The operator of the pipeline that leaked 25,000 gallons of petroleum off the coast of Huntington Beach is clearing up its legal issues and casting two foreign shipping companies into the fray.
Amplify Energy pleaded no contest to both state and federal prosecutions Sept. 8, as part of a plea deal that lands it with $12 million in fines. The company also reached a tentative settlement with the class-action litigants that would leave foreign shipping companies on the hook for possibly damaging the pipeline.
“I want to thank all our local, state, and federal partners for their assistance in this investigation and for their ongoing efforts to clean up this environmental disaster. In times of crisis, it takes all of us – working together – to get the job done,” Attorney General Rob Bonta said in a press release.
The state charged Amplify with six criminal counts: one count of failure to immediately report an oil spill, one count of pollution and four counts of taking of migratory birds.
They will be fined $2 million for failure to report, another $2.9 million for the pollution charge and $19,700 for each remaining count, for a total of $5 million.
Half the money will be given to the State Fish and Game Preservation Fund, and the other half will be given to Orange County to use in a fish and wildlife propagation fund.
The plea deal leaves Amplify with unsupervised probation of one year. Under the rules of probation, the company is required to use a new leak-detection system on their pipeline, is required to report any pipeline movement and must visually inspect the pipeline using an underwater robot twice a year.
The plea deal also settles a federal criminal case brought by United States attorneys that would have gone to trial Nov. 1, on the single count of an oil discharge. Amplify will pay $7.1 million in fines.
Civil case
In the consolidated class action lawsuit against Amplify, plaintiffs announced they reached a tentative settlement with the company Aug. 24. The parties have not yet submitted the settlement to the court, and a copy is not available.
“Although we are unable to provide additional detail at this time, we negotiated in good faith and believe we have come to a reasonable and fair resolution,” Amplify’s President and Chief Executive Officer Martyn Willsher said according to a press release.
If accepted, the settlement will clear Amplify from the case, but will keep two foreign companies on the table. In a Feb. 28 third-party complaint, Amplify claimed two cargo ships, the Beijing – owned by the Liberian Capetanissa Maritime Corp. and managed by the Greek Costamare Shipping Co., and the Danit – owned by the Swiss Mediterranean Shipping Co., and the Panamanian Dordellas Finance Corp., damaged the pipeline and should be held responsible. The ships dragged the pipeline during a January, 2021, storm, Amplify claims.
The Beijing’s owners are claiming the lawsuit against them has no jurisdiction.
In a joint status report, the companies say Amplify has not been providing requested documents. Amplify proposed trial in the case to begin Feb. 28.
State case info
Deputy Attorney General Paul Seo, Attorney General Rob Bonta, Orange County Senior Deputy District Attorney William Fallon and Orange County District Attorney Todd Spitzer prosecuted.
Brian Benczkowski and Mark Holscher of Kirkland & Ellis LLP represented Amplify.
Orange Superior Court Case No. 22CM07111.
Read the plea agreement here.
Federal case info
Federal attorneys Matthew O’Brien and Brian Faerstein represented the United States.
Brian Benczkowski and Mark Holscher represented Amplify.
California Central District Judge David Carter presided.
Case No. 21-00226.
Read the judgment here.
Civil case info
Multiple attorneys represent plaintiffs in this consolidated class action suit. Stephen Larson of Larson LLP, Wylie Aitken of Aitken Aitken Cohn and Lexi Hazam of Lieff Cabraser Heimann & Bernstein LLP are co-lead counsel. Attorneys from Ontario’s McCune Wright Arevalo are also involved.
California Central District Case No. 8:21-cv-01628.
California Central District Judge David Carter presides.
Read our prior coverage here.
Read the first amended consolidated class action complaint here.
Read the third-party complaint filed by Amplify against the shipping companies here.
