Edison Utility Defeats Shareholder Lawsuit Over LA Wildfires

The parent company of Southern California Edison won the dismissal of a lawsuit alleging it defrauded shareholders prior to the January 2025 Los Angeles-area wildfires by assuring it had significantly reduced the risk of losses from such catastrophes.

Shareholders accused Edison International of being “structurally unable” to address extreme weather events and safely implement its Public Safety Power Shutoff program, a last-resort measure to shut down power lines when fire risks grow too high.

The shareholders also said Edison falsely promised that the program, together with hardening power lines and trimming vegetation, could reduce wildfire risk by as much as 90%. Edison’s share price fell by about one-third within one month of the wildfires.

But in a decision on Friday, U.S. District Judge Otis Wright in Los Angeles said Edison’s statements about its power shutoff program were too vague to rely on, and shareholders didn’t show that Edison promised to reduce wildfire risk everywhere it served.

“If anything, the PSPS statements, read charitably for plaintiffs, plainly indicate that PSPS was not perfect,” Wright wrote. “Without an assertion of perfect or complete loss-reduction through PSPS, it would be illogical for reasonable investor[s] to assume that SCE could use PSPS on all 38 of their transmission lines.”

The judge said shareholders may replead their risk reduction claims.

Lawyers for the shareholders did not immediately respond to requests for comment on Monday. Edison, based in Rosemead, California, and its lawyers did not immediately respond to similar requests.

The January 2025 wildfires killed 31 people and destroyed or damaged more than 16,000 structures, with much of the damage caused by the Eaton Fire in Altadena and the Palisades Fire in Pacific Palisades.

In September, the U.S. government sued Southern California Edison, blaming the utility’s equipment for starting the Eaton Fire and damaging National Forest System lands.

(Reporting by Stempel in New York; Editing by Franklin Paul)

Top photo: Crews sift through debris from the destructive 2025 Eaton Fire in Los Angeles. Photo by CalFire.