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Henke v. Arco Midcon, L.L.C.

United States District Court, E.D. Missouri, Eastern Division

January 5, 2015

ARCO MIDCON, L.L.C., Defendant.



This matter is before the Court on the remaining Defendant ARCO MIDCON, LLC's Motion for Summary Judgment, [Doc. No. 156].[1] Plaintiffs oppose the motion. For the reasons set forth below, the Motion is granted.


Plaintiffs brought this action as a putative class action seeking recovery for alleged damages to property that Plaintiffs claim they incurred as a result of Defendant's ownership, maintenance and control of a pipeline and easement on or beside the properties. On March 12, 2014, the Court denied Plaintiff's Motion for Class Certification.

Plaintiffs Glenn Henke and Linda Kluner jointly own a single parcel of land located in West Alton, St. Charles County, Missouri. Plaintiffs, who are brother and sister, each have 50 percent ownership interest in the land. The property is located near the intersection of Saale Road and Route 94 in West Alton, Missouri; the single parcel is approximately 76 and 1/3 acres. Plaintiffs do not live on their property. Plaintiffs rent their property solely for use to a tenant farmer, Gary Machens, who pays annual rent to Plaintiffs. Plaintiffs have never rented to any other persons.

There is petroleum contamination identified on approximately one half-acre of Plaintiffs' property in the subsurface soil and groundwater. Soil and groundwater piezometer testing was conducted on the Plaintiffs' property in both July 2010 and April 2014.

There is a former petroleum pipeline that runs along the northern edge of Plaintiffs' property in an east-west direction, adjacent to Saale Road. The former petroleum pipeline segment that crosses Plaintiffs' property was owned until July 1994 by ARCO Pipeline Company.

From 1950 to 1969, the pipeline segment at issue was owned and operated by a company named Sinclair Pipe Line Company. In 1969, Sinclair Pipe Line Company changed its name to ARCO Pipe Line Company. ARCO Pipeline Company owned and operated the pipeline segment at issue from 1969 to 1994.

Between 1952 and 1990, the pipeline segment at issue was used to transport petroleum products at various times. By December of 1990, the former petroleum pipeline at issue was idled, purged of any petroleum products and packed with nitrogen.

In July 1994, ARCO Pipe Line Company sold the pipeline as well as the real estate, contracts, permits, leases, easements and other rights of way to Williams Pipeline Company pursuant to a "Pipeline Sale and Purchase Agreement" or "PSA."

ARCO Pipe Line Company was dissolved in 2000. As a result of the dissolution of ARCO Pipe Line Company, certain rights and liabilities associated with the pipeline segment at issue, which previously belonged to ARCO Pipe Line Company, were transferred to Defendant ARCO Midcon LLC.

The pipeline is a segment of a former petroleum pipeline owned by a predecessor of Defendant ARCO Midcon, LLC - ARCO Pipeline Company - from 1950 to 1994. The segment runs from Mexico, Missouri to Wood River, Illinois[2]

Over several decades, the pipeline was laid, repaired, reconditioned, mothballed, and ultimately converted to a conduit for telecommunications cable. ARCO Pipeline Company operated the pipeline as a petroleum pipeline for decades until 1990, when it began the process of packing and purging it, i.e., mothballing the pipeline, by removing all petroleum products and pressurizing it with nitrogen. After the pipeline was mothballed, a process that was completed by the end of 1990, it was never again used to transport petroleum products. In 1994, ARCO sold the pipeline to Williams Pipe Line Company, n/k/a Defendant Magellan, as part of a larger transaction involving other pipeline segments. Beginning in 1999, the pipeline segment was prepared for and ultimately had fiber optic cable installed in it. In 2001, the pipeline segment was sold to Defendant WilTel, a telecommunications company that currently uses the pipeline to house its fiber optic network. WilTel acquired communication rights from all of the landowners along the segment.

The 1994 "Pipeline Sale and Purchase Agreement Between ARCO Pipe Line Company and Williams Pipe Line Company" ("the PSA, ") contained an exhibit titled: "ARCO Pipe Line Company - Products Spills for Assets Being Sold To Williams - APL Retained Environmental Liabilities - Exhibit 10.4." Exhibit 10.4 is a list of remediated leaks for which ARCO agreed to retain liability. It lists leaks by pipeline segment, including segments which are not part of Plaintiffs' allegations. It was compiled by ARCO's Safety, Health, and Environmental Protection group ("SHEP") and identifies a list of prior leaks known to the seller, ARCO, for which ARCO agreed to remain responsible. Exhibit 10.4 does not indicate specific property locations for the ...

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