Torts - Cases, Principles, and Institutions Fifth Edition, 2016a

Witt & Tani, TCPI 7. Proximate Cause
the side of Webb, not Ryan. E.g., Frace v. New York, L. E. & W. R. Co., 143 N.Y. 182, 189 (1894)
(“The Ryan case should not be extended beyond the precise facts which appear therein. Even if
correctly applied in that case, the principle ought not to be applied to other facts. See Webb v.
Railroad Co. . . .”).
One further puzzle to consider in conjunction with Ryan is this: If plaintiffs have property
insurance against fire damages, and if defendants have liability insurance against tort damages,
who ought to pay for damages that could be covered by both? Should tort law be involved at all
once there is first-party property insurance? Tort liability in such cases essentially becomes a
battle between or among insurers over which insurer will register the loss. At the extreme, in a
fully insured world, we could imagine tort law becoming a field exclusively occupied by insurers
duking it out over whose bottom line takes a hit when losses from fire spread through a town like
Syracuse. We will take up this insurance question at greater length in Chapter 10 when we look at
the law of damages in torts. For now, suffice it to say that the relevant doctrines here are: (a) the
so-called “collateral source rule,” which holds that the damages owed by a tortfeasor to a plaintiff
are not affected by compensation received by that plaintiff from a third (or “collateral”) source,
and (b) the doctrine of subrogation, which allows an insurer to step into the shoes of its insured
and prosecute a tort claim against a defendant who breached a duty to the insurer’s insured. Does
it make sense to allow tort suits under these conditions? What if it means that tort law’s
administrative expenses are spent on battles among insurers?
3. PG&E and the New Fire Cases. In November 2018, the deadliest wildfire in California’s
history, the “Camp Fire,” killed eighty-six people and destroyed approximately fourteen thousand
buildings. Lawsuits currently proceeding against utility company Pacific Gas and Electric
(PG&E) identify PG&E power lines as the origin of the fire. PG&E, facing the possibility of
billions of dollars in liability, filed for bankruptcy in January 2019. See Ariel Cohen, Part I:
PG&E Gets Burned for California Wildfires, Forbes (Feb. 7, 2019). If California operated under
the Ryan rule, the issue of proximate causation would prevent such extended liability. California
courts, however, have expressly declined to follow the decision in Ryan, leaving it to the jury to
draw the line for proximate causation on a case-by-case basis. See Butcher v. Vaca Val. R. Co., 8
P. 174, 175 (Cal. 1885) (quoting Henry v. S. Pac. R. Co., 50 Cal. 176, 183 (1875))
(“[C]onsidering the long dry season of California and the prevalence of certain winds in our
valleys, . . . it may be left to a jury to determine whether the spreading of a fire from one field to
another is not the natural, direct, or proximate consequence of the original firing.”).
Note that it is possible PG&E will be held liable for the wildfire even if it was not
negligent due to California’s “inverse condemnation” theory. Under the inverse condemnation
theory, a privately-owned public utility company may be held strictly liable for wildfire injuries
caused by its power lines, essentially on the grounds that such injuries are a kind of taking by an
official body for which just compensation is required. See, e.g., Barham v. S. Cal. Edison Co., 88
Cal. Rptr. 2d 424 (Ct. App. 1999). This is true regardless of whether the injury was foreseeable,
so long as it constitutes an “actual physical injury to real property proximately caused by [a
public] improvement as deliberately designed and constructed.” Id. at 429 (quoting Albers v. Los
Angeles Cty., 398 P.2d 129 (Cal. 1965) (en banc)). Note that the court in this sentence seems to
suggesting that there could be unforeseeable injuries that are nonetheless proximately caused.
Inverse condemnation principles might not be needed for PG&E to be held liable in this
case. It seems likely that PG&E could have foreseen a devastating fire caused by its power lines
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