US law holds that, when the government seizes or damages land and does not pay compensation as required under the Fifth Amendment, the landowner must sue in court for damages. It is known as inverse condemnation, because the standard roles are switched: the government, although taking land or damaging it for an ostensibly official purpose, is the defendant.^[1]

For utilities and railroads, who are given the right of eminent domain or condemnation, any damage to private or public property that occurs during the regular operations of the utility can also fall under inverse condemnation. For California’s utilities, this means they can be held liable for fire damage. Pacific Gas and Electric Company has already sought bankruptcy protection to escape as much as $30 billion in liabilities from fires that its equipment helped start.^[2]