Plains pipeline company to pay $60M in no-fault settlement

Without admitting fault, a pipeline company found criminally responsible in a massive Santa Barbara County oil spill has agreed to pay $60 million in civil penalties for natural resource damage.

Plains All American Pipeline LP has been the subject of several criminal and civil actions in state and federal courts, after crude oil spilled and polluted the ocean when its pipeline ruptured northwest of Santa Barbara on May 19, 2015. The incident affected marine life, natural resources and resulted in closures of the coastline, according to state officials.

The federal government filed a regulatory action against Plains on Friday which settled the same day. United States of America et al. v. Plains All American Pipeline L.P. et al., 2:20-CV-02415 (C.D. Cal., filed Mar. 13, 2020).

According to the consent decree, Plains agreed to pay $24 million in penalties for alleged noncompliance and Pipeline Safety Law violations. Another $22.3 million will be used to clean up natural resource damage, and $10 million will go toward compensation for damage assessment. The U.S. Coast Guard will receive $4.25 million for cleanup.

Plains must also implement procedures for maintaining safe infrastructure.

Plains did not admit any violations alleged in the complaint. The company's media relations team issued the following statement Monday:

"This consent decree represents a significant step and is the culmination of collaborative discussions with federal and state agencies over the course of a multi-year period. The consent decree sets forth certain improvement actions that we are implementing into our operations. We take responsibility for the safe delivery of energy resources very seriously and we are committed to designing, constructing, operating and maintaining our assets in a safe, reliable and responsible manner."

The resolution is subject to a 30-day public notice and comment period.

Plains was convicted in September 2018 of one felony and eight misdemeanors. The company is also being sued by a group of oil workers, fishermen affected by the closure of the oil platforms, and property owners who signed easement contracts allowing the pipeline to be built on their land.

In April 2019, Plains was fined $3.35 million, despite prosecutors asking for $1.25 billion. Santa Barbara County Superior Court Judge James Herman, who presided over Plains' criminal trial, said the fine was the maximum allowed by law. People v. Plains All American Pipeline LP, 1495091 (Santa Barbara Super. Ct., filed May 16, 2016).

Last month, oil workers and fishermen asked Herman to order criminal restitution for economic damages they said they suffered, after the 9th U.S. Circuit Court of Appeals decertified their classes in July 2019.

Plains' counsel Henry Weissmann, partner at Munger, Tolles & Olson LLP, could not be reached for comment Monday.

A. Barry Cappello, managing partner at Cappello & Noel LLP in Santa Barbara who represents plaintiffs in civil class actions against Plains along with plaintiffs seeking restitution in the criminal case, said the settlement won't have any affect in his matters. The criminal restitution hearings have been impacted by the closure of Santa Barbara County courts due to COVID-19, Cappello said.

The next date for the criminal restitution hearing is April 13.