The Eaton Fire killed 17 people in Altadena, California, while destroying the homes and neighborhoods of the town and upending countless lives and families. It also started a conversation about justice and what it means to hold someone accountable for causing so much death, damage and despair.
We know about this, and we know how this story ends. We have litigated wildfire liability on behalf of fire victims against some of the West Coast’s largest utilities responsible for the worst fires. For Eaton Fire victims seeking justice, time is not on their side, but for Southern California Edison (SCE), delay is a strategy.
Already, evidence strongly suggests that SCE will be found liable for the Eaton Fire. The location of the ignition point, reports of powerline issues and evidence of arcing all indicate that SCE’s equipment played a role. But even with liability appearing almost certain, the utility will do everything it can to delay paying claims. That’s not just speculation — it’s a well-established playbook that investor-owned utilities have used regularly to protect their financial interests.
But for the families who lost loved ones, the residents of the more than 6,000 homes destroyed and the business owners whose livelihoods depend on their communities, time delays their ability to move on with their lives. In the immediate aftermath of a fire, their focus is rightly on urgent necessities – finding a place to live for themselves and for their employees, filing insurance claims, and taking care of their and others’ physical and emotional health. But once there is some breathing room, the longer it takes to resolve claims, the longer they remain in limbo, unable to fully move forward — and, in many cases, unable to rebuild.
The hidden cost to local businesses
The effects of a wildfire don’t end when the flames are extinguished. Fires permanently reshape the economic landscape of a community. Some residents will leave and never return. Those who stay will prioritize rebuilding their lives, which means local businesses — especially small, independently owned ones — will suffer from lower revenue for years.
We’ve seen this happen before – in Paradise, California, after the 2018 Camp Fire, entire commercial districts became ghost towns. Businesses that had been staples of the community for decades shut their doors permanently.
This is why insurance matters. But unfortunately, most businesses are underinsured, just like most homeowners. Business interruption insurance rarely accounts for the reality of multiyear economic devastation, and even for those businesses that have coverage, insurance payments are often insufficient. In the case of the Eaton Fire, SCE is the source of recovery. In PG&E’s bankruptcy, many business claims were paid, though not without significant legal battles.
For example, Adventist Health, which lost a hospital in Paradise to the Camp Fire, initially sought $1 billion in claims but ultimately settled for $200 million. This settlement — while substantial — was still a fraction of the damages alleged. And even with the funds it received, Adventist Health decided not to rebuild the hospital in Paradise, leaving the town’s largest employer and healthcare provider permanently gone.
What happened in Paradise is a cautionary tale. Without aggressive legal action, Altadena’s businesses and community could face a similarly bleak future.
The importance of insurance claims
One of the biggest mistakes fire victims make is waiting too long to file insurance claims, believing they have time or that the process will work itself out. But insurance claims must be tendered within strict deadlines — and missing those deadlines can mean losing out on compensation entirely.
Even those who do file within the deadline often discover their policies won’t cover their full losses. That’s especially true for businesses. While homeowners may be covered for their structures and some personal property, business owners face additional complexities — inventory loss, equipment damage, lost revenue and, in many cases, disputes with insurers that downplay the true value of their claims.
This is where SCE comes in. If a business is underinsured, its best path to financial recovery is through legal action against the utility. We’ve seen this strategy work in the past. In PG&E’s bankruptcy, many businesses received compensation, though it took years of litigation and legal pressure to force the company to settle.
The utility playbook
SCE is a publicly traded company, and like all investor-owned utilities, its primary obligation is to its shareholders. The longer it can delay settlements, the longer it can avoid massive payouts, protect its stock price and maintain its financial standing. PG&E used this approach for years before ultimately filing for bankruptcy, and PacifiCorp has resisted compensating fire victims in Oregon at every turn, even after losing jury verdicts in court.
Beyond outright delay, utilities also rely on the confusion and despair victims face after a catastrophe. Just because a company is at fault doesn’t mean it will voluntarily pay what it owes. Outrage alone doesn’t move corporations of this size, and neither does simply filing thousands of individual claims without a strategic approach.
Meanwhile, many victims of the Eaton Fire are hearing rumors that it’s too early to take action and that they should wait until the government’s investigation is complete, suggesting that the government will swoop in like a deus ex machina to force SCE to pay their claims. But the government investigation, thorough as it is, will take at least a year, and no other wildfire in recent memory has ever had that kind of mass governmental intervention. In the meantime, waiting does nothing to help victims, nor does it increase the amount of money available — it only gives SCE more time to control the narrative and avoid financial pressure.
To the contrary, in our experience, the investigations led by fire victims’ attorneys are just as effective as — and often more conclusive than — the government investigations in identifying exactly why and how a utility caused a fire. Those attorney-led investigations occur in the context of litigation against the utility and carry with them all the pressures of active lawsuits that prompt utilities to act rather than delay.
Real pressure is the only way to move SCE
A corporation as large as SCE won’t move because of bad press or public frustration — it will move when it becomes financially and legally untenable to keep delaying.
So far, dozens of lawsuits have been filed against SCE arising from its alleged role in causing the Eaton Fire. But thousands of fire victims remain on the sidelines, no doubt still dealing with and processing their new reality, contemplating the rebuild and recovery process. Eventually, it will be the sheer magnitude of destruction of so many homes and lives that forces SCE to take action. The only one who gains from delaying that process is SCE.
SCE values certainty and wants to understand the extent of its liability. It wants to limit its financial exposure and avoid an open-ended disaster that keeps its stock price in free fall. The faster victims create real leverage, the faster SCE will be forced to negotiate. Without that pressure, there’s no reason for the utility to move quickly. Just like we saw with PG&E and PacifiCorp, delay will always be the default approach until it cannot be avoided.
Could bankruptcy be the answer?
If SCE ultimately cannot cover its liabilities, a reorganization in the structured environment of bankruptcy may not be the worst outcome for fire victims.
While bankruptcy often carries a negative connotation, it can also create a clear process that ensures timely and just compensation. PG&E’s bankruptcy, despite its flaws, provided a framework that ultimately resulted in payments to victims. Unlike open-ended litigation, the bankruptcy process could establish a defined timeline and funding pool, rather than leaving victims in limbo while SCE determines how to minimize its financial exposure. Bankruptcy will be particularly effective if SCE is willing to engage in substantial pre-bankruptcy planning with victims’ representatives to ensure a prompt resolution of their claims.
Financially, there’s a limited pool of money available. Fitch Ratings estimates that SCE and its parent company have $4.5 billion in consolidated liquidity available. The California Wildfire Fund, which was set up to help utilities cover wildfire claims, has about $12 billion available. But early damage estimates suggest that total claims from recent fires will vastly exceed those amounts. Waiting will not make that number grow in any meaningful way. If anything, delaying only extends the financial uncertainty for victims while SCE strategizes how to pay as little as possible.
Fire victims need certainty
At the end of the day, SCE will not pay unless it is forced to. That’s the reality fire victims must navigate. The government’s investigation will take time, but waiting does nothing to create the kind of pressure needed to force SCE into real negotiations. The only way to move toward real compensation is through a coordinated legal effort that makes it financially impossible for SCE to keep stalling. For those affected, this isn’t just about seeking compensation — it’s about ensuring they don’t spend the next several years stuck in uncertainty while a massive corporation runs out the clock.
As the saying goes, “everyone hates lawyers until they need one.” The Eaton Fire victims need lawyers now to apply real pressure that can force SCE to deal with the devastation caused by its equipment and allow Altadena to rebuild and move forward.
The authors, Lauren Attard (lattard@bakerlaw.com) and Dustin Dow (ddow@bakerlaw.com), represent Eaton Fire victims with claims against Southern California Edison.