By pacbiztimes Thursday, July 28th, 2016

Plains All American Pipeline and Plains employee James Buchanan pleaded not guilty to criminal charges regarding the Refugio oil spill and the court ruled on July 28 that the grand jury transcripts in the indictment will remain sealed until the trial’s completion.

Houston-based Plains was charged with four felonies and 42 misdemeanors after its corroded Line 901 ruptured on May 19, 2015 and spilled about 140,000 gallons of oil along the Gaviota Coast, 21,000 gallons of which seeped into the ocean. Buchanan also faces misdemeanor charges for failing to notify proper authorities in a timely manner.

Santa Barbara Superior Court Judge Jean Dandona reviewed the 2,000-plus page grand jury transcript in the indictment, which includes pleadings and exhibits, and granted Plains’ motion to keep it sealed until the trial is over. She ruled that there would be a reasonable likelihood that its release would prejudice the defendants’ right to a fair trial, as outlined in statute 938.1.

“There is a great potential that potential jurors will read or hear potentially inadmissible prejudicial evidence that was not, during the grand jury proceedings, subject to cross examination,” Dandona said at the hearing. “At the very minimum, a release would complicate the process of selecting an unbiased jury.”

The transcript is not public record nor is there a constitutional right of access, Dandona said.

Plains also requested that the witnesses should be redacted from the indictment in order to protect their privacy and that other portions of the indictment should remain sealed. Dandona denied the motion, except for one witness, and sealed pages 14 through 18 in the indictment that are “not typically part of the public record.”

She granted a stay requested by Plains to review the redaction ruling. The court will reconvene on Aug. 11.

Barry Cappello of the law firm of Cappello & Noel, who is representing alleged victims of the spill along with Keller Rohrback and Lieff Cabraser Heimann & Bernstein in a consolidated civil class-action case, argued that the victims have a constitutional right to hear the full extent of the charges against Plains and that lawyers should have the right to verify that the pleadings in the transcript were accurate and true.

“The victims have a right to that transcript so they can make sure things like perjury haven’t taken place and assist the prosecution and the people that are getting those victims’ rights protected,” Cappello said during the hearing. “In the end, not necessarily restitution, but we want to make sure that the people of Santa Barbara don’t have this happen again in five years,” given Plains’ poor maintenance record and the pipeline’s decrepit state, he added.

Cappello went on to say that the consolidated civil case represents more than 1,000 property owners who allegedly lost value in their homes due to the spill, 500 oil platform workers who claim they are out of work, 200 fishermen who say they lost revenue, along with hundreds of other impacted businesses. There is a separate suit involving property owners requesting that Plains pay them for additional easement access needed to repair and properly outfit the pipelines that run through their property.

“The number of plaintiffs Mr. Cappello represents makes it less likely that I would be inclined to release some or all of the transcript — in this case it’s all or nothing,” Dandona said. “The more people that review material, the more likely there is to be some kind of a leak.”

The felony charges include discharging oil into state and federal waters in violation of the Clean Water Act, knowingly causing a hazardous substance to spill on any road, street, highway or railroad, and knowingly making false or misleading reports following the spill.

Plains employees misreported corrosion levels, tried to restart the pipeline after the spill and delayed notifying the proper authorities to verify it was their pipeline that burst, according to reports from the Pipeline and Hazardous Materials Safety Administration.

Plains also filed a motion to change the venue to Kern County, which Dandona denied in a tentative ruling. That hearing is planned for Sept. 8.

“I don’t think the defendants want a fair trial for the victims,” Cappello said. “They want this case transferred to Kern County, an oil county.”

Prosecutors can seek to unseal the record by appealing her ruling, Dandona said.

Cappello told the Business Times that he has not yet decided whether he will appeal the ruling.

• Contact Alex Kacik at akacik@pacbiztimes.com.