Attorneys put finishing touches on oil spill settlement

A federal judge in Santa Ana this week signed off on $95 million to settle all of the claims in class-action litigation involving the pipeline oil leak that gushed thousands of gallons of crude into the ocean off Huntington Beach in 2021, but it only happened after working through a hitch.

U.S. District Judge David O. Carter ordered all of the attorneys involved in the litigation with Amplify Energy to hammer out an agreement Thursday on a $2-million claim from the organizers of the annual Pacific Airshow, which was curtailed due to the oil leak in 2021.

Carter ultimately ruled that the Pacific Airshow was a member of the class and would have a claim to about $1.9 million, but the payout could be less depending on how the funds are allocated, said attorney Wylie Aitken, who represents the plaintiffs. The attorney for the air show, Dan Robinson, indicated the company may seek to opt out of the class-action, presumably so it can pursue a potentially more lucrative lawsuit on its own against Amplify Energy.

“On behalf of myself and my co-counsel, we’re delighted the matter has been resolved,” Aitken told City News Service. “[Carter] was complimentary to us as lawyers in terms of how quickly we resolved the matter and how fairly we resolved it and the amount of money we obtained for the citizens of Orange County.’’

Aitken praised Carter, “who devoted so many hours to this case,” to steer it clear of years of litigation.

Amplify’s attorneys wanted to put off the issue with the Pacific Airshow until Oct. 14, so they could do more research on the issue of whether the air show’s organizers should get a slice of the settlement earmarked for tourism businesses. The attorneys for the plaintiffs, however, said the matter was decided in an administrative hearing to deny the claim and that it was up to Carter to decide if the air show company should be included in the class.

The plaintiffs say any more delays hurt the claimants because it could hold up the payments to them. Amplify’s attorneys argued that putting the matter over to Oct. 14 would not delay the process of getting the checks out.

“Well, we’re all here,” Carter told the attorneys. “The special master is gathering. ... I don’t mean to inconvenience any of you, but why not work through it today [Thursday]. ... We’re going to be one big happy family.”

Carter praised the overall settlements with Amplify and the shipping companies that damaged the pipeline.

“Getting $95 million back to the public so quickly is beneficial,” Carter said, adding it was much better than the anticipated seven years of litigation if it went to trial.

He especially appreciated how the attorneys worked out a way to get money to the waterfront tourism class when there were scant claims filed.

“You got more money to the class and cut your costs,” Carter said.

At issue with the Pacific Airshow was whether it should be considered a member of the class when its officers were not necessarily in the area of the oil spill but staging a show there.

Carter signed off on $50 million in the settlement agreements with Amplify Energy in April, but the $45-million agreement with the vessel companies — the MSC Danit and M/V Beijing — was pending until Thursday. The air show claim, however, would be part of the $50-million agreement.

The Pacific Airshow, which had to cancel its last day due to the oil spill in 2021, has already received $6 million from Huntington Beach, the attorneys said.

Last year, Amplify Energy settled criminal cases in state and federal court and agreed to pay fines.

The company agreed in federal court to pay a $7.1-million fine and $5.8 million to reimburse the U.S. Coast Guard for expenses from the October 2021 spill and also agreed to pay $4.9 million in fines to resolve a misdemeanor complaint in state court.

The pipeline, which is used to carry crude oil from several offshore drilling platforms to a processing plant in Long Beach, began leaking the afternoon of Oct. 1, 2021, but oil continued to pump through the line until the following morning, authorities said last year.

All told, about 25,000 gallons of oil seeped into the ocean from the ruptured 16-inch pipeline, which is submerged about 4.7 miles west of Huntington Beach. The leak forced the cancellation of the popular airshow, which was underway when the spill was detected. Beaches were closed up and down the Orange County coast as crews worked to contain the crude oil.

Federal investigators have said the pipeline appeared to have been damaged by a ship’s anchor, likely belonging to one of dozens of cargo ships that were backlogged over a period of months outside the Los Angeles-Long Beach port complex.

More than a dozen companies doing business in the region sued Amplify Energy Corp. for damages resulting from the spill.

Fishing resumed in late November 2021 along the Orange County coast, following a two-month shutdown of fisheries due to the spill. The fishing ban encircled 650 square miles of marine waters and about 45 miles of shoreline, including all bays and harbors from Seal Beach to San Onofre State Beach, officials said.