Shippers to Pay $45 Million to Settle 2021 California Oil Spill Lawsuits
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LOS ANGELES — Companies linked to two cargo ships accused of damaging a pipeline months before it ruptured, sending crude oil gushing into the waters off Orange County, have agreed to pay $45 million to settle lawsuits brought by business owners and residents, attorneys said Feb. 9.
If approved by a judge, the settlement would end the legal wrangling by those whose livelihoods were affected after 25,000 gallons of crude oil gushed into the waters off Orange County in October 2021.
Attorneys representing the plaintiffs in the class-action lawsuits said Feb. 9 that they are also finalizing nonfinancial terms with the companies that owned and operated the MSC Danit and Cosco Beijing containerships to prevent “similar events from occurring in the future.”
The full settlement details have not been disclosed.
Capetanissa Maritime Corp., Dordellas Finance Corp. and their subsidiaries have been accused of allowing their ships to drag their anchors across the sea floor during a storm in January 2021, about nine months before the oil spill. The shipping companies have denied any wrongdoing. Attorneys representing the shipping companies could not immediately be reached for comment.
Houston-based Amplify Energy Corp., which owns the pipeline, agreed in fall to pay $50 million to residents and business owners affected by the spill, including a Huntington Beach surf school, coastal property owners, a Seal Beach bait-and-tackle store and several groups of fishing and seafood sales companies.
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The combined settlements, totaling nearly $100 million, will be distributed among three classes: one representing the fishing industry, another for coastal homeowners and a third for individuals and businesses whose livelihoods relied on the use of the ocean for tourism, said attorney Wylie Aitken.
Aitken, Lexi Hazam and Stephen Larson, the attorneys representing the plaintiffs, described the tentative settlement agreement as a “result the Orange County coastal community and our Orange County community overall can be proud of.”
“It sends a clear message to large corporations operating off the coast of California that they will be held responsible for their negligence,” they said in a statement.
Amplify is still squaring off in federal court against the shipping companies over responsibility for the spill, accusing them of improperly allowing their ships to stay in San Pedro Bay during a bad winter storm in January 2021.
Amid 60 mph winds and 17-foot waves, the MSC Danit and Cosco Beijing dragged their anchors “into areas where federal law prohibits anchoring,” including across the pipeline, Amplify’s lawyers said in their 2022 complaint against the shipping companies. Underwater footage showed parts of the pipeline displaced by more than 100 feet.
The Coast Guard has said that the displaced pipeline could have been more vulnerable to damage and to environmental stressors.
Workers continue to clean the contaminated beach in Huntington Beach, Calif., in October 2021. (Ringo H.W. Chiu/Associated Press)
Amplify has alleged that the shipping companies failed to notify authorities after the damage occurred. The company is seeking punitive damages, as well as reimbursement for legal fees, the costs of repairing and replacing the ruptured portions of the pipeline, and revenue lost while the pipeline was offline.
Last year, Amplify agreed to plead no contest to state environmental charges and pay $4.9 million in fines and penalties in the aftermath of the spill. About $3.45 million was earmarked for the state and the rest for the county.
Under the agreement with prosecutors, Amplify was placed on a yearlong probation and was required to install a new leak detection system in the pipeline. The company was also mandated to train employees to immediately notify regulators of potential spills and conduct other operational safety measures, including biannual visual inspections of the pipeline.
Amplify and its subsidiaries also agreed to plead guilty to federal environmental charges and pay nearly $13 million in connection with the oil spill.
Despite hours of signals that their 17.3-mile oil pipeline may have been leaking, the companies continued to negligently pump crude oil into the waters off Huntington Beach, according to county and state prosecutors.
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