FEDERAL JURY AWARDS $40 MILLION TO TVA'S CLIENT AGAINST TRESPASSING PIPELINE OPERATORS

Case Update: C & C Properties, Inc., et al., v. Shell Pipeline Co., et al. (E.D.Cal.)

Previous Case Update: Federal Court Orders Shell Company to Remove Pipeline from Property

June 2019: Following a three-week trial, a Fresno, California jury returned a unanimous verdict that defendants Shell Pipeline Company and Alon Bakersfield Property, Inc. operated oil and gas pipelines in trespass on TVA's clients' property, adjacent from the Meadows Field airport in Bakersfield, the site of Amazon's new fulfillment facility. The jury awarded the property owners, C&C Properties, Inc., JEC Panama, LLC, and Wings Way, LLC, $40.6 million, including $33.2 million against Shell and $6 million against Alon as the benefits the pipeline companies obtained from their trespass.

At trial, TVA argued that Shell and Alon's pipelines were not disclosed or marked when the owners bought the 138-acre parcel. The owners ordered a title report, but the title report did not show the pipelines because Shell and Alon never recorded their easements. Shell did not return the owners' request for information prior to the sale.

The decades'-old easements contained owner-favorable clauses, including a requirement that the operators relocate the pipelines at the owner's discretion and at the operator's expense. TVA argued the pipeline operators decided not to record or disclose the easements for tactical reasons.

Shell and Alon argued the owners should have known the pipelines were there. Shell argued it had markers on the property. TVA noted those markers corresponded to two different, recorded easements out of the way of the owners' development, and that, when Shell did not respond to the owners' request for any additional information, reasonably concluded that no other pipelines were present.

An Alon witness said purchasers of real property should call every pipeline operator in Kern County before buying.

A Shell witness explained to the jury the reason it did not disclose or relocate its pipeline was because it was to everyone's benefit to defer to oil companies.

TVA also argued that oil company documents showed that, after the owners discovered the pipelines and demanded they be relocated to prevent construction delays, the oil companies colluded to force the owners to accommodate the pipelines in place.

The jury found Shell and Alon acted with malice, oppression, or fraud.

Shell and Alon have appealed the judgment to the Ninth Circuit Court of Appeals.

Contact: Tim Kowal at (714) 641-1232; tkowal@tvalaw.com.