Lawsuit Update



July 8, 2011

Los Angeles Superior Court judge says she will allow anti-oil drilling lawsuit to go forward




Court Victory for WHOW and Open Space Legal Defense Fund

On Monday January 31, 2011, Judge Ann I. Jones of the Los Angeles Superior Court released her final written ruling regarding the Open Space Legal Defense Fund (OSLDF) lawsuit against Matrix Oil Co., the City of Whittier and Los Angeles County.

In what is a significant victory for OSLDF, Judge Jones ruled that the OSLDF lawsuit has merit and will be allowed to proceed.

During the hearing, an attorney for the County of Los Angeles argued vehemently that the City Council’s proposed oil drilling project was not a violation of Proposition A.  The Court disagreed, saying that OSLDF’s interpretation of Proposition A may be correct. OSLDF argues that Proposition A prevents the City of Whittier from converting recreational lands purchased with Proposition A dollars to a commercial and noxious oil drilling operations.

OSLDF has maintained that the City took title to Whittier Hills in trust for the public and that such lands may not be taken out of public service and handed over to a multi-billion dollar Texas Oil Company for exploitation.  The court agreed that OSLDF has made a valid argument that may be correct. OSLDF will be allowed to proceed to trial on this theory. 

In addition, OSLDF alleged that the City of Whittier and its lobbyist Esther Feldman violated county ordinances by failing to register for lobbying activities. Records produced by the County show that Feldman was meeting with County officials to discuss the project, at least a year before she and the City registered (Feldman registered as a lobbyist prior to the Jan. 26th hearing).

Feldman and the City argued that no lobbying activities occurred.  Under the Los Angeles County ordinances, any contact with regards to advancing a project’s approval would qualify as a violation.  The court held that OSLDF may require the County to conduct an investigation and to make a determination under the lobbyist regulations if the county fails to act.

“These rulings are exactly what we were hoping for,” said Eddie Diaz, executive director of OSLDF. “They reinforce what the OSLDF and WHOW have been saying about this project from the beginning. We couldn’t have asked for a better outcome.”

Court proceedings will take place at a later date to decide on each of these allegations. 

Read More:

Whittier Daily News, Jan. 26, 2011:

Judge allows anti-oil drilling lawsuit to continue in Whittier

Whittier Daily News, Jan 31, 2011:

LA Superior Court judge releases written ruling on oil lawsuit, allows most of case to advance

Learn about Clayton Williams, the man behind the Whittier/Matrix lease:


 Why did the County argue forcefully in favor of the oil drilling project?

Proposition A, the Proposition A program agreement with Whittier and the Whittier/Matrix lease agreement, would allow the County to be the recipient of all of the royalties.  The County may be the sole beneficiary of any royalties produced in the Whittier Hills.  This is why the City must negotiate a royalty share with County officials. 



Why a Lawsuit?


On October 28, 2008, The Whittier City Council “quietly” authorized the signing of a lease agreement with Matrix Oil Corporation (25% lessee) and Clayton Williams Energy, Inc. (75% lessee), covering property the City purchased with funds provided by County Proposition A.  Very little public information was made of the lease transaction at the time, even though it would seem to violate the purpose by which Proposition A funds were made available to purchase the property.  Section 4 of Proposition A states:


It is the intent of this order and proposition to provide funds to benefit property and improve the quality of life in the District by preserving and protecting the beach, wildlife, park, recreation and natural lands of the District, providing safer recreation areas for all residents, preventing gangs, developing and improving recreation facilities for senior citizens, planting trees, building trails and restoring rivers and streams.     


Section 16, parts (a) and (b), of Proposition A restricts the use of any monies generated from properties acquired with Proposition A funds to that same purpose for which the property was acquired.  That would be to preserve open space, and would not include oil drilling, nor would it include using oil royalties for general city services.


The lease could have been challenged before it was signed in 2008 if it had been broadly made known and the issues made clear.  The lease did, however, set in motion the “process” which includes an Environmental Impact Report (EIR) identifying environmental hazards and how they may be mitigated, or lessened, leading up to the city council voting on a conditional use permit allowing or not the oil companies to drill. 


The oil companies have provided the City with escrow funds (approximately $400,000) to pay for the EIR.  They have also paid for television ads promoting oil drilling in the hills.  The oil companies are counting on drilling for oil, and anticipate the necessary conditional use permit will be granted when the “process” is complete.  None of this answers the question whether oil drilling will be permitted by the County in light of  the conditions set by Proposition A.  Proposition A monies come through countywide property tax assessments.   Will the County allow oil drilling, and if it does, how much of the 30% oil royalties to Whittier would have to be given up for the benefit of all county residents, and probably for the benefit of all California residents.  And of the remaining royalty sums, their use is restricted. 


Our city council has set in motion the commitment of our special preserve property, for decades, when there is issue as to the legality to do so.  The potential oil royalty revenue to Whittier is uncertain, and would be restricted in its use.  The argument the council and pro oil advocates make is quite vague—it being that oil will potentially bring millions of dollars to the City.  But to what use will it be, and is it worth the price of additional air pollution, more noise, heavy truck traffic, potential fire and other disasters, greater health risks, and  injury to our unique habitat?  Is that really in the best interest of our residents?


The oil companies are not likely to let the city back out of the lease.  The City council also seems determined to go forward with oil drilling.  The only way to stop the shortsightedness of the city council is through a lawsuit to prevent the October 28, 2008 oil drilling lease from moving forward.   That’s the reason for the lawsuit brought by the Open Space Legal Defense Fund (OSLDF), formed by local citizens volunteering their time to acquire and examine documents, frame the issues, and hire the necessary firms to challenge the EIR and the legality of the oil drilling lease.  If you think our special hills should be preserved for recreation and habitat protection, the purposes for which it was bought, your donation is essential in this fight.


The OSLDF is incorporated as a 501 (c) 3 organization.  Contributions made to OSLDF may be tax deductible to the extent allowed by law.  Consult you tax consultant for advice. 



Box 4422

Whittier, CA 90607-4422





Attorneys representing Matrix Oil Company in a letter threatening to sue individual members of WHOW demanded the clarification below.  We do not believe this clarification alters public debate over the safety of oil operations in the Whittier Hills.

CLARIFICATION TO DECEMBER 18, 2010 MAILER REGARDING DEATH CAUSED BY 2005 EXPLOSION ON MATRIX OWNED AND OPERATED HONOLULU TERRACE SITE and resulting lawsuit entitled Delaney et al. v. Matrix Oil Corporation, et al. Los Angeles Superior Court Case No. VC 046677.

On December 18, 2010 WHOW sent a mailer soliciting contributions to support a legal action maintained by the Open Space Legal Defense Fund to terminate the Whittier/Matrix lease, which permits Matrix to drill for oil and gas in our wilderness preserve.  The lease agreement is for the entire Open Space Preserve area, which is approximately 1280 acres in the Whittier Hills. This preserve includes land designated Significant Ecological Areas by Los Angeles County and contains portions of the last remaining chaparral, native oak woodlands, and coastal sage scrub. The lease permits Matrix to conduct noxious operations on this Open Space Preserve land.  The legal action seeks to terminate the Whittier/Matrix lease on grounds that the lease is in violation of the City Charter and Proposition A, which was approved by county voters.   

In its mailer WHOW made reference to the unfortunate 2005 death of Herbert Delaney, Jr. who was providing services to Matrix under the employment of Pool Well Services Company (“Pool”).  Pool was a Matrix Oil Corporation subcontractor hired to increase the production of a Matrix-owned and operated oil well at the Honolulu Terrance oil production facility in Whittier, California. On May 19, 2005, flammable gas and/or vapor were released from the open wellhead and ignited by the engine on the rig, which was located in close proximity to the well.  An explosion and subsequent fire occurred, which caused Mr. Delaney’s death and severe burns to two other Pool employees. 

A wrongful death lawsuit was filed by the wife and three children of Herbert Delaney, entitled Connie Delaney, et al. v. Matrix Oil Corporation, et al. in the Norwalk Court, VC046677, whereby the Delaney family received a settlement in the amount of $3,075,000 from defendants; with Matrix contributing $1,075,000. The Delaney family argued that Matrix shared in the responsibility as the well owner-operator, by negligently managing subcontractors in failing to assure that safety procedures were followed in accordance with permits.

Matrix has threatened to sue individual members in WHOW for the release of this information and specifically on grounds that the letter stated Mr. Delaney was a Matrix employee at the time of his death.  WHOW desires to clarify that Mr. Delaney was not directly employed by Matrix.  Mr. Delaney’s unfortunate death occurred while carrying out oil production operations for Matrix at Honolulu Terrace in WhittierMatrix’s alleged failure to oversee the operations resulted in Matrix’s capitulation and sizeable contribution to the settlement. 

The Whittier/Matrix lease would allow Matrix to carry out similar operations on all 1280 acres of the Proposition A protected wilderness preserve.  Up to 60 oil wells are contemplated for the project.

Sources:  United States Department of Labor Occupational Safety & Health Administration Report ID 0950637 Open Date 5/19/2005, Whittier Daily News Article “Oil Well Fire Continues to Burn” May 20, 2005 and VerdictSearch. Com, Verdict Search case number 155560.




United States Department of Labor - Occupational Safety & Health Administration Report on the Honolulu Terrace Fire May 2005.