California commercial fishermen set to receive second oil spill settlement in September

California commercial fishermen and seafood processors as well as other coastal property owners and businesses could be awarded a second settlement as a result of an oil spill near Huntington Beach in October 2021.

In October 2021, approximately 25,000 gallons of crude oil were discharged from a cracked pipeline owned and operated by Amplify Energy and its subsidies near Huntington Beach, according to a federal grand jury indictment against the oil company. The jury accused Amplify of acting negligently by “operating the pipeline with an understaffed and fatigued crew” and failing to properly respond to multiple alarms.

Following the spill, the California Department of Fish and Wildlife shut down the area for testing, preventing commercial fishermen from accessing a valuable fishing area. Commercial fishermen, processors, and other stakeholders were quick to file suit.

“Lobster fishermen are unable to bait and trap lobster for the short harvesting season which was set to begin on 6 October, 2021,” one of the early complaints stated. “Many fishers and trappers have lost significant revenue because they have not been able to collect any of the fish or shellfish in their already-set traps.”

The U.S. Department of Justice also launched an investigation into the oil spill, ultimately resulting in a plea agreement with Amplify in August 2022 comprised of a USD 7.1 million (EUR 6.4 million) criminal fine USD 5.8 million (EUR 5.2 million) in compensation for federal programs.

“The substantial financial penalties and compliance measures required by the plea agreements demonstrate the federal government’s resolve to punish any entity that causes environmental damage,” Acting United States Attorney Stephanie S. Christensen said. “This oil spill affected numerous people, businesses and organizations who use the Southern California coastal waters. The companies involved are now accepting their responsibility for criminal conduct and are required to make significant improvements that will help prevent future oil spills.”

The class action lawsuits, however, continued.

In April, a federal judge approved a USD 50 million (EUR 44.9 million) settlement between the plaintiffs and Amplify. Under that deal, fisheries will receive USD 34 million (EUR 30.5 million), coastal homeowners will receive USD 9 million (EUR 8 million), and tourism business will receive USD 7 million (EUR 6.3 million).

A second settlement with multiple shipping companies is also under consideration by the court. The plaintiffs claim that the owners and operators of two container ships are also responsible for the spill because those ships damaged the pipeline by dragging their anchors over it during a heavy storm. The shipping defendants have denied those allegations, but have agreed to a USD 45 million (EUR 40.4 million) settlement.

“Nobody deserves this more than the citizens of Orange County and the coastal community to have this matter resolved quickly,” co-lead counsel for the plaintiffs Wylie Aitken said of the USD 95 million (EUR 85.3 million) in total settlement money. “It is certainly a result the Orange County coastal community and our Orange County community overall can be proud of, and it sends a clear message to large corporations operating off the coast of California that they will be held responsible for their negligence.”

The court will hold a final approval hearing on the settlement on 14 September 2023.