San Luis Obispo Superior Court Judge Martin Tangeman has tentatively dismissed a lawsuit brought by the oil exploration company Excelaron against the county over its refusal to allow it to drill for oil in rural Huasna Valley.
Tangeman heard oral arguments in the case Wednesday morning. He said he expects to issue a final ruling in a week or so.
The Canadian oil company sued the county for $6.24 billion based on the value of the oil it could have recovered if the project had been approved. The county Board of Supervisors denied the project at a hearing in August, saying oil development is incompatible with the rural character of the area.
Discussion of the case Wednesday did not focus on its merits. Instead, it focused on a motion, called a demurrer, filed by the county to have the case thrown out due to the fact that the oil company failed to meet a deadline to file and serve the lawsuit within 90 days of the supervisors’ final decision as required by state law.
The lawsuit was filed on the 90th day after the supervisors’ hearing, but service of an amended version of the suit was made more than a month later.
Sophia Treder, an attorney for Excelaron, argued that the county misled the oil company into believing that the filing deadline was governed by a county statute that requires that the lawsuit only be filed, but not served, within 90 days.
“Clearly, the petitioner was lied to here,” she said.
Whitney McDonald, deputy county counsel, said the oil company’s lawyers should have known better. The requirement to file and serve the suit within 90 days prevents agencies like the county from waiting indefinitely under a Sword of Damocles for the suit to be served.
Although the arguments were dominated by whether the deadline was missed, other aspects of the case were also discussed. Gregory Broderick, another Excelaron attorney, said that the county rejected the oil drilling plan without considering alternatives suggested by the oil company.
This blanket rejection of the project stripped Excelaron of its property rights, Broderick said. The court could at least order the county to go back and examine alternatives proposed by the oil company.
However, McDonald argued that Excelaron still has the option of proposing an alternative project that addresses the environmental impacts raised by county planners and residents of the Huasna area.
At the end of the hearing, Tangeman took the case under advisement. If he affirms his tentative decision, the case is closed. If he alters it, another hearing will be held May 13.