Huntington Beach oil spill: $50 million settlement agreed to for locals hurt financially

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Amplify Energy will pay $50 million to individuals and companies that lost money last year when nearly 25,000 gallons of oil spilled into the ocean from a ruptured pipeline about 4 miles off the coast of Huntington Beach, California, under the terms of a preliminary class action settlement filed on Monday, October 17.

The deal calls for Amplify, which owns the pipeline, to compensate three specific groups: $34 million to people associated with the fishing industry, $9 million to homeowners, and $7 million to regional tour operators and others. . In total, an estimated 10,000 people could be eligible for compensation, and it is not yet known how much an individual or company will receive.

While Amplify and plaintiffs’ attorneys have agreed on the terms, the deal filed on Monday is not final. An approval hearing is scheduled for Nov. 16 in federal court in Santa Ana.

After a deal is closed, lawyers will contact people affected by the incident, contact some directly, and set up websites and other outlets for others who believe they have lost their home value or income.

“This may be a good day for the lawyers, but it’s a much better day for the people of Orange County, especially those who were harmed by the spill,” said Wylie Aitken, a Santa Ana attorney who represents the class of people. represents those who have lost. money.

Aitken noted that some individuals, particularly the fishermen and lobster men who were about to start their peak season when the spill hit on Oct. 1, 2021, are likely to be compensated more than others.

“Fortunately, the spill turned out not to be as big as predicted. And that’s lucky. But some people were seriously injured,” Aitken said. “We’ve had experts calculate the damage for each of these groups and we’ll get into the details when appropriate.”

Some people who lost money from the spill say it’s too early to know how to react to the deal submitted on Monday.

“We’re not exactly sure what our arrangement is, so I can’t say whether I’m happy or not,” said Rachel Vernes, owner of Bongos Sportfishing, located at Davey’s Locker in Newport Beach.

Bongos has two six-person fishing boats, and Vernes said both were packed with customers when the spill hit and was forced to dock in Alamitos Bay. That meant customer refunds and short-term logistical problems.

It was also just the beginning of the financial impact. For the rest of October, usually one of the busiest months of the fishing season, the spill prevented Bongos from returning its boats to their home docks, meaning they were not licensed to operate. And while fishing resumed in early spring — March marks the start of redfish season — Vernes said many potential customers were wary of fishing in local waters until at least early summer.

“Basically, it’s had quite a bit of impact on our business.”

The class action involving economic victims is just one of many legal entanglements with Amplify and the spill.

Earlier this year, Amplify agreed to pay approximately $13 million to settle criminal charges related to its response to the pipeline breach, and $1 million to the county to cover cleanup costs. And other civil cases, including one involving the Pacific Air Show operator, which had to cancel the third day of the three-day event, and another related to long-term environmental damage the spill caused to local wetlands, are still under negotiation.

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Amplify said it had received permission from the US Army Corps in recent weeks. of engineers to retrieve and replace the section of the pipeline that has ruptured. If the new pipeline passes inspection after that, the company hopes to get approval to resume offshore drilling in the area, possibly as early as the first half of next year.

Amplify has argued that the spill would not have happened if two tankers had not dragged anchors over the pipeline during a storm in January 2021. The company said it was never made aware of those incidents and is demanding compensation from the tankers’ owners. , something Aitken said his customers also haunt.

But in their criminal case against the company, federal prosecutors said Amplify could have responded much earlier after the pipe began spewing oil into the ocean. Although an alarm went off on the afternoon of October 1, 2021, indicating a rupture, workers initially shut down the pipeline and restarted the pipeline several times during the night, not informing authorities of the spill for 13 hours.

On Monday, an Amplify spokesperson released a statement attributed to the company’s CEO Martyn Willsher indicating the company’s satisfaction with the current terms of the class action: “We have negotiated in good faith and believe that that we have come to a reasonable and fair solution.”

Not all terms proposed in the class action are financial. As part of the deal, Houston-based Amplify has agreed to several terms aimed at improving the environmental safety of its Southern California operations if drilling resumes. In particular, Amplify has agreed to:

  • Hire more people and train its employees on how to react if a pipe is damaged or leaking. Last year, workers failed to notify the state, as required by law, after alarms went off indicating the pipeline had ruptured.
  • Spend at least $250,000 to upgrade pipeline response procedures.
  • Work with a contracted company or other entity that can detect oil in the ocean at night or in low light conditions.

“Those conditions are meant to make sure this never happens again,” Aitken said.

“Of course the best way to do that is to have no offshore drilling at all. But that’s out of our reach; that’s up to lawmakers and others,” he added. “So we’ve put every possible security measure into this settlement.”

Pipeline operator reaches preliminary settlement in California oil spill lawsuits

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