Plains Suffers Legal Setback

Plains All American Pipeline lost a significant preliminary skirmish this past week in what promises to be prolonged legal war over damages inflicted by last May’s Refugio Oil Spill. A federal judge ruled that agreements by about 150 individuals with whom Plains has already settled cannot bar them from seeking further compensation in the future.

According to attorney Barry Cappello, whose firm is one of three designated as lead co-counsel pursuing five consolidated class action lawsuits against Plains, the company agreed to pay off nearly 150 individuals for damages incurred on the condition that they not take any further legal action, even if new evidence emerges indicating the damages inflicted were greater than initially understood.

Plains took out large advertisements in Santa Barba ra media outlets — including The Santa Barbara Independent — announcing it was willing to enter into out-of-court settlements with parties harmed by the spill. Cappello — and the other two law firms designated joint lead counsel — took out ads as well, urging potential victims not to enter into out-of-court settlements with Plains and alerting them that the class action lawsuit had been filed.

At issue in federal court was whether the federal Oil Pollution Act precluded the aggrieved parties from signing “interim releases” with Plains at all and when a class action lawsuit is pending. Both sides, Cappello stated, argued the federal law upheld their position, but the issue had never been litigated before. In a ruling that qualifies as a legal first, the judge ruled against Plains, ordering the company to notify anyone who signed such a release that it was no longer valid. The judge also ruled Plains All American had to notify anyone seeking settlement that the class action lawsuit had been initiated and that they should seek private legal advice before waiving any claims.

Cappello said he thought he heard Plains representatives state in court that they’d settled with 147 parties for “a couple million dollars.” Of that, Cappello said $1 million went to a single hotel. Cappello stated the class action team would be seeking “multiples of multiples” of the $2 million. “This is no small figure,” he said. The pipeline spill effectively cost up to 500 oil platform and oil support workers their jobs, he said. Other classes involved in the litigation include those in the fishing, tourism, and real estate industries that were adversely affected by the rupture and spill.

A Plains spokesperson declined to comment for the story, explaining Plains does not comment on pending litigation. Cappello also noted that Plains had moved to have the case tossed out, and that he expected a ruling on that shortly. With last week’s ruling, Cappello said he and the other legal teams pursuing the case could commence depositions and discovery.