Southern California Edison Settles 2017 Wildfire, 2018 Mudslide Claims for $1.1 Billion

Firefighters successfully rescued a 14-year-old girl (right) after she was trapped for hours inside a destroyed home in Montecito. (Photo courtesy Santa Barbara Fire Department)

(CN) — Southern California Edison will pay over $1 billion to settle litigation over the 2017 Thomas and Koenigstein fires and subsequent mudslides that followed in the community of Montecito, the utility giant announced Wednesday.

SCE did not acknowledge liability in the settlement, although its equipment sparked the massive wildfire.

The settlement Edison relates to subrogation plaintiffs in multiple lawsuits filed against the utility over the Thomas and Koenigstein fires and the 2018 Montecito mudslides. The plaintiffs include insurance companies and financial institutions who now own claims stemming from the disasters.

The Thomas Fire burned nearly 282,000 acres across multiple counties in late 2017, killing two people and destroying over 1,000 structures. Heavy rain the following year on the fire scar led to a mudslide above the community of Montecito in Ventura County that killed 21 people when debris flowed over homes.

In March 2019, fire investigators determined that SCE’s equipment sparked two spot fires that became the massive wildfire.

The cities of Malibu and Calabasas sued the utility, as did Los Angeles and Ventura counties and other entities in the path of the wildfire that burned up to the Pacific Coast. This past November, 23 public entities agreed to a $360 million settlement with SCE, which did not acknowledge wrongdoing or liability in that case either.

On Wednesday, SCE announced it reached an agreement with all the holders of subrogation claims from the fires and mudslide. The agreement does not extend to any individuals suing the utility company and any claims from the Rye Fire, which burned at the same time as the Thomas Fire.

The utility will also pay for any future claim payments made by policyholders up until July 15, 2023, up to a certain cap.

In a statement, CEO Pedro Pizarro of Edison International — SCE’s parent company — said while other claims and potential claims related to the 2017 fires and 2018 mudslide are pending litigation, “SCE has reached settlements with several hundred individual plaintiffs in litigation arising from these events. The company continues to explore reasonable settlement opportunities with other parties.”

SCE says it will receive an investment from its parent company pending future settlements and claim payments and seek reimbursement from the roughly $843 million remaining from its wildfire insurance for the fires and mudslide.

Attorney Craig Simon with Berger Kahn, co-lead counsel in the ongoing litigation being coordinated in LA Superior Court for the subrogation plaintiffs, called the case a “hard-fought battle” and credits LA County Superior Court Judge Daniel Buckley for overseeing the many lawsuits stemming from the fires and mudslides.

“It’s a fair resolution for both sides,” Simon said by phone Wednesday.

The settlement does not resolve the many individual lawsuits filed against SCE, which destroyed homes across three counties.

SCE is also facing multiple lawsuits in LA Superior Court stemming from damage caused by the 2018 Woolsey Fire, which burned nearly 97,000 acres. In October 2019, SCE said its equipment likely sparked that fire, but the cause remains under investigation.

SCE did not immediately respond to questions about the size of the class that will receive the $1.16 billion settlement agreement.

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