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Wednesday, May 25, 2022

$1.8 Billion Gas Leak Settlement Still in Process

Southern California Gas Co. announced late last month it had entered into settlement agreements related to the 2015 Aliso Canyon natural gas leak for $1.8 billion. The settlement is intended to resolve a majority of the pending civil litigation against the utility.

For the Valley law firms that represent many of the 35,700 plaintiffs in the mass tort, the settlement represents a business milestone.

“This is a long journey for all of us, most importantly the residents, homeowners and first-responders who were present during the gas leak, which was entirely preventable,” R. Rex Parris, whose Lancaster-based Parris Law Firm represented several thousand plaintiffs in the case, said in a statement. “This settlement should go a long way toward helping everyone pay for the various health issues that have arisen due to this disaster.”

In addition to the settlement with plaintiffs announced Sept. 27, SoCalGas separately announced that it and parent company Sempra entered into an agreement to settle the Property Class Action, representing at least 23,000 properties, for a total amount of $40 million. 

SoCalGas declined requests to comment for this article.

The first agreement will be subject to obtaining roughly 97 percent participation among the nearly 36,000 individual plaintiffs, as well as court approval of the settlement allocation process. A panel of two retired judges, Louis Meisinger and Scott Gordon, who were selected by the joint leadership of all plaintiffs in the case, will create an allocation protocol to determine how much of the $1.8 billion will be awarded to each plaintiff. 

“(The protocol) can include various factors such as, do they own their home, or were they renters? Did they have to relocate? Did they have children? Did they have medical issues? And did they seek medical treatment?” Susan Owen, an attorney at the firm Owen Patterson and Owen in Santa Clarita, said. Her personal injury firm represented about 3,800 plaintiffs in the settlement.  

“We expect that we should have that protocol within the next several weeks, and then the judges will consider the extensive questionnaire that was submitted (by clients) back in August of 2019. Then our clients will have the opportunity to submit a one to two page statement, which might expand upon their experience and their injuries or damages,” Owen said. “So the $1.8 billion agreement was reached, but while we reached that agreement, it can be from nine months to a year before the entire process (of allocation) is completed.”

As the allocation procedures have yet to be announced, some experts warn the process could lead to lingering issues if a victim’s health conditions have not yet developed as a result of the leak.

“The big issue here is whether there will be health injuries down the road (e.g., cancers), whether it will be possible to trace causal connections between those injuries and the leak; and whether people who, say, die prematurely as a result of this leak will get the reparation they should get,” Gregory Keating, professor of law and philosophy at USC Gould School of Law in Los Angeles, said. “The risk I see is that people who suffered only substantial inconvenience and annoyance will do as well as people who turn out to become very seriously or chronically ill, or who die prematurely. Everyone may get something for having to leave their homes, put their kids in different schools, rent property elsewhere, deal with nosebleeds and headaches. But if some people suffer much more serious health injuries down the road? Will they be out of luck?”

While SoCalGas seeks to put the leak behind it, involved attorneys and those impacted are reflecting on the settlement as an important — but incomplete — measure of justice. 

“It’s nothing short of amazing, the result. And while the monetary resolution and the hard work and effort has paid off to a tremendous result, I know that others will look at this cautiously and carefully and make their determinations as to what they want to do going forward,” David J. Shapiro, an attorney in Calabasas who represents more than 100 plaintiffs in the settlement, said. 

Though most of the plaintiffs Shapiro represents have been extremely happy with the settlement outcome, he knows some who were impacted by the leak have taken a firm stance about wanting the gas storage facility permanently closed as a measure of justice.

Massive release

The gas leak at the Aliso Canyon underground storage facility was discovered on Oct. 23, 2015 and released nearly 100,000 tons of methane over the Porter Ranch area during the next 118 days, making it the largest known gas leak in U.S. history.

During and after the leak, which was finally stopped on Feb. 11, 2016, residents reported a strange smell that permeated clothing and caused headaches, nosebleeds, rashes and, according to some, lingering health problems. An independent root cause analysis report, conducted by Blade Energy Partners at the request of the California Public Utilities Commission, found SoCalGas did nothing to investigate the causes of the dozens of previous leaks at the facility and noted corroded pipes and other safety failures. Blade also found Sempra and SoCalGas did not assess the gas wells for disaster potential and that the well in question should have been plugged sooner.

A 2018 settlement with city, county and state officials and prosecutors provided nearly $120 million to fund a health study, the results of which have not yet been released, as well as several environmental measures intended to offset damage caused by the leak. A further $5.7 million was awarded in discovery sanctions against the law firm that represented Sempra for bad faith tactics including concealing documents during the case. Combined with other settlements and relocation costs Sempra was forced to pay, total costs have totaled well over $2 billion, though none have required the company to admit fault.

“These agreements are an important milestone that will help the community and our company work toward putting this difficult chapter behind us,” Scott Drury, chief executive of SoCalGas, said in a statement. “In the years since the leak, SoCalGas has worked alongside regulators, technical experts and our neighbors to enhance safety at all our underground storage facilities and our engagement with the community. As a result, our storage facilities operate by what regulators and experts have called some of the most rigorous safety standards in the country.”

“At the end of the day there needs to be not just accountability, but really a focus on how to make all the facilities safer, no matter what form of energy – clean energy, gas, oil – it doesn’t matter,” Shapiro, the Calabasas attorney, said. “It needs to be safe so that consumers and these facilities can coexist in our communities.”

Even with the settlement, a pending trial against SoCalGas, with 26 plaintiffs whose cases represent a variety of impacts from the leak, will proceed against the company in February.

Katherine Tangalakis-Lippert
Katherine Tangalakis-Lippert
Katherine Tangalakis-Lippert is a Los Angeles-based reporter covering retail, hospitality and philanthropy for the San Fernando Valley Business Journal. In addition to her current beat, she is particularly interested in criminal justice topics, health and science stories and investigative journalism. She received her AA in Humanities from Moorpark College in 2016, her BA in Communication from Cal Lutheran University in 2019 and followed it up with a MA in Specialized Journalism from USC in the summer of 2020. Through her work, Katherine aspires to help strengthen the fragile trust between members of the media and the public.

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