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Gavin Newsom's wildfire liability proposal fails to pass as California lawmakers seek a more comprehensive solution

California Governor Gavin Newsom faced a setback as Democratic lawmakers rejected a pared-down version of his wildfire liability proposal on Tuesday. The bill, which aimed to shield utility companies from soaring costs and limit insurance companies' right to sue utilities to recoup losses, was criticized for not addressing the underlying structural problems of the crisis.

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Assembly Speaker Robert Rivas announced that the Assembly would not take up the bill, describing the compromise as a "half-measure" that failed to meet the gravity of the moment. While the final version of the bill included fee caps for attorneys and new wildfire prevention programs, it failed to include Newsom's primary goals of ending subrogation and capping non-economic damages. The failure of the bill led to a slight rebound in stocks for PG&E and Southern California Edison, which had previously plunged after the announcement of the deal. Newsom stated that the issue is not going away and suggested a special legislative session may be necessary to address the core liability problems before he leaves office in January.

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