The Justice Department Sues Southern California Edison Over the Eaton and Fairview Fires
On September 4, 2025, the US Department of Justice filed two civil lawsuits against Southern California Edison, the utility subsidiary of Edison International, seeking damages for wildfires it alleges were caused by the company's equipment. The first complaint concerns the Eaton fire, which began on January 7, 2025, in the hills above Altadena and Pasadena during an extreme Santa Ana wind event. The second complaint concerns the Fairview fire in September 2022 in Riverside County.
The Eaton fire was one of the most destructive in California's history. The federal claims are small relative to the total losses, because they cover only damage to federal property and federal costs. SCE has said publicly that its equipment may have been associated with the ignition of the Eaton fire, and that it believes it is likely that its equipment was involved. The utility has launched a compensation program to offer payments to people affected by the fire without the need for litigation, which it says is intended to provide faster payment than court proceedings.
NPR has also reported that distribution lines in Altadena experienced problems in the hours before the Eaton fire began, and that SCE did not shut off power to most of the circuits serving the community. California applies the doctrine of inverse condemnation to utilities, under which a utility can be held liable for property damage caused by its equipment even without negligence. After the 2017 and 2018 wildfires, including the Camp fire caused by PG&E equipment, PG&E filed for bankruptcy in 2019.
Edison International's share price fell sharply in January after the fire and has remained volatile as investigations and litigation have progressed. For other western utilities, the case reinforces how wildfire risk now dominates credit assessments. A large share of the eventual claims against SCE is likely to come from insurers rather than individuals. For California's electricity customers, wildfire liability affects bills through the Wildfire Fund charge, through utility spending on wildfire mitigation, and through the cost of capital.