A sweeping wildfire lawsuit against PacifiCorp, the utility owned by Berkshire Hathaway, is back before Oregon’s highest court, with the outcome potentially exposing the company to damages running into tens of billions of dollars.
The dispute centres on four wildfires that tore through Oregon in 2020. Residents and business owners are fighting to restore a $1.25 billion jury verdict after a state appeals court overturned the awards, citing an error in the instructions given to jurors.
The Oregon Supreme Court heard arguments on Tuesday, with justices questioning whether the massive class-action case was handled properly and whether the jury had sufficient grounds to hold the utility responsible for all four fires.
More than 2,400 plaintiffs have accused PacifiCorp of negligence, alleging that its electrical equipment and failure to shut down power lines during a powerful Labor Day weekend windstorm contributed to widespread destruction. More than 2,000 properties were reportedly damaged.
The initial trial phase ended in 2023, when jurors found the utility liable for the Santiam Canyon, Echo Mountain Complex, South Obenchain and 242 fires. The trial judge had instructed jurors that they could assume evidence presented in court applied to every member of the class.
PacifiCorp argues that the instruction was flawed and that the verdict should not stand.
Representing the utility, attorney Ted Boutrous described the litigation as an extraordinary undertaking, arguing that the scale of the class action had no real precedent in the country.
He acknowledged the devastation caused by wildfires but maintained that the lawsuit had grouped together claims that were too different to be resolved through a single verdict.
The plaintiffs, however, insist the jury reached the correct conclusion. Their attorney, Nicholas Rosinia, argued that the fires were not isolated incidents but part of a wider pattern in which PacifiCorp’s conduct played a substantial role in the resulting damage.
Distance Between Fires Becomes a Central Issue
PacifiCorp has denied wrongdoing and challenged the decision to combine the claims, pointing out that the four fires occurred more than 100 miles apart.
During the hearing, Justice Stephen Bushong questioned whether the jury instruction actually required jurors to apply evidence across the entire class. The wording allowed them to make that assumption, he noted, but did not force them to do so.
Chief Justice Meagan Flynn raised a more direct concern, asking whether jurors could reasonably conclude that evidence from a fire burning far away established liability for another blaze.
Boutrous acknowledged that jurors might have made such an assumption, adding that they were not specialists in handling complex class-action litigation.
Several justices appeared concerned about whether the geographic separation of the fires had been properly considered when the jury reached its verdict.
The Supreme Court is expected to issue a decision in the coming months.
The Oregon Court of Appeals had overturned the liability verdict and associated judgments in April. It also directed the trial judge to reconsider whether the class should have been certified in the first place, potentially forcing the entire case back to an earlier stage.
For wildfire victims, a class action offers the prospect of pursuing compensation collectively rather than filing separate lawsuits, which can be expensive and time-consuming.
Berkshire Warns of Wider Consequences for Utilities
The case also carries significant implications for the broader utility industry.
Berkshire Hathaway Chief Executive Greg Abel has warned that enormous wildfire liabilities could threaten the longstanding regulatory arrangement governing power companies.
Under that framework, utilities operate under government oversight in exchange for the opportunity to earn reasonable returns on their investments. Those returns help finance infrastructure and improvements intended to serve customers.
But the prospect of recovering wildfire losses through higher electricity bills can become politically contentious, with regulators and elected officials often resisting rate increases.
Attorneys representing the Oregon plaintiffs argue that the fires shared important evidence of negligence. They allege PacifiCorp failed to adequately insulate power lines, maintain surrounding vegetation and establish a proactive strategy for shutting down electricity during dangerous weather conditions.
PacifiCorp has already faced substantial financial consequences from the wildfires. By June 30, the company had reached approximately $2.9 billion in settlements with claimants outside the certified class, as well as with the federal government over fires that damaged federal land.
Berkshire Hathaway acquired PacifiCorp in 2006 for $5.1 billion, when Warren Buffett was leading the conglomerate.
The Oregon Supreme Court’s decision could determine whether the wildfire victims retain a collective path to compensation or must return to a far more fragmented legal battle.
