Case Status
On April 11, 2008, San Diego Fire Victims Lawyers (SDFVL) filed a lawsuit on behalf of almost 300 people, including, growers, ranchers, business owners, and individuals. Additional people have joined since and are continuing to join. SDFVL has thus filed an amended lawsuit naming the new people who have joined and they will continue to do this from time to time as more people join. Various groups of lawyers, including from Los Angeles, have filed "class action" lawsuits in the names of five, or so, individuals, including a renter. These lawyers have tried to take control of the case. One group of class action lawyers filed a motion with the Court to combine all lawsuits against SDG&E and make the "class action" lawyers the "lead" lawyers. SDFVL and other lawyers zealously opposed the motion. During the week of June 2, 2008, San Diego Fire Victims Lawyers and its electrical engineering and utility consultants and experts participated in all-day inspections of the electrical lines at the point of origin of the Witch Creek fire. On June 20, 2008, the Judge ruled on the "class action" lawyers' motion to combine all the cases and to appoint them as the "lead" lawyers. The Judge denied the motion. The Judge commented that there are over 300 people represented by SDFVL. The Judge directed the attorneys for the various groups (individuals, insurance companies, the State of California and other public entities, and SDG&E) to meet to work out a plan for the orderly conduct of the case. The "class action" lawyers will not be allowed to take control of the case. On July 9, 2008, Cal Fire released its complete report, finding that the Witch Creek, Guejito, and Rice Fires were all caused by SDG&E. For the full report, click here: CAL FIRE - Fire Protection - Red Sheets Court Refuses to Approve Settlement by SDG&E and Insurance Companies at Expense of Fire Victims
Insurance companies that provided homeowners policies and other policies have paid a reported $1.5 billion to policy holders. The insurance companies sued SDG&E to get this money back and initially reached a settlement agreement with SDG&E under which SDG&E would pay $900 million to settle the insurance company claims—with a catch. The catch was that SDG&E receive an assignment of the insurance companies’ rights and be allowed to assert against fire victims an offset for the full amount the insurance companies paid even though SDG&E is only paying a portion of the amount. The agreement was also conditioned on Judge Strauss approving the full offset. Needless to say, we opposed the motion. Click here to veiw SDFVL's opposition. SDG&E and the insurance companies argued that fire victims should not be allowed a “double recovery.” We pointed out long-standing law that the person who pays for insurance should get the benefit, not a wrongdoer such as SDG&E who caused the harm. On May 7, 2009, Judge Strauss denied the motion by SDG&E and the insurance companies.
SDG&E Settles with Insurance Companies But SDG&E and Sempra Have Plenty of Resources to Pay Fire Victims’ Claims
After Judge Strauss denied approval of the settlement between SDG&E and the insurance companies, the insurance companies settled for less money, $686 million, but with the prospects for the insurance companies to receive up to the original $900 million depending on many conditions. The settlement is being paid out of SDG&E’s own insurance of $1.1 billion. This has raised questions about whether SDG&E will have enough insurance to pay the remaining claims of individual fire victims and claims by the State of California and City and County of San Diego. But it doesn’t matter. Fire victims are not limited to SDG&E’s insurance. And SDG&E had profits of $339 million in 2008 while its parent company had profits of $1.1 billion in 2008. SDG&E and Sempra have plenty of money to pay all claims. They have told the press that they will ask for a rate hike if they have to pay amounts over their available insurance. We believe this is to avoid having their stock price fall because of the potential for payment of claims to cause earnings to fall.
Court Rejects Class Actions
Two class actions have been pending for many months. We opposed the class actions. The court hearing on whether to approve the class actions has been delayed many times but finally took place on June 26, 2009. One class action was to prove SDG&E’s responsibility for the fires and then leave it to class members to go hire lawyers to prove their damages. Judge Strauss rejected this so-called “liability only” class action as unnecessary because we are already proving SDG&E’s responsibility. Click here to veiw SDFVL's Oppostion the Liability Only Class. The other class action was on behalf of those who did not suffer any property losses but who were evacuated; the purpose was to recover food and lodging expenses during the period of the evacuation. Click here to veiw SDFVL's Oppostion the Evacuee Only Class. Judge Strauss rejected this class action, too. Both class actions were delaying the progress of the case and getting to trial. Now that Judge Strauss has rejected the class actions, we can proceed toward a quicker resolution of your claims.
SDFVL Files Motion to Find Out About SDG&E’s Knowledge of the Fire Danger and Its Failure to Budget Money to Maintain Power Lines Despite the Danger
SDFVL lawyers continue to staff and serve as coordinators of the key discovery groups, including the Witch-Guejito Policies, Budget and ISO (PBI) Discovery Group. The PBI Discovery Group asked SDG&E for all information exchanged between SDG&E and its insurance companies, as part of SDG&E obtaining insurance, concerning the fire danger posed by SDG&E power lines. We believe the information will show that SDG&E was aware of not only the risk of fires from its equipment but the extent of the devastation such a fire could cause in San Diego. At the same time, we believe, SDG&E has continually cut budgets to maintain its equipment in a safe manner, instead making a financial decision not to upgrade equipment until after a disaster, like it did with the power lines that caused the Witch Creek Fire. SDG&E has refused to provide the information. The PBI Discovery Group has thus filed a motion to ask Judge Strauss to order SDG&E to furnish the requested information. Click here to veiw the PBI group's motion to compel discovery from SDG&E. SDG&E Loses Bid to Shut Off Power in the Back Country
On September 10, 2009 the CPUC rejected SDG&E’s application to approve shutting off power in the back country during Red Flag warning conditions. SDG&E argued that shutting off power is necessary to prevent fires during Red Flag Santa Ana conditions. It isn’t. All SDG&E has to do is follow reasonable installation and maintenance practices which it has consistently failed to do. SDG&E installed the Witch Creek power lines too close together in violation of CPUC clearance standards and automatically re-energized the lines three times when the lines faulted before the fire started in violation of safety practices. SDG&E allowed the Guejito power lines to be too close to a Cox communication line in violation of CPUC clearance standards. And SDG&E ignored the recommendation of its own tree trimming contractor to trim the tree that broke and fell on the Rice Canyon power lines causing that fire. Court Orders SDG&E to Provide Information Concerning Its Knowledge of Fire Danger, Budgeting for Power Line Maintenance, and Red Flag Warning Procedures
One of the discovery Groups headed by SDFVL is called the Policies, Budget and ISO (“PBI”) Discovery Group. The PBI Discovery Group is responsible for obtaining, through discovery, information from SDG&E concerning SDG&E’s budgeting for power line inspection, maintenance and upgrading, SDG&E’s compliance with maintenance regulations, and its procedures during Red Flag (fire danger) warnings by the National Weather Service. In addition to serving formal discovery demands on SDG&E for this information, the PBI Group also demanded information concerning the assessment by SDG&E and its insurance companies of the risk of power line fires and the extent of property damage, injury and loss of life they determined would reasonably result from a power line fire during Santa Ana winds.
SDG&E steadfastly refused to provide this information, prompting SDFVL, as Coordinator of the PBI Discovery Group, to file a motion with Judge Strauss. On September 11, 2009, Judge Strauss heard the PBI Group’s motion and ordered SDG&E to provide the information within two weeks. Judge Strauss agreed that the information the PBI Group seeks is relevant to SDG&E’s knowledge of the risk of power line fires, the likely consequences of such fires, and the reasonableness of SDG&E’s maintenance budgeting in light of the known risk, and therefore, to negligence and punitive damages.
State Assemblyman and Chairman of Utilities & Commerce Committee Resigns After Inadvertent Disclosure of Tryst with SDG&E/Sempra Lobbyist
On September 11, 2009, various media outlets reported the resignation of Yorba Linda State Assemblyman Mike Duvall after he detailed his sexual tryst with a woman identified by news agencies as an SDG&E/Sempra lobbyist. Click here for San Diego 6 News story. San Diego 6 News quotes a “capitol staffer” as saying the Assemblyman’s relationship was “one of the worst-kept secrets in Sacramento” and reported that SDG&E/Sempra hired the lobbyist two months after Duvall became Chairman of the Utilities and Commerce Committee SDFVL Leads Discovery Charge with Allies and Obtains Incriminating Testimony from SDG&E Witnesses
SDFVL and allied attorneys have pursued SDG&E for written information and documents and have thus far taken dozens of depositions of SDG&E employees. SDG&E employees have been so thoroughly coached to deny knowing what caused the fires that they say this before even being asked. Click here to see for yourself a few excerpts of the actual depositions. But SDFVL and its allies have obtained audio files of conversations among SDG&E field personnel, including on the very day of the fires, with comments that the power lines caused the fires—such as this one: “I am pretty sure power lines are involved, we caused this one possibly and we’ll be paying for it and our lawyers will be busy for the next couple years.”
SDG&E employees have also been coached to remember virtually nothing. But the audio files include a call by the troubleman SDG&E dispatched when the Witch Creek lines tripped the first time—he told SDG&E to send out a patrol to see what caused the lines to trip. Had SDG&E done this, the Witch Creek Fire—the largest of the fires—would never have happened. Questioned at length about saying SDG&E should patrol the line, the troubleman purported not to remember what he said. So SDFVL lead attorney Terry Singleton played the audio file back for him right there in the deposition. Click here to see the troubleman's reaction.
The audio files also show SDG&E’s callous attitude. One couple died in the fires. Law enforcement personnel found their charred remains and, next to them, a downed line. So they called SDG&E to send someone to the scene who then called in and reported, “dude, they were burnt to [expletive] crispy critters.” SDG&E and Cox Agree in CPUC Proceedings to Improve Power Line Fire Safety and SDG&E Agrees to Upgrade System to Withstand 85 MPH Winds
The CPUC just released signed Settlement Agreements with SDG&E and Cox under which SDG&E and Cox have agreed to improve fire safety standards. SDG&E has agreed to conduct additional training in vegetation management, equipment clearance standards, and recognition of hazards to ensure that power lines and equipment meet required clearance standards between power lines and clearance distances from communication lines and trees, as well as other safety standards. SDG&E is also agreeing to increase system safety in high fire danger areas, including by designing power lines to withstand winds up to 85 mph. (Had SDG&E done this, the Witch Creek and Guejito Fires would not have happened, as the winds were well under 85 mph.) SDG&E is also agreeing to improve coordination with communication companies, including Cox which is also agreeing to improve its inspection and safety monitoring. Try as SDG&E might to deny it, this is a powerful admission that SDG&E’s standards were inadequate and did not comply with reasonable safety practices. Click here to read the Settlement Agreements. SDFVL Is Mediating and Settling Cases and Has Obtained an Agreement with SDG&E for Binding Mediation Mediation
Last fall, we began mediating and settling cases with SDG&E on an individual basis. We are presenting each person’s/family’s case individually because everyone’s damages are unique and different, and it would be a disservice to our clients to lump everyone together in one settlement fund as some other attorney groups are doing. Mediation is a process in which our and SDG&E’s evaluations of a client’s damages are exchanged in a confidential setting before a mediator (a retired judge or attorney), who helps the parties settle the case. We have been working with three mediators and more mediators may be added. So far, we settled over 80% of the cases we have taken to mediation, but resolution of some cases took more than one session. Both sides had to agree, and some cases did not settle.
Voluntary Binding Mediation
We considered the process too time consuming and wanted to present our clients with the option of a quicker process that does not require both sides to agree. So, together with a few other attorney groups, we negotiated with SDG&E a binding agreement, approved by the Court, which permits our clients to enter “binding mediation.”
Under the agreement (click here to read the full Stipulation re Mediation Protocol and Order), fire victims represented by us in all but the largest and most complex cases may choose to have their cases resolved by “binding mediation.” In this process, a fire victim must present SDG&E with all the information necessary to evaluate his or her damages and make a demand for settlement. SDG&E then is under a time limit to respond with an offer. If the parties cannot informally settle, a half day session is held before a mediator. If the parties are unable to settle by the end of the half day session, the mediator decides the amount of the settlement, which is final and binding on all parties. SDG&E must then pay the amount no later than 30 days after the mediation. To our knowledge, this process is unprecedented in the country in this type of case, and it offers fire victims and SDG&E the ability to more speedily resolve numerous cases.
At this point, the binding mediation agreement applies to victims of the Witch and Rice fires. In addition, we were able to expand the mediation protocol to include victims of the Guejito fire who have legal “preference” - over the age of 70 and/or in poor health or certain “hardship cases”. See page 5 lines 5-23 of the above referenced Mediation Protocol and Order for an explanation of the Guejito claims eligible for mediation now. The remaining claims arising from the Guejito fire are excluded for now.
The claims of fire victims with large and complex cases are continuing to be mediated on a non-binding basis, where both sides must agree to a settlement. People who do not want to have binding mediation can also enter non-binding mediation if they choose.
Guejito Fire Victims
For now, SDG&E refuses to mediate claims of Guejito fire victims who do not have “preference” cases or qualify as a “hardship” case. SDG&E’s reason is solely tactical and, we think, unfair. SDG&E blames Cox for the Guejito fire; Cox blames SDG&E. It’s quite a sight: two utilities pointing fingers at each other in order to avoid responsibility for the devastating fire they both caused. The evidence we have developed so far in discovery indicates both SDG&E and Cox are responsible for the Guejito fire. SDG&E and Cox can read the same evidence, and we think both utilities should wake up, accept responsibility, and mediate and fairly settle the claims of the victims of the Guejito fire now, not later. If the utilities do not come to their senses, a series of trials anticipated to occur in the first half of 2011 will resolve the question of their compared responsibilities.
Finalize Your Discovery & Decide About Binding Mediation
We are excited about the binding mediation process and the progress we are making in non-binding mediation. Those of you who have not completed your questionnaires and provided documents are encouraged to do so as quickly and as thoroughly as possible so you can enter mediation as well. For those of you who have done so, we are in the process of developing settlement demands for your approval and will contact you when your turn for mediation approaches. Should you have any questions, please call one of our attorneys.
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