Investors sue Edison International, claiming wildfire misstatements

The first federal action against Edison International was filed by a putative class of investors who claimed the company artificially inflated its stock price and caused them significant losses by making misleading statements about its Los Angeles County wildfire mitigation processes.

Laurence M. Rosen, founder of The Rosen Law Firm PA, represents the individual plaintiff and putative investors who claim they purchased securities from Edison International - the parent company of Southern California Edison (SCE) - from Feb. 25, 2021, through Feb. 6, 2025.

Jeff Monford, a spokesman for Edison, responded to the federal complaint in a phone interview on Wednesday: "We are reviewing and will address the allegations," he said. Rosen was not available for additional comment by press deadline.

Rosen did not respond by press time to a phone call and email seeking additional comment.

At the heart of the complaint, filed Tuesday, is a statement the plaintiffs claim the company made about SCE's use of a wildfire prevention tool that temporarily shuts off electrical power in neighborhoods during dangerous weather conditions. On the evening of Jan. 7, a series of wildfires blazed throughout Los Angeles County. The investors' action primarily follows the fire that began in the Eaton Canyon area that day, burning homes throughout Altadena and in Pasadena. Antillon v. Edison International et al., 2:25-cv-01154 (C.D. Cal., filed Feb. 11, 2025).

"Following the outbreak of the Eaton Canyon Fire ... Edison stated in a press release that its 'distribution lines immediately to the west of Eaton Canyon were de-energized well before the reported start time of the fire, as part of SCE's Public Safety Power Shutoffs program. However, on Jan. 12, 2025, Edison admitted that there were 'no interruptions or operational/electrical anomalies in the 12 hours prior to the fire's reported start time until more than one hour after the reported start time of the fire," the complaint stated.

On Jan. 13, several state lawsuits against Edison were filed in Los Angeles County Superior Court that alleged the fires originated from the company's power lines. Edison's share prices dropped approximately 12% shortly thereafter, according to the federal complaint. The company's stock dropped an additional 2.5% on Feb. 6, the investors claimed, after SCE submitted letters to the California Public Utilities Commission that suggested the company's equipment could be associated with the start of the smaller Hurst fire in Sylmar.

The investors claimed the company's statements about its proactive usage of the power shutoff program since 2021 were false and misleading, in violation of the Securities Exchange Act. The action raises two claims against Edison International, its CEO and CFO.

In one instance, a red flag and high wind warning was issued in Los Angeles County on Jan. 5, yet Edison kept many parts of its distribution circuit near Eaton Canyon energized, the plaintiffs claimed.

"These statements ... misrepresented and failed to disclose the following adverse facts pertaining to the company's business, operations and prospects, which were known to defendants or recklessly disregarded by them," the complaint stated.

"Specifically, defendant made false and/or misleading statements and/or failed to disclose that: (1) Edison's claim that SCE used its Public Safety Power Shutoffs program to 'proactively de-energize power lines to mitigate the risk of catastrophic wildfires during extreme weather events' was false; (2) this resulted in heightened fire risk in California and heightened legal exposure to the company; and (3) as a result, defendants' statements about Edison's business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all times."

The exact number of class members is unknown to the plaintiff's counsel at this time, according to the complaint. However, they estimated that number could range between hundreds or thousands of Edison investors who traded during the proposed four-year class period.