In response to extensive legal challenges stemming from the recent Palisades fire, the Los Angeles Department of Water and Power (DWP) has engaged the services of the prominent law firm Munger, Tolles & Olson through a three-year contract worth $10 million. The decision, made by the Board of Water and Power, which consists of appointees from the mayor’s office, aims to address the anticipated claims and lawsuits from residents who suffered damage or loss of their homes in the devastating blaze.
The contract was approved on Tuesday, although the firm had already begun its work on January 12, just days after the fire erupted, resulting in the destruction of nearly 7,000 homes and claiming at least 12 lives. Under the agreement, Munger, Tolles & Olson’s partners will charge the city up to $1,975 per hour for their legal services, while associates will bill between $745 and $1,180 per hour. A spokesperson for City Attorney Hydee Feldstein Soto indicated that the firm’s “discounted rate structure” was a significant factor in their selection.
DWP officials highlighted the firm’s specialized expertise in wildfire litigation as a critical reason for their choice. Munger, Tolles & Olson has a history of handling complex cases related to major wildfires, including representation of Hawaiian Electric Industries during the recent Maui fires, which resulted in settlements exceeding $4 billion. The firm also defended Pacific Gas & Electric in connection with the catastrophic 2018 Camp fire, which led to significant legal repercussions for the utility.
The swift hiring of Munger, Tolles & Olson stands in stark contrast to DWP’s slower approach in securing contractors for repairing the Santa Ynez Reservoir, a crucial water storage facility that was offline during the Palisades fire. DWP officials noted that the reservoir had to be emptied for repairs due to a tear in its floating cover, and they attributed the delays to the competitive bidding process for contractors.
As part of their legal strategy, Munger, Tolles & Olson will investigate the circumstances surrounding the reservoir’s prolonged offline status, as well as defend against claims regarding fire hydrants that reportedly ran dry during the firefighting efforts. DWP maintains that its water system adhered to city standards, asserting that only a fraction of the hydrants in the affected area experienced pressure loss.
The city is bracing for a wave of lawsuits from homeowners, businesses, and insurance companies, with at least five lawsuits already filed in Los Angeles County Superior Court. These lawsuits allege “inverse condemnation,” allowing property owners to seek compensation for damages attributed to public use. Plaintiffs are linking their property damage to the actions of DWP, claiming that deficiencies in the design, installation, and maintenance of the water system exacerbated the fire’s impact.
As the legal battles unfold, DWP officials are preparing for a lengthy process, given the scale of the claims expected. The hiring of Munger, Tolles & Olson is seen as a proactive measure to ensure that the utility is adequately represented during this challenging time.