Industry Impact From Criminal Verdict In Pipeline Oil Spill

On September 7, 2018, a jury in a California state court found Plains All American Pipeline guilty on 9 criminal counts, stemming from a release of 140,000 gallons of crude oil from a Plains pipeline near Santa Barbara in 2015. Media across America reported on the criminal verdict in the Plains case, and certain commenters predict that the verdict could further energize pipeline opposition groups around the country. The case may be viewed best, however, as somewhat of an anomaly: a broadside of state legal requirements brought after an oil spill to a sensitive environment in California.

The release reached waters along the coast, traveling through a State Park, and resulted in the loss of a number of birds and marine mammals. The then California Attorney General Kamala Harris (now U.S. Senator with Presidential ambitions) and the Santa Barbara County prosecutor sought and obtained an indictment of Plains in the middle of 2016. All of the 46 criminal charges initially brought by the State were based on state law except for one State statute that adopted Section 301 of the federal Clean Water Act (CWA) (33 U.S.C. § 1301) (known as 'the discharge prohibition' for any release of oil to water without a permit), alleging a felony charge that Plains knowingly discharged a pollutant to waters of the State. The majority of the remaining 45 criminal charges were based on alleged violations of the California Fish & Game Code, including separate counts for individual animals affected.

The federal CWA authorizes strict liability for a release of oil to water. Strict liability means that the fact of a release of oil to waters is all that is necessary to create liability; there is no need to prove causation or fault. In addition, simple negligence is enough to sustain misdemeanor criminal liability under the CWA (while "knowingly" causing a discharge is required to sustain felony liability under the CWA). Certain state laws, including California, also authorize strict liability for the "taking" of wildlife or for delayed incident reporting. For these reasons, it is uncommon for operators to proceed to trial for criminal charges as opposed to negotiating plea agreements.

Over the course of the underlying prosecution, the 46 initial charges were reduced to 13, which went to trial. Most of the charges withdrawn related to the multiple, individual wildlife Counts. According to news sources, the jury found Plains guilty of 9 of the remaining 13 charges (Counts...