Rossi accuses oil companies of polluting Santa Margarita Ranch

Cattle graze at Santa Margarita Ranch with Phillips 66 tanks in background. The Phillips 66 facility north of Santa Margarita is supplied by pipes running through Santa Margarita Ranch.
Cattle graze at Santa Margarita Ranch with Phillips 66 tanks in background. The Phillips 66 facility north of Santa Margarita is supplied by pipes running through Santa Margarita Ranch. dmiddlecamp@thetribunenews.com

Oil pipelines stretching across Santa Margarita Ranch have been leaking toxic petroleum hydrocarbons into the soil and may be contaminating one or more wells on the historic property, according to owner Rob Rossi, a prominent San Luis Obispo developer.

Rossi filed a lawsuit in San Luis Obispo Superior Court on Friday claiming that Phillips 66 and other oil companies who installed or maintained the pipelines over the years allowed them to fall into disrepair and foul portions of the ranch.

The lawsuit stops short, however, of claiming there is any threat to public safety for people visiting the ranch, but it states the contamination will hinder agricultural production and future proposed developments.

In his filing, Rossi names Phillips 66, ConocoPhillips, Union Oil Co. of California and Unocal as defendants, though the oil and gas pipelines are currently owned by Phillips 66. The lawsuit states that the pipelines cover approximately 3.4 miles between the Santa Margarita Pump Station and Tassajara Creek Road. The lines are a segment of a 78-mile transmission system from the Santa Maria Refinery in Nipomo to the San Joaquin Valley.

As of Tuesday evening, none of the oil companies had filed responses to the complaint.

Located off Highway 101 about six miles north of San Luis Obispo and 18 miles south of Paso Robles, the 14,000-acre ranch is used primarily for agriculture and recreational activities and is surrounded by National Forest land.

The site has been used as a cattle ranch since 1774, when it became part of the California Mission system. It had previously been home to the Chumash and Salinan Native American tribes. According to Rossi, the property hosts numerous events drawing tens of thousands of visitors. Rossi cites several other agricultural and recreational developments he has planned for the 900-acre portion of the Santa Margarita Ranch he individually owns.

According to the lawsuit, that portion is bisected by oil and gas pipelines installed in 1909 and originally operated by Union Oil Co. of California. They have been replaced twice, as the pipelines changed hands to several other companies over the years, the complaint states.

The Central Coast Regional Water Quality Control Board began an investigation after a maintenance project revealed petroleum hydrocarbons in the soil underlying the pipes at several locations on the property. The investigation revealed “extensive” petroleum hydrocarbon contamination that extends beyond the pipelines’ right of way, contamination that allegedly has been ongoing since 1995.

“Beyond the threat it poses to human health and the environment, Defendants’ petroleum hydrocarbon contamination on the (property) has impeded, and, until abated, will continue to impede, (Rossi’s) ability to freely and beneficially use, enjoy, and develop the Ranch,” the lawsuit reads.

Rossi says the contamination affects his ability to supply water to a planned 111-unit residential complex slated to be built on the east side of the property near Santa Margarita and Garden Farms. The contamination is also preventing him from intensifying his various agricultural projects, and will hinder other projects in various stages of development, such as a proposed bed-and-breakfast, a cafe, an amphitheater, craft studios, a winery, a school and an equestrian center, the lawsuit states.

Petroleum hydrocarbon is a combination of hundreds of chemical compounds that originally come from crude oil, according to the U.S. Department of Health and Human Services. Significant exposure to the chemicals can cause liver, renal, immunological and developmental problems, according to the agency.

Rossi alleges the lines have also contaminated the groundwater under and around the pipelines, including several potable groundwater wells, which Rossi uses for drinking and irrigation.

In addition to polluting the groundwater, the contamination extends to three creeks that supply drinking water to a number of houses near the property — Tassajara Creek, Santa Margarita Creek and Yerba Buena Creek — according to the complaint.

Rossi is accusing the oil companies of nuisance, trespass, unlawful business practices, breach of contract and breach of implied covenant of good faith. He is seeking to have the court force the companies to identify the extent of the leaks, remediate the contamination, pay for the cleanup and reimburse Rossi’s expenses, as well as unspecified damages.

Rossi’s attorney, Jed Borghei, and Phillips 66 spokesman Dennis Nuss both declined to comment on the lawsuit Tuesday.

Representatives for the Central Coast Regional Water Quality Control Board and the San Luis Obispo County Environmental Health Services could not be reached for comment on any potential public safety hazards.

According to court records, a case management conference is scheduled for Oct. 17 at the Paso Robles Superior Courthouse.