Preparation key for pipeline's management of large spill, explosion

The time to prepare is now. The development of a plan is the solution.

Would your company be prepared if faced with the scene depicted in Fig. 1 on its right-of-way? The accompanying box lists some of the issues and recommendations that should be considered and addressed. This article further discusses them.

Would your company be prepared if confronted with this situation on a pipeline-right-of-way in a heavily populated area? (Fig. 1)

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"Hot button" issues

To avoid damaging errors or omissions during the response to an event involving your company's pipeline, you must understand the perspective of the trial lawyer who is attacking your company. Understanding the kinds of issues that trial lawyers look for and will attempt to seize upon will allow appropriate training and provide additional impetus for diligence in adhering to the plan.

For example, company responders should be trained on and intimately familiar with the portions of your plan that address notification of governmental authorities, including local and state law enforcement authorities, fire departments, environmental agencies, and regulatory authorities. While the failure to notify one or more of these entities may seem trivial or without consequence, such an omission can be costly in the litigation arena.

For example, consider a pipeline spill that releases a large volume of gasoline into a body of water. Predictably, a fire results. Company and governmental records reflect that no notifications were provided to local law enforcement agencies or fire departments.

Although there may be little or no evidence that such a notification would have prevented the harm suffered by the individuals at the water's edge when ignition occurred, opposing counsel will invest considerable time and effort developing the theme that the company's response reflected its lack of care and concern for public safety while at the same time taking immediate action to deal with other aspects of the emergency which bore the potential for economic loss.

Plaintiff's lawyers look for issues that are potentially inflammatory and can be spun in a manner to make the target appear to be a "bad" or "callous" company.

The same principle applies to following company procedures concerning such matters as the closure of valves and the implementation of other emergency mechanisms. Failing to follow the company response plan provides opportunistic plaintiffs' lawyers with ammunition and arguments that, even if unconnected to actual harm, can be lethal in practice.

Retain experts with experience in accident reconstruction to document the physical evidence (Fig. 2).

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Media strategy

Failing to plan and prepare for dealing with the media can seriously handicap the company in the "court of public opinion" before litigation even begins.

Statements by the company and its employees during the maelstrom of a pipeline event are evidence. All too often such communications are made without the benefit of full information by persons unschooled in dealing with the media or by multiple personnel acting without proper coordination.

The result is that a bad situation is made worse by creating an opportunity for opposing lawyers to distort and twist such statements to their advantage by claiming, for example, that the company failed to warn the public, hid or destroyed information, violated safety regulations, responded ineffectually, deceived the public, or committed fraud.

Do your media contacts know how to respond to questions such as in the accompanying box? Do you know how the answers might later affect litigation or claims?

Visualize an employee with a minimum of media training wading into an army of radio and television reporters with live microphones and cameras rolling. Over his shoulder, a large hydrocarbon-fed fire rages in the distance, while smoke flumes waft toward heavily-populated areas and neighborhoods.

In answer to inquiries regarding the toxicity of the smoke, the employee in an almost casual manner says "it's just gasoline, it shouldn't be a problem." While the statement may be true as it pertains to the particular plaintiffs involved in your lawsuit, it does not pass muster as an unqualified and comprehensive statement concerning potential hazards from smoke or fumes admitted by burning hydrocarbons.

These kinds of statements as well as many other seemingly innocent answers to shouted questions from a hoard of reporters can provide the tender necessary to ignite a second conflagration, this time in the courtroom. When the newsreel containing the statement is played back during the employee's deposition or, worse yet, when he or she is giving testimony in the courtroom, the jury may have already made up its mind before hearing what may be an honest, plausible and defensible explanation.

The impact can be dramatic and hurtful to the company and will allow opposing lawyers to argue that such statements reflect either incompetence or a lack of care when it comes to the safety of the public.

Accordingly, dealing successfully with the media is critical. Quickly taking charge of the news flow by giving the public, through the news media, a credible, concerned, and fully committed spokesperson is strongly recommended. Optimally, this person will have received media training in advance of the problem.

All media contacts should be channeled through the spokesperson. This includes responding to questions from the press as well as handling press conferences and issuing press releases. Experience working with the media following small spills by itself cannot prepare a person to deal with the media in the aftermath of a more significant disaster.

Counsel should review all statements made by the spokesperson so that those statements do not jeopardize the defense of the lawsuits that are likely to follow and so that they are consistent with themes that will underlie the company's defense.

In addition, counsel will be able to verify that the release of information complies with the regulations of any federal agency in charge of an investigation; these regulations may restrict the release of information at the accident scene to certain authorized persons.

Physical evidence

Government investigators often appear on the site of large spills or explosions immediately and take control of physical evidence. If an appropriate agency or peace officer does not take control of the site and the physical evidence, it is important that the company and its investigators take appropriate steps to preserve evidence.

Obviously, the priority concern must be the health and safety of responders and the public including extinguishing any fires and stopping the flow of product from a pipeline. The next level of concern should be preservation of the damaged pipe and other evidence. If care is not exercised with the pipe, the metallurgy may be forever changed and some details obliterated before analysis.

Moreover, there are frequently other important clues that can be lost if immediate steps are not taken to gather, preserve, and record relevant information. Engaging competent environmental and safety counsel to assist in the initial response and to deal with regulatory inquiries will also provide valuable insight into the preservation of evidence that may be critical to the company's defense in subsequent litigation.

The company should also consider immediately retaining a litigation-savvy expert skilled in accident reconstruction who can document what happened and preserve evidence in its original state. Burn and explosion patterns could prove vitally important down the line, yet, if not properly documented by someone who knows what he or she is looking for, the evidence could be lost forever (Fig. 2). Careful preservation of evidence up front can save significant future costs in attempting to recreate the incident through the use of a model.

Similarly, photographs can also provide a valuable tool to validate computer or other mathematical models. Not all photographs are created equal, however.

Careful composition of the photograph is necessary to incorporate all of the relevant information, and these matters are frequently best left to qualified experts whose litigation experience will allow them to create the most effective and defensible photographic evidence.

In addition, do not forget to preserve and maintain real time data recorded during the event and maintained electronically or through the use of other media. Plaintiff's counsel will make every effort to identify all possible sources of information, especially data recorded by the company during the event. For example, supervisory control and data acquisition (SCADA) systems record data in real time, including information regarding pressures, flow rates, and other critical parameters relating to pipelines.

In some cases, such data are maintained in the regular course of business only for a short time and then later recorded over.

You can be sure that if such information is lost or not preserved, your company will face the accusation that the documents were destroyed intentionally to hide the truth. This charge will be leveled even if the data were not consciously or deliberately deleted, but were simply recorded over in the normal course of business without conscious thought or deliberate conduct.

While the company may have a valid argument that the data were insignificant to the real matters of dispute in the litigation to come or that such data can be obtained or reconstituted from other sources and methodologies, in the context of litigation, such issues can be dangerous and many times resonate with juries.

Under certain circumstances, the court may instruct the jury in such a way that allows its members to infer that the lost or destroyed materials would have been adverse to the company's interest. At best, considerable time, effort, and money will be spent by the company and its lawyers in defending against peripheral charges that serve only to distract or prejudice the judge or jury who may hear your case.

Government investigations

Significant pipeline disasters will draw a response from several levels of government.

Depending on the type of pipeline, the product, and the circumstances surrounding the release, state and federal environmental agencies, the US National Transportation Safety Board, the Federal Bureau of Investigation, the Department of Transportation's Office of Pipeline Safety, the state commission responsible for pipeline safety, the Federal Emergency Management Agency, the Coast Guard, local law enforcement, fire fighters, and other emergency response officials all may respond.

These government representatives will vary widely in terms both of knowledge and sophistication as well as degree of oversight and participation in the emergency response. Regardless of the relative degree of sophistication, it is important to have established and to maintain good rapport with the government at all levels.

If a large spill, explosion, or fire occurs, make not only those notifications required by law, but also make courtesy calls to known contacts with significant regulatory responsibility over the pipeline and have your employees who work with these individuals on a regular basis involved in responding to the incident and maintaining open lines of communications with the regulators.

Invariably, the NTSB, the US Environmental Protection Agency, and possibly other government representatives will demand company records and interviews with company employees. This will happen immediately, and there is little you can do to cut the information flow to the agency. The agency will get the information one way or another.

There are, however, a few things that you can do at least to minimize the damage that these information gathering efforts can cause:

Designate a single point of contact. This will permit the company to keep track of what information the government has requested and received. Keep a separate set of copies of everything provided to the government.

Prepare company employees for interviews with the government investigators. While the company position will almost always be to cooperate with the government investigation and employees should be encouraged to do the same, employees frequently need to be reminded to avoid speculating or making statements that are beyond their knowledge.

Irrelevant, misleading, and even erroneous speculation by employees can create havoc with the company's subsequent defense in civil litigation. Employees need to understand that "I don't know" is an acceptable answer if it is the truth.

If permissible, monitor government investigator interviews. If permitted by the regulatory authority, presence of counsel in the government interview will give the company contemporaneous possession of the same information as the government.

If government representatives refuse to allow a company representative to be present, it is very important to interview the employee as soon as possible to determine what the government asked about and what answers were given.

Damage claims

If your company's incident has the potential to affect large numbers of area residents, you may be faced with several claimants demanding food, shelter, and financial assistance, not to mention claims for supposed personal injury and property damage. Likewise, the company may be required by environmental laws to open a claims office and to publish notices regarding how to make a claim against the company.

Dealing with these issues presents important strategic decisions that may well affect the nature and volume of future litigation, the settlement value anticipated by litigants and plaintiffs' counsels, and the confidentiality of the company's settlement negotiations and agreements.

On the one hand, it may be possible to act proactively to settle financially many of the claims which would otherwise end up in the hands of an aggressive lawyer, saving the company in litigation costs and settlement payments or jury awards. On the other hand, attempting to settle large numbers of claims may not save the company any money and may encourage and stimulate even more litigation.

Similarly, the company may be tempted to reimburse local residents or hospitals for medical bills on a "no questions asked" basis. Such decisions may make it very difficult to dispute the legitimacy of these charges in later litigation brought by the same persons even though no credible injury is present.

There is no pat answer or cookie-cutter solution for every situation. Decisions concerning how to approach the claims-handling process must take into consideration various factors and should be made in consultation with company trial counsel.

Moreover, once the strategic calls have been made, the claims process, including investigation, adjusting, and negotiating, must be set up with a view to protecting information generated by applicable privileges.

Otherwise, the company may be required to produce in later litigation large volumes of information created during the claims process that can be used against the company.

For example, plaintiff's counsel may attempt to use property-damage investigation and payments as support for an air model purporting to document smoke and soot damage over a large area. These procedures should be worked out with the advice and assistance of competent trial counsel.

Finally, if the company elects to set up an initial claims process, do not neglect to establish contact with your insurance carriers and provide all of the necessary notifications to ensure coverage. The insurance carriers will likely want to be involved in whatever procedures are established for early settlement of claims.

In any major pipeline spill, insurance coverage is almost always triggered, and disputes with your insurance carrier are inevitable. These disputes can revolve around the scope of your policy coverage with regard to spill-response efforts, particular claims for personal injury and property damage, or your legal defense costs or all three.

You can make your insurance carrier's duties to you, as the carrier's insured, work for you by engaging the insurance company's participation soon after the initial accident.

• Capture key information with employee interviews. Memories fade quickly. In an emergency response, key employees frequently work long hours under substantial stress. This condition can cause events to run together in memory and result in a subsequent lack of clear recollection of important facts or events.

Get the facts

Conducting interviews of employees who are involved shortly after the immediate emergency has subsided provides the best opportunity for capturing critical details of the incident and response, and other relevant chronology.

• Interview relevant third parties. For the same reasons, begin interviewing third-party witnesses who may have knowledge concerning the facts of the case as soon as possible. These may include local, state, or federal governmental agency employees. If you can get to these people before the other side does, you may find a wealth of helpful information.
• Obtain documents from third parties. Like the memories of witnesses, documents can disappear with time. Third parties may not have any reason to keep documents that could prove to be important to defense of the future litigation. Requesting documents shortly after the incident increases significantly the chances that they may still exist.

An example where obtaining third-party materials quickly is particularly important is television video footage and photographs possessed by newspapers and other media companies. Often, this is the only real time video or photographs available of the event. This footage may be absolutely essential for an expert attempting to reconstruct events.

Television news stations, however, and video monitoring services typically have limited retention times for video. If these materials are not captured very quickly, they will be gone forever.

• Obtain documents from the government. Use the federal Freedom of Information Act and the applicable state analogs to obtain all of the government documents that are relevant to your case from federal, state, and local government agencies. Government agencies have an enormous amount of relevant and useful information, and almost all of it is available via a FOIA request.

Unfortunately, this information frequently resides in a number of widely dispersed and poorly organized files buried within the bowels of an agency populated by unresponsive bureaucrats.

Crafting an FOIA request to obtain all of the documents you need without receiving an overwhelmingly over-inclusive or under-inclusive response is an art. Your request must assist the FOIA officer in finding your documents. If it does not, your chances of actually getting everything available are slim.

• Obtain physical evidence from the government. Split samples taken by the government if permitted, or keep a list of all physical items collected by the government, if split samples are not permitted. Plan to have your experts participate in setting up testing procedures and observe any testing on the samples performed by the government.
• Anticipate document discovery. Document production in litigation initiated by private litigants as well as the government is more often than not a massive undertaking involving impossible deadlines. As employees are being interviewed, begin the process of identifying what documents are available and where they are stored.

Because certain federal statutes take the company's regulatory compliance history and good faith into consideration, obtaining information about the company's efforts to comply, its record-keeping practices (including its operations and maintenance manual and safety logs), and its relationship with its state regulators will become vital to the preparation of a successful defense.

This is also a good opportunity to begin identifying documents key to the litigation, as well as emphasizing to employees the importance of document retention and evidence spoliation issues.

The authors

Morgan L. Copeland Jr. ([email protected]) is a partner at Vinson & Elkins LLP, Houston. His practice includes a variety of tort and business litigation in both state and federal courts, including tort cases involving thousands of claimants, class actions, and other matters involving catastrophic loss of life or property, as well as business litigation, including energy-related cases of all kinds. Copeland is certified by the Texas Board of Legal Specialization in civil trial law and personal injury trial law. He is an associate of the American Board of Trial Advocates. He received a DBA with honors (1978) in Petroleum Land Management from the University of Texas and a JD with honors (1981) from the University of Texas School of Law.

George Wilkinson ([email protected]) is a partner at Vinson & Elkins LLP, Houston. His practice includes toxic tort litigation and environmental law; he has experience with pipeline operations and regulation. Wilkinson holds a BS (1986) in mechanical engineering and a JD (1991) from the University of Texas.