Berkshire-owned PacifiCorp utility wins ruling that could reduce Oregon wildfire damages

By Jonathan Stempel

April 8 (Reuters) - An appeals court on Wednesday ruled in favor of Berkshire Hathaway's BRKa.N PacifiCorp unit over a series of Oregon wildfires in 2020, saying a trial judge erred in letting litigation against the utility proceed as a class action.

The decision by the Oregon Court of Appeals in Salem could reduce PacifiCorp's liability from wildfires. Berkshire has estimated the cost could reach tens of billions of dollars, including $1.1 billion awarded in a series of already-completed trials.

PacifiCorp has denied claims by Oregon residents and business owners who accused it of negligently failing to shut off power lines during a Labor Day weekend windstorm, causing four wildfires - Santiam Canyon, Echo Mountain Complex, South Obenchain and 242 - that damaged more than 2,000 properties.

The Portland-based utility said the trial judge overseeing the so-called James litigation erred in allowing a class action over fires that were each more than 100 miles (161 km) from each other, and a fifth fire that PacifiCorp blamed on lightning.

A three-judge appeals court panel said the judge should not have instructed jurors in the litigation's first phase that they could "assume that the evidence at the trial applies to all class members."

Judge Anna Joyce wrote for the panel that much of the evidence concerned "particular issues concerning particular wildfires," as well as specific ignitions within the largest fire, Santiam Canyon.

Jurors could not "simply 'assume' that that evidence applied 'to all class members,'" Joyce wrote.

Class actions can allow greater recoveries at lower cost than if plaintiffs were required to sue individually.

PACIFICORP OPEN TO RESOLVING REASONABLE CLAIMS

The appeals court returned the case to Judge Steffan Alexander in the Multnomah County Circuit Court. It said he could reconsider whether a single class was appropriate, having seen the litigation's progress.

Jay Edelson, a lawyer for the plaintiffs, called the decision a "procedural setback" that did not address the merits of his clients' negligence claims.

"What the court addressed was a single jury instruction, charting several paths forward - including fixing that instruction and trying the case again," Edelson said in a statement. "PacifiCorp will not escape having to answer to wildfire survivors."

PacifiCorp said in a statement it was "sensitive to the profound losses" suffered by fire victims, and remained open to resolving reasonable claims.

"There are no winners in wildfire, however the court’s decision supports our longstanding belief that this process was prejudicial and not appropriate for managing wildfire litigation," it said.

TRIALS SLATED TO CONTINUE INTO 2028

The James litigation has encompassed "mini-trials" that began in January 2024, and which had been expected to continue into 2028.

Through late March, 171 plaintiffs had been awarded an average $6.6 million, totaling about $1.1 billion, including for non-economic damages such as emotional distress.

Standard & Poor's warned last month it may downgrade PacifiCorp to "junk" status if future jury awards remained high.

PacifiCorp has reached about $2.2 billion of settlements with approximately 4,600 wildfire claimants overall.

On February 20, PacifiCorp agreed to pay $575 million to resolve U.S. government claims related to six wildfires in Oregon and California that burned federal land.

Berkshire bought PacifiCorp for $5.1 billion in 2006. The utility's immediate parent is Berkshire Hathaway Energy, whose former chief Greg Abel replaced Warren Buffett as Berkshire's chief executive on January 1. Buffett remains chairman of the Omaha, Nebraska-based conglomerate.