LOS ANGELES (CN) - Shell Oil knowingly let developers build homes above three underground tanks that have leaked oil and carcinogenic chemicals into a neighborhood where more than 1,000 people live, the city of Carson claims in court.
Carson, a city of 93,000 in the Los Angeles metroplex, sued Shell Oil and property the owners and developers of the Carousel neighborhood, alleging fraudulent concealment, negligent misrepresentation, trespass, unjust enrichment and a dozen other counts, in Superior Court.
Residents of the Carousel community sued Shell in 2011. With their homes just feet above the chemicals and oil, residents told ABC News at the time, there was no way to sell their homes and leave.
Now Carson has taken legal action against the oil giant. It claims that "toxic and ultra hazardous" benzene and methane migrated from three tanks and drainage fields which were connected to a nearby Shell Oil refinery.
"(B)enzene is a recognized carcinogen that poses severe health risks to anyone who is exposed to it. There is also a scientific causal link between benzene and leukemia," according to the 52-page complaint.
"Additional causal links have been found between other diseases of the blood and blood-forming systems, including multiple myeloma and non-Hodgkin's lymphoma. Moreover, exposure to benzene can also weaken the immune and central nervous system causing a greater susceptibility to infection and illness."
Shell acquired the area from a German settlement called the Kast site. The oil company ran the facility from 1922 until 1967, then transferred part of the Kast site to developers, while keeping subsurface rights 500 feet underground, according to the complaint.
That developer, Barclay Hollander, is a defendant, along with three successor companies.
Barclay built homes right on top of the tanks, according to the complaint. Carson claims that Shell discovered in 2009 that the chemicals had seeped into soil, groundwater and air.
Oil and chemicals are spreading to surrounding neighborhoods "at levels in excess of California regulatory limits" the city claims. It says it took legal action because the city water board lacks "sufficient power" to force Shell to remedy the situation.
Carson says the fiasco has "stigmatized" the city, reduced property values, tax revenue, and made the city an undesirable place to live.
The city claims that Shell "had been aware for many years" that people would live above the tanks.
After Shell testing caused oil to seep above ground, Carousel resident Evelyn Salinas told an ABC News reporter she had oil deposits oozing through cracks in her garage.
Dogs developed tumors and died of cancer, and resident Kathy Post said she had suffered from pneumonia, asthma and had a tumor in her leg, according to ABC News reports.
"None of the banks will help you at all because of the mess in here," Carousel community resident Darlene Wells told ABC.
Shell spokeswoman Kayla Macke told Courthouse News it was "disappointed" that the City had decided to go to court. Shell told CNS that that the "health and safety of the residents and the integrity of the Carousel community is our priority."
"We have been in constant communication with the regulatory agencies and the City of Carson to determine the best course of action to address the issues in the Carousel neighborhood. Since the water board has issued a clean-up and abatement order for the former Kast site, and Shell is fully complying with that order through a state-of-the-art investigation, there is no basis for the city to file an action against Shell," Macke wrote in an email.
Macke said that pilot testing and sampling was under way and that she was "concerned that litigation could further delay our investigation and any future remediation work."
"To date, regulatory agencies including the Water Board, Los Angeles County Public Health Department and the California Office of Environmental Health Hazard Assessment have indicated that the test results do not show any imminent health or safety risks to the residents of the Carousel community," Macke wrote.
The city seeks compensatory and punitive damages, plus costs and future damages and costs, on 16 counts, including unjust enrichment, unfair business practices, public nuisance, inverse condemnation, strict liability, Health and Safety Code violations and negligence.
Carson is represented by Thomas Girardi, with Girardi Keese.
Carson's estimated median household income in 2009 was $68,965, which was 17 percent above the state median of $58,931, according to city-data.com. But the median value of a house or condo in Carson that year was 5 percent below the state median: $364,800 compared to $384,200, according to city-data.