Home or Business Destroyed by California Wildfire?

Attorney Helps Dixie Fire Victims Recover 

Video Transcript:

Mikal Watts: 

That's my job to make sure that they get the justice that they're entitled to. Our first goal is to get people the money that they need to rebuild their homes.

Rob Rosenthal: 

If you're a victim of the Dixie wildfires in California, how do you know if you can get compensation for your losses and where do you turn for help? Well, we're gonna find the answer to those questions and a lot more right now because that's what we're going to ask the lawyer. Hi again everybody. I'm Rob Rosenthal with askthelawyers.com, and my guest is Attorney Mikal Watts, who has been helping wildfire victims all over the country, as a matter of fact, for several years now, and we're gonna get to him in just a second. I wanna let you know right off the top, if you have questions, and you wanna talk to Michael or his team about anything as far as wildfires, just call the number that's on the screen. That's the easiest way to do that. Michael, good to see you, thank you for helping us out today.

Mikal Watts: 

You bet, Rob, thanks. Thanks for having me on.

Rob Rosenthal: 

So let's just start off talking about wildfires in general. They happen, lightning strike or something like that, very little you can do about it, but I think you're here to tell me that some of these big wildfires we're hearing in the news lately, especially these ones in California, something could have been done to prevent those.

Mikal Watts: 

Well, about 68% of all the wildfires that have happened in California over the last five years have been caused by utility equipment, and so there's fuel everywhere in terms of all the forest and that's why people live in California. But what is unnecessary and what is preventable is the ignition that's being provided by the interplay between utility equipment and the trees that surround it, and so PG&E's equipment is starting repetitive fires over and over and over again, and they know how to stop it. We just need to make them stop it.

Rob Rosenthal: 

So let's back up a little bit, give me a little synopsis of how you and your law firm got so involved in helping people who are victims of wildfires?

Mikal Watts: 

Well, I was working on a lawsuit for Valero Energy Corporation against PG&E when the Northern California wildfires happened in the fall of 2017. We saw what happened, we saw the carnage that resulted from it, the 44 people who died, the 5500 homes that were incinerated by a completely preventable wildfire that started in the Calistoga area and burned up a good portion of the Santa Rosa, California area, and so we opened an office there, and before you know it, we represented about 2500 people from the 2017 Northern California wildfires. While we were working on that case, PG&E's equipment started a fire, and it was a camp fire that burned down the entire town of Paradise, incinerating 14,000 homes and killing 86 people. We ended up representing about 12,000 people in that fire, and of course, PG&E took bankruptcy. We were involved in that, and I was proud to negotiate what was then the second largest settlement in American Tort history. It was valued at $13.5 billion, unfortunately because of the stock price, maybe that's less than that now, but the bottom line is, it was the second most valuable settlement the history of the American Tort system, and I was involved in that.

Mikal Watts: 

Since that, we've been hired by hundreds of people in the 2019 Kincade fire, hundreds of people in the 2020 Zogg fire up near Redding, California, as well as fires down south, the Bobcat fire against Southern California, Edison and up north in Oregon, the Archie Creek Fire, we have over 500 clients there against Pacific Power. So what we're seeing up and down the West Coast is a repetitive failure by the utility companies to properly maintain their equipment, to properly manage the vegetation surrounding their equipment and their active lines, in high wind events, those two come together and you get wildfires. The real change is, is because of climate change issues, these wildfires are no longer controllable within 5000 or 10,000 acres, they become these mega-wildfires that more recently are burning up a million acres of land and all the homes and all of the property and all the lives that are inside those wildfires, they're uncontrollable.

Rob Rosenthal: 

Speaking of a mega-wildfire, let's talk specifically about the Dixie fire. It's still burning, it's still growing, tell us what we know about that at this point, Michael.

Mikal Watts: 

Well, we know it started on July 13th of 2021. There was a troubleshooter for PG&E that was out there at the site where it began, there was a river between him and what he was looking at across the ravine, and in effect, he could see blown fuses in effect and blown fuses are equipment, crying out that something is wrong. Unfortunately, there was no passage across the river, it took him nine hours to get to the other side, but when he got there, he confirmed that two or three fuses had burned, there was a healthy tree that had fallen on one of PG&E's line, and there was a fire in that area. So it's very strong evidence of what happened, and that is a tree, that was in proximity to PG&E's equipment, fell into the equipment, which makes PG&E liable under California's inverse condemnation law. That fire began small that day, it accelerated, it became massive and then it joined up with a second fire and it was the Fly Fire that started nine days later, and you guessed it, it started when a tree fell into PG&E's equipment a second time. Those two fires merged, it's now one of the largest fires in California history, over 850,000 acres, well over 1200 buildings and homes incinerated.

Mikal Watts: 

The good news is, is that the good people that are fighting the fire have done a good job of evacuating folks, nobody has died, three firefighters have sustained serious injuries, but it's still only 52% contained as of the date of this video, so we hope and pray that they can get it under control, but the carnage in terms of lost property is pretty severe.

Rob Rosenthal: 

One thing I think might cross people's mind Michael, they heard you just a minute ago, say PG&E filed for bankruptcy, so they may be thinking, where is the money to recover for the compensation, is there still money to be had?

Mikal Watts: 

Sure, the good news is, is when we settled the 2017 North Bay fires and the 2018 Camp fires for what was then believed to be $13.5 billion in cash and stock, unfortunately, that stock has gone down a little bit, so it's not quite worth that anymore, but the bottom line is, is that that recorded an infusion of about $26 billion in capital from New York hedge funds and other financial institutions, we know who now owns what I call new PG&E.

Mikal Watts: 

The Governor of the State of California had to approve that settlement in order for PG&E to be eligible to participate in a $20.5 billion wildfire risk mitigation fund. In other words, there was the threat that future fires would happen, and there had to be some money that these people putting in $26 billion knew, that their investment wouldn't go in smoke to coin a phrase. So the legislature extended a surcharge in everybody's monthly bill that started in 2001 with the Enron bankruptcy and was about to expire, and they extended that in order to create capital that could be used to see this $20.5 billion wildfire payment funds so that if you have a fire, there would be money to pay the victims of those fires, so that money is available. There's a couple of things that are important. First, in order to be able to participate in that wildfire fund, PG&E, as part of its exit plan, had to put billions of dollars in it to seed the fund. Secondly, in order to be able to participate, they had to buy a wildfire liability insurance, and in 2021 they have $900 million in insurance available to cover losses that are caused by the Dixie fire.

Mikal Watts: 

Now, we already know that the losses that are caused by the Dixie fire are well in excess of $900 million, so I would anticipate that in addition to the $900 million in insurance funds, that AB 1054, this $20.5 billion risk pool will be called upon to help pay the damages of the people whose homes were burned down during the Dixie fire.

Rob Rosenthal: 

Let's talk about those people for a second, Michael, what can they expect? Let's just use for an example, say that they decide to be represented by your law firm to try and recover for their damages, what can they expect? What's the process like? How long does it take? What do they need to do? Walk us through that a little bit.

Mikal Watts: 

Well, generally, our law firm tries to concentrate on people whose homes burned down, we require a minimum threshold of $50,000 in economic damage to accept them as a client. Sometimes you can have smoke damage that's that severe, but generally, we represent people whose homes and properties and businesses burned down, that way we can focus on obtaining justice and redress and compensation for people who are hurt the worst. So people call us, we sign a contract with them, they give us their permission and we file lawsuits. We've already filed what is believed to be the first or second law suit in the state of California, with respect to the Dixie fire, PG&E's answer is due on September the 12th, we anticipate there will be hundreds, if not thousands of these lawsuits that will all be consolidated for pretrial and discovery purposes into what's known as a JCCP proceeding. Typically, those happen in either San Francisco or Sacramento where the computer systems are the best, but it doesn't mean the cases won't we tried right there in the counties where this fire happened, but we'll spend a good amount of time with very sophisticated Mass tort judges, these JCCP judges are picked because they're the best in California. In the Kincade Fire for example, we're in the midst of the JCCP discovery, court's already ordered mediation, so that's what happens on the litigation side, we'll be taking depositions with respect to what PG&E knew and when it knew it.

Mikal Watts: 

The maintenance history of this line, the maintenance history of the area around this line. The good news is, is that through CPUC rulemaking, they have an affirmative obligation to maintain all of these lines, to inspect them, to record the inspection and to send the evidence of that inspection to the CPUC. So there is no opportunity for PG&E to fudge the facts. The facts are what they are. We know what those facts are for two reasons. There's an additional obligation for PG&E when they have an incident to file an incident report with the CPUC, both with respect to the Dixie fire and with respect to the fly fire. The contemporaneously filed incident reports indicate that PG&E knows its equipment was the cause of the fire, which is important. In addition, under the Securities and Exchange Commission rules, when a publicly traded corporation like PG&E has something that could materially affect the stock price, like a fire of the size of the Dixie fire, they have to file a report explaining what's going on, and they've already done that, what's called a form on AQ that in effect tells their stockholders that PG&E is going to be materially affected by liabilities from the Dixie fire because they know it's their equipment.

Mikal Watts: 

So all signs point to PG&E. I don't think we're gonna have that much difficulty proving that, but just to be careful, we've hired one of the world's most renowned fire cause and origin experts, Michael Schulz, he worked for us on the 2017 North Bay fire, he worked for us on the 2018 Camp fire. He worked for us on the 2019 Kincade fire and on the 2020 Zogg fire. He's been out there, he's been doing the work, pinning down the evidence that we'll need to independently prove what happened, but it's pretty clear what happened. The other thing that happens is we spend a lot of time with Google Earth images, both from the standpoint of what started the fire, but also from the standpoint of documenting damage, Google replenishes its Google Earth images about every six months through software that we've had available to us, we know every home that burned down within the fire parameter, and we've got law clerks that are in effect doing the Google Earth imagery to pull down all those images, and that allows us to reconstruct what burned and the value of it; surface area of the roof, the surface area of the saw that needs to be replaced in the front yard, the hedges on the side, the cement driveway, the structures in the back, whether it's garages or sheds.

Mikal Watts: 

And more importantly, in California, one of the reason people live where they live is they're in proximity to these wonderful trees. When those trees burn down and they're on your property, California law provides for compensation as to the lost value of those trees and that forestry. So we hire experts known as abberis, we've done this 8000 times already. They go out and literally widget by widget, put a value on everything that burned up, and so that's kind of our methodology. We encourage our clients also, especially if they were close to the zone of danger, to send us the videos and the pictures they took of the fire during their escape, 'cause that proves that they were there. They're gonna have post-traumatic stress disorder in a lot of situations where their lives were in danger, and then the third thing that we do is we ask people to work hard on going room by room through their homes, and literally everything... You look behind me there's a toaster of some sort, well, we have to prove what the value of the toaster was, the spatula, the blender, all of the stuff that's in our homes room by room by room, so that we can reconstruct its value.

Mikal Watts: 

We have people that are former insurance adjusters that help price all of those things, and we provide that to our clients so that they can try to get paid from the insurance companies, but typically people who are insured have an artificial cap on contents that maybe limit the payment to $200,000 when there's $600,000 in contents that burned up with the house. So we try to collect all that for them. So it's a very methodical, computerised data-based process where we're collecting all the information from our clients as we're just getting started with the litigation with PG&E. The reason that's important is once we know what's going on and we do, once PG&E knows that we've got all of the equipment, PG&E knows that we know what they need in order to pay these claims. There are insurance companies that are gonna pay first, and we've gotta get them the information, they've got the money and we want it so that people can rebuild their homes as quickly as they can.

Mikal Watts: 

So and to answer your question about how long it takes, it depends on the quality of the judge and how fast he's moving. California judges are known to move pretty quickly, you have a preference statute in California, people over the age of 70 are presumptively entitled to a trial in a short period of time, so we follow the preference cases, we ask for trial settings very quickly, and it's all about applying pressure. And so the concept is, is that we're trying to get PG&E in a position where they admit that their equipment caused the fire, they admit that they're financially responsible for the fire, and then we get in discussions about how much they're going to pay. And one thing I've learned is that we can all say we're gonna get somebody a magnificent amount of money, but if it takes six years, that's not near as valuable if we can do it quickly, so we're very involved in trying to do this as quickly as possible.

Rob Rosenthal: All that stuff you just laid out, Michael, is that... Any law firm that just... Says we can handle your wildfire cases, are they all doing that same thing? Or is this unique to Watts Guerra?

Mikal Watts: 

Well, what I would say is this, what's unique is the prevalence of these wildfires over the last six years. I mean, frankly, there was a big wild fire in San Diego in 2006, where a bunch of people's houses got burned down and to their credit, San Diego Gas and Electric buried their lines, which PG&E refused to do until recently, and they also asked for permission to shut the power off, in what's called a Public Safety Power Shut off, a PSPS, that was done well over a decade ago. And part of what we're dealing with is when you got something like a line man that sees a blown fuse and takes nine hours to get around and confirm it, why wouldn't you shut the power off during those nine hours to prevent fires? So the PSPS theory in addition to the failure to trim trees next to lines, is part of the case against PG&E. The California Supreme Court has made clear for over or almost eight decades that if your utilities equipment starts a fire under California's laws, they're responsible for the damage that those fires cause. And that's what we have here with the Dixie fire.

Rob Rosenthal: 

You've done a lot of these, you've been involved for many years now, you've talked to a lot of victims, you've been yourself there on the ground, and when people come to you and you're the first people they talk to, what do you see? Is there a recurring... What is their state of mind? Is there some recurring thread that you see from all the victims, no matter what the fire it is?

Mikal Watts: Yeah, it is pretty repetitive. The first time we visit with people that have just lost everything, they had that war-torn look in their eyes like a Vietnam veteran coming back after an explosion or something. It's called PTSD or post-traumatic stress disorder, that has to be dealt with, and we encourage people to get into counselling and get into groups and work their way through the trauma. Of course, the second thing that we see is a fair amount of frustration with respect to FEMA who's there and trying to provide temporary housing units, trying to provide tentative help but it's never enough. And then you see at an absence or a shortage of housing. I was in Quincy just two days ago, and there's a part with just tents. It goes on as long as the eye can see, the same thing is in Susanville, so people are scattered from their home sites to places where they've never lived before, they have no homes, they have no access to housing so you have housing limitations, which is very dangerous and very problematic.

Mikal Watts: 

But as the months go by, people have this incredible ability to recover and to rebuild, and so what I really like is after a year, you come back and you see those same clients and that war-torn look of PTSD has been replaced by a steely-eyed determination and an anger about what happened, and that's why it's my job to make sure that they get the justice that they're entitled to. Our first goal is to get people the money that they need to rebuild their homes, but on top of that, they've gotta feel good about what happened, and frankly, this repetitive litigation is making PG&E a better company. I wouldn't say they're a good company, but they're less bad. We apply pressure on them by bringing large numbers of people together, after all, when we started this, PG&E was an almost 40 billion dollar corporation. Any one individual suing them would have been squashed like a bug, but by bringing together thousands, and in this case, tens of thousands of plaintiffs, all filing suit together, not only do you equalise the playing field, but you get the intention of the owners of PG&E who are largely hedge funds in New York and institutional investors all over the United States, and once you have their attention, they realise that the jig is up and they need to pay these claims, and so they do.

Rob Rosenthal: 

One more question, Mikal, let's talk more about specifics. So let's say somebody has decided to retain your law firm to help them recover for their losses, their life has just been turned upside down, they may have nothing. Do they need to be prepared to come up with something out of pocket initially to hire your firm?

Mikal Watts: 

No, we encourage people, beware of people that are asking for money to do this, what we do is we work on a contingency fee, and contingency means we only get paid if we win, you don't have to put anything up front, I put up all the risk dollars, I hire all the experts, I do all the damages work up, which in some of these fires can be millions and millions and millions of dollars. Our standard deal, and it's standard across the industry, is contingency fee of one-third of what we recover. Now the good news is in California, the inverse condemnation statute provides for attorney's fees for all economic damages recovered, so PG&E in effect has to pay the attorney's fees except with respect to the non-economic damages like mental anguish, loss of enjoyment of property. But we need to go after that in order to have enough margin so that after attorney's fees and expenses, there's more than enough money left to pay people to allow them to rebuild their homes. The second thing that happens is, is that we try to maintain and initiate and maintain a very vigilant communication system. I go out and I meet personally with the clients, once in every three months in town hall meetings, we send out sometimes monthly, sometimes weekly, depending upon how quickly things are moving.

Mikal Watts: 

Emails and texts, I'll shoot videos and provide text updates, I'll send emails and the like 'cause we're trying to let people know what's going on. Lawyers often fall into the trap that they think that they're working hard and doing great things for the clients, but that absence of communication is a real problem, so that's why we ask for people's email address and their cell phone numbers, not because we're gonna bother them, but because we're gonna text them periodic updates 'cause they need that feeling of progress repetitively drummed into them in order to be able to heal and to rebuild.

Rob Rosenthal: 

And did you say you have offices in these towns or near these towns with people on the ground there?

Mikal Watts: 

Yeah, we do. I've got right now, I've got three offices in California, in addition to the four that we had in Texas, we have another office in Puerto Rico. Got about 240 people and 40 something lawyers that are working on this because we represent over 17,000 fire victims. The reason we have multiple offices in California is we made a promise in 2017 when we started on the North Bay fires that we would be there until the job was done, and we're still there, we have an office that's a 22,000 square foot large office in Santa Rosa, that we had to have large because of COVID, we have another office in Chico for the camp fire. We have a third office in Igo, which is for the Zogg fire, we have another place, I wouldn't really call it an office down in Southern California for the Bobcat fire. We've just opened an office in Oregon for the Archie Creek Fire, and we intend to open offices with respect to the Dixie fire, both in Quincy and in Susanville, because our information is, is that the fire survivors from the Dixie fire have resettled in both Susanville and Quincy.

Rob Rosenthal: 

Is there ever a time, Mikal, when it's say too early to retain your services for people who are victims in the Dixie fire or is there ever a time when it's too late?

Mikal Watts: 

It's too late if you wait two years from the day of the fire, California has a statute of limitations of two years and we have to file your lawsuit by then, or it's gone forever, it's never too early for this reason. As we've done this year after year, from 2017-18, '19, '20, '21, we're trying to optimise the process, and of course, the most important thing is to get the process going quickly so that we can get people paid faster, so literally, we received a phone call within a week at the start of this fire, and we filed the first lawsuit, I think, or first or second lawsuit with respect to the Dixie fire. Why did I do that? Number one, I know what's happening. Number two, PG&E has a certain amount of time to answer it and that's September the 12th. Their answers do solely because we filed the lawsuits so early. There will be hundreds of these lawsuits that will be consolidated into the JCCP procedure, the faster we can get that consolidation done, the faster we can get to work, which is the faster that we can get to the end of the process and get people paid, so I really do encourage people that if you're ready, we're ready and we'll get to work right away.

Rob Rosenthal: 

Michael, tons of great information. I'm sure we could keep talking for another... Who knows how long. But thank you so much for taking some time to answer our questions.

Mikal Watts: 

Thank you for having me, I appreciate it.

Rob Rosenthal: 

That's gonna do it for this episode of Ask The Lawyer, my guest has been attorney Mikal Watts. Remember, if you want to talk to Mikal or someone on his team and ask questions about your specific situation, the best thing to do is call the number on the screen. Thanks for watching, everybody. I'm Rob Rosenthal with Ask The Lawyers.

This is a paid advertisement funded by the law firm of Watts Guerra LLC. The purpose is to reach prospective clients with respect to the matters described. Doug Boxer of The Law Office of Douglas Boxer is licensed to practice law in California. Attorneys identified, other than Doug Boxer, are licensed to practice law in the State of Texas. Mikal Watts is Board Certified in Personal Injury Law. Unless otherwise indicated, the attorneys listed are not board certified. This does not constitute a guarantee, warranty, or prediction regarding the outcome of your potential legal matter and does not constitute an attorney-client privilege or relationship. The principal offices of Watts Guerra LLC are located in Guaynabo, Puerto Rico. The principal office of the Law Office of Douglas Boxer is at 2561 California Park Drive, Suite 100, Chico, CA 95928. Doug Boxer, of The Law Office of Douglas Boxer, and Mikal Watts, of Watts Guerra LLC, are the attorneys responsible for the content of this advertisement.