Judge dismisses oil-spill lawsuit

He says ruling seems unfair, but class action unwarranted

A federal judge dismissed a class-action lawsuit Tuesday against Exxon Mobil over a 2013 oil spill in Mayflower and acknowledged that the message his decision sends to people with pipeline easements "does not seem fair," but said it is based on the law.

Judge Brian Miller, ruling in U.S. District Court in Little Rock, dismissed the case "with prejudice," meaning it cannot be refiled.

In Tuesday's 22-page decision, Miller found that he had been incorrect when he granted class-action status in the case, and concluded that easement contracts alone do not require that Exxon Mobil maintain its crude-oil pipeline.

"While plaintiffs' easements grant Exxon the privilege to enter their land to maintain and repair the pipeline, nothing in the easements supports plaintiffs' argument that the easements impose an obligation on Exxon to do so," the judge wrote. "In fact, it appears that plaintiffs have granted Exxon no more than what the documents' titles suggest, a mere right of way."

Properties owned by those filing the lawsuit were not among the homes or land damaged by the spill -- a point referred to in the ruling.

"Nothing in the record indicates that any landowners have any oil leakage on their property, suffered any ground discoloration, or smelled any fumes," the judge wrote. "Indeed, plaintiffs are suing in an attempt to avoid an uncertain future injury."

Miller also said he was decertifying the class, which would have covered thousands of people, "because failing to do so would permit plaintiffs to proceed on state law claims that have the potential of conflicting with the [federal Pipeline Safety Act]."

The judge said he had to rely on the law, not what was fair.

"The difficulty with this case is that the decision-maker has to decide between two objectionable options," he wrote. "If Exxon's position prevails, the message to easement grantors is that they are helpless in attempting to avoid a pipeline oil spill, and have no rights until after the oil starts spewing from the pipeline. And, this does not seem fair.

"On the other hand, if plaintiffs' position prevails, easement grantors would essentially be able to hold pipeline easement holders hostage, threatening them with lawsuits or contract rescission every time the easement grantors possess any notion that the companies are not meeting the easement grantors' personal safety standards. And, this appears to be neither fair nor commercially acceptable," the judge continued.

"While neither scenario is desirable, the questions presented do not turn on what is fair or desirable, but upon whether reconsideration and summary judgment are appropriate under the law," he said.

It was unknown whether the Mayflower property owners who filed the lawsuit plan to appeal. Attorneys did not immediately return phone messages seeking comment.

Exxon Mobil spokesman Christian Flathman said in an email late Tuesday, "We are pleased with the Court's ruling today and believe it properly applied the law to the facts of this case."

Rudy and Betty Webb and Charletha and Arnez Harper sued the oil giant after the Pegasus cracked open on March 29, 2013, and spilled an estimated 210,000 gallons of heavy Canadian crude into Mayflower's Northwoods subdivision, drainage ditches and a cove of Lake Conway.

Twenty-two of the subdivision's 62 houses remained vacant long after the spill. Exxon Mobil eventually bought dozens of the houses, demolished three of them and sold some of the others.

In August, Miller granted class-action status to the Harpers, who live in Mayflower. He ruled then that the class would consist of people in four states who own property that is subject to an easement for the Pegasus and that is physically crossed by the pipeline running from Corsicana, Texas, to Patoka, Ill.

He declined to give the Webbs class-action status, but they remained plaintiffs.

The lawsuit had sought either cancellation of the easements and removal of the pipeline from the class members' property or a requirement that Exxon replace the pipeline.

Built in 1947-48, the Pegasus used a type of low-frequency, electric-resistance welded pipe that is prone to manufacturing defects and that no longer is made. Exxon Mobil has said defects -- hook cracks near the pipe's seam -- caused the Mayflower accident.

Miller's ruling Tuesday referred to the lack of similarities among class members, which likely would have included thousands of people in Arkansas, Texas, Illinois and Missouri.

He noted, for instance, that an oil leak in Illinois "would have no practical effect on a landowner in Texas."

"Simply because Exxon may not be fulfilling its duties on one person's land does not necessarily mean it is not fulfilling its duties on all landowners' property," he wrote. "Defendants are therefore correct that a trial would necessarily devolve into a parcel-by-parcel analysis of whether Exxon breached each individual easement."

As a result, Miller found that "it stands to reason that plaintiffs cannot show that common issues predominate ... or that a class action is the superior method of adjudication."

Miller said the plaintiffs had asked "whether Exxon fulfilled its contractual duties to maintain and repair the pipeline."

He said, however, that Exxon Mobil had argued that Arkansas law interprets the easement contracts "as the mere granting of a right of way, without any affirmative duty to maintain or repair."

Further, a class-action lawsuit on the issue "would run the risk of imposing a unique Arkansas state law remedy across four states," even though such easements are governed by individual laws in each state, Miller wrote.

The lawsuit applied to the Pegasus pipeline's 650-mile northern section, which has been shut down since the accident and which includes the Mayflower segment. The pipeline's remaining 211-mile portion runs from Corsicana, Texas, to Nederland, Texas, and has resumed service.

The Harpers did not return a phone message seeking comment.

Betty Webb said she had not heard about the ruling when contacted late Tuesday.

"We never really expected anything to come of it," she said.

But the ruling was unexpected, even by Miller's own statement.

He wrote: "It is important to note that, at the hearing on February 9, 2015, the parties were informed that there was little chance that Exxon's motions for reconsideration and/or for summary judgment would be granted.

"This was the case because, at first blush, this case appeared to be a simple one, involving a class of easement holders and a single pipeline. ... Nonetheless, when the entire record is reviewed, and the various layers are stripped away, it comes clear that not only is class treatment improper but summary judgment is appropriate," he added.

Dismissal of the case leaves several individuals' lawsuits pending in Faulkner County Circuit Court and a lawsuit filed by the state and the federal government pending in U.S. District Court.

A Section on 03/18/2015

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