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California's Power Outages: Reasonable Precaution or Liability Escapism?


In the past few years, California has seen its most destructive wildfires in history. Last year, California wildfires burned over 1.3 million acres and were responsible for at least $18 billion in property damage. Defective electrical equipment is one of the leading causes of wildfires in the state.

Due to the destructive capacity of wildfires, California’s inverse condemnation laws hold power utilities strictly liable for wildfires that resulted from defective equipment, regardless of fault. This year, utilities lobbied to get California’s inverse condemnation laws changed. However, the bill that passed did little to relieve utilities from the strict liability standard. Instead, the new law requires energy utilities to file wildfire mitigation plans with the government, complete with shut-down procedures, in the event extreme weather creates a high risk of wildfire.

Major investor-owned energy utilities, Pacific Gas & Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E) have started a practice of shutting down power or threatening to shut down power to California residents due to weather conditions that could lead to wildfires. As a result, California’s fire seasons have become synonymous with power outages in high-risk areas.

Last week, PG&E decided to cut power to approximately 60,000 customers due to strong winds and dry vegetation near the San Francisco Bay Area and Sacramento foothills. But some believe the power outages are more motivated by political retribution than public safety.

“They didn’t get inverse condemnation [changed],” according to Jamie Court, president of Los Angeles-based consumer advocacy group, Consumer Watchdog. “They want to get out of liability forever for everything, and this is the way they send a signal. The biggest power a utility has is the ability to turn off power.”

But PG&E maintains that its decision to de-energize power was motivated solely by wildfire prevention, according to the company’s spokeswoman, Angela Lombardi.

However, Jamie Court remains convinced that the conditions weren’t severe enough to justify cutting off power to schools and hospitals: “If there are no firefighters in an area, there is no reason for a utility to shut down power unless they know they have faulty equipment or problems with vegetation management.”

Michael Picker, president of the California Public Utilities Commission (CPUC) has more or less confirmed the legal authority behind the shut-downs: “[T]he state’s investor-owned utilities have general authority to shut off electric power to protect public safety under California law, specifically California Public Utilities Code Section 451 and 399.2(a).”

What Is Inverse Condemnation?

Inverse condemnation is a cause of action that derives from the U.S. and California Constitutions, which provide that the government can only take private property for a public purpose if the property owner is paid just compensation.

Eminent Domain. When the government wants to formally take property, it must initiate a civil action for “eminent domain” in a court of law. In an eminent domain lawsuit, the government is the “plaintiff” and sues the private property owner – the “defendant” – for the right to take their property. A successful eminent domain lawsuit concludes with the government acquiring the owner’s property and the owner receiving “just compensation” from the government for the acquisition.

Inverse Condemnation. Under California law, government actions that restrict the beneficial use of property or otherwise diminish its value legally qualify as a “taking.” Therefore, the government must pay just compensation for any property damage it causes. When that happens, the private property owner may sue the government for inverse condemnation, arguing that the government “took” their private property without just compensation. An inverse condemnation lawsuit is thus an “inverted” eminent domain lawsuit because the property owner is the plaintiff, and the government is the defendant.

How Can Inverse Condemnation Apply to Private Utility Companies?

If eminent domain or inverse condemnation lawsuits function as constitutional protections against tyrannical government acts, why are private utilities worried about inverse condemnation? This is because California inverse condemnation laws also apply to private persons for assuming acts that are traditionally a government function. The California courts have consistently held publically owned electric utilities liable for inverse condemnation. Likewise, the California Court of Appeal has also held private utility companies liable for inverse condemnation as a public entity.


While inverse condemnation does expose California’s investor-owned energy utilities to significant financial risk, it is difficult to see how shutting off power in retaliation would benefit the utility companies. Unless it is performed as an absolute prophylactic measure against wildfires, shutting down power on a mass scale leaves utility companies with little benefit and a lot of irate customers.

Consult a Qualified California Eminent Domain Lawyer

Are you the defendant in an eminent domain action? Has your home or business suffered as a result of government regulations, or at the hands of a private entity acting for the government? If so, you should consult an experienced California eminent domain attorney immediately. At Allen, Semelsberger & Kaelin, LLP we have experience in eminent domain and inverse condemnation cases. We are dedicated to protecting your rights and aggressively advocating for your constitutional-guaranteed right to receive just compensation for harmful government acts.

Contact Allen, Semelsberger & Kaelin, LLP online or call us at (888) 998-2031 to schedule a free consultation with an experienced California lawyer today.