Cheryl Niquette and Jerry Schwartz stand in what remains of their dream home in Glide, Oregon. January 26, 2023 Beth Nakamura/Staff
PacifiCorp’s decision to settle comes after the utility lost a similar lawsuit in June for wildfires in other parts of the state.
The size and scope of Tuesday’s announced settlement is unprecedented in Oregon and caps three years of legal wrangling that has left many fire victims in financial and emotional limbo, unable to rebuild or move on from the devastation. The Archie Creek fire devastated communities along the North Umpqua River east of Roseburg, one of several massive blazes that broke out statewide amid the historic Labor Day 2020 windstorm.
Some 220 families and individuals sued PacifiCorp, Oregon’s second-largest electric utility, alleging the utility was negligent and responsible for causing the Archie Creek blaze that destroyed their homes and properties.
The $299 million settlement amounts to an average of about $1.35 million per family represented in the lawsuit, though their individual claims, and thus their payouts, vary substantially. Victims will pay attorneys’ fees out of their settlements, which typically amount to between 30 to 40% of the settlement amount in similar wildfire litigation, and portions of the settlement may be taxable. No money has changed hands yet.
For PacifiCorp, which announced the settlement in a regulatory filing first reported by Bloomberg, the agreement avoids a consolidated trial that was scheduled for Jan. 30 on behalf of the individual Archie Creek plaintiffs and seven timber companies. And it shields the company from potentially far larger jury awards that could have included non-economic and punitive damages.
In its filing, PacifiCorp said the settlement amounts are consistent with amounts previously estimated and established in accounting reserves for the Labor Day 2020 wildfires.
“PacifiCorp has settled and is committed to settling all reasonable claims for actual damages as provided under Oregon law,” the company said in a statement posted on its website. “These settlements are in addition to settlements with other individuals and businesses, and hundreds of insurance claims PacifiCorp settled where homeowners and businesses have received insurance payments for their real and personal property damages and alternative living expenses.”
The plaintiffs’ lawyers declined to comment on specifics but heaped uncharacteristic praise on the company for settling.
“I want to congratulate the new CEO and the General Counsel of PacifiCorp for stepping up and doing the right thing by their ratepayers who lost their homes during the Labor Day 2020 fires,” Mikal Watts, the plaintiffs’ co-lead counsel, said in a statement. “Today’s settlement is the result of one thing – good lawyers and good corporate leadership.”
In fact, plaintiffs’ lawyers in this and other wildfire litigation have long bashed the management team of the local subsidiary, Pacific Power, for being asleep at the switch before and after the fires broke out and for since pursuing a strategy of legal obstructionism instead of promptly settling with victims. They’ve sought legal sanctions against the company for seeking to withhold what it knew about the origins of the fires through a privileged investigation, denying access to key employees’ work and investigations after the fires, and limiting the questions they answered in depositions by asserting what plaintiffs alleged were expansive applications of attorney-client privilege.
Cindy Crane, a 28-year veteran with the utility, was appointed in September as the new chief executive of the holding company for Pacific Power and Rocky Mountain Power, PacifiCorp’s Utah-based subsidiary. Robert Julian, the other lead counsel for the plaintiffs, said Crane’s appointment marked a turning point in the settlement discussions.
PacifiCorp is part of Warren Buffett’s Berkshire Hathaway conglomerate. The company still faces numerous lawsuits related to the 2020 fires, including a trial scheduled for January for seven timber companies that lost property in the Archie Creek fire and whose claims were not part of Tuesday’s settlement.
The Archie Creek settlement also comes months after the utility lost a jury trial in Multnomah County for its role in four other wildfires that broke out around the state on Labor Day 2020. The jury found the company’s conduct was grossly negligent and willful, and awarded 17 named plaintiffs in the class action suit $90 million in damages, including non-economic and punitive damages.
PacifiCorp has vowed to appeal that verdict. Multnomah County Circuit Court Judge Steffan Alexander has scheduled three trials early next year that will determine damages for 20 additional plaintiffs and a group of timber companies in the suit, and he has ordered the company and more than a thousand remaining plaintiffs to enter a formal mediation process after those trials are complete – a process that could dramatically increase PacifiCorp’s financial liability in that lawsuit.
PacifiCorp said in another recent financial filing that “certain government entities” have also informed the company that they are contemplating legal actions. Total damages sought in lawsuits filed in Oregon related to the 2020 fires is about $8 billion, it said, excluding any doubling or trebling of damages included in the complaints.
PacifiCorp took the unusual step this fall of trying to financially protect itself from wildfire lawsuits going forward. It’s asked state regulators to limit its liabilities to only actual damages and prevent juries from awarding any future victims non-economic or punitive damages. No decision has been made.
— Ted Sickinger; [email protected]; 503-221-8505; @tedsickinger
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