Inverse Condemnation: Suing Utilities After a California Wildfire

When a wildfire is caused by utility infrastructure — a downed power line, a malfunctioning transformer, inadequate vegetation clearance — you have a potential claim against the utility company that goes far beyond what your insurance policy pays. In California, one of the most powerful legal tools for wildfire victims is inverse condemnation: a strict-liability cause of action that doesn't require you to prove the utility was negligent.

This article explains how inverse condemnation works, how it differs from a negligence lawsuit, what damages you can recover, and why it matters even if you have insurance.

What Is Inverse Condemnation?

The government (and entities acting under government authority, like investor-owned utilities) has the power of “eminent domain” — the right to take private property for public use, with just compensation. When the government takes your property through formal proceedings, that's condemnation.

Inverse condemnationis the reverse: the property owner sues the government entity (or utility) claiming that the entity's actions or infrastructure effectively damaged or destroyed their private property without compensation. Under the California Constitution, Article I, Section 19, private property may not be taken or damaged for public use without just compensation.

In the wildfire context, the theory is: the utility operates its electrical infrastructure for public benefit (delivering power). When that infrastructure causes a fire that destroys your property, the utility has effectively “taken” or “damaged” your property for public use — and must compensate you.

Strict Liability: No Need to Prove Negligence

This is the critical legal advantage. Under California inverse condemnation law, the cause of action is based on strict liability. You do not need to prove that the utility was negligent — you do not need to show they failed to maintain their equipment, violated safety standards, or did anything “wrong.” You only need to prove:

1. The utility's infrastructure or operations were a substantial cause of the fire
2. The fire caused damage to your property
3. The utility operates its infrastructure for public use

Neither foreseeability nor fault need be shown. The utility doesn't escape liability by showing it followed all safety regulations or used reasonable care. If their equipment started the fire, they pay.

Inverse Condemnation vs. Negligence

Many wildfire lawsuits include both claims — inverse condemnation (strict liability for the infrastructure failure) and negligence (for failing to maintain equipment, clear vegetation, or de-energize during high-wind events). This maximizes available damages.

Which Utilities Can Be Sued?

• Investor-owned utilities (IOUs).Pacific Gas & Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E) are the three major IOUs in California. They operate electrical infrastructure for public use and are subject to inverse condemnation.
• Municipal utilities. Publicly-owned utilities (e.g., LADWP) are also subject to inverse condemnation under the California Constitution.
• Water districts and other public entities.If a public entity's infrastructure contributes to property damage (e.g., failed water systems that couldn't fight the fire), inverse condemnation may apply.

What Damages Can You Recover?

The measure of damages in inverse condemnation is “just compensation” — the amount necessary to make the property owner whole. This can include:

• Cost to repair or rebuild the damaged property
• Diminution in property value (for damage that can't be fully repaired)
• Loss of use (temporary housing, lost rental income)
• Personal property destroyed in the fire
• Business losses (lost income, extra expenses)
• Landscaping and trees

When combined with a negligence claim, additional damages may be available, including emotional distress and (in cases of extreme conduct) punitive damages — though punitive damages against a public utility are rare.

Recent California Wildfire Litigation

Inverse condemnation has been central to nearly every major California wildfire case in recent years:

• PG&E / Camp Fire (2018):PG&E was found responsible for the Camp Fire, which destroyed Paradise. The company filed for bankruptcy, established a $13.5 billion fire victim trust, and ultimately pled guilty to 84 counts of involuntary manslaughter. Inverse condemnation was a core theory.
• SCE / Thomas Fire, Woolsey Fire: Southern California Edison faced thousands of inverse condemnation and negligence claims from the 2017 Thomas Fire and 2018 Woolsey Fire.
• 2025 Palisades and Eaton Fires: Multiple lawsuits have been filed against utilities and LADWP alleging inverse condemnation and negligence. Litigation is ongoing.

How Inverse Condemnation Interacts With Your Insurance Claim

Your insurance claim and your inverse condemnation/negligence claim against the utility are separate proceedings that run in parallel:

1. File your insurance claim immediately.Don't wait for the utility litigation. Your policy has deadlines and your insurer owes you money now.
2. Retain an attorney for the utility claim.Inverse condemnation litigation is complex and typically handled by attorneys on contingency. Many plaintiffs' firms specialize in wildfire litigation.
3. Document everything. The documentation you create for your insurance claim (damage photos, inventory, contractor estimates, ALE records) also supports your utility claim.
4. Understand the offset.You cannot recover the same damages twice. If insurance pays $500,000 for your dwelling and the utility settlement also addresses dwelling damage, those amounts offset. But damages your insurance didn't cover (underinsurance gap, uncovered losses, emotional distress) are additive.

Do You Need a Public Adjuster AND an Attorney?

Often, yes. They handle different claims:

• A Public Adjuster handles your insurance claim — documenting the loss, negotiating with the insurer, and maximizing your policy recovery. This is a contract dispute with your insurer.
• An attorney handles your utility claim — the inverse condemnation and negligence lawsuit against the entity that caused the fire. This is a tort/constitutional claim.

Having both ensures you recover the maximum from your insurance policy and pursue the responsible party for damages beyond your policy limits.