Warren Buffett’s Berkshire Hathaway may be on the hook for billions for devastating Oregon wildfires

A jury in Oregon on Monday found the electric utility PacifiCorp responsible for causing devastating fires during Labor Day weekend in 2020, ordering the company to pay tens of millions of dollars to 17 homeowners who sued and finding it liable for broader damages that could push the total award into the billions.

The Portland utility is one of several owned by billionaire Warren Buffett’s Omaha, Nebraska-based investment conglomerate Berkshire Hathaway. The property owners, suing on behalf of a class of thousands of others, alleged that PacifiCorp negligently failed to shut off power to its 600,000 customers during a windstorm, despite warnings from then-Gov. Kate Brown’s chief-of-staff and top fire officials, and that its power lines were responsible for multiple blazes.

There has been no official cause determined for the Labor Day fires, which killed nine people, burned more than 1,875 square miles (4,856 square kilometers) in Oregon, and destroyed upward of 5,000 homes and structures. The blazes together were one of the worst natural disasters in Oregon history.

In a written statement, lawyers for the plaintiffs called the decision historic and said it “paves the way for potentially billions of dollars in further damages for the class members.”

PacifiCorp immediately said it would appeal.

“Escalating climate change, challenging state and federal forest management, and population growth in the wildland-urban interface are substantial factors contributing to growing wildfire risk,” PacifiCorp said in an emailed statement after the verdict. “These systemic issues affect all Oregonians and are larger than any single utility.”

The Multnomah County Circuit Court jury awarded more than $73 million to 17 homeowners who sued PacifiCorp a month after the fires, with each receiving between $3 million and $5.5 million for physical damage to their property and emotional distress.

The jury also applied its liability finding to a larger class including the owners of nearly 2,500 properties damaged in the fires, which could push the price tag for damages well into the billions of dollars. Those damages will be determined later.

The jury heard testimony Monday afternoon over whether to make PacifiCorp pay punitive damages. Nick Rosinia, an attorney for plaintiffs, told the jurors they should award punitive damages totaling five times what they have already been awarded for the harm PacifiCorp caused.

“For its reckless and outrageous action on Labor Day, it’s the only way they will truly get your message,” Rosinia said.

Doug Dixon, an attorney for the power company, insisted no punitive damages were warranted. The company keeps working on safety and was not recklessly negligent, he said. And while lawyers for the property owners described PacifiCorp as deep-pocketed, the company is $9 billion in debt.

Among those in court for the verdict was Rachelle McMaster, whose home in the town of Otis near the Oregon coast was destroyed in the fires. Wearing a tie-dye T-shirt that read “keep Earth awesome,” she wiped her eyes and clasped her spouse’s hand after it was read.

The seven-week trial wrapped with closing arguments last Wednesday, Oregon Public Radio reported.

The plaintiffs alleged PacifiCorp was negligent when it didn’t shut off its power lines despite extreme wind warnings over the holiday weekend.

“They have no real response to any of this,” plaintiffs’ attorney Cody Berne said during closing arguments. “(PacifiCorp) started the fires. They destroyed the evidence. And now they have come before you and are asking not to be held accountable.”

Jurors were to determine PacifiCorp’s responsibility in four of those blazes: the Santiam Canyon fires east of Salem; the Echo Mountain Complex near Lincoln City; the South Obenchain fire near Eagle Point; and the Two Four Two fire near the southwest Oregon town of Chiloquin.

Attorneys for the plaintiffs said utility executives kept the power on even as the company’s line workers took calls about damaged electrical equipment. The same executives, attorneys said, took no responsibility at the trial, saying it was front-line workers who make de-energization decisions, the news outlet reported.

In his closing arguments, Dixon said “alleged power line fires” in Santiam Canyon, where more than half the class members live, could not have spread to plaintiff’s homes. Plus, PacifiCorp does not have equipment in some areas where they were accused of causing damage, he said.

The risk of wildfires is increasingly fraught for power companies in the West. Pacific Gas & Electric declared bankruptcy and pleaded guilty to 84 counts of manslaughter after its neglected equipment caused a fire in the Sierra Nevada foothills in 2018 that destroyed nearly 19,000 homes, businesses and other buildings and virtually razed the town of Paradise, California.