Why Inverse Condemnation Isn’t That American — and Shouldn’t be Californian, Either

Ruben Barrales
Ruben Barrales serves as president of the Latino Leadership and Policy Forum

The wildfires in Northern California and Southern California late last year were horrific disasters. They leave us mournful, determined to find justice for all those affected and to prevent future tragedies. Many of us are searching for policy solutions to achieve climate resiliency and to build a safe and clean energy future for California.

The Latino Leadership and Policy Forum, which I lead, is proud to partner with hundreds of other organizations, unions, businesses and community leaders in a statewide coalition called BRITE— for “Building Resilient Infrastructure for Tomorrow’s Economy” — to support Gov. Jerry Brown and bipartisan legislators in their work to protect Californians from natural disasters caused by climate change. This includes reforming regulations and laws that govern California’s utilities.

That is why I was intrigued by attorney John Fiske’s recent op-ed related to the fires. (“Why Inverse Condemnation Is One of the Most American Things We Do,” May 16, 2018). It started out as an interesting history lesson on the origins of Eminent Domain, but quickly devolved into an imaginative argument for inverse condemnation in the case of California wildfires.

It’s just not true that the American Revolution had anything to do with holding utilities strictly liable for unlimited wildfire damages.

I am left to conclude that the application of “inverse condemnation” liability that virtually no other state but California applies to non-negligent utilities is not — and cannot be — “one of the most American things we do.” As a matter of fact, I’m more convinced that California should reform its current inverse condemnation framework to be fair to fire victims, ratepayers and taxpayers.

Mr. Fiske argues, correctly, that the constitution guarantees that no one may be deprived of private property by the government without “just compensation,” and he highlights the American value of fairness. He is correct, and no one is arguing against it. In fact, there is no reasonable policy argument today suggesting that California’s investor-owned utilities should be unaccountable for negligence or substandard operations.

The problem is not in cases of negligence. It’s in the application of inverse condemnation for which the author advocates. It seems unfair to punish ratepayers and utilities without a single finding of negligence — even after a utility followed all required safety standards. The pursuit of justice usually requires that allegations be proven.

Among the most convincing arguments against the need for inverse condemnation, comes from the author himself. The author blames two energy utilities in full for the fires in Northern and Southern California. He alleges that both “designed and used their electrical systems in a way that caused” the fires — and adds that “they intentionally designed their vegetation management plans, re-energizing policies, and high-wind policies in a way that caused the most destructive and largest fires in state history.”

If his accusation were true, any entity engaging in such “intentionally designed” destruction would be liable before any judge and jury in America. In the extreme scenario he asserts, no ruling would rely on anything close to inverse condemnation to grant victims “just compensation.” No one is arguing that actual negligence or malice go unpunished.

The inevitable consequences of unlimited liability for our environment, economy and communities argue most strongly for the need to reform inverse condemnation in California. Unlimited liability is simply unsustainable.

With the support from the BRITE Coalition and many others, I’m confident we can achieve our goals to reform and update liability regulations for utility services and to maximize our state’s resiliency to extreme weather-related disasters. I’m glad that Governor Brown and some legislators are listening.

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