Victims of New Mexico’s largest wildfire may be eligible to receive hundreds of millions of dollars from the federal government due to the U.S. Forest Service accidentally igniting the blaze that swept through their land in 2022.
During a hearing in Albuquerque, U.S. District Judge James Browning indicated that he is inclined to rule in favor of the fire victims who filed a lawsuit against the Federal Emergency Management Agency (FEMA) last year. The lawsuit challenges FEMA’s restriction on the types of damages it covers. Browning stated that a formal ruling is expected soon, potentially in the upcoming month.
The legal case raises questions about FEMA’s interpretation of a federal law that allows compensation for economic losses but excludes emotional harm. According to reports by Source New Mexico and ProPublica in January, attorneys for the victims argue that without compensation for emotional harm, those who owned little prior to the fire would receive insufficient funds to rebuild.
Should Browning rule in favor of the victims, it could require FEMA to compensate for the psychological stress endured during the fire, the emotional impact of losing homes, personal belongings, and the devastation of their environment, which lawyers have described as “annoyance, discomfort, and inconvenience.”
Some individuals may receive substantial payments for pain and suffering that accompany physical injuries. Until now, the only recourse for individuals injured or families of those who died due to the fire or subsequent floods has been to sue the federal government, a process fraught with uncertainty. A lawsuit concerning three individuals who died in post-fire flooding remains pending.
Gerald Singleton, an attorney representing approximately 1,000 fire victims, estimated that compensation for emotional harm could total around $400 million. Such payments could lead to a fairer distribution of funds, as renters and those with limited assets would receive more than just reimbursement for tangible possessions.
Should the victims prevail in their lawsuit, the timeline for compensation remains uncertain. FEMA’s attorneys noted that the agency would need to undertake a formal rulemaking process to disburse payments for emotional damages—a procedure that could extend over several months.
The compensation would be sourced from a $4 billion fund established by Congress in September 2022, intended to ensure victims of the Hermits Peak-Calf Canyon Fire are “fully compensated,” as stated by President Joe Biden. The fire, ignited by two out-of-control controlled burns, devastated 534 square miles and destroyed several hundred homes.
As of the past Friday, FEMA’s Hermits Peak-Calf Canyon Claims Office has disbursed $1.5 billion to affected households, businesses, nonprofits, and local and tribal governments.
Jay Mitchell, the claims office director, observed Tuesday’s hearing. In a subsequent brief interview, he expressed concerns over the logistical and financial challenges of compensating for emotional distress, cautioning that the decision might lead to numerous claims for nuisance or trespass related to wildfire smoke effects.
FEMA has declined to offer further comment on the matter, citing the ongoing litigation and urging those affected by the fire to file a claim by December 20.
The core of the legal debate focuses on FEMA’s interpretation of the Hermits Peak-Calf Canyon Fire Assistance Act, spearheaded by U.S. Rep. Teresa Leger Fernandez and U.S. Sen. Ben Ray Luján of New Mexico. Plaintiffs contend that FEMA improperly excluded “noneconomic damages” in its stipulation of fund allocations, which otherwise confines compensation to quantifiable economic damages like those associated with property and business losses.
Over recent months, FEMA’s legal team and four firms representing the victims have exchanged legal briefs regarding Congressional intentions behind the legislation. During Tuesday’s hearing, Browning probed both sides’ attorneys on the matter.
The legislation’s language indicates compensation shall be restricted to “actual compensatory damages.” Victims’ attorneys referenced numerous legal precedents asserting that such damages encompass both economic and noneconomic aspects, while FEMA’s lawyers argue that the wording implies a limitation to economic damages alone. Browning agreed with the victims’ lawyers, stating that “Plaintiffs have a better reading.”
Earlier in Tuesday’s hearing, Browning clarified his preliminary agreement with the argument that New Mexico law allows for noneconomic damages in incidents similar to the fire, reinforcing that compensation should align with state legal standards. This view was supported by a recent opinion from the New Mexico attorney general, affirming the eligibility of emotional hardship payments for incidents involving “nuisance and trespass.”
In efforts to expedite his decision, Browning alluded to previous criticisms over delays in disbursing funds to victims, acknowledging the urgency and public scrutiny faced by the process.
