BILL ANALYSIS Ó
AB 992
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Date of Hearing: May 3, 2011
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 992 (Nielsen) - As Amended: April 12, 2011
SUBJECT : CIVIL LIABILITY: WILDFIRES
KEY ISSUE : SHOULD LIABILITY FOR WILDFIRES BE SUBSTANTIALLY
LIMITED?
FISCAL EFFECT : As currently in print this bill is keyed fiscal.
SYNOPSIS
This bill seeks to substantially re-write California statutes
regarding liability and damages with respect to injuries caused
by wildfires. Among other provisions the bill would declare
that damage caused by an escaping fire shall no longer
constitute a trespass for purposes of injuries to timber, trees,
or underwood upon the land of another person. It would also
substantially reduce the measure of money damages, provide new
defenses, and shorten the time period for bringing suit. The
measure apparently grows out of litigation filed by the United
States for damage to public lands caused by a 2007 wildfire
involving the sponsor. Supporters argue that the bill reflects
the need to more sensibly determine fault and damages when
multi-million dollar wildfires occur, contending that recent
lawsuits have misused longstanding California statutes to apply
them to massive fire losses, sending recovery costs soaring.
While supporters complain about the prosecution by the United
States Department of Justice, the bill also applies to both
state and local agencies as well as to private victims of
wildfires. The bill is opposed by the Consumer Attorneys of
California, which argues that the bill would insulate negligent
parties from liability for full compensation for damages caused
by irresponsible and negligent action.
SUMMARY : Substantially reduces liability and money damages for
harm caused by wildfires. Specifically, this bill :
1)Provides that damage caused by an escaping fire, other than an
arson fire, shall not be deemed a trespass for purposes of
damages for wrongful injuries to timber, trees, or underwood
upon the land of another person.
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2)Provides that the amount of monetary damages recoverable by
any person, including a governmental entity, for fire escaping
to the land of another, other than arson, shall be limited to
the fair market value of the land and timber affected by the
fire in its prefire condition, less the fair market value of
the land and timber in its post-fire condition.
3)Provides that non-fee-based public benefit use, land
conservation management activity, and timber operations
conducted in compliance with all laws and regulations
pertaining or related to fire safety shall not be deemed a
foreseeable risk in the context of any damage related to fire
or its escape onto the property of another.
4)Provides that existing law imposing treble money damages
liability for any injury to wood, underwood, trees, or timber,
shall not apply to damages caused by any wildfire, other than
an arson fire.
5)Deletes liability for persons who willfully set fire to, allow
fire to be set to, or allow a fire kindled or attended by him
or her to escape to the property of another.
6)Requires that an action for damages be filed within three
years of the date of official extinguishment of a fire for
willfully setting fire to, allowing a fire to be set to or
allowing a fire kindled by him or her to escape to the
property of another.
7)Requires that a public entity give notice within 90 days of
the official extinguishment of a fire to any person it has
probable cause to believe may be liable for damages caused by
the fire so that the entity may bring a civil action to
recover those damages.
8)Deletes existing law providing that the occurrence of a fire
is prima facie evidence of negligence in the maintenance,
operation, or use of an engine, barbecue, incinerator,
railroad, rolling stock, chimney or other device if that fire
escapes from the place where it originated, and it is proven
that a person's negligence proximately caused that fire,
making that person guilty of a misdemeanor and civilly liable
for his or her negligence.
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EXISTING LAW :
1)Defines "wildfire" as an unplanned, unwanted wildland fire,
including unauthorized human-caused fires, escaped wildland
use events, escaped prescribed fire projects, and all other
wildland fires where the objective is to extinguish the fire.
(Government Code section 51177(j).)
2)Specifies the measure of damages available for trespass to
timber, trees, or underwood upon the land of another person is
three times the sum as would compensate for the actual
detriment unless the trespass was casual or involuntary, or
the defendant had probable cause to believe that the land on
which the trespass was committed was his or her own or the
land of the person in whose service or by whose direction the
act was done, in which case the measure of damages shall be
twice the sum as would compensate for the actual detriment.
(Civil Code section 3346.)
3)Provides that any person who cuts down or carries off any
wood, underwood, tree, or timber, or girdles or otherwise
injures any tree or timber without lawful authority, as
specified, is liable for treble the amount of damages that may
be assessed therefor in a civil action. (Code of Civil
Procedure section 733.)
4)Provides that any person who personally or through another
willfully, negligently, or in violation of law sets fire to,
allows fire to be set to, or allows a fire kindled or attended
by him or her to escape to the property of another is liable
to the owner of that property for any damages to the property
caused by the fire. (Health and Safety Code section 13007.)
5)Provides that if a fire originates from the operation or use
of an engine, machine, barbecue, incinerator, railroad rolling
stock, chimney, or any other device that may kindle a fire,
the occurrence of the fire is prima facie evidence of
negligence in the maintenance, operation, or use of that
engine, machine, barbecue, incinerator, railroad rolling
stock, chimney, or other device. If the fire escapes from the
place where it originated and it can be determined which
person's negligence caused the fire, that person is guilty of
a misdemeanor. (Public Resources Code section 4435.)
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COMMENTS : The author explains the reason for the bill as
follows:
California statutes and case law are now being applied by
the Federal government in a new way to support unheard of
levels of overlapping and duplicative damages against
landowners for fires that spread from their lands in cases
where the landowners are neither negligent nor should they
be held legally responsible for the parties that caused the
fire.
Recent "resource damages" cases pursued by the Federal
government, namely the $102 million settlement in the
Storrie Fire matter, has spawned a new Federal policy of
pursuing resource damage claims in unprecedented sums that
could lead to new exposure for the variety of landowners
that are in relative proximity to Federal lands, such as
National Forests. In short, the Federal government's new
application of long-standing State and Federal laws will
undermine forest conservation and management in the State
of California.
Specifically, the Federal government through the U.S.
Attorney's office has taken a "task force" approach to
pursuing cases to generate extremely large settlements for
damages associated with wildfires. These cases have
provided a new revenue generation stream, which has further
exacerbated motivations in today's trying budget times.
Existing insurance and risk management programs will not be
sufficient to address this new approach to extraordinary
resource damage claims. If a fire is found to have
potentially originated on or spread from your land, then
you have new exposure to consider regardless of your role
in the actual activity that started the fire. In
particular, State of California statutes are being used and
depended upon by the Federal government to prosecute these
cases. These statutes are being used to support concepts
of "strict liability" and "guilty until proven innocent".
With the new efforts towards exponential claims for
damages, the intent of these statutes needs to be
clarified. Until recently, these statutes provided the
legal framework for fire suppression costs recovery only.
Consequences are substantial for land conservation groups
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(i.e. land trusts, conservancies, and open space
districts). This new potential exposure presents grave
risk as to the viability of these organizations and may
prevent future forest conservation transactions.
Progressive private forest landowners face similar
circumstances. These landowners could be forced to
completely re-evaluate their risk management and
potentially limit recreation and restoration-oriented
activities, such as prescribed burning. These types of
landowners play an important alternative role to more
industrial management of forestlands. These consequences
obviously were not envisioned by the California Legislature
when these statutes were first enacted nor was there an
understanding of the Federal government's application of
such statutes.
Furthermore, this new potential liability exposure could be
used against any landowner, but conservation and
progressive forest landowners may have additional special
exposure since they often encourage recreational activities
and use management techniques, such as prescribed burning.
This Bill Would Dramatically Limit A Wrongdoer's Legal Liability
And Responsibility To Pay Damages For Injuries Caused By
Wildfires. Among other changes to existing law this bill would
limit the liability of wrongdoers in the following ways:
Damage caused by an escaping fire, other than an arson fire,
would no longer be deemed a trespass for purposes of damages
for wrongful injuries to timber, trees, or underwood upon the
land of another person.
Reduces to the measure of damages recoverable by any person or
governmental entity for fire escaping to the land of another,
other than arson, to the fair market value of the land and
timber affected by the fire in its prefire condition, less the
fair market value of the land and timber in its post-fire
condition, instead of the longstanding rule of three times the
sum as would compensate for the actual detriment.
Declares that timber operations, non-fee-based public benefit
use, and land conservation management activity conducted in
compliance with all laws and regulations pertaining or related
to fire safety shall not be deemed a foreseeable risk in the
context of any damage related to fire or its escape onto the
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property of another.
Exempts wildfire injuries to wood, trees and timber from
existing law imposing treble money damages liability.
Deletes liability for persons who willfully set fire to, allow
fire to be set to, or allow a fire kindled or attended by him
or her to escape to the property of another.
Deletes existing law providing that the occurrence of a fire
is prima facie evidence of negligence in the maintenance,
operation, or use of an engine, barbecue, incinerator,
railroad, rolling stock, chimney or other device if that fire
escapes from the place where it originated, and it is proven
that a person's negligence proximately caused that fire,
making that person guilty of a misdemeanor and civilly liable
for his or her negligence.
Under Current Law Fire is Considered Trespass. This bill would
follow a repudiated 1970 case, Gould v. Madonna (1970) 5
Cal.App.3d 404, which found that fire is not trespass and reject
subsequent case authority. The Gould case was overruled on that
point by Elton v. Anheuser-Busch in 1996. There the court held
that a negligent invasion by fire which causes damage to real
property constitutes a trespass. The split between Gould and
Elton was considered further in Kelly v. CB&I Contractors, Inc.
which upheld the current rule that fire may constitute a
trespass.
This Bill Would Also Shorten The Time For And Otherwise Impose
Limitations on Legal Action Against Wrongdoers For Wildfires.
In addition to the substantive liability and damages limitations
discussed above, this bill would also change the time period in
which legal action could be pursued. First, it would require
that an action for damages be filed within three years of the
date of official extinguishment of a fire for willfully setting
fire to, allowing a fire to be set to or allowing a fire kindled
by him or her to escape to the property of another. Of
potentially even greater significance, the bill would also
require that a public entity give notice within 90 days of the
official extinguishment of a fire to any person it has probable
cause to believe may be liable for damages caused by the fire so
that the entity may bring a civil action to recover those
damages. This provision would appear to effectively require
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that any investigation regarding the cause of a wildfire be
concluded within three months in every case. This timeframe may
be unrealistic. While the cause of a fire may be determinable
within 90 days, the full extent of the causes and complete fire
investigation may take significantly longer, particularly in
light of budget cuts exacerbated by the severe demand on
resources that occur in difficult fire seasons with multiple
large wildfires.
This Bill Is Apparently Intended to Affect Pending Litigation
Regarding the 2007 "Moonlight Fire" That Is Believed To Involve
The Sponsor. Asked whether the issues addressed by the bill are
the subject of pending litigation, the author states, "This bill
potentially impacts all pending wildfire cases to the extent, if
any, that it is retroactive. The legislation clarifies a split
of authority in the appellate courts as to whether double
damages are available in a wildfire case for casual or
involuntary trespass."
A non-exhaustive list of pending cases provided by the author's
office includes the following, some of which are believed to
name the sponsor, Walker Family Trust, or persons affiliated
with the sponsor, as the legally responsible party, although the
author has not responded to the Committee's inquiry regarding
the identity of the Walker Family Trust, what if any
relationship it has to the Walker parties noted in this list, or
how would the bill affect the issues in these cases:
United States of America v. Sierra Pacific
Industries, et al. - United States District Court,
Eastern District Case No. 2:09-CV-02445-JAM-EFB
California Department of Forestry and Fire
Protection v. Eunice F. Howell, et al. - Plumas County
Superior Court Case No. CV09-00205
Grange Insurance Association v Eunice Howell,
et al - Plumas County Superior Court Case No.
CV09-00245
Richard A. Guy v Books Walker et al - Plumas
County Superior Court Case No. CV09-00231
California-Engels Mining Co. v Sierra Pacific
Industries, et al - Plumas County Superior Court Case
No. CV09-00396
James Brandt el al v Sierra Pacific Industries
- Plumas County Superior Court Case No. CV10-00255
Cosmez v. Brooks Walker, et al. - Plumas
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County Superior Court Case No. CV10-00264
United States of America v. Pacific Gas &
Electric (No. 2:09-CV-02868-JAM-JFM- Eastern District)
United States of America v. Pacific Gas &
Electric (No. 2:09-CV-02877-GEB-EFB- Eastern District)
Research by the Committee indicates that the first seven of the
cases listed above relate to the "Moonlight Fire" of 2007. That
fire appeared to have started on Labor Day, September 3, 2007,
and continued until September 19, 2007. Located in Plumas
County, the fire burned almost 65,000 acres (46,000 of National
Forest Service property) including 2 residences and 5
outbuildings, caused 34 injuries and cost $31.5 million.
Classified as a human-caused wildfire, the Moonlight Fire
apparently started as a result of logging operations on private
land when two Howell Timber employees hired by Sierra Pacific
Industries to conduct logging operations on private land were
using bulldozers on a "Red Flag" warning day (i.e., probability
of ignition is 100 percent, meaning that 100 out of 100
firebrands landing in a receptive fuel bed would be expected to
ignite a fire). According to pleadings filed in the case, when
the alert went out to completely cease all operations likely to
start a fire (i.e. use of heavy machinery that generates heat
and/or sparks) at 1 pm, the employees stopped their work.
However, instead of staying to inspect the area to ensure their
operations had not caused a fire as required by the fire
service, the employees allegedly left the area; the fire ignited
where one had been operating a bulldozer. The Moonlight Fire
was allegedly the fourth fire that summer started by Howell
employees for failure to check the area after operations before
leaving. The defendants in that case include the Walkers as
part of the group of persons that owned the land on which the
fire started.
Impact on Public Agencies. Although the bill is apparently
directed principally at recovery actions by the United States,
it is not limited to losses suffered by the federal government.
Given the brief period of time this bill has been in print - and
the much shorter time since the author provided the Committee
any information about the bill last Friday - it is not known
whether any other state or local public entity may have concerns
about the bill. At this point, all that is known is the
following statement by the author: "CAL FIRE's Chief General
Counsel has voiced some concerns with some of the language in AB
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992 as amended 4/12/2011 that she feels could have some negative
impacts on the department's ability to operate its Civil Cost
Recovery Program. However, it has been expressed to CAL FIRE's
Chief Counsel that it is not the intent of AB 992 to hamper the
Civil Cost Recovery Program or the program's mission of seeking
reimbursement for the state's fire suppression costs."
ARGUMENTS IN SUPPORT: The Committee received one letter of
support, from the Associated California Loggers, stating:
Loggers and log truckers are the infrastructure for
timber harvesting in California, and can provide
the workforce for coming developments in the arenas
of global warming and in forest fire prevention and
clean-up. But we are in danger of losing an
increasing number of the hard-working and skilled
people who perform these tasks. The logging season
is short, existing regulatory requirements are
costly, and loggers must look to make a living in a
short window of time to continue in the trade.
The timber industry provides good middle-class jobs
in rural communities where the unemployment rates
are often well above those of the rest of
California.
In 2011, the timber industry in California is looking
at dire economic circumstances not seen since at
least the early eighties, and as a matter of price
economics, since the Great Depression. The crisis in
the housing economy has spread outwards and killed
off the demand for logs and lumber.
California logs and lumber are the most
environmentally-regulated in the nation and the
world. This time of economic crisis is a good time
for the California Legislature to look at ways to
save a state industry that must compete with the
less-regulated products of other states and nations.
AB 992 is two things at once: (1) Vitally important
to the survival of the California economy and (2)
Eminently fair, simple and sensible in its approach
to making needed changes to the law relating to
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civil liability for wildfires.
AB 992 reflects the need to more sensibly determine
fault and damages when multi-
million dollar wildfires occur. Recent lawsuits have
evidently misused over 100-
year old California statutes relating to trespass and
the "conversion of timber" to
apply them to massive fire losses, using the automatic
"treble damages" provisions to
send recovery costs unfairly soaring.
Moreover, in light of how responsibility for these fires
needs to be analyzed and
distributed, it is time to apply the principles of
negligence to analysis of the causation
of wildfires.
Modernly, California timber harvesting is in a very
fragile state. Sawmills and
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alternative-energy-producing biomass facilities are
closing; operating mills are not
accepting logs. The ability of our industry - and its
insurers - to handle the massive
costs imposed by current assessments of strict liability
and treble damages for fire
cost recovery under the current law is nil. It is time
for reform.
ARGUMENTS IN OPPOSITION: The Consumer Attorneys of California
opposes the bill, stating:
In 2007, the Southern California "power line fires" burned
approximately 300,000 acres of California land, including
1,100 homes and an untold number of trees. AB 992 threatens
the right of landowners to recover from this and other
unfortunate disasters. Contrary to long standing law and
the policy of protecting and preserving California's
natural resources, AB 992 would insulate negligent parties
from liability for full compensation for damages caused by
irresponsible and negligent action.
State, county and municipal governments are vested with the
public trust in protecting and preserving California's
natural resources. AB 992 proposes to undermine this trust
by amending Health and Safety Code §13007 to impose a 90
day statute of limitations on suits brought by the state to
recover damages caused by fire. The potential ramifications
of AB 992 are particularly troubling as wildfires pose
unique risks to public entities. Forest fires spread
quickly, and damage large tracks of property. State lands,
consequently, are frequently subject to the ravages of
negligently spread fires. Consider the following:
By instituting a 90 day statute of limitations, AB 992
would force public entities to spend large sums of public
funds to quickly research and prosecute potential claims.
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If the state fails to quickly institute a claim, it will be
barred from recovering for damage caused by negligent
parties. As the state is charged with the responsibility of
maintaining public lands, and because fires often leave
lands in an unsafe or unusable condition, the state could
potentially be forced to spend large sums of public monies
in order to repair injured properties. By limiting the
ability of public entities to recover precious state
resources, this amendment runs afoul of public policy and
will inevitably contribute to our crippling deficit.
It is long settled under California law that a land owner
may recover the cost of repair even if it is more than the
diminution in value to property if "there is a reason
personal to the owner for restoring the original condition"
(Rest2d Torts, §929, com. B, at 545-546) or "where there is
reason to believe that the plaintiff will, in fact, make
the repairs." (22 Am. Jur.2d, Damages, §132, at p. 192).
The court followed this rule in Kelly v. CB & I
Constructors, Inc. when it affirmed the jury's award of
restoration costs that exceeded the value of fire
destructed property by 67%. Kelly v. CB & I Constructors,
Inc., 179 Cal.App.4th 442, 453 (2009). AB 992's amendment
of Civil Code §3346 would eliminate this right to recover
restoration costs and instead strictly limit recovery to
diminution in value.
To ease the stress experienced by those who are caught in
the path of merciless fires, California Civil Code
currently provides impacted parties with a glimmer of hope
in their attempt to recover from these debilitating
disasters. Fires claim lives, level homes, and leave their
victims in desperate need of assistance. When discussing
the ravages of fire damage, the term "recovery" thus
encompasses much more than financial restitution. The law,
however, can only do so much to assist affected parties in
their battle to recuperate.
California Civil Code §3346 recognizes that the path to
recovery is laden with unanticipated expenses and sizeable
legal fees. Consequently, existing code establishes that a
defendant who "involuntarily or casually" trespasses on the
land of another is responsible for two times actual damages
to trees resulting from the trespass (liability grows to
three times if the trespass was willful). In Kelly v. CB &
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I Constructors, Inc., the court affirmed a jury verdict and
"doubling" for tree damage caused by fires. The court held
that "tree damage caused by a negligently spread fire is
wrongful injury to trees caused by a trespass subject to
mandatory doubling pursuant to Civil Code section 3346."
Kelly, 179 Cal.App.4th at 450-453. This decision, and the
code which motivates it, is in no way novel but does much
to assist those impacted by fires.
California code is patterned after virtually identical
Oregon Revised Statute §105.815. In Kinzua Lumber Co. v.
Daggett, the Oregon Supreme Court explained that mandatory
doubling is necessary to ensure just compensation for fire
damage. Kinzua Lumber Co. v Daggett, 203 Ore. 585 (1955).
Trial costs, attorney's fees, and inconveniences
experienced necessarily increase the damages suffered by
victims seeking recovery for fire damage.
The Committee received one additional letter in opposition from
attorney Mitchell Wagner, who states:
I, along with numerous colleagues, represent hundreds of
homeowners and other property owners who suffered the loss
of 1,100 homes and other property in the 2007 Witch Creek,
Guejito and Rice Canyon Fires in San Diego which were
caused by negligently installed and maintained SDG&E power
lines.
The provision proposed in AB 992 that a public entity would
be required to give 90-days notice after a fire loss to
recover would be a unique and severe time constraint
otherwise foreign to California law and would require
notice and action before public entities complete their
investigations to determine liability. As an illustration,
after the 2007 SDG&E power line fires, it was more than a
year before CalFire and the CPUC issued their findings on
the cause and origin of the Witch Creek, Guejito and Rice
Canyon Fires. Requiring public entities to proceed with
the first step in litigation in 90 days would impose
unreasonable financial burdens on public entities and force
them to jump the gun before completing fire investigations.
The Walker Family Trust asserts that under the existing
statutes a landowner is liable for a fire that spreads from
his property "regardless of Ýthe landowner's] role in the
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actual activity that started the fire" and that "these
statutes are being used to support concepts of 'strict
liability' and 'guilty until proven innocent.'" Not true.
Civil Code § 3346 requires that the trespass be negligent
("casual or involuntary") and, for trebling tree damages,
that it be willful.
The Walker Family Trust also asserts that "land
conservation groups" will face "grave consequences" if the
Legislature does not pass AB 992. To the contrary, land
conservation groups would be hurt the most. First,
liability for the full extent of damages a wrongdoer causes
and for double damages for loss to trees serves as an
incentive to act with due care in engaging in activities
creating a risk of fire. Second, when a land conservation
group sustains losses from a negligently set fire, it is,
under existing law, able to recover for the cost of
remediation and is not limited to the difference between
the pre-fire and post-fire property value which is almost
always much less.
AB 992 is so destructive of public and private landowner
rights that it is inconceivable a private landowner, as
opposed to electric utilities or other interests engaged in
activities posing a severe fire risk, would submit AB 992
for the Legislature's consideration. If a private
landowner is behind AB 992, it is guided by a truly narrow
and selfish interest inimical to Californians as a whole.
REGISTERED SUPPORT / OPPOSITION :
Support
Associated California Loggers
Opposition
Consumer Attorneys of California
One individual
Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334
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