You may have read of SCE’s latest ploy, the announcement of a “fund” to “fairly compensate” victims of the Eaton Fire. Don’t be fooled. Instead, this is a tactic commonly used by utility companies to delay trial dates and pay pennies on the dollar in lieu of a fair settlement process.
Here is our analysis for you:
THIS IS NOT A SETTLEMENT
First, this is not a settlement. SCE cannot announce its formation of a fund and unilaterally resolve all the claims against it on its “take it or leave it” terms.
This is SCE’s attempt to “pick off” a number of claims early on, to save SCE money.
If SCE wanted to resolve these cases like it has in other fires, it would enter into an agreed-upon Resolution Protocol to resolve victims’ claims – not try to dictate what IT believes is a “fair” process.
SCE CANNOT BE TRUSTED
You simply cannot trust SCE. They are the same outfit that burned down your homes, burned you out of your rental units, inflicted serious smoke and ash, and caused mountains of emotional distress – all because they failed to spend the requisite money on wildfire remediation BEFORE the fire, and failed to power down on the day of the fire.
At the end of the day it’s really as simple as this: How can any victim possibly trust SCE when they made $1.7 billion in profit in 2024 and $1.6 billion in 2023, paid healthy bonuses and compensation to their C-suite, but have failed to adopt the wildfire remediation necessary to avoid these fires, or even to power down on the day of the fire?
Those facts alone tell you that this fund is being adopted by SCE to save SCE money – not to help the victims or pay a fair settlement value for the substantial damages they’ve caused (both economic and noneconomic).
SCE has its best interests in mind, NOT your best interests.
THE DETAILS
Additionally, SCE’s supposed fund is woefully lacking in detail. There’s good reason for that: Like past utility “funds” set up to end-run the litigation process and avoid paying fair compensation to victims, it will be designed to vastly underpay the victims their true legal damages in a lawsuit.
For example, the last utility-designed fund paid roughly 20-30 cents on the dollar in comparison to mediated cases. Below are a few examples of how the last fund implemented by a utility company did so:
- No award for Emotional Distress. $0 were factored into the “take it or leave it” offers in prior funds for victims’ evacuation from the fire and their emotional distress tied to being displaced, losing their home, losing all worldly possessions, the loss of their community, and all of the pain and suffering that comes with a tragic but preventable event such as the Eaton Fire caused by SCE.
- No award for ALE or Loss of Use damages.
- No award for statutory inverse condemnation damages, such as payment of attorney’s fees, interest on the settlement, and costs.
- A severe reduction (65%) if the homeowner did not live in the home but instead rented it out.
- A reduced cost per square foot for rebuilding in many cases.
- A greatly reduced cost to replace vegetation.
TRACK RECORD OF SUCH “FUNDS”
Perhaps most importantly, there’s a track record for funds of this type. In the past, we believe LESS THAN 5% participated in the PGE “fund” program in the Dixie fire. In the past, victims have seen through the utility’s tricks and recognized that such funds largely ignore victims recovery for true emotional distress, alternative living expense, loss of use, lost plants and trees, the true value of personal property, AND underestimates the price per square foot to rebuild in today’s dollars with all Code upgrades to which the victims are entitled.
AS MENTIONED ABOVE, SUCH “FUNDS” PROPOSED BY THE UTILITIES IN THE PAST HAVE SOUGHT TO SHORT-CHANGE THE VICTIMS, AND FOR THAT REASON ALMOST NONE OF OUR CLIENTS HAVE PARTICIPATED IN THE PAST, BUT INSTEAD HAVE DONE MUCH BETTER THROUGH OUR REPRESENTATION IN THE LAWSUIT BY WAY OF A RESOLUTION PROTOCOL THAT SCE ENTERS INTO TO AVOID A LOOMING TRIAL DATE. SCE’s CURRENT PLOY TO IMPLEMENT A FUND IS AN ATTEMPT TO DELAY THAT TRIAL DATE AND AVOID PAYING FAIR SETTLEMENTS SO THAT SCE CAN SAVE MONEY AT YOUR EXPENSE, AND THE EXPENSE OF REBUILDING YOUR COMMUNITY.
ATTORNEYS ADD VALUE TO MAXIMIZE YOUR RECOVERY
Finally, as your legal counsel we exist for a reason: We add value to your claims. At the end of the day, what you will recover in the Eaton Fire comes down to the expertise and hard work that your legal team does in preparing your claim, to maximize your recovery. On the other hand, SCE hopes to shortcut that work by offering to pay out what in the past, in our experience, has amounted to somewhere between $0.20 and $0.30 on the dollar compared to what we have obtained in settlements for our clients. This means that choosing mediation with representation will likely result in 2-3 times greater a NET recovery by our clients, even after attorney’s fees, in comparison to a proposed fund designed to save SCE money.
TIMING
Past ploys by utility companies to implement a fund that pays pennies on the dollar did NOT result in victims being paid substantially quicker. For the less than 5% who participated and accepted pennies on the dollar from the utility’s self-serving fund, those individuals were paid only a few months earlier than other victims who settled their cases in a mediation setting for the true settlement value of their case. SCE will use every excuse at their disposal to drag out their proposed fund in an effort to hold onto any potential pennies on the dollar offer as long as they possibly can so that they can earn interest on your money.
Please know that we will be reporting at greater length upon the details of SCE ‘s “fund” proposal. But we want you to know now that we are very familiar with these types of “funds” and that they are not formed because they benefit you – they are made in order to save Edison money. In the past we have always opposed these attempts to cheap-settle claims by the utility, because we could do much better for our clients’ net recovery outside such funds.
Please know that we will carefully review their proposal once they provide detail. The lack of detail is significant. Just know that we are perfectly aligned with you because both you and we have the same goal of maximizing your recovery. As such, we will continue to report to you upon the disadvantages of such a fund being proposed by an entity that can hardly be trusted.
If you should have any questions regarding this, please attend one of our weekly town halls.