The parent company of Southern California Edison has been sued for allegedly defrauding shareholders before the recent Los Angeles-area wildfires by assuring them it could shut down power lines to reduce the risk of catastrophic damage.
Tuesday’s proposed class action against Edison International appeared to be the first shareholder lawsuit stemming from the Eaton Fire, which broke out on January 7 east of Los Angeles in Altadena, California during a Santa Ana windstorm.
Related: Edison Probing Retired Power Line as Possible Start of LA Eaton Fire
The fire burned more than 14,000 acres, destroyed more than 9,400 structures and killed 17 people.
Edison had no immediate comment, saying it will review the complaint.
Shareholders led by Felipe Antillon said Edison made materially false and misleading statements over nearly four years before the fire, in assuring that its utility unit used a power shutoff program to “proactively de-energize power lines” to reduce wildfire risks during “extreme weather events.”
Related: Edison Shares New Details on Transmission Lines in Eaton Amid Wildfire Probe
The shareholders said the truth began to emerge amid reports that Edison had not de-energized nearby power lines, while lawsuits blamed the company’s electrical equipment for starting the Eaton fire, which has since been contained.
Edison’s share price has fallen 34% since the fire broke out.
The lawsuit seeks unspecified damages for shareholders from February 25, 2021 through February 6, 2025.
On the latter date, Edison said it received information suggesting a possible link between its equipment and the Eaton fire, and that it believed its equipment may be associated with the ignition of the Hurst fire, which burned 799 acres.
Other defendants include Edison’s Chief Executive Pedro Pizarro and Chief Financial Officer Maria Rigatti. Edison is based in Rosemead, California.
Shareholders often sue companies for alleged misleading disclosures or omissions after unexpected events cause stock prices to fall.
The several Los Angeles-area wildfires last month may prove the most expensive natural disaster in U.S. history.
The case is Antillon v Edison International Inc, U.S. District Court, Central District of California, No. 25-01154.
(Reporting by Jonathan Stempel in New York; Editing by Cynthia Osterman)
Topics Lawsuits Catastrophe Natural Disasters Wildfire Louisiana