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Pegasus lawsuits: where we're at now

Posted: March 29, 2014 - 4:35pm

There are more than 200 individual plaintiffs in almost 20 lawsuits against ExxonMobil Pipeline Company and associated Exxon entities and employees, and it’s likely that trials will be held sometime next year. For the sake of simplicity, all the defendants will be referred to simply as “Exxon” in this story.

Generally, the plaintiffs want to be compensated for the loss of their homes or reduced property values, lingering health effects from the fumes, loss of access to or confidence in the lake, and the months of aggravation and burden while cleanup efforts “occupied the town,” as a complaint filed by Little Rock’s McMath Woods firm puts it.

“Cleaning crews clogged streets, creating traffic problems, drove massive trucks through residential neighborhoods, and conducted operations at all hours of the night in an effort to recover Wabasca Heavy Crude,” this complaint states. The complaint goes on to describe how diesel powered lights “illuminated the town as if it were a stadium during a sporting event” during the cleanup.

What are the claims being made?

Fumes, oil or cleanup efforts crossing onto property can constitute trespass, which is any unlawful intrusion that interferes with a person’s use and enjoyment of their property, even if it’s just the intrusion of fumes. The suits alleging trespass also include the related claim of nuisance, which argues that Exxon’s breach of its duty to keep the oil inside Pegasus interfered with the rights of the general public and private property owners to use and enjoy their property.

For defendants who merely have Pegasus running through their property but didn’t have direct harm from the spill, there’s the possibility of a “breach of contract” claim. This theory essentially argues that Exxon’s operation of what it knew, or should have known to be a “bad pipeline” and failure to replace the pipeline has created a “zone of danger” for whoever’s property it goes through.

These “breach of contract” complaints demand that Exxon either remove the pipeline, replace it, or pay damages for the breach of contract. The Duncan and Thrash law firms and Mississippi attorney Don Barrett have filed a federal complaint along these lines, and are trying to certify a multi-state class of plaintiffs that would include virtually every property owner along Pegasus’ path. “Exxon will have the exact number of class members and identity of each class member,” this complaint reads.

 

What can we expect from Exxon’s defense attorneys?

From the filings so far we can see what some of Exxon’s defenses are probably going to be. In a federal case filed by Little Rock law firm Wright, Lindsey & Jennings, Exxon has moved to have the claims of plaintiffs whose damages are mainly reduced market value dismissed because, Exxon claims, without actual physical damage to the property, they can’t be held liable for trespass or nuisance because there’s no

Beyond that, much will depend on expert testimony from scientists, doctors and ecologists will say as expert witnesses in what would be a sort of “dueling experts” trial. Exxon’s experts can be expected to testify that in their opinion there are no health or environmental concerns left at this point, as Exxon said at last week’s press conference in Mayflower. The expert witnesses called by the plaintiffs can likewise be expected to testify that in their opinion there still are concerns from the oil and other chemicals, and/or their lingering health and environmental effects.

 

Who are the plaintiffs?

The McMath Woods firm is has filed the most lawsuits. McMath Woods has filed separate complaints all containing very similar language for different groups of plaintiffs — for example, one group of plaintiffs in a McMath lawsuit all lived in the Northwoods subdivision and have since moved while another group of plaintiffs in another suit have kept their homes in Northwoods. Local firm Brazil, Adlong & Mickel are representing dozens of plaintiffs in a state case based mostly on property damages from fumes and disruption from the industrial cleanup, and also a few plaintiffs, including two Mayflower businesses, in a federal lawsuit.

The plaintiffs range from people whose houses were demolished because oil had so completely contaminated the home’s underpinnings to a man described in a complaint as a “subsistence fisherman” who doesn’t feel comfortable eating fish from the lake anymore.

 

What do the plaintiffs say Exxon did wrong?

All of the suits claim, and Exxon admits, that in 2009 Pegasus’s flow was increased by about 50%. This, the plaintiffs will argue, combined with the Exxon’s decision to start pumping more viscous “tar sands” or “dilbit” through Pegasus, created a situation that Exxon knew, or should have known, required adequate monitoring at the least. Instead, the plaintiffs will argue, Exxon’s inspection was not adequate to discover certain types of cracks in the pipeline.

 

Science and terminology

Much will depend on what exactly was flowing through Pegasus and what burst forth from the ground behind a home in the Northwoods neighborhood.

All of the complaints claim that what spilled was “tar sands” oil, “a heavy, high sulfur material, with a consistency of cold molasses … often called bitumen [that] … must be diluted by adding toxic diluting chemicals because in its natural state it will not flow through a pipeline.” This language comes from a federal court complaint filed jointly by the Little Rock Duncan Law Firm and Thrash Law Firm and national firm Parker Waichman, which has experience in class-action suits. Once these diluting agents are added, the complaint continues, “the product is known as diluted bitumen or ‘dilbit,’” which is known to be toxic to air, water and property. “Further, Tar Sands sinks in water.”

This is a claim that Exxon denies, with the response, “the terms ‘tar sands oil,’ ‘bitumen,’ and ‘diluted bitumen’ are subject to colloquial uses and varying understandings … [and Exxon] considers the crude oil released on March 29, 2013 to be Wabasca Heavy crude [oil]” appearing in its responses to the federal and state complaints.

The answer to “does it float or does it sink?” may be yes and yes. If it was bitumen diluted by organic solvents including as benzene, as has been alleged, the lighter solvents and the oil itself would separate from the tar extract, which is understood to be heavier than water. It would be this remaining oil that causes the “sheen” still periodically showing up in the cove. Continued testing of the lakebed through core sampling will reveal how much, if any, “tar” may have made it to the bottom. If there is a substantial amount, cleanup will be much more involved that Exxon has publicly acknowledged, and might involve a large-scale dredging of parts of the lake.

 

Is this a class

action situation?

Currently, the plaintiffs are not all joined together as a common class of people affected by the same alleged misconduct or negligence that broke Pegasus. But some attorneys for the plaintiffs are trying to do this. The Duncan/Thrash/Parker Waichman firms are trying in their federal case to get the class certified, meaning that other plaintiffs could be added more easily and the trial process would be streamlined with the delays of having the same witnesses, evidence and issues rolled out from trial to trial.

But the several lawsuits and plaintiffs do share many of the same arguments regarding damages and evidence, and so take on the nature of a class action case. For this reason, it’s likely that the judges presiding over the cases will consolidate many of the suits involving similarly situated plaintiffs (for example, plaintiffs from the same general areas of Mayflower with similar problems from the Pegasus spill).

What can we expect in the next few months?

Probably many of the cases will be consolidated in the interest of streamlining the process. Discovery, the process by which formal questions about the case and the “other side’s” evidence are answered, is proceeding efficiently, according to several lawyers interviewed for today’s coverage. Once the discovery phase is wrapping up, it will be more clear which groups of plaintiffs need to be joined for a common trial.

Also, a handful of plaintiffs have already settled with Exxon. It’s likely that many more — maybe even most — will be offered settlements in the next year or so. The ones that don’t settle will go to trial. At that point, we can all expect to learn more about Pegasus, oil and the oil transportation industry, and the Lake Conway ecosystem — and at least twelve Faulkner County citizens will probably end up being downright expert in these fields.

(Staff writer Joe Lamb, can be reached by email at joe.lamb@thecabin.net or by phone at 505-1277. To comment on this and other stories in the Log Cabin, log on to www.thecabin.net. Send us your news at www.thecabin.net/submit)

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