A federal judge recently ruled that victims of the Hermits Peak-Calf Canyon fire in New Mexico should be compensated not only for economic losses, such as destroyed homes or lost businesses, but also for the emotional distress they experienced.
This ruling challenges a decision made by FEMA in August 2023, which limited compensation to only economic damages, despite Congress setting aside nearly $4 billion for fire victims.
Law firms representing thousands of victims filed a lawsuit against FEMA, arguing that state law allows victims to receive compensation for emotional harm in addition to financial losses. The case involves the largest wildfire in New Mexico’s history, which caused widespread damage and suffering.
Judge James O. Browning’s ruling was expected, as he had previously indicated that he disagreed with FEMA’s restrictions. The judge went a step further by declaring that FEMA had wrongly withheld money owed to victims and ordered the agency to find a way to pay for emotional distress claims.
This decision was surprising to some, as it showed the judge’s frustration with FEMA’s delays and inefficiency. Lawyers estimate that the emotional losses suffered by victims could amount to $400 million. The next steps are uncertain, as FEMA and the U.S. Attorney’s Office could appeal the ruling or comply with it.
The ruling comes just before a deadline for filing claims, and Congress is considering an additional $1.5 billion in compensation for fire victims, bringing the total to $5.45 billion, though FEMA has only paid out around $1.6 billion so far.