A year and a half after a ruptured oil pipeline poured thousands of gallons of crude oil into Southern California waters, the legal blame game is beginning to settle.
A group of international shipping companies and their subsidiaries tentatively agreed on Wednesday to pay $96.5 million to Houston-based Amplify Energy Corp. to dismiss one of the last remaining lawsuits over the oil spill, which spilled at least 25,000 gallons of crude oil into Huntington Beach waters in October 2021.
Amplify’s lawsuit, filed last year, accused the shipping companies of improperly allowing their container ships, the MSC Danit and Cosco Beijing, to drag their anchors across the seabed near the pipeline.
The ships were anchored near the San Pedro Bay pipeline during a storm in January 2021, about nine months before the oil spill. Motion data sent by the ships showed that the ships crossed the pipeline repeatedly during the storm, driven by winds of up to 100 mph and waves of up to 17 feet, Amplify’s lawyers said.
The lawsuit alleged that the shipping companies should have notified authorities of the damage to the pipeline, but failed to do so. Investigators later said the huge anchors moving across the seafloor hitting or dragging the oil pipeline could weaken the pipeline by stripping away the concrete casing and making it more vulnerable to future damage.
“We are eager to move forward and turn the page on this unfortunate and preventable event,” Martyn Willsher, President and Chief Executive of Amplify, said in a statement.
The preliminary settlement agreement requires approval from U.S. District Judge David O. Carter, who has overseen the sprawling litigation into the 2021 spill.
The agreement comes as the parties prepare for a first-stage trial next month, which would have determined whether Amplify was solely responsible for the oil spill and whether the seaworthiness of the container ships or any negligence by the crew or owners caused the damage. to the pipeline or the oil leak.
In an order setting parameters for the process, Carter wrote that if evidence showed that the ship’s owners or operators were at fault, they could only escape liability if there was “extraordinary negligence by Amplify.”
The Mediterranean Shipping Co., the Swiss company that operates the Danit, said Wednesday that the preliminary settlement agreement contains no admission of liability and that the company intends to prove in “the remaining legal proceedings with Amplify’s insurers” that the ship not responsible for the leakage.
The company said its experts have concluded that the Danit “maneuvered safely and that Amplify simply failed to properly maintain and inspect the pipeline.” It was “reasonable” for the crew to believe that the container ship had “not been involved in any marine casualty to be reported to the Coast Guard,” an MSC representative said.
Representatives of Capetanissa Maritime Corp. of Greece and COSCO Container Lines of China, which own and operate the Beijing, did not respond to a request for comment on Wednesday, nor did lawyers representing the shipping companies.
The Southern California Marine Exchange, which monitors and regulates traffic in busy San Pedro Bay, also agreed with Amplify Energy Wednesday on “non-monetary terms,” the company said in a press release. Amplify had alleged in its lawsuit that the nonprofit should have known about the anchor drags and informed the company.
It is not clear what the Marine Exchange agreed to as part of the settlement. Kip Louttit, the organization’s executive director, said Wednesday that while their lawyers finalized details of the settlement over the weekend, he has not seen the official document and was not prepared to comment.
Last month, the same group of international shipping companies agreed to pay $45 million to settle a lawsuit brought by business owners and coastal property owners over the effects of the spill.
Amplify settled with the same entrepreneurs and property owners for $50 million last fall. That settlement agreement paid out $34 million to commercial fishermen, $9 million to coastal property owners and $7 million to businesses that rely on waterfront tourism, including surf schools and bait shops.
The oil spill occurred about four miles offshore and caused crude oil to wash ashore in Huntington Beach and along other parts of the California coastline.
Although the spill was less serious than initially feared, beaches were closed for a week and fisheries closed for a month.
The spill also threatened coastal wetlands and affected local wildlife: environmental scientists say said last year that they recovered 82 dead birds and six dead mammals in the aftermath of the spill, including a bottlenose dolphin, three California sea lions, and a wide variety of birds, including coots and grebes.
Amplify Energy also agreed to plea no contest to set environmental charges and pay $4.9 million in fines and penalties in the aftermath of last year’s spill. About $3.45 million of those fines went to the state and the rest to the county.
Under the agreement with prosecutors, Amplify was placed on probation for a year and a new leak detection system had to be installed in the pipeline. The company was also instructed to train employees to immediately notify regulators of potential spills and to implement other operational safety measures, including biannual visual inspections of the pipeline.
Amplify and its subsidiaries also agreed to plead guilty federal criminal environmental taxes and paying nearly $13 million in connection with the oil spill.
