‘Frankly Extraordinary’: Santa Barbara Judge Reacts After Plains and Venoco Reach Settlement for Undisclosed Amount
Lawsuit over Plains’ Role in Venoco’s Bankruptcy Abruptly Ends Midway Through Jury Trial
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After more than eight years of hashing it out in federal and county courtrooms, Venoco Inc. — which sued Plains All American Pipeline in 2016 for its role in Venoco’s bankruptcy — agreed to settle with Plains on September 17. While the settlement amount remains confidential, Venoco sought compensation for financial losses and creditor payments that would have amounted to hundreds of millions of dollars.
Venoco’s liquidating trustee, Eugene Davis, initially sued Plains for $12.4 million after Line 901 ruptured under Plains’s ownership in the 2015 Refugio Oil Spill. At the time, Venoco was contracted with Plains to transport oil produced on offshore Platform Holly from Venoco’s refinery through Line 901 up toward Kern County. When that pipeline ruptured, Venoco’s oil had nowhere to go, and they quickly fell into bankruptcy. In the complaint, Venoco claims that Plains’s negligence in properly maintaining the pipeline directly caused their downfall.
“This is frankly extraordinary considering where we were in the trial,” said the Honorable Colleen K. Sterne before relieving the jurors, who were expected to remain in the jury box through September.
Venoco’s team of Houston attorneys, led by Paul Yetter, had already presented the majority of their case to the jury when the settlement was reached. An oddly truncated trial day on September 13 (jurors were present for less than 30 minutes) marked the beginning of the parties’ private settlement deliberations. Sources say the Plaintiffs were always willing to accept a reasonable settlement to repay Venoco’s creditors.
“We are pleased that the parties were able to reach a mutually satisfactory and confidential settlement that resolves all claims in this litigation,” said Timothy McConn, one of Venoco’s attorneys.
