A Perfect Firestorm – PG&E’s Saga of Negligence and the 2017 California Wildfires

//A Perfect Firestorm – PG&E’s Saga of Negligence and the 2017 California Wildfires

2017 saw some of the deadliest fires in the history of California, and of the entire United States. As more and more facts have come to the surface, mounting evidence suggests that PG&E, the major California power and gas supplier, is to blame for most, if not all, of these deadly fires. Injured homeowners and the families of the victims of these fires have begun to pursue claims against PG&E in court, and the state of California has opened its own investigation into PG&E to determine possible criminal penalties against the company. These penalties which could result in fines, and even prison time for at-fault parties, and lawsuits against PG&E could result in hundreds of millions or even billions of dollars of compensation for victims.

PG&E: A History of Failure

PG&E is no stranger to both allegations regarding its fault in deadly fires throughout the country and state, and for safety violations in general. Over the past thirty years, PG&E has been subjected to fines, penalties, and criminal action levied by federal agencies and numerous different states. The most recent fires, sadly, represent only a single chapter in an ongoing saga of negligence by PG&E. By way of example, in 1994, the so-called “Trauner Fire” or “Rough and Ready Fire” burned 500 acres in the town of Rough and Ready, destroying 12 homes and damaging 22 structures, including a historic school house. Soon after the fire, investigators discovered that a 21,000-volt power line had brushed against a tree limb that should have been maintained by PG&E, resulting in the fire. This incident was one of over 200 separate safety violations uncovered by investigators in a state investigation after the incident, leading to PG&E being convicted of 739 counts of criminal negligence in 1997. PG&E was similarly forced to pay $24 million in penalties to the state, along with an unknown amount of compensation to victims. Shockingly, and in connection with this incident, investigators discovered that PG&E had diverted $77.6 million from its tree-trimming and vegetation maintenance budget for other uses between 1987 to 1994, and further underspent its projected maintenance budget by $495 million, instead using this money to boost corporate profits.

The same pattern of negligence, underfunding of required maintenance, and continued diversion of funds to corporate profits continued. In 2003, a fire broke out a PG&E substation in San Francisco, causing 1/3 of all San Francisco businesses and residents to lose power. A California state investigation specifically noted that PG&E had failed to implement the safety and maintenance recommendations that had been imposed as a result of the Trauner Fire and related incidents. In 2008, PG&E was found at fault for a deadly gas leak resulting in a death and thousands of dollars in property damage; in 2010, a PG&E gas leak caused the death of 8 people and destroyed an entire neighborhood in San Bruno, California; in 2011 and 2014 two more gas-related explosions resulted in substantial damages and injuries; and, in 2015, the “Butte Fire,” resulting from vegetation coming into touch with PG&E equipment, resulting in 5 deaths, 921 homes and structures destroyed, and 70,000 acres destroyed. In total, PG&E was forced to pay billions of dollars in fines stemming from these and related incidents, and, in almost all cases, PG&E was singled out by state regulators as repeatedly failing to have implemented the required steps to maintain and properly monitor its equipment.

The 2017 fires are yet another example of PG&E’s broken corporate culture and habitual behavior of negligence. Instead of spending the substantial revenue it generates from its services (PG&E reported nearly $18 billion of revenue in 2016 alone), PG&E chose to divert this money towards corporate profits for its shareholders, and hefty bonuses for its executives (PG&E reported nearly $1.5 billion of profit in 2016). For example, in 2007, corporate whistleblowers found that PG&E planned to spend $5 million it had raised from residents to replace a segment of pipeline in San Bruno county that had been determined as being dangerous. In lieu of replacing the pipeline, PG&E repurposed the money, and ultimately chose to pay nearly $5 million in bonuses to PG&E executives in 2009. In 2010, as noted above, a deadly fire resulted from poorly maintained gas pipelines in San Bruno claimed lives and destroyed buildings. Doubtlessly other examples of PG&E’s mismanagement of its finances to focus entirely on corporate profit and paying its executives would exist if PG&E provided more transparency into its vast operations.

The California Public Utility Commission has classified PG&E’s behavior in these incidents as a “run to failure” strategy, meaning that PG&E systematically chooses to underfund its maintenance operations to increase profits, or changes the assessments and manner of evaluation of its infrastructure to make maintenance seem unnecessary. In lieu of maintenance, PG&E responds to catastrophic failures only after they occur, choosing to deal with these emergencies at the time in which they occur instead of proactively preventing them.

A Perfect Firestorm

As applied to the 2017 California fires, PG&E had both ample financial resources, and advance warning that its activities and equipment throughout the state created an extremely elevated risk of fire. Numerous reports generated by California agencies, citizen watchdog groups, and the federal government suggested that PG&E was aware of the dangers its infrastructure imposed, but did nothing. For example, in a landmark report in 2013, the Liberty Consulting Group prepared a detailed report for the California Public Utility Commission, finding numerous “significant safety issues” in PG&E’s behavior. Among other findings, PG&E was discovered to have over 100,000 miles of obsolete wire, with over 60 percent of this wire prone to imminent failure. Moreover, evidence suggests that PG&E never implemented strategies adopted elsewhere by other power utility companies in California to prevent wildfires. Specifically, PG&E restarts its electrical service in the case of a service interruption. Other utility companies, knowing that such so-called “reclosures” can lead to forest fires, have automatically programmed their systems to not restart when the threat of a fire is evident, such as in the summer. PG&E chose not to invest in the time and cost required to make this crucial and widely adopted safety improvement. In 2015 alone, there were some 3,500 unfilled PG&E repair and maintenance requests in the area of the 2017 North Bay fires, which included reports of downed power lines and vegetation coming into touch with electrical equipment. Evidence suggests that PG&E similarly refused or actively ignored its obligation to yearly inspect equipment in these areas, as it mandated by California law.

The specific conditions around in the 2017 fires were both expected, foreseeable, and not out of the ordinary. Years of drought, combined with recent heavy rains in the winter and spring of 2017 created dangerous conditions in which even small sparks might promote massive fires. Despite PG&E contractors servicing power equipment throughout the state, evidence suggests that PG&E failed to take steps to look for “Facility Protect Trees” (trees which may fall into power lines, causing service interruptions and leading to fires) throughout 2017 in many of the impacted areas. Moreover, these PG&E contractors were not trained or informed regarding the identification of such trees, their need for removal or pruning, or the procedures by which these trees would actually be removed. Although PG&E has, on numerous occasions, suggested that unprecedented storms and weather conditions preceded the fires, ample evidence suggests that the wind events and other weather at and around many 2017 California fires was well within expected ranges for the season, and, crucially, well within the tolerances to which PG&E’s utility equipment was legally mandated to handle.

Witnesses, and PG&E’s own reports on power failures shortly before many of these fires, confirm the presence of downed power lines, broken and unrepaired power infrastructure equipment, and exposure wires throughout the areas in which these fires would soon rage. Although the exact causes and origin locations of these fires will likely always remain unknown, the ample reports of service disruptions and eye-witness reports of downed equipment, combined with PG&E’s culture of safety violations, negligence, poor training, and continued diversion of funds towards corporate profits, create an extremely strong case for PG&E’s actions and inactions being the cause of these fires.

PG&E’s Obligations to California

PG&E’s duties towards California residents are quite clear. Like any entity—and, particularly, any utility company—PG&E owes a duty to California residents to install, construct, maintain, operate, inspect, and repair its electrical equipment. This duty includes reasonable protections against fires, such as by inspecting and repairing power equipment, and by inspecting and removing dangerous vegetation. A breach of these duties, such as by failing to maintain its equipment, or by failing to prevent vegetation from coming into contact with its equipment, creates a strong case for a negligence action. In a negligence action, injured Californians can sue PG&E claiming that PG&E breached its legal duties to California residents, that this breach resulted in damages, and that the damages were severe and worthy of compensation.

That PG&E breached its duties is abundantly clear. As suggested throughout, PG&E failed to conduct adequate, proper, and frequent inspections of its electrical equipment, both throughout the entire state, and, in specificity, in the areas impacted by the 2017 fires. It similarly failed to design, operate, repair, or monitor the transmission of electricity through this electrical equipment, such as by failing to instigate known safety suppression systems during the 2017 wildfire season. It did not monitor, report on, train, or actually remove dangerous trees or vegetation that PG&E actually knew of or, had it inspected its power equipment, should have known of that might cause a danger to human life and property. It failed to supervise its employees and contractors regarding the necessity of maintaining its equipment and monitoring for dangerous vegetation. Crucially, it failed to warn the public that its practices and behavior created a dangerous threat to human life and property.

California law is similarly clear on PG&E’s obligations. California Health and Safety Code §13009 imposes liability on anyone who “negligently or in violation of the law” causes a fire resulting in damage is liable for “suppression costs . . . and for the cost of providing emergency or rescue services.” Numerous other California statutes also impose fines, criminal penalties, and significant repercussion for entities, like PG&E, whose actions or inactions cause deadly fires. Doubtlessly, the results of the ongoing California investigation into PG&E will result in the levying of significant fines on the company.

More Than Just A Financial Cost

As a result of this negligence, billions of dollars’ worth of property and structures were damaged or destroyed. Tens of thousands of people were displaced, resulting in billions of dollars of lost revenue and relocation costs by businesses and citizens. Over forty people were killed, with thousands more seriously and permanently injured. All of these damages are direct and proximate causes of PG&E’s negligence and willful disregard for its obligations under the law. But for PG&E’s poor maintenance of its equipment and failure to remove dangerous vegetation, these fires would not have occurred, and the significant repercussions that have flown from the fires would not have resulted.

Some injured parties have also begun to pursue so-called punitive damages against PG&E. Beyond merely compensatory damages (which are intended to compensate for loss of property, money, and human life), punitive damages are damages levied by courts to punish for particularly egregious actions, such as action motivated by malice, or extreme and flagrant negligence. PG&E’s actions and inactions in these fires appears to many to be so egregious that punitive damages may be appropriate, in addition to the significant fines and other repercussions likely imposed by California state regulators. These damages could be up to triple the amount of damages obtained for compensation purposes.

The 2017 California fires are another, tragic example of PG&E’s warped culture of prioritizing corporate profits over the welfare of Californians. Lawsuits, such as many of those filled or to be filed in California courts, can attempt to compensate for the massive damages caused by these fires, though their complexity, and the legal issues at stake, require zealous attorneys capable of attacking one of California’s largest and most entrenched corporations. Hope remains for the tens of thousands of victims who are seeking justice, both in attorneys willing to fight for the rights of their clients, and in the state for aggressively pursuing actions against PG&E for its involvement in these deadly incidents.

Thompson Law Office’s Obligation is to Its Clients

Since the beginning of these tragic events, lawyers at Thompson Law Office, P.C. has been keeping up-to-date on all the news and conditions regarding these fires and PG&E’s involvement. Our hearts go out to all those who have suffered due to this neglect and we are working diligently to work with those affected to bring them the justice and compensation they deserve. If you or someone you know has been directly affected by the 2017 California Wildfires, please contact Thompson Law Office to schedule a free consultation.

By |2018-03-14T09:09:48+00:00January 14th, 2018|Wildfires & Utility Companies|

About the Author:

In 2005, Bobby graduating from New York Law School and was admitted to practice Law in New York and California. Since then, Bobby has built a successful practice in the shadow of San Francisco, San Mateo County. With the mentoring of his father Jim Thompson, a practicing lawyer in Kansas City, MO, Bobby has built a personal injury law firm that prides itself on "represents individuals harmed by the irresponsible and careless conduct of others." Bobby maintains membership in several prominent Lawyer, Attorney, and Bar Associations in California. When he is not at trial, he is volunteering pro bono legal services with the Bar Association of San Francisco.