Telecommunications Company May Be Liable for Pipeline Contamination

In a number of posts, I have suggested that petroleum pipelines may soon become the new USTs. An interesting case from Missouri illustrates the dangers that easement holders may face for historic spills from pipelines--much line property owners may be liable for historic contamination from old UST.

In Henke v Arco Midcon LLC, 2010 U.S.Dist, LEXIS 116314 (E.D.Mo. 11/2/10), an 8-inch cast iron pipeline was used from early 1900s to until mid-1990s to transport petroleum. The Sinclair Oil Company owned and operated the easement and pipeline.  In 1950, the easement and pipeline was conveyed to the Sinclair Pipeline Company which changed its name to ARCO Pipeline Company in 1969. In 1994, ARCO sold the pipeline and easment to Williams Pipeline Company ( now Magellan Pipeline Company). Prior to the sale, Williams employees reviewed records of past leaks and the list was attached to the Pipeline Sale and Purchase Agreement. As part of the deal, Williams agreed to a "no look" clause whereby Williams would not conduct any soil or groundwater sampling in connection with the past leaks. Following the sale,  Williams Communications Company (now Wiltel Communicatios), a subsidiary of Williams Pipeline,  acquired the easement and operated the  pipeline for fiber optic cable. There is no evidence that any of the Williams entities performed any remediation after taking title to the easement and pipeline. 

At some point, owners of property along the pipeline route discovered soil and drinking water contaminated with petroleum and benzene. Plaintiffs then filed their lawsuit against Magellan, Wiltrl and ARCO alleging that the defendants had a duty to stop the leaks from the pipelines and easement, to investigate for past and present leaks including using "intelligent pigs" to inspect the pipeline, to warn the plaintiffs about the contamination and to remediate the contamination.

The Telecommunication defendants file motion for summary judgment, arguing they did not own easement at the time the pipeline was used to transport petroleum, and therefore could not have caused the spill. The plaintiffs responded that their claims were not limited to the original leaks but also based on the continued migration of the contamination from the easement along with the defendant's failure to prevent the migration.

Relying on the Section 824 of the Second Restatement of Torts, the court dismissed nuisance claim on the grounds that the plaintiffs did not allege any actions that set in motion the chain of events resulting in the damage. The court also found that under Missouri law, petroleum pipelines were not as a matter of law an abnormally dangerous activity, and dismissed the strict liability claims. However, the court allowed the plaintiffs' claim for negligence on the grounds that they had sufficiently alleged that the defendants had a duty to stop the migration and such failure was the cause of their damages. The court also allowed the trespass claim to survive based on the defendants' knowledge about the leaks and failure to act.  

A motion to dismiss is not a ruling on the merits of a case. Instead, the court simply decides after assuming the facts alleged as being true whether the plaintiff claims are plausible.  The parties will now presumably move to discovery and then file a motion for summary judgment.