After five years and $4.75 million in attorneys’ fees, the city of San Diego failed to convince a judge that a Texas-based oil company deliberately dragged its feet in cleaning up the soil and groundwater pollution it caused in Mission Valley.
U.S. District Court Judge Michael M. Anello found that the city’s case against Kinder Morgan Energy Partners, which owns the fuel tanks next to Qualcomm Stadium, was so weak a jury trial would not be necessary.
Claiming that Kinder Morgan failed to clean up leaks from its fuel tanks in a timely and efficient fashion, the city sought $246 million in real estate and restoration damages.
“The Court enters judgment in favor of Kinder Morgan not because doubt exists that Kinder Morgan has contaminated the Property in the past two or three decades, but because the City has not complied with applicable statutes of limitation nor gathered the evidence necessary to meet its burden of proof at trial,” Anello wrote in the ruling.
The City Council voted in closed session Feb. 13 to appeal the Jan. 25 ruling. The city attorney and members of the City Council declined to comment on the case.
Since City Attorney Michael Aguirre filed the case in 2007, the city has relied on special outside legal services from Los Angeles firm Tatro Tekosky Sadwick LLP at a cost of up to $4.75 million.
The city’s case was severely undermined by Anello’s determination that the testimony of one of the city’s key expert witnesses, Ray Forrester, was “unreliable and irrelevant,” according to legal standards. Anello wrote that while Forrester, a chemical engineer with more than 30 years’ experience, was qualified as an expert, his opinions contained internal inconsistencies and were not entirely supported by sound scientific methodology. Thus, Anello granted Kinder Morgan’s motion to exclude Forrester’s testimony.
The city’s claim that it was entitled to $126 million in restoration damages collapsed because it was based on Forrester’s excluded testimony.
The city also claimed that groundwater contamination from Kinder Morgan’s fuel tanks prevented the city from planning and developing a water supply and storage project at the underground Mission Valley Aquifer, beneath the stadium site. Anello found that the city lacked expert evidence that would show that a water project at the site would even be possible.
The city’s claim that it was entitled to real estate damages was based on its argument that the “highest and best use” of the stadium site – a mixed-use development – would have resulted in $120 million worth of rent. Anello found the city had no legal basis for that claim, since it successfully collected rent from the existing stadium.
The city claimed that it was entitled to $570,000 in compensation for the water Kinder Morgan extracted from the ground as part of the remediation process ordered by the San Diego Regional Water Quality Control Board. The city abandoned this claim when Kinder Morgan challenged it with a motion for summary judgment.
Anello also found that the city failed to meet the statute of limitations on its claims of public nuisance, trespass and private nuisance.
“Somebody missed the statute of limitations,” said local attorney Hud Collins during public comment at a City Council meeting last month. “I don’t know who it was, but that’s malpractice where I come from.”
Kinder Morgan is pleased with the court’s decision, said spokesperson Emily Mir.
“We believe the decision to be well-reasoned and correct as a matter of fact and law, and we do not expect it to be overturned if the city decides to pursue an appeal,” Mir said.
Mir declined to say how much Kinder Morgan spent defending itself in the case, or whether Kinder Morgan would seek to recoup that amount from the city of San Diego.
Kinder Morgan has spent $60 million cleaning up the site, Mir said. The firm finished cleaning up the soil beneath Qualcomm Stadium and its parking lots by the 2010 deadline set by the San Diego Regional Water Quality Control Board. The firm expects to meet the Dec. 31, 2013 deadline to finish cleaning up groundwater at the site, Mir said.
The ongoing uncertainty about the future of the Qualcomm Stadium site is a source of anxiety for neighboring property owners, said Mat Kostrinsky, who ran for the City Council seat now held by Scott Sherman.
“The longer this thing goes, the more expensive it will become,” Kostrinsky said. “It’s been five years. There’s a lot of concern among residents.”
