Thomas Fire Lawsuit: Settlements, Ratepayers, and Cross-Complaints

The Thomas Fire lawsuits ended with Southern California Edison paying out billions of dollars to insurance companies, wildfire victims, and the federal government, all without admitting fault, and with California regulators clearing the utility in January 2025 to recover roughly $1.6 billion of those costs from its customers. The litigation grew out of the December 2017 fire that burned nearly 282,000 acres in Ventura and Santa Barbara counties, killed two people, and set the stage for the January 2018 Montecito mudslides that killed 23 more.

Who Sued SCE and Why

The first class action landed in Los Angeles Superior Court on January 24, 2018, against SCE and its parent Edison International.¹²³

The cases were coordinated under the caption “Southern California Fire Cases,” JCCP No. 4965.⁴ At least four were filed as putative class actions, but no class was ever certified. Claims moved forward individually through litigation and through settlement programs SCE created to resolve them in bulk.²

Plaintiffs brought claims for negligence, inverse condemnation, trespass, and nuisance, along with alleged violations of public utility and safety codes.²⁵⁶¹

Plaintiffs cited specific maintenance failures. SCE had allegedly not followed a CPUC order requiring inspection and repair of transformers and poles at least every five years. Many poles were reportedly over 70 years old and overloaded. And plaintiffs claimed that since 2007, the CPUC had fined SCE more than $78 million for electric and fire-related incidents tied to safety failures.⁷

The Inverse Condemnation Ruling That Shaped Everything

The single most important legal ruling in the case came early. Under California’s inverse condemnation doctrine, courts can hold utilities strictly liable for property damage from wildfires if their equipment was a “substantial cause,” even without any showing of negligence. The theory is that damage caused by a public improvement should be spread across the community that benefits from it, through rates.⁸

SCE tried to eliminate those claims with a demurrer in August 2018. On October 4, 2018, the trial court overruled it, relying on the 1999 decision in Barham v. Southern Cal. Edison Co.⁹ The Court of Appeal denied review that December, and the California Supreme Court denied review in February 2019.⁸ Plaintiffs could now pursue SCE without having to prove carelessness, which gave them enormous leverage at the negotiating table.

SCE kept trying. In January 2022, it entered a $1.75 million stipulated judgment with plaintiff Simple Avo Paradise Ranch LLC, structured specifically to create an appealable order on the 2018 ruling. The Court of Appeal affirmed the trial court in May 2024, leaving the inverse condemnation theory intact.⁹

What SCE Paid

SCE resolved the litigation in three major waves. In every case, it settled without admitting fault.

Insurance Subrogation: $1.16 Billion

In September 2020, SCE reached a $1.16 billion settlement covering all insurance subrogation claims from the Thomas Fire, Koenigstein Fire, and Montecito mudslides. The deal, called the TKM Subrogation Settlement internally, resolved amounts insurers had already paid to policyholders and included capped payments for future policyholder claims made before July 15, 2023. SCE paid $1.2 billion in October 2020 under the agreement.¹⁰²

Individual Victims: About $500 Million Through Early 2021

By March 31, 2021, SCE had settled with roughly 2,000 individual plaintiffs for approximately $500 million: about $300 million in 2020 and another $200 million in the first quarter of 2021.² Bellwether trials scheduled to test cases before juries were postponed by the COVID-19 pandemic and then to allow more settlement talks. None reached verdict.

U.S. Forest Service: $80 Million

In February 2024, SCE agreed to pay $80 million to resolve a 2020 Department of Justice lawsuit brought on behalf of the U.S. Forest Service, which sought reimbursement for fire suppression costs and damage to the Los Padres National Forest. More than 150,000 acres of National Forest System land had burned. Federal prosecutors called it the largest recovery their office had ever obtained for Forest Service firefighting costs.¹¹¹²

Who Actually Pays: The Ratepayer Decision

The bigger question was who would ultimately bear the cost of those settlements. In August 2023, SCE asked the California Public Utilities Commission for permission to recover its Thomas Fire expenditures through customer rate increases. The fire predated Assembly Bill 1054, the 2019 law that created a state insurance fund for wildfire costs, so no state safety net was available. CPUC President Alice Busching Reynolds said that for this “pre-AB 1054 wildfire,” there were no state funds to pay claims beyond what insurance covered.¹³

SCE and the CPUC’s Public Advocates Office reached a proposed settlement in August 2024, amended it in November 2024, and sent it to the commission for approval.¹⁴ On January 30, 2025, the CPUC voted 4-0 to adopt it.¹³ The order split costs three ways:

Ratepayers pick up roughly $1.6 billion, which is 60% of the costs SCE had recorded in its wildfire expense accounts through May 2024. Residential bills were expected to rise about $1 per month.
Edison International shareholders absorb approximately $1 billion, plus $50 million in shareholder-funded wildfire mitigation projects spread across 2024 through 2028.
Roughly $1.085 billion in wildfire expense account costs and $9.7 million in catastrophic event costs are permanently disallowed from recovery.

Any remaining unsettled claims will be handled through future filings under the same 60/40 split between ratepayers and shareholders.¹⁵¹⁶

The nonprofit Wild Tree Foundation opposed the deal, arguing SCE had not proven its conduct was reasonable and prudent and that letting the utility pass costs to customers created a “moral hazard” that discouraged safety investment.¹⁷ The commission rejected that framing, holding that the standard for approving a settlement is whether it is “reasonable in light of the whole record, consistent with law, and in the public interest,” not whether the utility could win at trial. The record included roughly 3,500 pages of testimony from 41 witnesses.¹⁶ Reynolds described the agreement as settling “contested claims that would’ve been extensively litigated with an unknown result.”¹³

SCE’s Position and the Mudslide Cross-Complaints

Throughout the litigation, SCE said it operated “prudently” and at levels “at or above what is required by regulators.” On the Montecito mudslides, SCE blamed “inadequate governmental flood control infrastructure and deficient evacuation communications.”¹³ In SEC filings, SCE said it had “not determined” whether its equipment caused the Thomas Fire itself, citing radar data suggesting the fire may have begun 12 to 15 minutes before any issue appeared on its system. SCE did acknowledge that its equipment was “associated with” the Koenigstein Fire ignition point.² CAL FIRE, the Ventura County Fire Department, and CPUC investigators all attributed the fire to SCE equipment.

SCE also went on offense. In January 2019, it filed a cross-complaint in Los Angeles Superior Court against Santa Barbara County, the County Flood Control and Water Conservation District, the City of Santa Barbara, Caltrans, and the Montecito Water District, seeking to shift responsibility for the mudslide losses.¹⁸ SCE alleged that debris basins and flood infrastructure were “wholly inadequate,” that the county had allowed development in known flood zones and issued flawed hazard warnings, and that the evacuation boundary along State Highway 192 had no scientifically sound basis. SCE pointed out that 19 of the 23 people who died lived in the voluntary evacuation zone rather than the mandatory one. Caltrans was accused of building bridges and culverts too small to handle debris flows, and the Montecito Water District was accused of releasing millions of gallons of water during the event.¹⁹ Those cross-complaints were reported to remain unaffected by SCE’s settlements with fire victims.²⁰

Where Things Stand

The CPUC’s cost recovery proceeding was formally closed after the January 2025 decision. SCE has settled with all insurance subrogation plaintiffs, the U.S. Forest Service, and the vast majority of individual claimants. A “small number” of claims remained outstanding as of the CPUC ruling, and SCE is authorized to file future rate adjustment requests as those trailing costs are resolved.³ No criminal charges were filed against SCE or any individuals over the Thomas Fire.

1
Lieff Cabraser. Southern California Wildfires
2
SEC. Edison International SEC Filing, Risk Factors
3
CPUC. Decision on SCE Cost Recovery Application
4
Justia. Limoneira Co. Contract – JCCP 4965
5
Lieff Cabraser. Southern California Thomas Fire Class Action Complaint
6
Wildfire Today. Investigators Determine That a Power Line Caused the Thomas Fire
7
Cappello & Noel. Prominent Plaintiffs’ Attorneys File Class Action Against Southern California Edison
8
SEC. Edison International SEC Filing
9
FindLaw. Simple Avo Paradise Ranch LLC v. Southern California Edison Company
10
Edison Newsroom. SCE Resolves All Insurance Subrogation Claims for the Thomas, Koenigstein Fires and Montecito Mudslides
11
U.S. Department of Justice. Southern California Edison Agrees to Pay United States $80 Million to Resolve Lawsuit
12
Courthouse News Service. SoCal Edison to Pay $80 Million in Settlement With Forest Service Over 2017 Thomas Fire
13
CBS News. SoCal Edison Customers to Cover $1.6 Billion in Thomas Fire Settlement Costs, State Officials Say
14
CPUC. SCE and Cal Advocates Amended Settlement Agreement
15
E&E News. California Regulator Lets SCE Charge Ratepayers for Damages From Thomas Fire
16
CPUC. Decision 25-01-042
17
Wild Tree Foundation. Utility-Caused Catastrophes
18
Ventura County Star. Southern California Edison Sues Santa Barbara, Montecito Mudslide
19
Santa Barbara Independent. Edison Claims County Liable in Debris Flow Counter-Suit
20
Courthouse News Service. SoCal Edison to Pay $360 Million for Deadly Wildfires, Mudslide