This article was underwritten in part by the Mickey Flacks Journalism Fund for Social Justice, a proud, innovative supporter of local news. To make a contribution go to sbcan.org/journalism_fund.
[Updated: Thu., Sept. 12, 2024, 9:50 a.m.]
Plains All American Pipeline employees have been ubiquitous on witness stands across the state after Line 901, owned by Plains at the time, ruptured and caused the 2015 Refugio Oil Spill. Now, Plains remains under legal fire in Santa Barbara — this time by Venoco Inc., a Delaware-based oil company that owned offshore oil platform Holly, visible from the Santa Barbara beaches, at the time of the spill.
Due to Holly’s limited capacity to store oil onboard, Venoco was contracted with Plains to run oil through Line 901 from Venoco’s onshore refinery in Santa Barbara County up toward Kern County. After Line 901 ruptured, the oil produced on Platform Holly had nowhere to go. Venoco was forced to stop production from this facility and quickly went bankrupt. In 2024, Platform Holly’s wells were permanently plugged.
Eugene Davis, Venoco’s liquidating trustee, sued Plains for more than $12 million one month after the company’s bankruptcy filing in 2016 for its role in Venoco’s downfall. Davis’s attorneys claim that Plains knowingly put Venoco in the ground by neglecting to properly inspect and maintain the integrity of Line 901 in the years leading up to the spill. Further, they argue that Plains was well aware of Santa Barbara’s distaste toward oil trucking, and knew the county would not allow Venoco to truck their oil if, by some stroke of misfortune, something happened to the pipeline.
The 2016 suit was initially filed in Santa Barbara County Superior Court but was quickly removed to federal court due to the nature of Davis’s complaints. In a six-year whirlwind of motions to dismiss, appeals, and changing legal precedent, it was ultimately decided that the case be moved back into the hands of a Santa Barbara judge — the Honorable Colleen K. Sterne — in 2022.
A Santa Barbara jury heard opening statements on August 15 of this year.
Plains’s defense team is relying on a Connection Agreement signed by both companies in 2011, when Venoco built a small pipeline to run the oil produced on Platform Holly to Line 901. The “Shut-In Rights” provision of this agreement states, “Each Party shall have the right to shut-in the Connection at any time a Party deems it appropriate in order to protect persons, property, the common stream, or the environment.” This agreement, Plains claims, rids them of any responsibility to Venoco for the shutdown of Line 901.
Further, Plains’ attorneys are arguing that Venoco was dying anyway, and a final gunshot from Plains unintentionally — yet opportunistically — put them out of their misery. After oil prices started to plunge in 2014, a small company like Venoco wouldn’t have survived much longer regardless, they said.
Plains is being sued for Venoco’s past, present, and future lost earnings and profits. While the original complaint put that figure at $12.4 million in 2016, no amount is specified in the most recent amended complaint. Instead, the complaint states that the amount owed will be proven at trial, which is expected to continue through September.
Correction: This story was updated to clarify that Line 901 transported oil from Venoco’s onshore refinery up toward Kern County not from Platform Holly to the onshore refinery as originally reported. Also, the amount Venoco initially sued Plains for was $12.4 million, not $12.6 million as reported in an earlier version of this story.