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Amplify Energy faces possible class-action lawsuit after Southern California oil spill

<i>Kyle Grillot/for CNN</i><br/>The recently cleaned beach in the affected area of the oil spill off the coast of Huntington Beach
Kyle Grillot
Kyle Grillot/for CNN
The recently cleaned beach in the affected area of the oil spill off the coast of Huntington Beach

By Alexandra Meeks, CNN

A Southern California DJ, who said he will lose substantial business because of an oil spill off the coast of Orange County, filed a lawsuit Monday against the operator of the pipeline and its affiliated companies.

The complaint against Amplify Energy and its subsidiary Beta Operating Company, which operates the pipeline, said plaintiff Peter Moses Gutierrez Jr., whose company regularly books events along Huntington Beach, will lose business for the foreseeable future. It also alleged that Gutierrez, who is a local resident, has been or will be exposed to toxins as a result of the spill.

The complaint, which seeks class-action status, alleged the vast shoreline affected by the spill has suffered “tremendous damage” and residents and animals have endured “catastrophic” consequences.

On Monday, Gov. Gavin Newsom proclaimed a state of emergency due to the spill. “The state is moving to cut red tape and mobilize all available resources to protect public health and the environment,” he said in a statement.

The breach occurred about five miles off Huntington Beach and spilled as much as 144,000 gallons of oil, officials said.

According to documents reviewed by CNN, authorities were notified late Friday of reports of an oil sheen at the site of the pipeline spill, more than 12 hours before Amplify reported it to state and federal officials.

But in an interview with CNN on Monday, Amplify CEO Martyn Willsher said a sheen was detected by company personnel Saturday morning, not Friday night. Willsher said while there is equipment to detect the leak without visibly seeing oil spills, there were no notices of a potential leak in the line before Saturday.

The lawsuit also named 100 unnamed “subsidiaries and/or affiliates” of Amplify that “may be responsible for the conduct” alleged in the lawsuit.

CNN has reached out to Amplify Energy and Beta Operating for comment.

Amplify is a Houston-based company with 222 employees as of the end of 2018, the last time it reported its staff size in a company filing. Its most recent financial report shows sales of $153 million, with year-to-date losses of $54.4 million through the end of June.

Complaint seeks a trust fund to monitor health of individuals

There are potentially thousands of class members that could be named in this case, according to the complaint filed by attorneys at Milberg Coleman Bryson Phillips Gross.

The lawsuit alleged the companies were negligent and “failed to properly operate the oil rig, resulting in a catastrophic oil spill” and “failed to ensure the oil rig was safe to operate, when, in reality, it was not.”

The cause of the leak is not yet known. The federal Bureau of Safety and Environmental Enforcement and the National Transportation Safety Board were assisting the investigation.

According to the complaint, the effects of the spill to the surrounding area were “swift and drastic,” spanning about 8,320 acres and tarnishing a 25-acre ecological reserve. In response, the plaintiff is seeking monetary and punitive damages, injunctive relief, and response costs.

The complaint said the court should establish a trust fund for the medical monitoring of individuals who have been exposed to potentially dangerous substances and who may now be at an increased risk of contracting illnesses and diseases.

The plaintiff additionally claimed the conduct of the companies “fell below the standard of care” of a reasonable property owner or operator. The company also failed to warn the public in a timely manner about the hazardous spill and its potential impact, the complaint alleged.

Outlined in the complaint are allegations of damage including, but not limited to, harm to personal property, harm to personal health, harm to animals and livestock, and diminishment of businesses. The complaint alleged class members have suffered from dangerous substance releases from Amplify Energy’s oil rig, including the disposal of sulfur dioxide, hydrogen sulfide, volatile organic compounds, and oil, among other hazardous substances.

As of Monday afternoon, approximately 4,158 gallons of oil have been recovered from the water, the Southern California Unified Spill Response Team said in a news release. The California Department of Fish and Wildlife said 14 boats are conducting oil recovery operations.

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