The officials disbursing a nearly $4 billion fund allocated to victims of the Hermits Peak-Calf Canyon Fire failed to make compensation offers within deadlines required by law, according to two new lawsuits filed last week.
The Federal Emergency Management Agency is in charge of the Claims Office, which Congress established late last year to “fully compensate” victims of the 534-square-mile wildfire started accidentally by the United States Forest Service in 2022.
The law requires FEMA to make offers of payment 180 days after receiving claims from victims whose homes were destroyed, whose businesses failed or who lost trees and fencing to post-fire flooding, among other losses. As of Dec. 21, FEMA had paid out $276 million, or about 7% of the $3.95 billion fund.
Two lawsuits filed on Thursday and Friday of last week say FEMA has missed that deadline for 24 fire victims, who waited more than 180 days to get an offer after their claims were acknowledged. Singleton Schreiber, a San Diego-based law firm representing more than 1,000 fire victims, filed the lawsuits on behalf of its clients.
Under the law, fifteen of the 24 plaintiffs were supposed to get a payment offer on Dec. 22, according to the lawsuit. The other nine people were supposed to get theirs on Dec. 11 or Dec. 18.
A FEMA spokesperson said Thursday afternoon that, while she could not comment on pending litigation, she acknowledged that a “flaw” in the agency’s case reporting system allowed some claims to exceed the legal deadline.
“While this has impacted some claims, we are addressing the issue, and are calling the parties involved to notify them and discuss available steps to process their claims as quickly as possible,” spokesperson Danielle Stomberg said. “As has been true from the beginning, the Claims Office team is committed to ensuring that claims are processed as quickly as possible and every impacted New Mexican receives the maximum eligible compensation.”
A former Las Vegas lawman fought to rebuild after NM fire. He died before he could come home.
The allegations of missed deadlines come as some fire victims have grown increasingly frustrated at delays in payments. The delays leave some people stranded far from home as they await funds to rebuild, and some fear they may die before being able to return. The lawsuit also notes that FEMA has, in some cases, taken 300 days or more to make offers of payment because of the way it has interpreted the federal law.
FEMA first began accepting claims, known as notices of loss, in November 2022, but it took six more months for the office to staff up and open field offices. The agency determined back then it would start the 180-day clock for payment offers from the day it formally “acknowledged” them, rather than the day they were submitted.
That practice, which the agency in August codified into its final regulations, allows FEMA to “arbitrarily” and “indefinitely” delay compensation offers, according to the lawsuits. The lawsuits also say the way FEMA has implemented the law means it is not treating every claim equally.
“Rather than proceed with the required unbiased manner of processing claims as they are received, FEMA’s policy allows it to unilaterally determine which claims to process and which claims languish,” according to the lawsuit. “FEMA’s interpretation has allowed FEMA to impose significant delays, allowing months to pass in some cases before it acknowledges a claim.”
The lawsuits ask a judge to require that FEMA process notices of loss 180 days from when a victim submits one, not from when the agency acknowledges it.
Brian Colón, a lawyer for Singleton Schreiber and former state auditor, speaks to a group of clients at a Dec. 7 meeting in Las Vegas, N.M. (Photo by Patrick Lohmann / Source NM)
“FEMA has moved the goal posts so to speak, and New Mexicans are suffering because of it,” said Brian Colón, a local lawyer for Singleton Schreiber and former New Mexico state auditor.
The agency first acknowledged a notice of loss in April, a year after the fire began. FEMA recently told Source NM and ProPublica that it tries to acknowledge losses within 30 days of receiving them, but that doesn’t always happen. The agency also said its office had at times received a lot of notices at once, which delayed the process.
The two lawsuits are among at least six filed against FEMA since the opening of the Claims Office. Others accuse FEMA of violating the Freedom of Information Act, pushing victims to fire their lawyers and illegally withholding payments for non-economic damages. FEMA has not yet responded in court to the lawsuits, apart from denying violations of the federal public records law.
It also asks a judge to require FEMA to immediately make payment offers to those who have waited 180 days or longer from the date they submitted notices of loss. It seeks interest on delayed claims and attorney’s fees, as well.