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California Court Rules Church Group Corporation Can Be Vicariously Liable for Wildfires

Church Group Corporation

The 2016 Sherpa Fire burned nearly 7,500 acres near Goleta, CA, in Santa Barbara County. A water treatment plant at El Capitan Canyon ranch that provided water to El Capitan State Park for bathrooms, water fountains, and other use was lost in the blaze. On November 25, a unanimous Second Appellate Second District panel declared that a corporation can be held vicariously liable for the costs of extinguishing and investigating a fire if it can be determined that said corporation’s employee “negligently or illegally sets a fire, allows a fire to be set, or allows a fire it kindled or attended to escape.”

In the case of the 2016 Sherpa Fire, costs are believed to be in excess of more than $12 million, according to officials. The court’s decision directly affects the Presbyterian Camp and Conference Centers Inc., out of Big Bear Lake, who now face liability for the multimillion-dollar bill. A PCCC employee responsible for maintaining a camp in Santa Barbara County is blamed for accidentally starting the wildfire by dropping hot embers on the ground while moving a smoky fireplace log outside to hose it down. A reported chimney problem is what prompted the PCCC employee to remove the burning log from the cabin, thereby sparking the fire in the process. 

The ruling by the Second Appellate District panel is a departure from a previous 2017 decision from their peers in the Third District. In effect, the Second District’s decision declares that the Third District was wrong when they declared that two sections of the Health and Safety Code could not be used to hold corporations liable for their employees’ actions in relation to starting fires.

The Second District panel found that sections 13009 and 13009.1 do, in fact, state that “corporations can be held liable and that the legislative history supports the conclusion that the liability extended to when their employees’ actions were negligent, affirming the trial court decision and rejecting PCCC’s writ of mandate to overturn that decision.”

Justice Martin J. Tangeman, who wrote for the majority, declared, “It would be contrary to the legislature’s intent if we were to conclude that corporations are not among the wrongdoers required to pay for fire suppression and investigation costs…They are.”

The decision highlights the legal notion of corporate personhood, which finds that a corporation has at least some of the legal rights and responsibilities enjoyed by natural persons. On Monday, the court said that past decisions of relevance found the term “person” included corporations, adding that when the law was amended in the 1950s, “corporations, by definition could be liable for fires that escaped onto others’ properties.”

To the issue of negligence, investigators determined that PCCC did not maintain the cabin chimney properly, failed to maintain fire safety equipment, and failed to clear necessary brush and vegetation appropriately from the surrounding areas. Said oversights, in addition to the actions on the part of the PCCC employee, are what led to the court’s decision. 

Justice Tangeman declared, “Here, it is undisputed that Cook [the employee] started the Sherpa Fire. And it is undisputed that PCCC was his employer at that time. Therefore, if CalFire can prove that Cook started the fire negligently or in violation of law, and did so in the scope of his employment, PCCC can, pursuant to sections 13009 and 13009.1, be held vicariously liable for CalFire’s fire suppression and investigation costs.”

Following the decision, PCCC is said to be reviewing their options going forward. How the ruling will ultimately impact PCCC, as well as additional corporations who could potentially face similar liability suits given the spate of wildfires that have plagued California in recent years, remains to be seen. But the significant ruling could potentially expose a litany of corporations to a rash of lawsuits that subject them to multimillion-dollar bills for costs related to maintaining wildfires in California.  

The Office of the Attorney General provided counsel for the state of California.

Lee H. Roistacher, of Daley & Heft LLP in Solana Beach, represented the Presbyterian Camp and Conference Centers Inc.