Environmental Protection

Auto Body Repair Shop Sues Kinder Morgan for Soil Contamination

Lawyers for the plaintiffs are seeking cleanup of benzene, toluene, ethylbenzene, and xylenes on property that formerly provided petroleum storage in above-ground tanks, most recently by Kinder Morgan.

Younan Safar, Linda Safar, and Y & S Enterprises, Inc., allege that the real property and business they own and operate were damaged by Kinder Morgan Energy Partners, L.P., Kinder Morgan Liquids Terminals LLC, and Kinder Morgan Tank Storage Terminals LLC.

In the complaint filed in the U.S. District Court in Los Angeles, the plaintiffs allege that in February 2001, Kinder Morgan Liquids Terminals LLC began operating at the site previously owned by GATX Terminals Corporation, and as a successor to the site holds the liability for the former owner's legal and equitable obligations.

The site, located at 1313 and 1363 N. Gaffey St., in San Pedro, Calif., was first developed in the mid-1940s and has always been an above-ground petroleum storage facility. Time Oil Company and BP Marine maintained above-ground storage tanks on the site during their ownership. GATX Terminals purchased the facility from BP Marine in 1996, and Kinder Morgan Liquids Terminals purchased GATX in 2001. Kinder Morgan operated the facility until October 2004 when the tanks were decommissioned, emptied, and cleaned. During their operation, GATX and Kinder Morgan stored marine diesel oil, cutter stock, and bunker fuel at the site.

Kinder Morgan Liquids Terminals sold the site to a developer with plans to build residential housing after the remediation activities have been completed.

The lawsuit contends that in the course of Kinder Morgan's operations on the site, the company disposed, dumped, spilled, abandoned, and/or released hydrocarbons and other hazardous materials into and onto the plaintiffs’ real property, contaminating both the soil and groundwater.

Kinder Morgan has denied responsibility for any contamination, if any such contamination exists, and for any damages.

California's Department of Toxic Substance Control has demanded that the Kinder Morgan entities formulate and carry out a work plan to investigate and characterize the condition of the soil and groundwater at the site and that the companies perform environmental remediation of any contaminants in the soil and groundwater at the site and the subject property. According to the plaintiffs, soil samples collected on Jan. 6, 2011 and tested by Leighton Engineering show traces of benzene, toluene, ethylbenzene, and xylenes.

Y & S Enterprises operates a large auto body repair facility that controls the exclusive rights to work on high-end brands such as Rolls Royce, Mercedes-Benz, BMW, Lexus, and Jaguar for all the major insurance companies for the South Bay region. If the soil contamination requires remediation the process will cause the business to be closed and the damages could reach $30 million.

A jury trial is set to begin Oct. 18, 2011.

Source: Curd, Galindo & Smith LLP

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