Local businesses harmed by last year’s oil spill off Orange County’s coast could soon be seeing financial relief, after their attorneys reached a settlement deal with pipeline operator Amplify Energy.
Last year’s spill – which Amplify has been criminally charged over – devastated businesses that operate in fishing and coastal tourism, with fishing and lobster trapping zones shut down for weeks while authorities conducted safety testing.
On Thursday, both sides announced the local business lawsuits had been settled, with Amplify’s insurance to pay out money to the plaintiffs – though the amount has not yet been made public.
“As a result of extensive negotiations between the parties…counsel for the Class Plaintiffs and Amplify Energy Corp. and its affiliates have agreed to a resolution of the Class Plaintiffs’ claims against the Amplify entities,” said a statement Thursday from the lead attorneys for businesses impacted by the spill: Wylie Aitken, Lexi Hazam, and Stephen Larson.
“[The settlement] was done through some intense negotiations, led by two federal judges…and ultimately we arrived at a common ground,” said Aitkin, who is the chairman of Voice of OC’s board of directors, in an interview.
“Of course it’s still subject to [U.S. District Judge David O.] Carter’s consent and approval. And that’s important,” Aitken said.
“He will be concerned, as he legitimately should, about how the amount will be distributed among the various class participants and plaintiffs,” he added.
The settlement will include measures to prevent further spills, under a type of remedy called “injunctive relief,” according to Aitken and the other attorneys.
Amplify said in a statement that the settlement “will be funded under the Company’s insurance policies, and the final agreement will be subject to court approval.”
The pipeline operator added that it plans to continue its litigation against cargo ships that struck the pipeline, as well as the regional traffic coordinator for cargo ships, known as the Marine Exchange of Southern California.
“It’s good for the people who were victims of the oil spill, because it’s important that they get compensated for their losses, not have it drag on and have to wait to get reimbursed for something that they didn’t cause,” said county Supervisor Katrina Foley, who was elected by OC’s coastal communities last year, in a phone interview with Voice of OC.
Foley said she heard that attorneys were in Carter’s federal courtroom until 9:30 p.m. Wednesday night “hammering” out the settlement.
Three types of people are part of the settlement: those who catch, process and sell fish; those who own coastal property; and people who run coastal tourism businesses like whale watching, cruise boats and educational boats.
The coastal businesses also are pursuing compensation from the shipping companies whose boats struck the pipeline, Aitken said.
“All indications are they struck the first blow on the pipe, and then of course it collapsed, and of course Amplify did not handle it well,” he said.
Last October’s spill sent thousands of gallons of crude oil into the ocean and toward OC’s coasts and protected wetlands, with Huntington Beach forced to cancel the second day of the massive Pacific Airshow, impacting hotels, restaurants and other coastal businesses.
More than a dozen lawsuits were filed over the spill, and such cases often take years to make their way through the courts before they’re resolved.
But late last year, Carter moved to consolidate the cases, and they’ve now being resolved less than a year after the spill.
Another major legal action – pursued by county officials against Amplify – resulted in Amplify agreeing last month to pay the county a $1 million settlement.
County officials said their effort was meant to get reimbursement for taxpayers for a range of spill-related costs. Those included laying and moving spill berms and booms, securing wetlands areas, cleaning up oil, harbor patrol cleaning up oil, running the county’s emergency operations center and communications response.
In December, federal prosecutors announced they were charging Amplify Energy with criminal negligence, alleging the company failed to respond to eight different alarms from their leak detection system as early as 4:10 p.m. on the day before they first reported the spill to authorities.
The company did not alert authorities until the next morning, by which time over a million people had flocked to Huntington Beach for the airshow.
The federal charge is not against any company officials, but rather Amplify and its subsidiaries as companies.
The settlement amount between Amplify and local businesses “absolutely” will become public in the future, Aitken said.
“This will be totally and completely open,” he said.
At Carter’s request, both sides committed to writing a first draft of the settlement agreement within 20 days,” Aitken said.
“That will be the starting point, not the ending point…the devil’s in the details. and we’re going to work hard to ensure the devil gets out of those details,” he added.
“When the ultimate agreement is proposed and brought to Judge Carter, that will be a matter of public record, of public discussion,” Aitken said.
“So all of the details will be made open to the public for them to get a good, clear look.”
Nick Gerda covers county government for Voice of OC. You can contact him at ngerda@voiceofoc.org.
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