Santa Barbara News-Press: Judge orders plain truth, not Plains truth

Firm at center of Refugio spill must change its message to victims

By SCOTT STEEPLETON, NEWS-PRESS CITY EDITOR

March 8, 2016

Roughnecks, property owners, commercial fishermen and others who claim damages stemming from the Refugio oil spill made some headway in their federal class-action suit, convincing a judge in Los Angeles that portions of their case should move forward.

At the same time, the defendant, Plains All American Pipeline LP, operator of the corroded Line 901 that ruptured last May and spewed crude oil on land and in the ocean, has been ordered to stop engaging in “misleading communications” with the plaintiffs. This includes a ban on obtaining release forms without telling claimants about the class-action suit and describing the claims being asserted and an order to “seek the advice of counsel before waiving any claims.”

The lead plaintiff law firms are Lieff Cabraser, Keller Rohrback and Cappello & No’l.

On March 4, U.S. District Court Judge Philip Gutierrez granted a motion by Plains dismissing several claims, but allowing the plaintiffs to try again. These include claims for violations of California Business and Professions Code, nuisance per se.

A motion to dismiss a claim for negligence per se also was granted. But the judge says plaintiffs can amend another of their claims with the negligence per se theory.

Judge Gutierrez denied Plains’ motion to dismiss three causes of action: public nuisance, injunctive relief and interference with prospective economic advantage.

If the plaintiffs don’t amend the dismissed complaints with “cures” by April 1, Judge Gutierrez will dismiss them with prejudice, which means any chance to amend them will be lost.

A day before making these rulings, Judge Gutierrez granted a motion limiting communications between Plains and the plaintiffs in an effort to rectify some misleading actions on the defendant’s part.

Following the spill and in accordance with the Oil Pollution Act of 1990, Plains established a process to provide interim and short-term damages to those affected by the spill.

Plaintiffs counsel then requested Plains notify anyone in the OPA process about the class-action suit, but after months of negotiation, an agreement on the matter was elusive.

However, in none of the communications to potential victims does Plains tell them to contact counsel before submitting a claim initiation form.

In some cases, potential victims have signed form that “release, acquit and forever discharge” Plains of all claims related to the spill.

Attorneys for the plaintiffs alleged that Plains impermissibly initiated contact with class members and asked the judge to order the company to change its practices.

They also sought to bar Plains from running advertisements about the claims process.

Judge Gutierrez found that Plains engaged in misleading conduct “by using the OPA claims process – a process intended to compensate oil spill victims – to steer those victims toward unwittingly waiving their rights to full recovery.”

The judge called Plains’ actions “all the more suspicious in light of their own representation that continuing the process will foreclose the need for a class action.”

“Defendants have used a statutorily-mandated process which explicitly preserves a victim’s claims to pick off unrepresented victims in hopes of defeating numerosity down the line.”

Judge Gutierrez ordered that release forms purporting to immunize Plains from paying full compensation to injured class members are invalidated and Plains must notify claimants about this.

As for the advertisements, Judge Gutierrez denied plaintiffs’ request that they be altered in any way.

email: ssteepleton@newspress.com

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