Local Business

Thursday, Feb 21 2013 10:30 PM

New trial opens in long-running oil-ag dispute

BY JOHN COX Californian staff writer jcox@bakersfield.com

A Kern County jury heard opening statements Thursday in the latest phase of a decade-old legal dispute that pits a prominent local farmer against one of the area's biggest oil producers.

The lawsuit by Shafter nut grower Fred Starrh accuses Bakersfield-based Aera Energy LLC of damaging his family's farming operation by consciously polluting his groundwater between late 2004 and 2006.

Aera's legal responsibility for the pollution has already been established in previous court decisions. At issue now is how much money, if any, the company should have to pay Starrh as punishment for its actions.

Both sides appealed a 2004 jury verdict that Aera pay Starrh $3.25 million for the benefits it got from the pollution plus $3.8 million in restoration costs. An appellate court judge reversed that decision, and in a 2009 re-trial, a local jury awarded Starrh about $8.6 million in total compensatory damages.

In a separate phase of the case, Kern County Superior Court Judge Michael Bush denied Starrh punitive damages. His decision was reversed on appeal, and Starrh now seeks tens of millions of dollars in punitive damages from Aera.

Starrh's primary attorney, Ralph Wegis, said in opening statements Thursday that Aera allowed the pollution to continue because it had determined such activity was profitable over the long term.

"They (Aera executives) knew they were causing harm, they knew there were laws against it, and they did it willingly," he said.

Aera's lead attorney, Stephen Kristovich, countered that the groundwater was so salty as to be unsuitable for crop irrigation -- with or without the oil-related pollution.

"Aera did not act with intent to harm Starrh," he said.

The pollution occurred at about 300 acres of disposal ponds Aera operated next to 6,000 acres of almond and pistachio orchards owned by Starrh and his family.

The unlined ponds were designed to allow toxic water that comes up during oil production to seep slowly underground, eventually reaching underground reservoirs.

Aera became aware in 1999, or perhaps as early as 1989, that this "produced water" was trespassing onto Starrh's property, Wegis said.

These days Aera injects its wastewater deep underground, as do many other oil companies operating in Kern County.

It became clear during Thursday's opening statements that much of the trial will focus on what level of water purity is required to irrigate almonds and pistachios, both of which are high-value crops popular in Kern agriculture.

Kristovich said he will call in agricultural experts to testify that the groundwater under Starrh's property was never pure enough to support either kind of nut tree.

Wegis, however, said the area's native groundwater can be used to grow pistachios and almonds, though it may need to be mixed with water from the nearby California Aqueduct.

Kern County Superior Court Judge J. Eric Bradshaw is presiding over the case.

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