This article was prepared in partnership with Source of New Mexicowhich was a member of the ProPublica Local Reporting Network in 2023. Subscribe to Dispatches to receive such stories as soon as they are published.
Victims of New Mexico’s largest wildfire could receive hundreds of millions of dollars from the federal government for the hardships they endured when flames roared through their land in 2022 after the U.S. Forest Service accidentally ignited it.
U.S. District Judge James Browning said at the end of a hearing in Albuquerque, New Mexico, on Tuesday that he was “leaning” toward a ruling by fire victims who sued the Federal Emergency Management Agency last year to limit the types of damages that it will pay for . Browning said he would issue a ruling as soon as possible, but probably not before next month.
The lawsuit is based on FEMA’s determination that federal law allows victims to pay for economic damages, but not for emotional damagesas Source New Mexico and ProPublica reported in January. Attorneys for those affected by the fire said some people who own little property won’t get enough money to rebuild if FEMA doesn’t pay for emotional damages.
If Browning sides with the victims, FEMA could be required to compensate them for the stress of fleeing the fire, the suffering they experienced when their trees burned, and the damage from the loss of their home and property — what attorneys for the victims describe in court documents as “an exasperation , discomfort and inconvenience.”
Some may receive significant pain and suffering payments from their injuries, in addition to the payments for the injuries themselves. Until now, the only recourse for people who were injured or the families of those who died in the fire or subsequent flooding was to sue the federal government, a lengthy and uncertain process. One lawsuit, filed on behalf of three people who died in the flood, is pending.
Gerald Singleton, whose San Diego firm represents about 1,000 victims of the fire, said in an interview after the hearing that emotional damages could total about $400 million. Such payments could result in a more equitable distribution of funds than the current system, he said, because renters and low-income people would receive money that exceeds the dollar value of their property.
If victims win, it’s unclear how quickly they’ll be able to get their money. Lawyers representing FEMA said the agency would need to go through a formal rulemaking process to allow emotional harm payments. It could take months.
The money will come from a nearly $4 billion congressional fund established in September 2022 to provide what President Joe Biden called “full compensation” for victims of the Hermit Peak Calf Canyon fire. It was caused by two controlled burns that scorched an area of 534 square miles and destroyed several hundred homes.
As of Friday, FEMA’s Hermits Peak-Calf Canyon Claims Office has paid out $1.5 billion to households, nonprofits, businesses and local and tribal governments.
Jay Mitchell, director of the claims office, observed Tuesday’s hearing. In a brief interview afterward, Mitchell suggested that emotional distress payments could be difficult and expensive.
He said the ruling could open the door to a flood of “nuisance” or “trespass” damages claims from people whose properties were affected by wildfire smoke. “Smoke goes where it goes,” he said as he entered a meeting with lawyers representing FEMA.
FEMA declined further comment, citing the pending lawsuit, and urged anyone affected by the fire to file a claim by Dec. 20.
At the heart of the legal battle is FEMA’s interpretation of the Hermits Peak Calf Canyon Fire Relief Act, authored and sponsored by U.S. Rep. Teresa Leger Fernandez and U.S. Sen. Ben Ray Lujan, D-New Mexico. The plaintiffs allege the agency improperly denied what it called “non-economic damages” when it finalized the rules for the $4 billion fund payout. These rules limited compensation to economic damages that have a price: things like cars, homes, business expenses, and livestock.
For months, FEMA lawyers and four victim advocacy firms have been exchanging information about what federal lawmakers had in mind when they wrote the bill. At Tuesday’s hearing, Browning questioned attorneys for both sides about the language.
For example, the law states that payments are “limited to actual damages.” Victim advocates have argued, with numerous citations to New Mexico law and elsewhere, that “actual compensatory damages” have historically meant both economic and noneconomic damages. Lawyers representing FEMA have interpreted the clause to mean that Congress imposes a limit: only economic damages are allowed. Browning said he agreed with the victims’ attorneys. “Plaintiffs have a better read,” he said.
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Source New Mexico and ProPublica. Featured by ProPublica.
At the start of Tuesday’s hearing, Browning said he had already made up his mind on one issue: He agreed that New Mexico state law allows non-economic damages to be awarded to victims in an event such as a fire. This is important because federal law requires damages to be calculated according to state law.
He quoted an opinion issued this year by the New Mexico Attorney General that emotional hardship payments are allowed for victims of “nuisance and penetration”. Two state lawmakers requested the opinion shortly after the Source and ProPublica reported on the issue.
Browning said he would try to manage quickly, quote previous delays of Art get money to the victims. “I don’t live under a rock,” he said. “I know there’s been a lot of criticism about how slow the process has been.”
