Line 901 oil spill onto Pacific coastline initially called a small spill, until months later it was revealed to be much larger, and the U.S. Department of Justice had initiated a criminal investigation into the spill
A Denver law firm says that as part of a class action lawsuit it is investigating whether officers and directors of Houston-based Plains All American Pipeline, L.P. misled investors about a May 2015 pipeline rupture in California.
Shuman Law Firm said in a press release that its investigation of the midstream energy company concerns whether “certain current and/or former senior officers and directors of PAA breached their fiduciary duties to the company by allegedly causing the company to fail to disclose the lack of integrity concerning the company’s pipeline operations as well as their lack of compliance with federal safety regulations.”
A class action lawsuit filed alleges that senior Plains All American Pipeline executives characterized the company’s safety compliance efforts for the Line 901 pipeline off the coast of California as “state of the art” with an oil spill being qualified as “extremely unlikely.”
Despite these assurances, on May 19, 2015, Line 901 ruptured but was dismissed to be a small spill according to Plains All American Pipeline executives, estimating 2,400 barrels being released into the federally protected and environmentally sensitive Pacific coastline, the press release says.
However, on Aug. 5, Plains All American Pipeline announced that the extent of the spill was much greater than initially estimated, and that the U.S. Department of Justice had initiated a criminal investigation into the spill.
Following the Aug. 5, disclosure, the company’s stock price immediately fell more than 27 per cent from $49.59 per share on May 19, 2015 (before the spill) to a closing price of $35.95 per share on August 5, 2015. The company’s stock price has not rebounded and currently trades for under $20.00 per share, according to the law firm.