Embattled California utility PG&E is scheduled to appear in bankruptcy court Tuesday Nov. 19, to make an argument that could lower its estimated $30 billion in liabilities.
PG&E’s power grid infrastructure has been blamed for wildfires in 2017 and 2018. Under the legal concept of “inverse condemnation,” California homeowners can sue the utility for damages, and not need to show that the utility company was negligent.
“It’s the landowner that brings the claim,” Shelley Ross Saxer, law professor at Pepperdine University, said, “to say they are entitled to just compensation.”
PG&E is challenging inverse condemnation, arguing that it should only be on the hook if it can pass its liability costs along to the public in the form of higher rates, which the state regulators have not allowed it to do. If the utility wins the argument, it could reduce its liabilities substantially.
“From their perspective, yes, having the monkey of inverse condemnation off your back, that would be very nice,” Robert Thomas, an attorney with the Honolulu firm Damon Key Leong Kupchak Hastert, said.
On the other side of the argument, fire victims and insurance companies argue utilities should pay for the problems their equipment causes.
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