Plains All American Hit with $3.3 Million Sentence

Judge James Herman fined Plains All American Pipeline Company $3.3 million as a sentence for having caused the pipeline rupture and attendant oil spill into the ocean off Refugio Beach in May 2015. The sentence came in response to the felony conviction imposed by a Santa Barbara jury last summer.

The jury found the Texas-based pipeline company responsible for allowing the pipeline to become so corroded that it split and leaked, fouling in the process navigable waters. Judge Herman imposed what he said was the biggest fine the law allowed, but he expressed doubt that it was big enough to deter the oil pipeline company in the future.

Judge Herman echoed many of the concerns expressed by prosecuting attorney Kevin Weichbrod, who argued at some length that the company’s history of pipeline ruptures and safety violations constituted a pattern and practice of corporate negligence. Weichbrod had argued the judge should fine the company $1.2 billion. Weichbrod contended the judge should impose the maximum fine for every day Plains All American had known the pipeline was at risk of rupture and did nothing to make the necessary repairs. Herman stated that the indictment for which the company was convicted was for only one day.

Beyond the fine, Weichbrod had asked the judge to place the pipeline company on probation. Herman declined to do so, arguing that under the law, defendants have the option to refuse probation but to serve jail time instead. Corporations, said Herman, cannot by law be sentenced to jail time. Under this legal logic, Herman reckoned, there was no punishment he could mete out should the company violate the terms of its probation.

The hearing took the better part of Thursday, with Weichbrod providing an exhaustive two-hour summary of the history of the pipeline, what the company should have done to prevent the spill from occurring, what it failed to do, how its containment plans did not measure up, and how their execution of those plans failed even more.

Attorneys for Plains — and a company executive — expressed great remorse at the loss of sea life that occurred because of the spill and the hardship the spill caused Santa Barbara. They insisted the company is committed to safety and environmental protection, and they disputed there was any culture of negligence at Plains.

Three oil workers who lost their jobs as a result of the spill — seven platforms have been shut down since 2015 — testified at the sentencing hearing, as did representatives from the fishing industry, affected property owners, and Linda Krop with the Environmental Defense Center. Judge Herman noted the size of the company’s assets and expressed skepticism that the fine will have enough impact to discourage further spills in the future.

The sentencing was imposed just two days before Santa Barbara celebrates Earth Day. It is not, however, the last legal shoe to drop. On July 10, Judge Herman and attorneys for both sides will deliberate over how much the company should pay in restitution costs.