SoCal Gas needn't face permanent nuisance claims for well blast

A utility deemed responsible for a 2015 gas well blowout in northwest San Fernando Valley won't have to face permanent nuisance claims from plaintiffs alleging property value loss associated with a stigma that resulted from the event.

Acknowledging the court has no power to supersede state utility regulators who decided to keep Aliso Canyon open and functioning, Los Angeles County Judge Carolyn B. Kuhl on Thursday barred plaintiffs from pursuing permanent claims which could've amounted to a billion-dollar loss.

More than 40,000 plaintiffs have claimed the Oct. 23, 2015 leak caused health issues, ranging from rashes and coughs to cancer, according to hundreds of lawsuits. Plaintiffs have sought damages for a range of causes of action, including negligence, permanent nuisance, fraudulent concealment and inverse condemnation. Trial is set to begin June 2020.

Southern California Gas Co., a subsidiary of Sempra Energy, owns the Aliso Canyon gas storage facility north of the Porter Ranch neighborhood in Los Angeles. Southern California Gas Leak cases, JCCP 4861 (L.A. Super. Ct., filed Feb. 2, 2016).

In her ruling granting Morgan, Lewis & Bockius' motion for summary adjudication, Kuhl found plaintiffs' permanent nuisance claims are jurisdictionally barred, as the California Public Utilities Commission already found Aliso Canyon passed well integrity tests and those that didn't pass were temporarily isolated or abandoned, consistent with the Division of Oil, Gas, and Geothermal Resources' regulations.

After the gas leak, the Legislature ordered CPUC to participate in a gas storage well comprehensive safety review to determine whether the wells' operations should continue.

Kuhl wrote she had no power to entertain permanent nuisance claims without second-guessing CPUC findings.

"If a claim for permanent nuisance were allowed to proceed in this court, the court or a jury would be required to re-balance the interests already weighed by CPUC at the Legislature's direction," she wrote.

Kuhl's ruling narrows the scope of litigation to the dispute over alleged impacts from the leak.

Plaintiffs initially theorized Aliso Canyon's existence and continuing operations were a permanent nuisance, and the damages resulting from the leak cannot be abated. SoCalGas contended plaintiffs' fears of future leaks weren't enough to prove a permanent nuisance, and the nuisance concluded when the leak was sealed.

Kuhl's ruling comes as mixed results for plaintiffs as it removes a significant portion of economic damages they could've covered related to diminishing property values from the event. But permanent nuisance also would've been time-barred with a three-year statute of limitations. Now, future claimants can continue to bring suits for current and future events.

R. Rex Parris of Parris Law Firm who represents 8,000 plaintiffs said Friday he respected Kuhl's ruling and noted it was likely a difficult issue for the court to decide "but also one that is easily manipulated by the industry."

The permanent nuisance ban likely has no real negative effect on plaintiffs, Parris said, lambasting the utility for its ongoing conduct. He referenced Gov. Gavin Newsom's Nov. 18 letter to CPUC President Marybel Batjer, urging the regulator to expedite planning for the permanent closure of Aliso Canyon to increase public health and safety protections. Newsom's letter encouraged CPUC to measure the state's power needs and where Aliso Canyon would fit into those needs.

Given Newsom's push to hire third-party experts to find alternatives to the facility and any scenarios that can pursue faster closure, Parris estimates the facility could shutter within two years.

If the facility is to shutter, there'd be no more permanent nuisance anyway, said Parris, adding it's still a crime each time there is a gas release, which he said he believes won't be enforced.

"The ruling does come into play seeking losses for diminution property, but we can preserve those damages through inverse condemnation liability," said Parris. "My philosophy is we should err on the side of compensating victims of criminal activity."