Split decision in stratospheric lawsuit
A 12-year lawsuit that could bankrupt the City of Hermosa Beach has been sent back to square one by an appeals court ruling, in what amounts to a split decision for the city. The $500 million breach-of-contract lawsuit by Macpherson Oil Company had been on hold while a state appeals court considered a long-shot request by city officials to dismiss it altogether. Courts had previously ruled that the city was guilty of breaching Macpherson’s oil drilling contract, and high stakes were riding on the city’s request: if it was granted, Macpherson’s lawsuit would simply go away. But if it was rejected outright, the case would be returned to a lower court to determine how much of that $500 million the city would have to pay Macpherson. With all that on the line, the appeals court denied the city’s request to dismiss the lawsuit, but added a crucial caveat allowing the city to argue all over again that it did not illegally breach the lawsuit in the first place, and the whole matter should be dismissed. The city already had argued that it had an unquestioned discretion to strike down Macpherson’s oil drilling project as unsafe, legally nullifying the contract he held with the city…
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