Santa Barbara oil spill case hangs on subclass certification

After a state court found Plains All American Pipeline LP criminally negligent last year on charges relating to a massive 2015 oil spill off the Santa Barbara coast, a 4-year-old federal class action in Los Angeles including fishermen, property owners and oil workers seeking damages is still pending as subclass members fight for certification.

The four-firm litigation team of Cappello & Noël LLP, Keller Rohrback LLP, Lieff Cabraser Heimann & Bernstein LLP and Audet & Partners LLP represent class members including a subclass of property owners from Santa Barbara to Long Beach County who say their homes were negatively affected by the spill.

Class counsel filed a motion Tuesday opposing Plains' attempt to decertify the subclass, claiming the pipeline company's argument to decertify "because Plains' oil crossed the property line of some beachfront properties but not others" is flawed, and contradicts U.S. District Judge Philip S. Gutierrez's previous ruling to grant certification.

"Plaintiffs maintain that inclusion of all beachfront properties with injuries resulting from Plains' 2015 oil spill in this subclass, regardless of whether physical trespass occurred, remains appropriate and well supported by California law ...," the motion reads.

It proposes that if in fact the court intended that only those properties physically invaded by oil, rather than properties fronting oiled beaches, should be included in the class, that clarification specifying the two types of properties can be easily made. Andrews v. Plains All American Pipeline, 15-CV4113, (C.D. Cal., filed April 17, 2018).

Class counsel argues that a straightforward clarification would be "far more appropriate than the drastic measure of decertification, which would enable Plains to avoid responsibility to thousands of property owners impacted by its criminal oil spill," the motion reads.

Despite being convicted of one felony and eight misdemeanors relating to the oil spill back in April, Plains has for the most part avoided major litigation payouts as a consequence of either the criminal or federal civil case.

After Plains was convicted of a felony in 2018, state and federal prosecutors had asked for the company to be fined $1.25 billion and forced to comply with a seven-year probation program which included close operations monitoring by regulators. People v. Plains All American Pipeline LP, 1495091 (Santa Barbara Super. Ct., filed May 16, 2016).

However after exposing a loophole in the state criminal justice system which says that a criminal defendant may choose to take jail time in lieu of probation, Plains was able to side step any of the probation terms, because the company can't be jailed. After the ruling, Santa Barbara County District Attorney Joyce Dudley said she would support legislation that would give states the ability to enforce probation on corporations criminally convicted.

Prosecutors pleaded with Herman at a sentencing hearing to make an exception to the rule. Herman said he was unwilling, "to go where no judge has gone before," initially allowing Plains to walk away largely unscathed by the conviction.

However Plains is not out of the woods yet. A restitution hearing in front of Herman is set for Dec. 9 to determine how much the pipeline company owes the victims of one of the largest oil spills in state history.

At a hearing in Santa Barbara following the conviction, class counsel Lawrence J. Conlan of Cappello & Noël suggested a somewhat rare proposal that Herman coordinate with Gutierrez in determining the structure and damages amount of the restitution fines. It is unclear if Herman has consulted with Gutierrez and if such a conversation would affect the restitution terms.

The road to class certification in the federal class action has been a bumpy one including numerous certification challenges filed by Plains' defense team from Munger Tolles & Olson LLP.

In July after Plains appealed Gutierrez's order granting certification to the oil workers who say their livelihood was affected by the closing of the pipeline, a panel of 9th U.S. Circuit Court of Appeals judges ruled to reverse the district court and decertify the class.

It found the district court, "abused its discretion by concluding that common issues predominate over individual questions for the class ..."

The decision came in the wake of a ruling by a 2nd District Court of Appeal state panel in the 2017 Southern California Gas leak litigation which said the utility was not responsible for reimbursing economic damages suffered by area businesses related to the 2015 leak at Aliso Canyon.

The SoCal Gas ruling was referenced multiple times during oral arguments to decertify the oil worker class in the Plains case. Class counsel plans to file a motion to reconsider decertification in December, according to those familiar with the case.

Plains also filed a motion to decertify the fishermen class and strike certain expert testimony but was denied by Gutierrez last Monday.

At the last hearing in federal court, Gutierrez made clear his intentions to set a 2020 trial date in the civil class action.

Attorneys for Plains and class members were unavailable for comment Tuesday.