Shipping firms to pay pipeline company nearly $100 million in SoCal oil spill
LOS ANGELES — A year and a half after a ruptured oil pipeline sent thousands of gallons of crude gushing into the waters off Southern California, the legal blame game is starting to wind down.
A group of international shipping companies and their subsidiaries tentatively agreed Wednesday to pay $96.5 million to Houston-based Amplify Energy Corp. to dismiss one of the last remaining lawsuits over the oil spill, which sent at least 25,000 gallons of crude into the waters off Huntington Beach in October 2021.
Amplify’s lawsuit, filed last year, accused the shipping companies of improperly allowing their container ships, the MSC Danit and Cosco Beijing, to drag their anchors across the sea floor near the pipeline.
The ships were anchored near the San Pedro Bay pipeline during a storm in January 2021, about nine months before the oil spill. Movement data transmitted by the vessels showed that the vessels crossed over the pipeline repeatedly during the storm, driven by winds of up to 63 mph and waves of up to 17 feet, Amplify’s lawyers said.
The lawsuit alleged the shipping companies should have notified authorities about the pipeline damage but did not. Investigators later said the massive anchors moving across the sea floor and striking or dragging the oil pipeline could have weakened the conduit by stripping away its concrete casing and making it more vulnerable to future damage.
“We are eager to move forward and turn the page on this unfortunate and preventable event,” said Martyn Willsher, Amplify’s president and chief executive, in a statement.
The tentative settlement agreement will require approval from U.S. District Judge David O. Carter, who has been overseeing the sprawling litigation into the 2021 spill.
The agreement comes as the parties prepared for a first phase of trial next month that would have determined whether Amplify was solely responsible for the oil spill and whether the seaworthiness of the container ships or any negligence by the crews or owners caused the pipeline damage or the oil spill.
In an order setting parameters for the trial, Carter wrote that if evidence proved the vessel owners or operators were at fault, then they would be able to evade liability only if there were “extraordinary negligence by Amplify.”
The Mediterranean Shipping Co., the Swiss firm that operates the Danit, said Wednesday that the tentative settlement agreement does not include an admission of liability and that the firm plans to prove in “the remaining legal proceedings with Amplify’s insurers” that the ship was not responsible for the spill.
The company said its experts have concluded the Danit “maneuvered safely, and that Amplify simply failed to properly maintain and inspect the pipeline.” It was “reasonable” for the crew to believe the container ship “had not been involved in a marine casualty reportable to the Coast Guard,” a representative for MSC said.
Representatives for Capetanissa Maritime Corp. of Greece and COSCO Container Lines of China, which own and operate the Beijing, did not respond to a request seeking comment Wednesday, nor did lawyers representing the shipping companies.
The Marine Exchange of Southern California, which monitors and directs traffic in the busy San Pedro Bay, also agreed to settle with Amplify Energy Wednesday for “non-monetary terms,” the company said in a release.