Firm Obtains Olympic Pipeline Subrogation Recovery

February 17, 2005

The firm represented several foreign and domestic insurance companies in obtaining the largest subrogation recovery in the history of the firm.

The case involved the recovery of a business interruption claim paid to Atlantic Richfield Company for the loss it sustained as a result of a catastrophic explosion in Bellingham, Washington on June 10, 1999. The explosion was the result of the rupture of the Olympic pipeline.

The pipeline ruptured in a park in Bellingham, Washington and 237,000 gallons of gasoline were released from the pipeline and migrated to two creeks in the park. The vapors subsequently ignited along a 1 ½ mile section of the creek causing an explosion and fireball that could be seen for miles.

The pipeline was used by Atlantic Richfield to transport its petroleum products from its refinery in Northwestern Washington to the Seattle Tacoma Airport and other locations in the Pacific Northwest. The pipeline was closed for 22 months as a result of the rupture and explosion, causing Atlantic Richfield and the insurers to sustain business interruption and extra expense losses in excess of $400,000,000.

The defendants in the subrogation case included Olympic Pipe Line Company, the owner of the pipeline and Equilon Pipeline Company (now known as Shell Pipeline Company), the alleged operator of the pipeline.

The case was settled for a confidential amount a month before trial was scheduled to begin in federal court in Seattle.

In addition, the insurance group worked closely with the firm's bankruptcy group on this case. Olympic Pipeline was in bankruptcy at the time. With coordination between the two groups, the firm’s bankruptcy group contested confirmation of Olympic's plan of reorganization to permit the insurance group to continue to fully litigate the case outside of bankruptcy.

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