November 1, 2002 - Pipeline-blast plea deal crafted

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Federal prosecutors have reached a tentative plea deal with Olympic Pipe Line and Equilon Pipeline, now Shell Pipeline, to resolve criminal charges stemming from the 1999 pipeline rupture that killed two boys and a young man in Bellingham, according to lawyers familiar with the case. Olympic would plead guilty to at least one felony. Shell would be allowed to plead no contest to a felony, the lawyers said. Both companies also could plead guilty to misdemeanor offenses, they said. As part of any deal, Olympic and Shell would pay fines in the millions of dollars, the lawyers said. The deal also would include nationwide pipeline-safety measures.

The case is set for trial Jan. 13, but some pre-trial matters have been put on hold recently as the plea talks gained momentum. Olympic and Equilon were indicted last year on felony violations of the federal Pipeline Safety Act and misdemeanor violations of the Clean Water Act. Convictions on felony charges have been a concern for the companies because their insurers might balk at paying costs arising from the pending civil suits.

If a deal is reached with the companies, discussions between the government and attorneys for the individuals would intensify, the lawyers said. All parties would have to agree to a deal before it would be finalized. A final deal could call for the companies to also pay additional fines to settle a separate lawsuit brought in May by the Justice Department's Environmental and Natural Resources division, the lawyers said. That suit seeks up to $37.2 million from Olympic and Shell.

In April, Olympic, Shell and other parties agreed to pay $75 million to settle wrongful-death suits brought by the families of the two boys. They also reached an undisclosed settlement with Wood's family. But both companies still face a lawsuit seeking at least $450 million, brought by Arco over an interruption of business caused by the rupture and temporary shutdown of the pipeline. And Olympic, now run by BP Pipelines North America, has sued Shell, claiming Shell was the operator of the pipeline at the time of the rupture. Olympic is trying to get Shell to pay tens of millions of dollars in spill-related costs.