Wildfire Resource Hub

This is truly an unprecedented year. After the initial implications of the COVID-19 pandemic, many businesses and individuals in the Pacific Northwest have now had to battle the loss and damages caused by the record-breaking wildfires that scorched the West Coast. To help navigate legal issues related to the wildfires, Schwabe attorneys have created this resource hub with the below list of topics to provide some insight into how to move forward in these challenging times.

What lessons learned from COVID-19 can we apply to wildfires?

The COVID-19 pandemic brought many issues to light in terms of legal requirements and obligations. These articles may help businesses understand their rights when it comes to:

• Contracts and force majeure
• Dispute resolutions
• Insurance claims
• Employment issues/OSHA requirements
• Business and Real Estate transaction issues
• Healthcare issues

What legal issues are unique to wildfires?

In addition to the legal topics mentioned above, wildfires also raise the following issues:

• Land use issues
• Shelter and housing
• Environmental issues
• Tax relief
• Governmental loans
• Water rights and waterways
• Timberland and agricultural businesses

What do businesses need to know about OSHA and other employment issues when it comes to wildfires?
One side effect of the recent wildfires is unhealthy air quality. Oregon Occupational Safety and Health (“OSHA”) strongly encourages employers to take steps to protect employees from persistently unhealthy air quality. View our summary here. For Washington workers, Washington State Department of Labor and Industries (“L&I”) offers additional guidance.

Another consideration is employee time off due to wildfires:

• What are the rights of employees who have been affected by wildfire?
• What are the rights of volunteer firefighters? Oregon and Washington law permit optional leave for volunteer firefighters during this critical time.  

Employers that decide to provide leave should carefully consider their statutory obligations to avoid an unlawful employment violation.

Another issue will be workforce unavailability and shortages of housing in some areas. Businesses need to analyze how these changes will affect their workforce and their production.

We encourage you to engage an attorney in Schwabe’s Employment group for these types of matters.

What do businesses need to know about land use and fires?

For businesses with buildings that have been destroyed or damaged by the fires, it is important to understand the consequences. If the structure is currently allowed by local zoning laws, the owner can generally rebuild by obtaining a building permit. If zoning laws have changed since the buildings were constructed so that different requirements apply today, the buildings may be deemed “non-conforming use.” Generally, owners are allowed to rebuild a non-conforming use that is destroyed by fire, provided that the owner rebuilds or restores the use within a certain time period. But there are many steps to get this done. Furthermore, if there is a lien on the structure, your lender will need to be involved. If you have been affected by the fires and need to rebuild or restore your buildings and land uses, we encourage engaging an attorney in Schwabe’s Land Use group to talk to you about your rights under your local zoning ordinances.

What temporary rules have been approved allowing for additional shelter and interim housing? (added 10/26/2020)

On November 10, 2020, several new temporary rules relating to shelter and interim housing for Oregonians went into effect. These rules will assist communities affected by September’s wildfires with ongoing efforts to help those who lost their homes or are otherwise displaced. Specifically, the rules allow for temporary housing—including, e.g., manufactured dwellings, yurts, recreational vehicles, and tents or the like—outside urban areas for a period of 36 months, and counties will be allowed to grant two additional 12-month extensions upon a demonstration that such use is still necessary. The rules also allow for the replacement within 60 months of certain lawfully established dwellings, and further allow the property owner of record at the time of the wildfire to reside on the property in an existing building, tent, travel trailer, yurt, RV, or the like until replacement has been completed. The rules further create an allowance for emergency campgrounds under certain circumstances.  The full text of the new rules can be found here.

These rules will be in effect for 180 days, until May 8, 2021, and during that time period, Land Conservation & Development Commission staff will be working with local governments and community members to implement more permanent rules. 

Schwabe’s team of Oregon land use attorneys are monitoring the status of these temporary rules, and can be engaged to advise on needs and rights relating to these and other land use issues.

What environmental issues related to wildfires should businesses be aware of?

As a result of the fires, businesses may have had environmental spills, be in violation of existing permits, or have water quality issues. Businesses should assess these situations quickly and seek legal advice on how to respond to environmental hazards and reduce legal exposure. Please contact an attorney in Schwabe’s Environmental group to discuss these matters.

How will the wildfires affect water rights and waterways?

Waterways and water rights may be uniquely affected by the wildfires. For example, if wells and diversions are damaged by wildfire, there may be regulatory permitting requirements triggered by maintenance, repair, and replacement activities. If you are a business or owner with water rights and waterway issues, please reach out to our lawyers in our Water group for assistance.

What are some of the common insurance issues that businesses should consider regarding wildfires?

Fire insurance coverage: Fire policies often provide specific, limited coverage for the expenses involved in clearing away damaged property, rebuilding property, and complying with code or regulatory requirements. These are often inadequate to fully compensate for a loss, but your lawyer should review the applicable policy. Coverage might vary based on jurisdictional considerations. Many policies have specific time limits within which claims must be brought, so it is important to review those requirements as soon as possible.

Personal property: Some fire policies include coverage for lost or damaged personal business property. When replacing equipment or personal property following a fire loss, review your policy to determine the scope of coverage and how much will be reimbursed. Also, be sure to maintain purchase records so that you can substantiate the replacement costs.

Business interruption: In some circumstances, your policy might provide for limited coverage for lost income or extra expenses incurred to restart your business. This is commonly referred to as business interruption coverage. 

Landslides: When wildfires remove trees and vegetation, there can be an increased chance of slope instability. When unstable slopes are exposed to heavy rainfall, like that of the Pacific Northwest, landslides can become more common. Check to see if your insurance provides coverage for landslide hazards.

How will the wildfires and smoke damage affect pending real property and business transactions?

Depending on the wording of the agreements, the parties may be temporarily relieved from moving forward, the transaction may be delayed, or the agreement may terminate. Some outcomes will be critical, such as supply chain disruptions, and some may be less so. Please contact your Schwabe Business or Real Estate attorney to assist with your contract analysis.

How will the wildfires and smoke damage affect timberland owners and agricultural businesses, including vineyards and wineries?

Timberland owners and agricultural businesses may be uniquely affected by the wildfires and smoke. For example, there may be a need for timberland owners and third parties to renegotiate existing purchase and sale or option agreements or enter into new service agreements or access agreements, and agricultural businesses may also need to negotiate amendments to existing contracts or new agreements to address the effects of wildfires. As many timberlands and property may not be insured and time is critical, many businesses, especially family- and closely-held businesses, will need to reevaluate and modify business and management plans and get legal authority from owners and others to quickly adjust. Legal advice in this setting is essential. If you are an owner of such a business, please reach out to our lawyers in our Timber group or Agriculture group for assistance.

Will there be healthcare issues as a result of the wildfires?

Wildfires and the resulting smoke pose significant health risks to individuals suffering from asthma or other pulmonary conditions, and the airborne particulates can potentially compromise the health of individuals many hundreds of miles away from the fires, with measurable increases in the risk of coronary heart disease, irregular heart rhythm, heart failure, pulmonary embolism, and stroke.

The unfortunate timing of the wildfires amid the COVID-19 pandemic places yet an additional strain upon hospitals, providers, first responders, and other healthcare resources, and can create health conditions that could aggravate the already devastating effects of COVID-19. There will no doubt be increased healthcare claims, other insurance claims (business interruption as well as property and casualty insurance claims), and financial fallout to many stakeholders, including the healthcare industry, as a result of the wildfires and smoke. Businesses need to evaluate how this will affect their operations and financial prospects in the short and long term and prepare accordingly.  For those in the healthcare industry, see lawyers in our Healthcare group; for those in general business, see our Business department, which includes business and employment lawyers.

Will there be any form of tax relief due to damage caused by the fires?

On September 17, 2020, the IRS postponed various tax filing and payment deadlines for victims of the Oregon wildfires. On September 30, 2020, the Oregon Department of Revenue provided similar relief. For questions with tax issues please reach out to Schwabe’s Tax group for assistance.

Can my business get a government loan to repair damage caused by wildfires or associated smoke?

Oregon non-farm businesses, private nonprofits, homeowners, and renters physically affected by wildfires in eight counties may be eligible for low-interest federal loans (Business Physical Disaster Loans) through the Small Business Administration. Businesses in 14 adjacent Oregon counties and two California counties may also seek financial support through the SBA’s Economic Injury Disaster Loan program. More information on eligibility for these loan programs can be found on the SBA’s term sheet.

Washington has not yet received a presidential disaster declaration, but these programs may still be offered to those in Washington that meet the SBA’s disaster declaration criteria.

Conclusion

Unfortunately, wildfires have become a part of living and doing business on the West Coast. A disaster preparedness plan/emergency plan is essential for all businesses. To help understand the full spectrum of proactive legal measures you can take to protect your business, we encourage you to reach out to your Schwabe attorney today.