Fire Destroyed Paradise. Then Lawyers Launched a Marketing Blitz

(Bloomberg) -- In a conference room 13 miles from Paradise, California, Doug Boxer explains to survivors of the state’s worst wildfire why they should choose his law firm to sue PG&E Corp.

He walks a fine line between listening to victims coping with devastation and promoting the expertise of attorneys based thousands of miles away. Under the law, he says, the dozen or so residents who’ve gathered for this meeting on a Saturday in December have two years to file a complaint. But Boxer urges them not to wait that long, implying that if they sign on now they’ll have a front seat negotiating a payout from the utility.

Fire Destroyed Paradise. Then Lawyers Launched a Marketing Blitz

“If we have the biggest book of cases, who is PG&E going to come to first?” says Boxer, the son of Barbara Boxer, who represented California in the U.S. Senate for 24 years.

Dozens of lawyers are vying for the chance to sue the $12 billion power company, even before state investigators have determined the cause of the November blaze in Paradise that destroyed 13,972 homes and killed 86 people. Displaced residents living in shelters or temporary housing in nearby towns have found themselves inundated with legal advertising on signs, billboards, radio, television and mailers.

The competition is so intense that some California-based attorneys who’ve developed a specialty suing utilities over wildfires refer to out-of-state firms as “carpetbaggers.”

Boxer’s firm, Washington, D.C.-based Mauro Archer & Associates, made itself stand out by enlisting as its front woman perhaps the most famous person ever to spar with PG&E -- Erin Brockovich. Her success in a court case against the utility over water contamination in the 1990s inspired a movie bearing her name that won an Oscar for Julia Roberts, and in turn, helped Brockovich propel a career as an activist, author and consultant.

Mauro Archer and its partner firm, San Antonio-based Watts Guerra, now count about 700 clients from the Camp Fire. That includes Kathy and David Terstegen, a couple close to retirement who figure that insurance will cover only about 50 percent of their losses from the incineration of their mobile home, which stood on a third of an acre five miles northeast of Paradise.

Fire Destroyed Paradise. Then Lawyers Launched a Marketing Blitz

Many homes in Paradise were underinsured or lacked coverage entirely, which can make the suits more lucrative for lawyers, who generally take a 33.3 percent cut of any uninsured recovery. Overall, insured losses from the Camp Fire stand at about $7 billion and Citigroup Inc. estimates $15 billion in gross liabilities.

Even before Kathy Terstegen attended Boxer’s Dec. 15 presentation, she decided to sign on with his firm based on its connection with Brockovich, which she discovered browsing online. She sent Brockovich a message and was surprised to get a call back. In an hour-long conversation. Terstegen said she found the activist to be a “very gracious lady, kind and compassionate.”

“I know there are a lot of different firms doing this,” Terstegen said. “But I really wanted to be with the firm that Erin Brockovich was connected to.”

To veteran wildfire attorney Mike Danko, whose law firm in Redwood Shores, California, has partnered with two other in-state firms to represent 925 Camp Fire victims, Brockovich is “client bait.”

“They have the money to hire Erin and somehow clients say, ‘This is the place to go.’ But anyone could’ve done that,” Danko said. “Because Erin Brockovich is not working on your case, it’s the wrong thing to be looking at.”

Suing PG&E is expensive, and there’s no doubt that firms from out of state bring deep pockets to the fight, Danko said. But based on his past experience, he’s dubious that those firms are as committed as he and his local peers are to the “grunt work” of preparing for a trial against a company fighting for its very survival.

“These people from out of state, they end up not showing up, they get shoved aside, they’re not involved in the process,” Danko said. “It comes down to the same few lawyers in every case like this who are doing the work in court and otherwise driving the bus.”

Still, he said, the distant firms can walk off with a decent payday by scooping up and settling suits on a “mass basis” to compensate for the money they’re leaving on the table.

“No one’s going to hire a Texas lawyer," Danko said. So out-of-state firms find "a local straw man they team up with," he said. He "does the advertising so it seems very local, but the money behind it is from Texas."

Watts Guerra co-founder Mikal Watts, a nationally prominent trial attorney, rejects the notion that he’s an opportunist seeking to profit from an area where he has no connections. His team’s website touts “a team of local professionals who live and work in the communities impacted by the fires and are deeply concerned about this recovery.” Boxer, who lives in Oakland, introduced Brockovich, who he knew through his mother, to Watts.

Since the team started litigating against PG&E in the wake of the 2017 blazes that tore through the wine country north of San Francisco, Watts said he has invested $10 million preparing for cases. The expenses range from California-based arborists and forensics experts to a mobile home and an $81,000 trailer that are parked in Chico, a 25-minute drive from Paradise.

“To my knowledge there are no lawyers from any other part of California that have opened a permanent office in Chico and staffed it with Butte county residents to serve the needs of the Camp Fire,” Watts said. His team also has an office in Santa Rosa to serve its 2,500 clients from the wine country fires.

Fire Destroyed Paradise. Then Lawyers Launched a Marketing Blitz

Brockovich said she was drawn to the D.C.-Texas team precisely because it’s invested in building a local presence. She sees herself not as a marketing magnet, but as an adviser for victims facing a “feeding frenzy” of lawyers.

“They’re overwhelmed in a disaster and a sea of lawyers shows up -- who do they trust?” she said. “I’m never going to tell you what law firm to go with. I will always tell you: nobody can make an appropriate choice for their health, and welfare and their future if they don’t have all the information. I will give them every bit of information I know.”

©2018 Bloomberg L.P.