Houston-based Amplify Energy has agreed to pay out a total of $50m in the settlement of a class action lawsuit that stemmed from a pipeline leak near Huntington Beach, California in October 2021.
Details on the settlement were contained in a court filing, which noted 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 released at least 25,000 gallons of crude oil. It 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 1st 2021, with the US
Coast Guard investigating the slick to determine its origins.
The plaintiffs in the class action alleged that Amplify
ignored warnings and continued to pump oil through the pipeline before the
operation was finally suspended the following morning.
Amplify had previously reported that it reached a
preliminary settlement with the class that includes fishermen, businesses, and
property owners (IMN August 30th 2022).
According to the court filing, the agreement calls for payments
totalling $34m for the commercial fishermen. In addition, the company will pay
$7m to various impacted local businesses A further $9m will be paid to the
owners of property along the affected coastline.
Amplify Energy has also 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 $7.1m in federal fines and to reimburse the
USCG $5.8m for costs it incurred.
The settlement of the class action opens up the path for
Amplify Energy and the class plaintiffs to pursue their claims against the
shipping companies, where a trial is expected to begin in April 2023. That suit
charges that the containerships MSC Danit (IMO 9404649)and the Beijing (IMO 9308508) dragged their anchors across the pipeline during a January 2021
storm.
It is alleged that, 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 Energy has also named the Marine Exchange of
Southern California in the suit, alleging negligence in not reporting the
incident.
Amplify filed suit against MSC and Cosco in February 2022,
seeking punitive damages, reimbursement for the cost of the repairs, and lost
revenues.
2006-built, Malta-flagged, 109,149 gt Beijing is owned by
Capetanissa Maritime Corp care of manager Costamare Shipping Co SA of Athens,
Greece. ISM manager is V Ships Greece Ltd of Piraeus, Greece.
entered with Swedish Club (Piraeus Team) on behalf of Capetanissa
Maritime Corporation.
2009-built, Panama-flagged, 153,092 gt MSC Danit is owned
by Dordellas Finance Corp care of MSC Mediterranean Shipping Co of Geneva,
Switzerland. ISM manager is Mediterranean Shipping Co SRL. It is entered with
UK Club on behalf of Conglomerate Maritime Ltd.
