gas and Electric for the devastating 2015 Butte wildfire. But since we’re following the progress of all wildfire cases, we thought you might be interested in this one anyway.
The issue was pretty straightforward: could the utility be held liable for punitive damages to the more than 2,050 property owners under California law for a massive wildfire which started “when a gray pine (the subject tree) came into contact with one of PG&E’s power lines?” Slip op. at 2. The master complaint alleged inverse condemnation as well as negligence, nuisance, trespass, and related.
The Superior Court denied PG&E’s motion for summary judgment, but the Court of Appeal issued a writ of mandate and held that given the undisputed facts, the plaintiffs could not get to the jury on punies.
We won’t detail the rest of the opinion, leaving that task to you. But here’s the short story. The burden on the plaintiffs is to prove “oppression, fraud, or malice” by clear and convincing evidence. That’s pretty daunting, since to the court this didn’t seem like one of those cases where the defendant acted with malice, but was unintentional. “We have found no case considering an award of punitive damages in circumstances similar to those presented here.” Slip op. at 12.
The master complaint alleges that “defendants” failed “to properly train and to supervise employees and agents responsible for maintenance and inspection of the distribution lines and/or vegetation areas near those lines.” The master complaint further alleges that PG&E has a pattern and practice of disregarding public safety, as demonstrated by other fires attributed to PG&E’s power lines, various regulatory actions against PG&E by the California Public Utilities Commission, and the rupture of a PG&E gas line in San Bruno in September 2010. According to the master complaint, “The deaths, injuries, and damage occasioned by the Butte Fire are the result of the ongoing policies, practices, and/or financial decisions made by [PG&E] [which has] acted with a conscious disregard for public safety, and created a corporate culture that places a priority for profits above safety in their business operations.”
Slip op. at 13. The court concluded that PG&E’s evidence about its vegetation management and routing patrol programs carried its burden to show the “nonexistence of a triable issue of material fact on the issue of malice.” Slip op. at 21.
The burden then shifted to the plaintiffs to show that PG&E’s actions were “reprehensible, fraudulent or in blatant violation of law or policy.” Slip op. at 24. Mere carelessness isn’t enough generally, and the plaintiffs didn’t overcome that problem here:
Even viewing the evidence as favorably to plaintiffs as we can, plaintiffs fail to demonstrate the existence of a triable issue of material fact with respect to malice. Plaintiffs argue that PG&E evinces a cavalier attitude towards public safety, which justifies an award of punitive damages. They point to numerous potential shortcomings in PG&E’s risk management controls and fire mitigation efforts, raising thought-provoking questions about the efficacy of the risk and compliance committee’s reporting structure, the wisdom of the decision to extend the routine patrol cycle in 2013 and loosen hiring standards for seasonal CEMA inspectors, the soundness of the company’s audit methodologies and incentives for reducing patrol workload, and the timeliness of Quantum Spatial’s delivery of LiDAR data. But these criticisms, whatever their merits, do not amount to clear and convincing proof that PG&E acted with malice. At most, plaintiffs’ evidence shows “‘“mere carelessness or ignorance,”’” which is insufficient to establish malice.
Slip op. at 24-25.
We’ll keep on tracking these cases, so stay tuned.
Pacific Gas and Electric Co. v. Superior Court, No. C085308 (Cal. App. July 2, 2018)