Power outage announcements prompt legal action – Thousand Oaks newspaper
A federal class-action lawsuit has been initiated against Southern California Edison in connection with the Eaton fire outbreak, alleging that the company uses public safety shutoffs to falsely boost its stock price. The plaintiff, Douglas Elliott, claims in a lawsuit filed in Los Angeles federal court that SCE violated the Securities Exchange Act of 1934 through deceptive and fraudulent statements linked to the Eaton fire that ignited on January 7 in the Altadena/Pasadena area.
Edison has implemented power shutoffs during extreme weather conditions as a wildfire prevention measure since late 2019. The company maintains that these public safety shutoffs are a last-resort strategy to protect communities and prevent fires. However, Elliott’s lawsuit argues that SCE’s actions during the Eaton fire indicate a different motive. The lawsuit alleges that despite warnings of severe winds from the National Weather Service, SCE chose to keep certain parts of its distribution circuit around Eaton Canyon energized, contradicting their initial claims that lines in the fire’s vicinity were de-energized.
The lawsuit contends that SCE released false and misleading statements concerning the de-energization of distribution lines near Eaton Canyon before the fire’s reported start time, as part of their Public Safety Power Shutoff program. Eyewitness accounts and photographic evidence of a fire at the base of an SCE tower contradict these representations, according to Elliott. While SCE has not yet responded to the lawsuit, the company informed the California Public Utilities Commission that their preliminary analysis showed no disruptions or irregularities in transmission lines near Eaton Canyon hours before and after the fire’s reported beginning.
The lawsuit has affected SCE’s stock price, with shares plummeting from $65 to $51.16 between January 10 and February 6, unrelated to the broader market decline. Elliott is seeking class-action status for SCE shareholders from 2021 onwards, aiming for financial compensation, including interest, along with coverage for legal expenses incurred during the suit’s course. In light of ongoing investigations into a potential connection between SCE’s operations and the Eaton fire, this lawsuit sheds light on the accountability and responsibility of utility companies in managing public safety and their corporate practices.