La Verne Battery Fire: Can Businesses Recover Evacuation Losses Without Property Damage?

In Southern California Gas Leak Cases (2019) 7 Cal.5th 391, the California Supreme Court rejected negligence claims by businesses seeking lost income from the Aliso Canyon gas leak without alleging personal injury or property damage. The court declined to impose a tort duty supporting those purely economic claims. ³

That decision provides an important analogy, not a ruling on the La Verne litigation. California generally limits negligence recovery for purely economic losses, subject to recognized exceptions. An evacuation-related revenue decline does not itself establish a negligence claim. Physical damage is not required for every possible legal remedy; the applicable theory and relationship still matter. ³

Metropolitan’s public-entity status raises statutory liability and claim-presentation questions. For claims requiring presentation, Government Code section 945.4 generally requires a written claim and action by the entity—or deemed rejection—before a damages lawsuit. Section 911.2 generally distinguishes six-month deadlines for death, personal injury, personal-property injury or growing crops from one-year deadlines for other covered claims, measured from accrual. Claim type, exceptions and accrual matter; there is no universal six-month deadline. ⁴⁵

Inverse condemnation concerns a qualifying taking of or damage to private property for public use. City of Oroville v. Superior Court (2019) 7 Cal.5th 1091 requires a legally sufficient connection to a public improvement’s inherent risks. Temporary closure or lost revenue alone does not automatically establish this claim, nor does every accident at a public facility qualify. ⁶

This constitutional theory is distinct from ordinary tort claims. Government Code section 905.1 exempts qualifying inverse-condemnation actions from claim filing as a prerequisite to suit; other timing rules can still apply. ⁷

Recoverable lost profits require a valid legal basis, causation and reasonably reliable proof—not speculative projections. Revenue figures alone are insufficient: relevant expenses and reasonable efforts to limit losses matter. ⁹ Our business-interruption and lost-profits article explains these proof issues in more detail. ⁸

Preserve closure notices, sales records, canceled orders, expense records and reimbursement correspondence. Document the closure period and steps taken to reduce losses. Clear records support evaluation, but do not create an entitlement to payment.

Metropolitan directs affected residents and businesses to its formal ‘Claim Form for Injury to Person, Property, Death or Other.’ The form cites Government Claims Act requirements and directs submission to Metropolitan’s Board Executive Secretary by email, mail or delivery. Submitting the form does not guarantee payment; compliance depends on the claim’s content, signature, recipient and timing. ¹⁰

Insurance is separate again. Coverage depends on the policy, covered causes of loss, exclusions and applicable conditions, including any civil-authority provisions. An evacuation order alone does not establish coverage. ¹¹