February 6, 2023
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Judge orders Plains to stop misleading oil spill claimants


Workers donned protective gear to clean up the Refugio oil spill.

Workers donned protective gear to clean up the Refugio oil spill.

A U.S. District Court ordered Plains All American Pipeline to stop misleading claimants seeking to recover interim damages from the Refugio oil spill and invalidate releases that preclude them from joining the class-action lawsuit and recouping further compensation.

“The Court finds that Defendants are engaged in misleading conduct by using the OPA claims process — a process intended to compensate oil spill victims — to steer those victims towards unwittingly waiving their rights to full recovery,” the March 3 order reads.

Judge Philip Gutierrez ruled that the Oil Protection Act enacted after the Exxon Valdez oil spill in 1989 did not intend to force victims to choose between partial payment now and full payment later. Both Plains’ advertisements and actions have mislead the victims of the oil spill by requiring them to sign away their rights to obtain short-term claims or omitting information about the current class-action lawsuit, according to the order.

“The OPA legally obligates responsible parties to pay victims short-term damages, and responsible parties cannot shirk that obligation out of fear that they will later be forced to answer for the full extent of their liability,” the order reads.

The court ordered Plains to send claimants “curative notices” conveying their right to participate in ongoing and future litigation. It prohibited Plains from misleading claimants, obtaining releases forfeiting rights without legal consent and telling them about the pending class action. The court also voided previous releases.

“The Court finds these cures necessary to guard against the likelihood that the class action process has been abused,” the order reads.

Keller Rohrback, Cappello & Noel and Lieff Cabraser Heimann & Bernstein amended a class-action lawsuit in December to attempt to prevent Plains All American, the Houston-based energy producer responsible for the Refugio oil spill, from misleading claimants who were allegedly duped into taking short-term damages and forgoing their rights.

“Defendants’ actions are all the more suspicious in light of their own representation that continuing the process will foreclose the need for a class action. Defendants have used a statutorily-mandated process which explicitly preserves a victim’s claims to pick off unrepresented victims in hopes of defeating numerosity down the line,” the order reads.

• Contact Alex Kacik at akacik@pacbiztimes.com.