Excelaron appeals $6 billion lawsuit dismissal

April 8, 2013

hausnaBy KAREN VELIE

An appellate court will determine if San Luis Obispo County officials should be able to have a lawsuit dismissed after their staff provided deceptive information in an apparent attempt to mislead the plaintiff.

In what could become a precedent setting case, on Friday, Excelaron appealed a San Luis Obispo County Superior Court judge’s dismissal of a more than $6 billion lawsuit filed against the county because the suit was not served on the defendant within a 90-day deadline. Senior Planner John McKenzie said in an official correspondence the deadline did not apply.

“We feel strongly that the issues in this case deserve a second look, particularly whether the county should be allowed to send out inaccurate information in its notices, and disregard its own local ordinance pertaining to judicial review,” said Sophie Treder, an attorney for Excelaron. “There is also the question of whether it is permissible to effectively impose a 90-day service requirement on constitutional takings claims of the type and magnitude at issue here.”

In August, the board voted to deny an appeal of a Planning Commission rejection of the project based on the contention that oil production is incompatible with the character of the Huasna Valley.

The proposed drilling site, the Mankins Ranch, is zoned for agricultural use, and under San Luis Obispo County’s Land Use Ordinance, “petroleum extraction is allowed… subject to permit.” That law established development standards for oil projects in the county.

In the lawsuit filed in November, Treder said the county effected a regulatory taking of Excelaron’s property and failed to follow laws that require just compensation for that taking. The lawsuit requested that the San Luis Obispo County Board of Supervisors follow existing laws and set aside its decision denying the project, or compensate the company for its damages.

The ranch lies over a 720-acre pool of oil estimated to contain “approximately 208 million barrels of oil,” according to the lawsuit. “At the current price of $100 a barrel, this amounts to a gross value of $20.8 billion.”

In August, two days after the Board of Supervisors rejected the project, the county sent a letter to Exceleron explaining the rules regarding a possible appeal. In the letter, Senior Planner John McKenzie wrote that an appeal by Exclaron would fall under a code section which does not require the county to be served within 90 days.

Excelaron filed its initial complaint on Nov. 19, but did not serve the county at that time. The oil company amended its petition and served the county with the lawsuit on Dec. 28, well after the 90 days required by law to file and serve a complaint.

At a March hearing, Treder argued against the county’s request to have the lawsuit dismissed because the county’s letter misled the oil exploration company into believing the complaint only needed to be filed within the 90-day period, not also served within that time frame.

County Counsel attorney Whitney McDonald responded saying the county doesn’t usually send out letters explaining the appeal process, but they did in this case because of the high probability of a lawsuit being filed. She argued that Excelaron should have discovered the false assertions made by the county.

“The fact that the petitioners were represented by counsel all along almost dictates that they could not have detrimentally relied on the county’s notice,” McDonald said in court.

San Luis Obispo County Superior Court Judge Martin Tangeman granted the county’s request to have the case thrown out because it was not served on the county within the 90-day deadline.

 


10 Comments

  1. R.Hodin says:

    once spurned, twice burned

    Like or Dislike: Thumb up 0 Thumb down 0

  2. SLOthinker says:

    If the case is re-instated, the county is going to have to settle, which probably means letting the project move forward. If they were to lose the suit, it would mean bankruptcy for the county.

    Like or Dislike: Thumb up 4 Thumb down 2

  3. LAH says:

    Not surprised over the county manipulation’, 90day thing, but come on, Carol just wants her pay day one way or another. What she is saying is, the county has NO right to say NO to her project. The people who would be forced to live around the area have NO say in weather they endure stinky air, tainted water..etc…we are all sickly addicted to oil, I am guilty too, But we all should have a right to choose what we live next to.

    Like or Dislike: Thumb up 7 Thumb down 6

    • Jorge Estrada says:

      I like freedom of choice and for that reason I do not live where there are legal rights contrary to my pursuit of happiness. Oil interests are mapped, very public and easy to avoid or purchase.

      Like or Dislike: Thumb up 13 Thumb down 3

      • LAH says:

        Very true Jorge, But I am sure those who have been there for many years, maybe even before the oil was discovered will fight for no drilling.
        I really have no idea but, how far (wide) does that oil field go? Does it reach beyond the property lines? IF Carol sucks all that oil out, does she “Steal” the neighbors oil too?
        Bottom line though, the county should have a right to say no to a project like this without getting sued.

        Like or Dislike: Thumb up 2 Thumb down 6

        • Jorge Estrada says:

          Yes I have seen the movie, There Will Be Blood, where the milkshake sucking straw took the surrounding area too. This does happen and so do checks made payable to adjacent owners. As for the County saying “NO”, happens all the time but some can afford to not take no for answer and defend their rights. Wether or not we like it, the ability to fund our defense is where right can overcome might, the govenment has might but not always right. Civil courts protect everyone from the, just make it go away, lawlessness behavior of a corrupt system.

          Like or Dislike: Thumb up 2 Thumb down 0

          • LAH says:

            And Obviously She can afford to keep pushing till she gets her yes’. I can see it becomes “what can we afford rather than what is right”. Not too confident about the Civil courts protecting us from the corruption though, Well, not always anyway.

            Like or Dislike: Thumb up 0 Thumb down 2

            • Jorge Estrada says:

              The evolution from quickest at the draw, and yes, to the best system that money can buy is where we are today, it is civil and afforded to all.

              Like or Dislike: Thumb up 1 Thumb down 0

  4. rogerfreberg says:

    Another government entity making their own rules…

    “after their (county) staff provided deceptive information in an apparent attempt to mislead the plaintiff.”

    Also, I am constantly amazed at how many rulings the county loses on appeal? I am heartened by the fact that those who are able to file outside of the county often…. WIN.

    It is my hope that the case continues… justice is served … and those in the county who acted — lets just say “questionably” — have to pay the bill as well!

    Like or Dislike: Thumb up 18 Thumb down 6

  5. Russ J says:

    Old money wants to make up the rules. How much fuel do you trust fund landowners burn everyday? I hardly think that the quant little neighborhood of Huasna have adopted the Bill Deneen philosophy of subsistence living.

    Like or Dislike: Thumb up 8 Thumb down 9

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