Legal battlePipeline operator agrees to $50M spill settlement

SANTA ANA >> A pipeline operator has agreed to pay $50 million to thousands of Southern California fishermen, tourism companies and property owners who sued after an offshore oil spill last year near Huntington Beach.

A proposed settlement between Amplify Energy Corp., which owns the pipeline that ruptured in October 2021 and spilled 25,000 gallons (94,600 liters) of crude oil into the Pacific Ocean, and the businesses and residents was filed Monday in federal court in Santa Ana, court documents show.

Under the proposal, the Houston-based energy company would pay $34 million to commercial fishermen and $9 million to coastal property owners. It also would pay $7 million to waterfront tourism operators, including businesses that provide surf lessons and leisure cruises and shops that sell swimwear and fishing bait.

A federal judge still needs to sign off on the proposal for it to take effect. A hearing is scheduled for Nov. 16.

“This is a really dramatic first step and a dramatic compensation for these victims of this terrible tragedy,” said Wylie Aitken, co-lead counsel for the plaintiffs, whom he estimated number more than 10,000. “Though it may not be 100% it is very substantial and very helpful and a good deal of compensation to them. We’re going to continue to try to get every last penny that they deserve.”

The proposal requires Amplify to install a leak detection system and provide spill training to employees, steps that the company also agreed to in a plea deal with federal authorities. It also would require Amplify to increase staffing on an offshore oil platform, court papers show.

The leak occurred about 4 miles (6.4 kilometers) offshore and sent blobs of crude washing ashore in surf-friendly Huntington Beach and other coastal communities. While less severe than initially feared, the spill shuttered the beaches in the area for a week, fisheries for more than a month, oiled birds and threatened area wetlands.

Amplify had no comment Tuesday and referred to a statement issued when the agreement was reached in August calling it a “reasonable and fair resolution.” The company said it would continue to seek damages from shipping vessels accused of dragging anchor and damaging the pipeline months before the leak.

Amplify has $200 million in liability insurance coverage for spill-related claims and as of March the company had incurred costs of about $111 million, according to the court papers filed by the plaintiffs.

Earlier this year, Amplify reached a plea deal with federal authorities for negligently discharging crude oil. The company, which authorities said failed to respond to leak detection system alarms that should have alerted workers to the spill, agreed to pay a combined $13 million in fines and expenses incurred by government agencies.

Amplify contends that two commercial shipping vessels damaged its pipeline when they dragged their anchors across it during a January 2021 storm. The proposed settlement doesn’t apply to the operators of those ships or to an organization that helps oversee marine traffic, which has also been brought into the litigation.