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The Oil Pits - What Actually Happened


 Case Details

In the 1920's, three unlined underground storage tanks for oil were connected to the Pierce Junction Oil Well near Houston, Texas. The tanks, connected by pipeline, were known as the Mykawa Tank Farm. Each pit had an oil capacity of 300,000 barrels of crude oil. In 1927, a hurricane partially destroyed the wooden tank covers, making them virtually unusable; thus, the company abandoned them. In the 1960's, Gulf Oil, the owner of the land, decided to sell it, because the pits were no longer economically viable. Gulf Oil had the land appraised in hopes of passing it off to another owner, and during the appraisal, determined that the area would be a prime location for a mostly-black neighborhood. The document stated:

                                                           Should this land be developed for low-to medium-priced housing with FHA or VA financing, it
                                                           would have to be a bi-racial development according to present regulations.  It is felt that
                                                           eventually this would be the highest and best use of this property because it would then serve as a        
                                                           buffer between the white residential area in Crestmont Park and the heavily colored developments
                                                           to the north and west. We feel by being surrounded by negro subdivisions this property is committed to a use, either for
                                                           subdivision purposes or other, by this element. Eventual industrial use may be foreseeable;
                                                           although, this seems unlikely with the nearest trackage available two miles away.

John Lester of the Log Development Company bought the land six years later, hoping to develop the land as a "Negro residential and commercial development." Lester built the subdivision on top of the filled-in oil pits, disregarding contractors' advice that he should remove them entirely. This intentional and knowing disregard later would serve as the Kennedy Heights residents' evidence for racial discrimination. People in the neighborhood began to notice strange colors in the soil, strange phenomena with the plants of the region (like trees with fruit on only one side), and deaths of animals that happened to dig in the backyard. Residents fell ill, and began to wonder if there was a connection with the oil pits beneath their homes.

The Oil Pits (above view) before development
For nearly twenty years after the area was settled, the residents had issues with their water pipelines repeatedly breaking. In the early 1990's, Houston's Capital Projects Department finally took their complaints seriously, deciding to overhaul the entire water pipeline system. When a member of the work crew collapsed during the project, however, the contractor shut down the operation and ordered tests.

People continued to get sicker in the neighborhood, suffering from lupus, cancer, and pregnancy problems. The people of Kennedy Heights formed an association - the Kennedy Heights Civic Association, or KHCA - that met with the EPA and pushed for an examination of the toxicity of their drinking water. The organization formed a Contamination Committee to collect money to fund a private environmental consultant. They held that unclean water lead to their poor health and rampant disease (especially Lupus and cancer). They took the case all the way to the Texas Supreme Court, where they were rejected on the grounds that the EPA found no evidence of adverse health effects from the testing they did, and that the residents could not prove racial intent in the lack of cleanup effort.

Testing was carried out by Chevron, the Texas Railroad Commission (RRC), the Texas Water Commission, the city of Houston, a contractor hired by the pipe excavation company, a contractor hired by the residents, the American Home Dream Corporation (a developer interested in building 53 new units in Kennedy Heights), and eventually the Environmental Protection Agency (EPA) at different times throughout the case. Chevron's comprehensive testing found TPH, arsenic, and mercury at above-regulation levels, but risk analysis by the RRC determined that they did not pose a significant threat to human health. Pas-Key Construction's testing found that "the
contaminant is creosote mixed with crude oil which will cause skin rash, dermatitis, and breathing difficulties."

The original lawsuit, John R. Simmons et al. v. Chevron U.S.A., was filed in state district court on March 24, 1995 (Plaintiffs' Summary of the Case, Adams et al. v. Chevron U.S.A., Inc. et al., 96-CV-1462 (S.D. Tex. 10 September 1997). John Simmons, who headed the Kennedy Heights Civic Association at the time, sought assistance from one of the most well-known attorneys in the area, who urged him to seek temporary injunction against any further contractors after Pas-Key. Injunction was granted. Plaintiffs (having consolidated) alleged that:

                                      The three pits upon which the Kennedy Heights Subdivision had been built were utilized, stored, removed, and filled in an unreasonably dangerous and unlawful manner.  They claimed that chemicals                                                     from these operations had volatized and remained in the soils and groundwater in toxic and explosive quantities, exceeding federal and state regulatory limits.  Further, it was believed that "these                                                         chemicals and other unknown chemicals have infiltrated the water supply and may infiltrate the water system servicing the residents in and around the site." It was argued that defendants failed to                                                         disclose or falsely represented the historical uses of the site and presence of residual contamination in order to obtain government financing that would facilitate the
                                                        purchase of the property from Chevron.

However, after the case went to trial, the Court dismissed the plaintiffs' case "for want of prosecution." They stated that the plaintiffs were incorrect in saying that arbitration was in process, and denied their right to "reinstate on grounds of excusable neglect." The court held that the repeated arguments of the Kennedy Heights residents failed to be more persuasive with repetition; unfortunately, they could not prove racial intent. In 1997 the case was ordered to mediation. The master met with the 1,700 plaintiffs in groups of 20-30, attempting to put together a settlement model. The plaintiffs were resistant to a settlement. The case is still up in the air, because there were some residents who truly could not leave because of financial issues. Unlike the Love Canal Tragedy, in which the government helped fund relocation of the residents, the Kennedy Heights residents had no help in that regard. The case remains up in the air for many dissatisfied residents.

Related Pages:

WHAT: To find out more about what exactly happened to start the conflict, how the case was carried out, and how it was resolved, click here

WHO: To read about the parties and people involved in the case, click here

WHERE: To find out about the places and forums in which the case took place, click here

HOW: To read about the resolution and solutions for the case, click here

RELATED COURSES: To see what Colby courses may relate to this case study, click here.

SOURCES: To access government documents and news articles concerning the case, click here.