People v. Plains All Am. Pipeline

320 Cal.Rptr.3d 680

The PEOPLE, Plaintiff and Appellant,

v.PLAINS ALL AMERICAN PIPELINE, L.P., Defendant and Respondent.

Victim Restitution Claimants, Petitioners,

v.The Superior Court of Santa Barbara County, Respondent;

Plains All American Pipeline, L.P., et al., Real Parties in Interest.

2d Crim Nos. B315256, B316508

2d Crim. No. B317229

Court of Appeal, Second District, Division 6.

Filed May 2, 2024

Superior Court County of Santa Barbara, Thomas P. Anderle, Judge (Super. Ct. No. 1495091) (Santa Barbara County)

Rob Bonta, Attorney General, Lance E. Winters, Chief Assistant Attorney General, Susan Sullivan Pithey, Assistant Attorney General, Scott A. Taryle and Blythe J. Leszkay, Deputy Attorneys General, for Plaintiff and Appellant

Munger, Tolles & Olson, Henry Weissmann, Los Angeles, Donald B. Verrilli, Jr., Elaine J. Goldenberg, Daniel B. Levin, Los Angeles, and Sarah Weiner for Defendant and Respondent.

Cappello & Noël, A. Barry Cappello, Santa Barbara, Leila J. Noël, Lawrence J. Conlan, Santa Barbara; Lieff Cabraser Heimann & Bernstein, Robert J. Nelson, San Francisco, Nimish R. Desai, Wilson M. Dunlavey, San Francisco; Keller Rohr-back, Juli Farris, Matthew J. Preusch, Santa Barbara; Audet & Partners, William M. Audet and Ling Y. Kuang, San Francisco, for Petitioners.

No appearance for Respondent in No. B317229.

Munger, Tolles & Olson, Henry Weissmann, Los Angeles, Elaine J. Goldenberg, Daniel B. Levin, Los Angeles, and Sarah Weiner for Real Party in Interest Plains All American Pipeline, L.P.

No appearance for Real Party in Interest The People.

No appearance for Real Party in Interest James Buchanan.

BALTODANO, J.

[1, 2] Environmental crimes have far-reaching impacts on the community and can result in complex restitution determinations. Here we hold restitution cannot be denied based on mediated civil settlements or a class action lawsuit, and that persons seeking restitution have the right to make oral impact statements to the court. Nevertheless, we conclude the trial court properly denied restitution to fishers for catches reduced by an oil spill where the loss to each was not established. We also conclude oil platform workers and businesses whose income depended on the oil industry are not entitled to non-probationary restitution because they were only indirect victims of the pipeline shutdown after the spill.

The People of the State of California appeal orders denying restitution after Plains All American Pipeline, L.P. (Plains) was convicted of unlawfully discharging oil into the ocean. The trial court considered restitution for four groups: Group 1 (claims under $10,000), Group 2 (fishers, restaurants, and tourism businesses claiming lost revenue), Group 3 (oil industry claimants consisting of oil platform employees and others who derived income from the surrounding oil industry), and Group 4 (real property claimants alleging their property was damaged by the spill). The People appeal denial of restitution for claimants in Groups 2 and 3.¹

The People contend the trial court erred when it: (1) concluded oil industry claimants were not direct victims of defendant’s crimes, (2) accepted mediated settlements in lieu of restitution, (3) denied restitution to fishers based on a pending class action lawsuit, (4) declined to consider aggregate proof presented by fishers, (5) denied restitution to fishers based on "compelling and extraordinary reasons," (6) refused to consider defendant’s criminal conduct, and (7) refused oral victim impact statements.

Additional oil industry claimants in Group 3 sought restitution through private counsel (claimants’ counsel). They challenge the denial of restitution in a petition for writ of mandate. We issued an order to show cause and consolidated the writ proceedings with the People’s appeal.

We remand for consideration of restitution for four fisher claims. In all other respects we affirm. We deny the writ petition.

FACTUAL AND PROCEDURAL HISTORY

Several oil platforms off the coast of Santa Barbara County pumped oil and gas to onshore pumping stations. Oil from platforms operated by Venoco and ExxonMobil were pumped to the onshore Las Flores facility and then entered Plains Line 901, which ran up the coast and connected to Plains Line 903. Line 903 also transported oil from platforms operated by mining company Freeport-McMoRan. Before Venoco entered an agreement with Plains in 2011 to use Line 901, oil was shipped by barge.

Plains failed to reasonably monitor, maintain, and repair Line 901. The pipeline walls, originally 0.344 inches thick, were corroded 89 percent. The pipeline ruptured near Refugio State Beach on May 19, 2015, spilling over 142,000 gallons of crude oil into the ocean and onto the beach over the course of approximately 35 minutes. Line 903 was also corroded but did not rupture.

Regulators ordered Plains to shut down both pipelines until repairs could be approved.

Plains could have replaced the damaged portion of the pipeline and resumed operations in a few weeks, but decided instead to replace Line 901. Plains then faced regulatory delays. Neither pipeline has reopened.

Oil platforms that had used Lines 901 and 908 were closed by their operators. Petitioners presented evidence that workers were laid off because of the pipeline closures. Plains presented evidence that the closures were largely caused by industrywide economic conditions unrelated to the pipeline closures.

Plains was convicted of causing the discharge of oil into the waters of the state, a felony. (Gov. Code § 8670.64, subd. (a)(3).)² The court did not place Plains on probation. It sentenced Plains to the maximum fine of $3,347.650.

The court held restitution hearings after entry of judgment. (Pen. Code, §§ 1202.4, subd. (f), 1202.46.) It ordered that all claims identify "the amount of restitution each claimant seeks" based on spreadsheets and supporting declarations and documents, to be filed six weeks before the restitution hearing. The order did not permit "deviation from this schedule" and prohibited "supplemental claims."

The People, represented by the district attorney and the Attorney General, sought restitution for claimants in each group. Claimants’ counsel sought restitution for additional claimants in each group. The claimant groups are as follows:

Group 1: Claims under $10,000

The trial court concluded that a restitution hearing regarding Group 1 was unnecessary because Plains agreed to pay the claimants "in full." No writ or appeal was filed from this ruling.

Group 2: Fishers

This group included fishers who claimed their catch decreased due to pollution from the oil spill, and restaurants and other "tourism industry" businesses that claimed lost revenue due to decreased business purportedly caused by the spill. The People sought restitution for 16 claims from 14 claimants totaling approximately $3.2 million. The claims included a fisherman whose catch decreased; oil damage to the paint of a sailboat; the cost of relocating crab pots; closure of an abalone farm; and decreases in business to a wholesale fish business, charter fishing and whale watching boats, a bait and tackle shop, restaurants, a candy shop, a sunglass shop, and other retailers.

The court ordered $81,294 in restitution to five claimants identified by the People. It denied restitution to one claimant identified by the People and three individual claimants identified by claimants’ counsel, concluding they did not suffer any losses because of the spill. The court declined to order restitution for the remaining eight claimants identified by the People whose claims had been resolved through mediation.

Claimants’ counsel also sought restitution of over $430 million on behalf of a group of 1,500 to 8,000 unnamed fishers who had been certified as a class in the federal Andrews class action (Andrews v. Plains All Am. Pipeline, L.P. (C.D.Cal., Nov. 22, 2019, No. 2:15-cv-04113-PSG (JEMx)) 2019 WL 6647928, 2019 U.S.Dist. Lexis 212027). The court ruled that class members who did not make individual restitution claims in the criminal action were not entitled to restitution.

The court also ruled the criminal restitution hearing was duplicative of the federal class action, the class action was the appropriate forum, judicial resources were better directed there, and there were "compelling and extraordinary reasons" to not order class restitution for the fisher class. (Italics omitted.) The court also found that Plains established "that the amount of the loss is other than that claimed." (Italics omitted.)

Group 3: Oil industry claimants

Group 3 consisted of workers and businesses who lost wages or revenue resulting from the oil platform closures. The People filed nine restitution claims totaling approximately $28.5 million. Additional oil industry claimants, represented by claimants’ counsel, filed another 158 claims seeking approximately $213.5 million in restitution. They included oil platform workers who lost their jobs when the platforms closed, contractors who provided the platforms with supplies and oilfield services, ships that brought crew and supplies to the platforms, and a Port Hueneme company that fueled vessels that serviced the oil platforms.

Twenty-seven claimants resolved their claims through mediation and stated they withdrew their restitution claims. The court denied the remaining claims "based on a legal issue common to all those claims," i.e., that they were "not victims of the crimes of which Plains was convicted."

Group 4: Real property claimants

Group 4 included claimants whose properties were damaged by the oil spill. The only two claims in this group were withdrawn. The People have not appealed any ruling regarding this group, and the writ petition was withdrawn for this group.

Federal court settlement

[3, 4] After the restitution orders at issue here, the federal district court in Andrews approved a class action settlement of $184 million to resolve the claims of fisher class members and $46...