Berkshire Utility Settles 403 More Fire Claims for $178 Million

Berkshire Hathaway Inc.’s PacifiCorp said it agreed to pay $178 million to 403 victims of Oregon’s 2020 Labor Day wildfires, reducing the company’s exposure even as it still faces thousands of other claims.

The accord announced Monday comes after attorneys for victims sought to pressure the utility last month by demanding $30 billion for outstanding claims in the litigation that started almost four years ago.

The threat to PacifiCorp from mounting legal costs prompted Berkshire Chairman Warren Buffett to warn in his annual letter to investors this year that wildfires have turned utilities across the western US into risky investments. Utilities in California, Colorado, Hawaii and Texas have also faced billions of dollars in potential fire liabilities.

PacifiCorp said the company has now settled almost 1,500 claims from owners of residential and business properties over a series of wind-whipped fires that razed hundreds of thousands of acres across central and western Oregon.

“The process that led to this settlement represents the fairest and most efficient way to resolve wildfire litigation,” Ryan Flynn, president of PacifiCorp’s Pacific Power division, said in a statement. “Class litigation is costly, complex, takes several years to run its course through the legal system and is a barrier to reasonable outcomes for impacted individuals whose personal experiences vary dramatically.”

A lawyer for fire victims, George McCoy, said they “remain committed to pursuing further resolutions to support the ongoing recovery of all Oregonians affected by the fires.”

Most of the victims covered by the latest settlement had opted out of a class action over destruction caused by the fires, according to PacifiCorp’s statement. In the class action, jurors so far have awarded 36 plaintiffs a total of about $220 million — an average of more than $6 million per person.

PacifiCorp was found grossly negligent by a jury in Portland state court last year for failing to heed weather warnings and shut off electricity in its service areas ahead of a wind storm that toppled power lines. The company has said it’s confident it will prevail in an appeal of the verdict.

Top photo: Gates Elementary School destroyed by wildfires in Gates, Oregon, U.S., on Sunday, Sept. 20, 2020. Wildfires have burned nearly 5 million acres, killed at least 27 people, and forced hundreds of thousands to evacuate up and down the West Coast.