ST. PAUL, Minn. -- An attorney for landowners along a crude oil pipeline that ruptured in central Arkansas in 2013 said Wednesday that Exxon Mobil Pipeline Co. breached its contract with his clients because the pipeline interferes with their ability to enjoy their property.
Attorneys for the landowners and for Exxon Mobil appeared Wednesday before a three-judge panel of the 8th U.S. Circuit Court of Appeals in Minnesota.
Landowners attorney Phillip Duncan asked the appeals court to reinstate the case, which was dismissed last year. He said his clients can prove the pipeline is damaging their property.
"We have enough proof to stay in court," he said.
But Exxon Mobil attorney Gary Marts said the case was properly dismissed and landowners were essentially trying to use a common-law claim to regulate pipeline safety, which he said is the job of the federal Pipeline and Hazardous Materials Safety Administration, not the courts.
The 850-mile long Pegasus pipeline runs through Illinois, Missouri, Arkansas and Texas. The line ruptured March 29, 2013, spilling tens of thousands of gallons of crude oil in Mayflower, about 25 miles outside Little Rock.
The pipeline, built in 1947-48, was shut down after the spill. Only a 211-mile segment in Texas has reopened.
The landowners sued after the spill.
Duncan argued that the case is about protecting property owners' rights. He said easements say the company is responsible for repairing, replacing or removing the pipeline.
"We can't enforce the safety of it. We're not trying to," Duncan told the judges. He also argued that the case should go forward as a class-action claim.
In dismissing the case last year, U.S. District Judge Brian Miller acknowledged his decision seemed unfair.
Ruling in Little Rock, Miller said if Exxon prevailed, easement grantors would get the message that they had no rights until after an oil spill. But if landowners prevailed, he said, they could hold pipeline companies hostage if property owners thought the companies didn't meet personal safety standards.
In the end, Miller agreed with Exxon Mobil, which argued that Arkansas law interpreted easement contracts as a right of way, without a duty to maintain or repair a pipeline.
He also removed the case's class-action certification, saying that a potential leak in Illinois would have no practical effect on a landowner in Texas.
Marts argued Wednesday that Miller was right to dismiss the case and remove its class-action certification.
Marts also said the Pipeline and Hazardous Materials Safety Administration makes determinations about pipeline safety and effectively preempts landowners from suing.
Appeals Judge William Riley asked Marts if a property owner must sit back and wait for the government to regulate safety issues.
Marts said there is a way for citizens to sue, but he said it doesn't apply in this case.
Exxon Mobil has challenged a $2.6 million fine, the safety administration's findings that the company violated safety regulations and the agency's orders requiring upgraded safety measures for pipelines other than the Pegasus.
Those issues are pending in the 5th U.S. Circuit Court of Appeals in New Orleans.
State Desk on 10/20/2016