Amplify to Pay $50M to Settle Class Action Over 2021 Pipeline Leak
Amplify Energy has agreed to pay out a total of $50 million in the settlement of a class action lawsuit stemming from the October 2021 pipeline leak near Huntington Beach, California. Details on the settlement were contained in a court filing that notes that the company and the class are continuing to pursue their claims against the owners and operators of two containerships which they believe contributed to the oil spill.
The spill, which released at least 25,000 gallons of crude, occurred in federal waters from a pipeline operated by Amplify running from the Elly platform to shore near Huntington Beach and a processing plant in nearby Long Beach. The oil spill was first detected on October 1, 2021, with the U.S. Coast Guard investigating the slick to determine its origins. The plaintiffs in the class action charge that Amplify ignored warnings and continued to pump oil through the pipeline before the operation was finally suspended the following morning. The Coast Guard oversaw a massive clean-up operation along the California coast.
Amplify had previously reported that it reached a preliminary settlement with the class that includes fishermen, businesses, and property owners. According to the court filing, the agreement calls for payments totaling $34 million for the commercial fishermen. In addition, the company will pay $7 million to businesses, including providers of surf lessons, operators of tourist sightseeing and whale watching cruises, and businesses including those selling swimwear and fishing bait. A further $9 million will be paid to the owners of property along the affected coastline.
In addition to the financial payments, Amplify has agreed to improve leak detection systems for the pipeline. For the next four years, the company will conduct visual inspections of the pipeline twice each year up from the regulatory requirement of inspections every other year. Amplify will also increase training for its staff and increase control room staffing on the Elly platform.
The court will meet in November to approve the settlement of the class action, which comes after Amplify settled federal and state claims. The company agreed to pay $7.1 in federal tines and to also reimburse the US Coast Guard $5.8 million for costs it incurred related to the spill and clean up. Amplify has also settled with Huntington Beach.
According to the lawyers involved in this case, the settlement of the class action clears the way for Amplify and the class to pursue their claims against the shipping companies. A trial is expected to begin in April 2023. The suit charges that the containerships MSC Danit and the Beijing dragged their anchors across the pipeline during a January 2021 storm. In addition to contributing to the damage that weakened the pipeline by displacing it and cracking the outer casing, the company also charges that neither shipping company properly reported having drifted in the federally protected zone and dragging their anchors during the storm. Amplify also named the Marine Exchange of Southern California is the suit citing the organization for negligence in not reporting the incident.
Amplify filed the lawsuit against MSC and COSCO in February 2022. They are seeking punitive damages, reimbursement for the cost of the repairs, and lost revenues. The suit also seeks to require the Marine Exchange to notify companies of potential damage within 24 hours of an anchor dragging incident and for the Marine Exchange to block larger areas in the anchorage during potential bad weather to prevent damage to undersea property. The members of the class action against Amplify have also filed suit against the shipping companies.