LA-area city accuses Shell Oil of fraud and negligence in new lawsuit

The complaint brought by Carson officials claims that Shell Oil knowingly allowed residential development to proceed on a potentially hazardous site.

Residents of Carson, California – a city of 93,000 that is located south of Los Angeles – initially brought a lawsuit against Shell Oil in 2011.

The plaintiffs alleged that the company knowingly allowed residential development to take place on top of a cluster of underground storage tanks containing oil and various carcinogenic chemicals. The Carson residents claimed that they were stuck in their homes – some of which were sited mere feet above the tanks – as a result of the situation, which has made selling property in the area extremely difficult. 

This month, a fresh legal complaint was brought against Shell by the municipal government of Carson. In court, the city claimed that the oil company’s actions have “stigmatized” the community, draining the value of local properties and depriving the public of critical tax revenues.

Shell has been accused of fraudulent concealment, negligent misrepresentation, trespass and unjust enrichment, in addition to a slew of other counts. Carson officials are seeking compensatory and punitive damages.

For its part, the oil company argued that the lawsuit was unnecessary. Shell spokeswoman Kayla Macke told reporters that the company was “disappointed” with the city’s decision to initiate new litigation.

Whatever the outcome of this case, it could set new precedents governing the extent to which companies can be held liable for environmental damage stemming from their operations.

As we’ve previously discussed, California has considerable oil reserves and could be the next state to experience a major shale boom. However, an increase in the use of hydraulic fracturing could invite renewed regulatory scrutiny.

In any case, it’s clear that companies engaged in energy production can benefit from implementing oilfield equipment that maximizes output while maintaining safety. Using an oil jet pump or other hydraulic lift solutions can help a company keep its production levels high and avoid the negative effects of a drilling accident.