SAN FRANCISCO--(BUSINESS WIRE)--Plaintiffs in the class action lawsuits for economic harm caused by the May 19, 2015 Refugio State Beach pipeline rupture and oil spill won a victory in court yesterday when Judge Philip S. Gutierrez issued an order granting their requests for immediate changes to the way the pipeline companies responsible for the spill are permitted to communicate to plaintiffs and putative class members. The pipeline companies must cease all of what the plaintiffs termed misleading and deceptive communications to spill victims, and update the communications they do make to alert victims to the ongoing class action lawsuits.
Background on the 2015 Refugio State Beach Oil Spill
On May 19, 2015, a 24-inch pipeline ruptured, releasing crude oil onto Refugio State Beach in Santa Barbara County in a spill that had profound environmental and economic impacts on local fishers, fish buyers, and other affected businesses. Per federal law, the pipeline operators created an Oil Pollution Act ("OPA") claims process to provide short-term payments to individuals and businesses affected by the spill. Class action lawsuits were filed and then consolidated in federal court in the Central District of California seeking long-term restitution for the harmed fisheries.
Since the spill, the pipeline operators have notified victims of the claims process using online and print advertisements, some without making any mention of the ongoing class action. Though the ads state they are "committed to doing the right thing," they do not mention the lawsuits or advise victims to contact a lawyer before entering into short-term payment agreements -- or that these agreements can sever all future rights to potentially larger payments from the ongoing suit.
Plaintiffs claimed the defendant pipeline companies were using the OPA claims process to disadvantage the class and shrink their own liability. The plaintiffs argued that defendants induced class members to prematurely release their claims through a campaign which misled class members regarding the nature of the OPA process and the existence of the class action or other rights.
In the wake of these allegedly deceptive and misleading communications to class members, attorneys for the plaintiff successfully petitioned the Court for an order prohibiting the pipeline operators from obtaining improper releases from plaintiffs and putative class members; invalidating the releases the pipelines have already obtained; prohibiting misleading communications with plaintiffs and putative class members; and requiring the pipelines to issue corrective notices disclosing the existence of this litigation.
Judge Gutierrez noted flatly in his opinion that the defendant pipeline companies' advertisements did not comply with the OPA: "The advertisements omit any reference to the claims process as a vehicle for short-term damages or any indication that victims may have a right to recover more than the claims process can provide." Noting that "the [OPA] settlement agreements themselves establish the likelihood that the fairness of the litigation process has been compromised," Judge Gutierrez found that the pipelines' ads were misleading, concealing, and omitted important information, and that the companies had engaged in misleading conduct "by using the OPA claims process – a process intended to compensate oil spill victims – to steer those victims towards unwittingly waiving their rights to full recovery."
Attorneys for the plaintiffs hailed the Judge Gutierrez' order for preserving the rights of individuals and businesses harmed by the pipeline companies in the 2015 spill.
The class action complaint, filed on behalf of fishers, fish buyers, and other affected businesses, alleges the Texas-based companies negligently operated the 10-mile-long, 24-inch-wide oil pipeline, Line 901, causing a rupture that discharged over 100,000 gallons of crude oil onto beaches and into the Pacific Ocean, creating a slick that stretched for miles, contaminating several State Marine Conservation Areas along the way, and forcing the closure of beaches, fishing grounds, and shellfish operations. The case is Stace Cheverez v. Plains All American Pipeline, LP, CV15-4113 PSG (JEMx).
About Lieff Cabraser
Lieff Cabraser Heimann & Bernstein, LLP is a sixty-plus attorney law firm with offices in San Francisco, New York, Nashville, and Seattle. It is among the largest law firms in the United States that only represent plaintiffs. Since its founding in 1972, Lieff Cabraser has litigated and resolved hundreds of class action lawsuits and thousands of individual cases. We have successfully prosecuted cases against many of the world’s most powerful corporations, obtaining compensation for families and property owners harmed by toxic environmental exposures.