Wildfire victims' law firms allege collusion by Buffett's PacifiCorp

Class-Action Lawyers Accuse PacifiCorp of Lowball Settlements in Oregon Wildfire Litigation

The law firms spearheading class-action litigation against PacifiCorp regarding the 2020 Labor Day weekend wildfires in Oregon are scrutinizing the utility for potential collusion with other law firms to settle claims at undervalued amounts. The utility, owned by Warren Buffett's Berkshire Hathaway, is under fire from Edelson PC, Keller Rohrbach, and Stoll Berne, who allege they were blindsided by a recent settlement announcement.

In a court filing, the class-action firms highlighted that PacifiCorp, along with three other law firms not involved in the class action, jointly disclosed a $178 million settlement on June 3. This settlement covers 403 victims of the Beachie Creek and Echo Mountain Complex fires. Alarmingly, the per-victim payout from this settlement was reported to be significantly less—barely two-thirds—compared to an earlier $299 million settlement for victims of the Archie Creek fire. Furthermore, the new settlement reportedly neglected compensation for pain and mental suffering.

Allegations of Collusion and Ethical Concerns

The class-action firms have accused the three law firms—Warren Allen, Spreter Petiprin, and the Swigart Law Group—of potentially colluding with PacifiCorp to settle claims at what they described as "bargain-basement" prices. They asserted that the settlement announcement came just a week after attempts at mediation to resolve the class action collapsed. Subsequently, the three firms allegedly engaged in aggressive tactics, such as cold-calling and direct mail campaigns, to lure fire victims into settling.

According to the class-action lawyers, these firms “appear to be working hand-in-hand with PacifiCorp to enrich themselves, benefit PacifiCorp, and harm fire survivors.” They have requested judicial permission to scrutinize communications between the three law firms, PacifiCorp, and the class members for potential evidence of collusion. They also seek authorization for victims to rescind their settlements if collusion is discovered.

When reached for comment, PacifiCorp did not provide an immediate response, nor did the three implicated law firms.

Implications for PacifiCorp's Settlement Efforts

The disagreements could complicate ongoing efforts by Portland-based PacifiCorp to address wildfire claims in Oregon and northern California. The utility has already settled over 1,600 claims at a cost exceeding $1 billion but still faces substantial additional claims, including a colossal $30 billion lawsuit.

Adding to this complexity, the three law firms involved in the $178 million settlement recently approached the judge presiding over the class action for clarity on when they can contact fire victims. This move underscores the contentious nature of the settlement negotiations and reflects the ongoing legal battles PacifiCorp faces regarding their alleged failure to shut off power lines during the windstorm responsible for sparking the fires.

Leadership Comments and Legal Context

Greg Abel, speculated to be Warren Buffett's successor at Berkshire Hathaway, emphasized during Berkshire's annual meeting on May 4 that PacifiCorp will continue to contest what he termed "unfounded" wildfire litigation claims vigorously.

The legal case, identified as James et al v. PacifiCorp et al, is being heard in the Oregon Circuit Court, Multnomah County.

This escalating legal dispute highlights the complexities and ethical dilemmas surrounding mass litigation and settlement processes, particularly in the wake of devastating natural disasters.