Article content

(Bloomberg) — The city of Los Angeles’ electric and water utility was hit with a lawsuit faulting it for not supplying enough water to fight the biggest fire still raging in the second-largest US metropolis.

Article content

Article content

Property owners in the city’s tony Pacific Palisades neighborhood sued the Los Angeles Department of Water and Power, the largest municipal utility in the US. The complaint appeared late Monday on the Los Angeles Superior Court’s website, but hasn’t yet been fully processed by the court.

Article content

The plaintiffs claim that a reservoir that had been drained and not repaired, coupled with inadequate water pressure in fire hydrants, undercut efforts by firefighters and ultimately allowed the wind-whipped fire to spread out of control. The cause of the fire remains under investigation.

‘Homeowners to Homeless’

The city’s mishandling of the Santa Ynez Reservoir left the upscale neighborhood with no defense against the flames and turned victims from “homeowners to homeless in a matter of hours,” according to the complaint.

The LADWP referred an inquiry to the city attorney’s office, which didn’t immediately respond to a request for comment.

Earlier Monday, Edison International Inc.’s southern California utility was hit with several lawsuits blaming the energy provider’s equipment for igniting the Eaton Fire in the Pasadena area, the second-largest of the conflagrations that have ravaged Los Angeles since last week. 

The Palisades Fire, stretched across an area larger than Manhattan and where the median home price approaches $4 million, has damaged or destroyed more than 5,000 structures. As of early Monday, it was 13% contained but had consumed almost 24,000 acres and killed at least eight people.

Article content

Article content

Angelenos have been unnerved as fires have spread across the city and its surrounding communities over the last week, turning thousands of homes and businesses into charred rubble. The fires are the most devastating natural disaster to strike Los Angeles since the 1994 Northridge earthquake, which killed 57 people, and are likely to rank among the costliest natural disasters in modern US history.

Wells Fargo & Co. analysts estimated that the fires could result in losses of as much as $30 billion for the insurance industry, significantly exceeding last week’s highest prediction from JPMorgan Chase & Co. that the fires stood to cost insurers roughly $20 billion. 

Pizza Shop

The plaintiffs listed in the LADWP suit include about 14 people who lost their homes in the fire, along with a pizza shop that burned down.  

According to the 13-page complaint, the Santa Ynez Reservoir has been out of commission since February 2024, when a tear several feet wide was discovered in its floating cover. The reservoir, which can hold up to 117 million gallons, was then drained over concerns about water quality. The city then moved too slowly to hire a contractor to make repairs, the plaintiffs allege.

Article content

“With the Santa Ynez reservoir out of commission, hydrants in Pacific Palisades failed after 3 tanks, each holding 1 million gallons of water, went dry within a span of 12 hours,” lawyers said in the suit. They said that if the utility had acted responsibly, the damage caused by the fire could have been “greatly reduced.” 

California Governor Gavin Newsom last week ordered a state investigation of the Los Angeles agencies running the city’s water systems after fire hydrants ran dry.

History of Wildfires

The state has a history of catastrophic wildfires tied to electric-utility equipment operating during wind storms. PG&E Corp. — the state’s largest utility — was forced to file for Chapter 11 bankruptcy protection in 2019 to deal with a tidal wave of suits tied to multiple fatal northern California fires blamed on its wires. 

Under California law, a utility can be held liable for property damage when its equipment ignites a fire even if it didn’t act negligently. 

Utilities in western states including Oregon, Colorado and Hawaii also have been pummeled with litigation over devastating fires. Last year, Hawaiian Electric Industries agreed to pay about half of a $4 billion settlement of home and business owners’ suits tied to the 2023 Maui wildfires. That settlement is still awaiting final approval.

(Updates with details from lawsuit starting in fourth paragraph.)

Article content