Shell to Pay $90M in Class Action Settlement Over Carson Oil Contamination

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

Shell Oil Co. will be allowed to pay a $90 million good-faith settlement to vacate the personal injury class action lawsuit filed by about 1,500 Los Angeles area residents who allege that they were injured by waste oil buried in the ground. However, the lawsuits against the neighborhood developer, Barclay Hollander Corp. and Dole Food Co., which is the current owner, will continue.

In July 2013, Carson, California, located just outside of Los Angeles, declared an emergency when the Carousel housing tract was found to be contaminated with oil and toxic chemicals which was discovered in the soil around the houses in the neighborhood. The residents there were told to avoid contact with the soil and not to eat any produce they grew in their yards.

Carson wanted Shell Oil to clean the neighborhood of the toxic chemicals, which included benzine and petroleum which had been revealed in soil tests five years prior. It was found that the neighborhood sits on top of a former oil tank farm.

Shell had used the land as storage for toxic substances, which were kept in underground tanks after it purchased the land in the 1920s for $10, the oil contamination class action lawsuit explained.

When the land was sold to Barclay, Shell allegedly did not not give full disclosure to the developer of the contamination.

However, before Barclay built the tract in the 1960s, the developer allegedly ignored a report that concluded that the soil was contaminated by leaking oil, according to the class action lawsuit.

The declaration by the Carson city council was in addition to the Los Angeles Regional Water Quality Control Board ordering Shell that it was responsible for cleaning up the neighborhood.

The $90 million class action settlement, which has been approved by a California judge, will alleviate any future judgments against Shell made in the class action lawsuit against the developers.

In addition, Shell will still pay for part of the $146 million cleanup as ordered by the Los Angeles Regional Water Quality Control Board, according to the attorneys.

However, Barclay and Dole said during a hearing Friday that they were worried about some of the uncertainties that may come up in the course of the class action lawsuit, primarily that the $90 million may not be enough to cover the cost of the cleanup.

Los Angeles Superior Court Judge William Highberger said the amount is “squishy,” but that it could be relitigated later.

There are still personal injury lawsuits as a result of the oil contamination that Barclay and Dole are facing.

Shell had made an unusual move in December 2014, when it withdrew an ex parte motion, which is an emergency motion, for a ruling on the good-faith settlement of the personal injury lawsuits filed by residents and a public nuisance lawsuit filed by Carson. Shell had wanted the settlement to occur under seal, but Judge Highberger said that it was dubious that he would allow it.

The plaintiffs are represented by Thomas V. Girardi, Robert Finnerty and Christopher T. Aumais of Giradi Keese.

Shell is represented by David L. Schrader and Deanne L. Miller of Morgan Lewis & Bockius LLP and Michael R. Leslie and David Zaft of Caldwell Leslie & Proctor PC. The developer defendants are represented by Andrea E. Neuman, Thomas A. Manakides and William E. Thomson of Gibson Dunn.

The Shell Oil Class Action Lawsuit is Adelino Acosta et al. v. Shell Oil Co. et al., Case No. NC053643, in the Superior Court of the State of California, County of Los Angeles.