Landowners Tell Court: Exxon Mobil Pipeline Breached Deal
An attorney for landowners along a crude oil pipeline that ruptured in 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 — saying 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 are essentially trying to use a common-law claim to regulate pipeline safety —which is the job of the 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 on March 29, 2013, spilling tens of thousands of gallons of crude oil in Mayflower, Arkansas, about 25 miles northwest of Little Rock.
The 70-year-old pipeline was closed after the spill; a roughly 200-mile segment of it in Texas has reopened.
The landowners sued after the spill brought safety issues to light.
Duncan argued that the case is about protecting rights of property owners. 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.
When he dismissed the case last year, U.S. District Judge Brian Miller acknowledged his decision seemed unfair. He said if Exxon prevailed, easement grantors would get the message that they had no rights until after an oil spill; but if the landowners prevailed, they could hold pipeline companies hostage if they felt they 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 the pipeline.
He also removed the case's class-action certification, noting 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.
He also said the Pipeline and Hazardous Materials Safety Administration makes determinations about pipeline safety and effectively pre-empts landowners from suing.
Appeals Court 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 it doesn't apply in this case.
Exxon Mobil is currently challenging a $2.6 million fine and a Pipeline and Hazardous Materials Safety Administration's finding that it violated safety regulations, which led to the rupture.