Bark v. Pizarro

A shareholder derivative action was filed in the federal district court for the Central District of California against directors and officers of Edison International (Edison), the parent company of Southern California Edison Company (SCE), a public utility that supplies electricity to a 50,000-square-mile area in southern California. The plaintiff shareholder asserted that Edison suffered damages in connection with the Eaton and Hurst wildfires in January 2025 as a result of the defendants’ breaches of their fiduciary duties. In addition, the complaint asserted that the defendants “abandoned or abdicated” their fiduciary duties “with regard to prudently managing the assets and business of [Edison] in a manner consistent with the operations of a publicly held corporation”; that the defendants wasted corporate assets; and that they were unjustly enriched at the expense and to the detriment of Edison. Other claims included aiding and abetting, insider trading, and violations of Sections 10(b) and 14(a) of the Securities Exchange Act of 1934. The complaint cited reports and documents potentially linking the wildfires to SCE equipment. The complaint also included allegations that Edison made materially false and misleading statements in proxy statements in 2021, 2022, 2023, and 2024 regarding its preparations to mitigate wildfire risks. The complaint cited statements in those documents such as: “We continue to directly address the impacts of climate change with SCE’s significant advancement of grid hardening, situational awareness and operational enhancements, primarily focused on reducing wildfire risk.” The 2024 proxy statement stated: “We are now seeing the effects of climate-change-driven wildfires throughout the nation, particularly with the heart-wrenching fire in Maui and fires in places like Louisiana, Texas and the East Coast. These unfortunate events demonstrate the need to build on SCE’s progress by continuing to collaborate with industry peers, governments and communities to further enhance resiliency and adapt to climate change as we transition to a clean energy future.” The complaint alleged that, contrary to these statements, the defendants—including members of Edison’s Safety and Operations Committee, whose duties included reviewing and monitoring operations, significant developments, resources, risks, and risk mitigation plans related to wildfires and climate adaptation, among other issues—failed to fulfill their obligations related to wildfire prevention and mitigation. The plaintiffs seek damages, disgorgement of illegally gained proceeds from insider training, and a directive requiring the company to improve its corporate governance and internal procedures, as well as costs and disbursements, including attorneys’ fees.