Giornale Roma - Wildfire Litigation Becomes Multibillion-Dollar Industry Amid Climate Crisis

Wildfire litigation has transformed from a legal recourse into a multibillion-dollar industry, with more than $18 billion awarded or agreed to in civil settlements since 2017. As climate change intensifies fire risks across the United States, a growing network of law firms and Wall Street investors is driving claims against utility companies, raising fundamental questions about the sustainability and fairness of holding power providers solely responsible for disasters fueled by broader environmental factors.

The trend traces its modern origins to November 2018, when the Camp Fire destroyed the town of Paradise in Northern California. Dry conditions, low humidity, and winds up to 40 miles per hour created ideal conditions for ignition when a live wire broke from a 99-year-old transmission tower owned by Pacific Gas and Electric Co. (PG&E). The blaze killed 85 people, destroyed more than 18,000 structures, and displaced tens of thousands.

Thousands of victims sued PG&E, which eventually agreed to settle claims for $13.5 billion. This settlement, one of the largest civil payouts for an environmental disaster in U.S. history, drove the utility into bankruptcy and established a precedent that utilities could be held liable for massive sums when faulty equipment ignites conflagrations.

The Paradise case sparked a wave of lawsuits against utilities implicated in wildfire ignitions nationwide. Utility companies PG&E, PacifiCorp, Xcel Energy, and Southern California Edison have borne the brunt of these claims. The legal landscape has shifted significantly since 2017, with California firms expanding their reach beyond state borders to litigate multibillion-dollar claims against energy companies in Oregon, Colorado, and Hawaii.

California’s strict liability standard for investor-owned utilities, known as inverse condemnation, allows the state to hold utilities financially liable for wildfires even if they were not negligent in igniting them. This rule has historically allowed California claims to soar far beyond those in other Western states. The legal precedent for assigning wildfire culpability to ignition alone dates back to the late 19th century, when railroad companies were often subject to similar rulings.

As the wildfire crisis accelerates, lawsuits have followed in lockstep with fire activity. This year is shaping up to be among the worst on record for U.S. wildfires. Following a mild winter with light snowpacks in the Rockies and Sierra Nevada, more than 9 million acres had burned across the U.S. as of October, approximately 1.5 times the average for that time of year over the past decade, according to the National Interagency Fire Center.

In Colorado, residents have sued San Isabel Electric Association, a not-for-profit rural electric cooperative, for allegedly sparking the Aspen Acres Fire. The blaze, which ranks as the seventh-largest in state history, destroyed more than 320 homes. State officials found that an aspen tree had fallen onto energized powerlines, starting the fire.

In Los Angeles County, two large fires in January 2025—the Palisades Fire and the Eaton Fire—caused tens of billions of dollars in damage. Authorities arrested a 29-year-old former Uber driver in connection with one blaze, but a federal judge declared a mistrial in June after jurors deadlocked 10-2 in favor of acquittal. With no legally definitive source of ignition for the broader disaster, thousands of victims are now suing the city of Los Angeles, the L.A. Department of Water and Power, and the state of California for $10 billion. The claims allege gross negligence in failing to fully extinguish hot spots from a previous fire and failing to provide sufficient water to fight the blaze.

Wildfire litigation has emerged as a seemingly state-sanctioned climate resilience strategy to help homeowners deal with losses as the insurance industry backs out of high-fire-danger areas. Richard Bridgford, a California trial attorney who has represented close to 12,000 wildfire victims in cases against utilities in California and Hawaii, noted that if a house burns down, victims must hope a large utility with deep pockets was responsible for the ignition rather than lightning or a private individual.

The booming niche has attracted dozens of law firms advertising themselves as wildfire litigation experts across the American West. Gerald Singleton, managing partner with Singleton Schreiber law firm in San Diego, has specialized in this area since the mid-2000s. His firm now employs a couple dozen lawyers and 200 staff members working exclusively on wildfire cases. Over the past two decades, Singleton and his team have represented over 30,000 fire victims and recovered $3 billion on their behalf.

Singleton serves as court-appointed liaison counsel in the 2025 Eaton Fire litigation, which involves more than 50 law firms representing plaintiffs, and the 2021 Dixie Fire in Northern California. He noted that while just a few firms did this work for a long time, the number of firms involved has grown exponentially since the 2017 fires.

Bridgford said at least 95 percent of his practice’s focus over the last decade has been wildfires. His firm’s primary advertising method involves town hall meetings in devastated communities from Pasadena to Maui, encouraging victims to sign up for large lawsuits. Wildfire claims are often handled as mass torts, where a large pool of plaintiffs pursues claims against one or more defendants over the same event.

The scale of these cases has made wildfire litigation a lucrative specialization. Mass tort lawyers are generally paid through contingency fees, receiving a percentage of any settlement or jury judgment rather than charging clients upfront. These fees typically fall between 30 percent and 40 percent of the total compensation recovered, although some states dictate caps.

In the 2023 Maui wildfires in Lahaina, which led to a $4 billion settlement—including $1.99 billion from Hawaiian Electric Industries and its subsidiary, and $800 million from the state of Hawaii—attorney fees were capped at $222 million by a judge. Local media reported that plaintiff’s lawyers had hoped for a $1 billion payday before the cap was imposed.

Wall Street has recently taken notice of these lucrative settlements. Hedge funds and investment banks, including Jefferies Financial Group Inc. and Oppenheimer Holdings Inc., have moved to back California law firms in hopes of profiting from fire litigation. These third-party funders help law firms shoulder the costs of suing utilities by providing loans that cover caseloads, often with interest rates above 20 percent on an annualized basis.

Many lawyers have bristled at Wall Street’s interest and the resulting optics that could lead to greater government intervention. Singleton described the arrangement as awful and stated he would support a ban on such practices. "Hedge funds don’t come out and say, 'We care about the community. We’re trying to make the world a better place.' There’s none of that. It’s, 'We are here to make a profit,'" Singleton said.

The reliance on wildfire litigation has sent shockwaves through the country’s social and economic systems, raising electricity rates, contributing to power shutoffs, and draining public funds when governments are found liable. It also jeopardizes interventions such as prescribed burns that can meaningfully reduce the destructive potential of wildfires.

Beyond these consequences lies a foundational question of justice. Climate scientists and legal analysts have challenged the idea of singular liability versus collective responsibility. Chris Field, a climate scientist at Stanford University, noted that California has not seen a big increase in the number of fires, but rather a change in the probability that small fires grow into gigantic, devastating ones.

As the planet warms, landscapes have grown more flammable. At the same time, millions of houses have been built in wildfire-prone areas, risking greater property losses. Legal analysts question whether it is appropriate or fair to hold one person or entity responsible for a massive wildfire enabled by the burning of fossil fuels alongside decades of federal fire suppression and development policies. Judgments against oil majors for their climate impacts have so far proved nearly impossible to win in U.S. courtrooms, leaving utility companies holding the bag for worsening wildfires that other corporations helped fuel.

Douglas Dixon, a lawyer with Hueston Hennigan who has worked with roughly a dozen utilities or defendants accused of igniting wildfires across the Western U.S. since 2018, argued that many factors contribute to the spread and severity of a wildfire. "It’s not just the spark that starts the fire that is really solely responsible for the damage," Dixon said.

Eric Macomber, a wildfire legal fellow at Stanford University, expects that as cases expand beyond California, utilities will prefer to settle rather than go to court for a public jury judgment, as Xcel Energy did with the 2021 Marshall Fire in Colorado. "Utilities don’t want to generate bad precedent in states that haven’t really litigated a lot of these cases yet," Macomber explained.

More and more Western states, including California, are considering legislation that would afford greater protections to utilities, perhaps putting an end to ever-growing litigation. Utility companies themselves are pushing back against the current model. The U.S. appears to be heading toward a reckoning over ever-rising payouts as policymakers grapple with whether—and how much—the power sector should be made to bear the costs of a warming world.

Left to market forces alone, wildfire litigation shows little sign of slowing down. The legal industry is growing almost as fast as the wildfires ravaging the country, creating a complex web of accountability that extends far beyond the initial spark.

A.Fumagalli--GdR