Newhall Land, Oil Firms in Court Over Cleanup

While seeking approval for the largest subdivision in Los Angeles County, developer Newhall Land & Farming Co. has also been waging a court battle to force two oil companies to clean up “severe and extensive” oil contamination spreading under the property.

The developer estimates the cleanup could cost tens of millions of dollars, according to court records. In the suit, filed in 2001 in Los Angeles Superior Court, Newhall Land accuses Kerr-McGee Corp. and Medallion California Properties Co. of breaking promises to clean oil-contaminated soil on land slated to be part of Newhall Ranch, the proposed 21,600-home subdivision in the Santa Clarita Valley that county supervisors will consider for approval Jan. 28.

Soil contaminated by oil is capable of generating methane gas and other toxic vapors, according to documents filed by the developer with the county in 1996.

The contamination is dotted across 1,300 acres where the company is considering building homes and commercial space, Newhall Land spokeswoman Marlee Lauffer said.

But in documents, the developer maintained any oil contamination on the property could be cleaned to a level that is “safe for development.”

“It can be cleaned up,” Lauffer said. “It’s just a matter of [the oil companies] paying for it.”

Oil companies have been pumping crude on the property under a lease agreement with Newhall Land since the mid-1930s. Although the oil company that signed the 1935 lease had a different name, Newhall Land alleges it is essentially Kerr-McGee. In 1990, that company signed the lease over to Medallion.

Newhall Land contends Kerr-McGee officials broke numerous promises to clean up the soil. Now, Newhall Land is holding both companies responsible for returning the land to a “clean and safe” condition, as stipulated in the 1935 agreement. Rich Levy, an attorney for Kerr-McGee, said his client has already cleaned its share of the property.

A trial date is set for May 12.