Ledes from the Land of Enchantment

NM AG agrees with law firms’ argument seeking more funds for Hermits Peak-Calf Canyon Fire victims • Source New Mexico

The New Mexico attorney general has issued a formal, but nonbinding, opinion that lawyers say will buttress their ongoing federal lawsuits stemming from the biggest wildfire in state history.

The March 7 opinion agrees with a main legal argument in several lawsuits on behalf of fire victims seeking so-called “noneconomic damages” from a nearly $4 billion fund approved by Congress.

Congressional sponsors said the money is supposed to “fully compensate” those who suffered an array of losses from the Hermits Peak-Calf Canyon Fire, the product of two botched prescribed burns ignited by a federal agency in spring 2022.

If a federal judge rules against the Federal Emergency Management Agency, which is overseeing the fund, victims’ lawyers say it could mean “hundreds of millions of dollars” in compensation paid to victims for their noneconomic damages. FEMA has so far paid out about 11% of the $3.95 billion compensation fund, including for lost property, smoke damage, reforestation and other losses.

In the scar of New Mexico’s largest wildfire, a legal battle is brewing over the cost of suffering

But, as Source New Mexico and ProPublica highlighted in a story Jan. 4, some residents had few economic losses and so stand to get small checks, particularly renters and those who lived on familial homesteads, because they didn’t own their homes or cannot prove to FEMA’s satisfaction that they did.

Many low-income victims of the fire lived sparely, counting the beauty and bounty of their land among their greatest assets.

Payment for intangible damages — like the stress of being displaced, or the lost enjoyment of one’s land, for example — would likely add up to more than these victims will get for the loss of their possessions, their lawyers have said.

Early last year, FEMA decided that the law would allow it to pay only for losses that have a price tag, like lost business income, damaged property, foregone wages and other “economic” damages. Final rules it issued in August made that decision official.

FEMA deemed that the federal law creating the claims office prohibited the agency from paying damages for the loss of enjoyment of property, or the distress of the fire, for two reasons. They said the damages were not payable under federal law and, even if that weren’t true, New Mexico law only allows noneconomic damage payments under narrow circumstances.

The attorney general’s opinion dealt with the question about state law.

FEMA officials said they based their determination on a review of the Hermits Peak Fire Assistance Act, which established the claims office process, and state law. They also said they “consulted with” the New Mexico attorney general on the matter last spring, but the AG did not agree with their conclusion and, last week, issued a formal analysis explaining why.

Assistant Solicitor General Ellen Venegas, an official at the New Mexico Department of Justice, wrote in the opinion that the damages are available under New Mexico law. She issued the opinion after two state senators made a formal request Jan. 11 for the opinion, one week after SourceNM and ProPublica’s story.

She cited more than a dozen precedents and wrote that noneconomic damages for annoyance, discomfort and inconvenience are “generally available” under New Mexico law and that, depending on the nature of an invasion of property rights, they “may be an important component of compensating injuries resulting from nuisance or trespass.”

Venegas did not offer an opinion, and she wasn’t asked to do so, about the federal Hermits Peak Fire Assistance Act and whether it was clear that the “actual compensatory damages” referenced in the Act should include noneconomic damages. But she did say that noneconomic damages are “widely understood” to be a type of compensatory, or actual, damages.

Law firms representing more than 1,000 survivors filed lawsuits challenging FEMA’s policy. Local and state officials, including the past and current attorney general, have also publicly said they disagree with the decision. They all said noneconomic damages are allowed under New Mexico law and the act itself.

The dispute centers on what Congress intended when it said FEMA needed to pay “actual compensatory damages” to fire victims. The law didn’t define that term, and FEMA has interpreted it to mean that intangible losses don’t count. The federal law also says that, other than the requirements spelled out in the federal law, FEMA should make payments in accordance with New Mexico law.

A FEMA memorandum obtained by SourceNM and ProPublica said it interprets the law to exclude noneconomic damages through that phrase: “limited to actual compensatory damages.” It notes that noneconomic damages weren’t paid after the Cerro Grande Fire, which the Hermits Peak bill was modeled after.

They lost everything in New Mexico’s biggest wildfire. Now they’re sounding the alarm for others.

FEMA’s memo also asserts that even if the federal law didn’t bar payments for noneconomic damages, New Mexico law allows them in just a few narrow circumstances.

On Jan. 11 two New Mexico senators – Pete Campos (D-Las Vegas) and Michael Padilla (D-Albuquerque) – wrote Attorney General Raúl Torrez, asking for a formal legal opinion. Both senators said they were compelled to seek an opinion because of the legal dispute in the aftermath of the wildfire, though their letter did not mention the fire.

They asked whether noneconomic damages, including those resulting from “annoyance, discomfort, inconvenience, invasion of another’s interest in the private use and enjoyment of the land” are available to victims of trespass, private nuisance and public nuisance. The lawsuits allege that the wildfire and all the strife it caused amount to a trespass or nuisance claim under New Mexico law.

“We know that your office has stated there are strong arguments in support of such claims,” Padilla and Campos wrote, “but it would be helpful to the State of New Mexico and its people to have a formal opinion on the letter.”

John Mills, a spokesperson for the FEMA claims office, noted in an emailed statement that the AG opinion did not weigh in on the federal legal questions also being considered in the lawsuit.

“The state Attorney General’s opinion does not reference the Hermit’s Peak Act or applicability of New Mexico law under the limitations of the Act and federal law,” he said.

The FEMA claims office has previously declined to comment on the matter, citing the ongoing litigation. A spokesperson has stressed previously that “equity is a cornerstone” of the office and that it “is required to compensate all claimants for their losses consistent with the law, and we encourage all claimants to submit their claims and all their documentation.”

Levi Monagle is a New Mexico lawyer with no ties to the lawsuits but who has sought such damages on behalf of clergy sex abuse victims and others. He called the AG’s opinion a “victory” for those affected by the fire, even though it’s not binding and was limited to matters of New Mexico law.

“Clearly this opinion validates the availability of noneconomic damages for trespass and nuisance claims in New Mexico,” he said. “The underlying question of whether that was the original intent of the Hermits Peak-Calf Canyon Fire Act drafters is another question entirely.”

Singleton Schreiber, a San Diego-based law firm that is leading the lawsuits, has filed two suits on the issue, and another firm filed another. Brian Colón, a lawyer for Singleton Schreiber and former state auditor, said the opinion shows that New Mexico is united on what state law says and what survivors deserve.

“Hopefully, it assists us in finding a path forward to get FEMA to do the right thing, which is make the people of Northern New Mexico whole,” he said.

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