PERI MISHKIN—On January 7, 2025, two of the most destructive wildfires in California history ignited, causing nearly 40,000 acres to fall victim to the fires, entire neighborhoods reduced to ash, 27 lives to be lost, and more than 12,300 structures destroyed. Communities stand united in grief as thousands of displaced residents have no homes to return to. While firefighters have worked tirelessly to make progress on some fronts, the two largest—the Palisades and Eaton fires—are not yet fully under control. The Eaton Fire has already caused widespread devastation to the Pasadena area. As of January 25, 2025, the Los Angeles County Fire Department reports that the wildfire has scorched over 14,000 acres and destroyed at least 9,400 homes and buildings. While firefighters have managed to contain 95% of the fire, the danger is far from over.
As the damage continues to unfold, investigators are working diligently to determine the cause and origin of the fires. While no official conclusions have been reached, the first of several lawsuits, filed on January 13, 2025, was brought on behalf of homeowners, renters, evacuees, business owners, and others suffering from personal injury, property loss, and emotional distress due to the Eaton Fire. The complaint alleges that the Southern California Edison Company acted negligently by failing to properly maintain its power lines and other equipment, and that this failure contributed to the ignition of the Eaton fire. The plaintiffs allege that Edison neglected to properly maintain its electrical infrastructure, creating “an inherent risk and danger of fire to private property,” and failed to comply with local regulations regarding vegetation management. They claim that Edison disregarded warnings from the National Weather Service the day before the Eaton Fire began by failing to de-energize its transmission power lines on the night of the fire. Additionally, the plaintiffs accuse Edison of failing to maintain and replace its overhead electric facilities in a safe manner, violating Public Resources Code § 4292. The plaintiffs seek damages for property losses caused by the raging fires.
California has a history of catastrophic wildfires linked to electric utility equipment operating during windstorms. In 2017 and 2018, Edison’s equipment was blamed for igniting wildfires in the Los Angeles area, resulting in estimated losses of $9.9 billion. In 2019, PG&E Corporation—the state’s largest utility—was forced to file for Chapter 11 bankruptcy after facing a tidal wave of lawsuits tied to multiple deadly northern California fires blamed on its wires. Following PG&E’s bankruptcy, a $21 billion utility fund was established to provide financial protections to California’s large investor-owned power companies.
Given these circumstances, a judge ordered Edison to preserve data, equipment and evidence related to the Eaton fire, expressing concerns that the company could destroy materials connected to the fire. A spokesperson for Edison defended the company and said that the equipment and data were already being preserved, and that the opposing attorneys were creating a “false narrative.” Also, in an interview with Bloomberg Television, Pedro Pizarro, CEO of Edison International, further defended the company’s operations in relation to the Eaton Fire, stating that their telemetry data showed no indication of any electrical anomalies leading up to the fire. He emphasized that, typically, when a fire originates across infrastructure, there is a noticeable drop in voltage. According to Pizarro, Edison’s analysis revealed no such signs of voltage fluctuation, suggesting that their electrical systems were operating normally before the fire started. However, the plaintiffs allege in the complaint that the very operation of the electrical system as normal caused the fire to ignite because Edison did not de-energize its transmission power lines, despite warnings from the National Weather Service. In this context, Pizarro’s statement seemingly confirms that the electrical systems operated during a time when they were vulnerable to sparking a fire, given that the transmission lines ran near dry, highly combustible vegetation, and conditions were primed for ignition.
Under California law, electric utilities can be held liable for property damage caused by fires sparked by their equipment, even if they are not found negligent. This principle was solidified in Barham v. Southern California Edison Co. (1999), where the courts clarified that public utilities could be held liable under the doctrine of inverse condemnation, allowing property owners to seek compensation without proving negligence. California has provisions that allow for a utility to remain financially healthy even if it is found liable for a wildfire. So, if Edison is found liable for the Eaton fire, it could dip into the state’s $21 billion utility wildfire insurance fund. Pizarro noted that if Edison’s actions were deemed imprudent, the company’s shareholder liability would be capped at $3.9 billion under state regulations. The outcome of this case could not only shape the future of California’s utility regulations but also determine the extent to which those affected by the fire will receive the justice and compensation they so desperately need.