Hermosa Beach and Macpherson Oil are girding for a courtroom battle after a state appellate court denied the city's request to dismiss a lawsuit brought by the oil company.
On Feb. 11, Justice Patti S. Kitching with the 2nd District Court of Appeals wrote in an opinion for the three-judge panel that a jury trial was appropriate in deciding the city's fate in the long-running legal case against the Macpherson drilling project.
In the 23-page opinion, the appellate court concluded that Hermosa Beach's motion was "correctly denied" by Los Angeles Superior Court Judge Joanne O'Donnell.
Michael Jenkins, Hermosa city attorney, called the decision "very favorable to the city."
The court granted the city a chance to prove that the drilling is harmful for the community.
"It wasn't everything we were asking for," Jenkins said. "But the court agreed with our legal argument."
Jenkins said that although a dismissal of Macpherson's suit would have been ideal, he is confident that a jury will recognize the safety hazards of the proposed drilling.
Macpherson's attorney, James Bright said that his client was "delighted" by the Court of Appeal's decision and that the city's chance to win the lawsuit is like proving "hippopotamuses can fly."
In 1992, the city of Hermosa Beach signed a lease agreement with Macpherson for drilling at a maintenance yard near City Hall. However, before the oil company started breaking ground, Hermosa Beach voters in 1995 passed Proposition E, which banned oil and gas drilling within the city limits. The oil company sued the city in 1998 for breach of contract. Don Macpherson, who owns the company, claims he has lost $700 million in profit as a result of the ban.
Jenkins explained that the environmental report prepared and submitted by Macpherson in 1992 did not address some of significant findings, such as hydrogen sulfide issues, which were later revealed by the independent report done by the California Coastal Commission.
The decision by the three-justice Court of Appeals panel came after the Los Angeles Superior Court refused the city's motion to dismiss the case last summer. Although the panel unanimously denied the city's appeal, it also found that a jury trial will enable the beach city to raise safety issues regarding the drilling.
"We are considering whether or not to seek a review in the California Supreme Court in order to urge the court to dismiss the case without a necessity of the trial on the ground that those determinations [with regard to the environmental impact of the drilling] have been already made," Jenkins said.
Jenkins said that the city will decide whether to appeal the appellate ruling within the next couple of weeks.