The ruling could affect PG&E’s potential responsibility to reimburse CalFire and FEMA for their costs in combating numerous Northern California wildfires that have been traced to the utility’s power lines.
(TNS) — Corporations can be held legally responsible for the state’s costs in investigating and fighting fires that are carelessly started or spread by corporate employees, a state appeals court ruled Monday.
There has been no dispute that corporations can be required to pay compensation for deaths, injuries and property damage from fires caused by their employees, the source of at least $18 billion of the debt that drove Pacific Gas and Electric Co. into bankruptcy. But corporate responsibility for the state’s firefighting expenses is a separate issue governed by state laws, whose meaning is a subject of disagreement among appellate courts.
A state appeals court in Sacramento ruled in 2017 that the laws did not authorize the California Department of Forestry and Fire Protection, or Cal Fire, to recover costs from corporations whose employees may have negligently caused wildfires. On Monday, the Second District Court of Appeal in Ventura disagreed and said corporations act through their employees.
A 1939 state law allows Cal Fire to recover firefighting costs from “any person” who negligently sets fire or allows a fire to be set or to spread onto others’ property, the court said. The law — expanded in 1984 to include the costs of investigating a fire — defines “any person” to include a company or corporation.
State laws “expressly permit the recovery of fire suppression and investigation costs from a corporation ... when one of its agents or employees ‘negligently, or in violation of the law, sets a fire, allows a fire to be set, or allows a fire kindled or tended by (them) to escape onto any public or private property,’” Justice Martin Tangeman said in the 3-0 ruling, quoting the laws.
“The electric utility did not negligently construct and maintain its power lines; its employees did,” Tangeman said, referring to other cases. To hold corporations liable for firefighting costs only when they directly caused the fire, as the company argued in this case, would be “a legal impossibility,” he said.
The ruling could also affect PG&E’s potential responsibility to reimburse CalFire and the Federal Emergency Management Agency for their substantial costs in combating numerous Northern California wildfires that have been traced to the utility’s power lines.
The appeals court allowed Cal Fire to proceed with a suit against a corporation, Presbyterian Camp and Conference Centers, over the Sherpa Fire, which burned 7,500 acres in the Santa Ynez Mountains in Santa Barbara County in June 2016.
The fire started in the corporation’s camp and conference center. When a chimney malfunctioned and filled a cabin with smoke, the court said, an employee took a burning log from the fireplace, carried it outside, and accidentally spilled embers onto dry vegetation, igniting the fire. An investigation also found that the corporation had failed to properly maintain the chimney, to fully clear dry vegetation or to inspect and maintain fire safety devices, the court said.
Cal Fire sued both the corporation and its employee to recover more than $12 million in costs of combating the fire and investigating its cause. The ruling allows the agency to hold the corporation responsible for negligence by the employee.
Cal Fire spokeswoman Alisha Herring said the agency was pleased that a corporation can be held “responsible under the laws for the acts of its employees and agents.”
Lee Roistacher, a lawyer for Presbyterian Camp and Conference Centers, said it was reviewing the ruling and considering its options. The corporation could seek review by the state Supreme Court, which often takes up cases to resolve disagreements between lower courts.
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