By Daily Press Staff

HERMOSA BEACH A dispute over oil drilling in Hermosa Beach has festered for 25 years, with a Santa Monica oilman pressing ahead in a $500 million breach of contract lawsuit against a small city that has a $26 million annual budget, it was reported last week.

The oilman, Santa Monica resident Don Macpherson Jr., has won the first round in the courts, and may have the city and its taxpayers on the hook for damages. But the city is appealing.

The court battle has been waged since 1998, but the city and Macpherson have been tussling since an Hermosa Beach City Council 24 years ago decided to let the oilman’s father slant drill for oil under the beach from rigs that would be located at the city’s maintenance yard.

The Daily Breeze reports that the plan would have paid the city $500,000 in royalties for the use of the city property. But a giant political battle ensued in Hermosa Beach, with anti-oil activists eventually taking control of the council and banning oil drilling.

Macpherson’s father, Don Macpherson, sued for breach of contract. The elder Macpherson died in 1999, and his three sons continue to run the company and challenge Hermosa Beach.

The city has paid more than $1 million in legal fees, and the family oil company has reportedly spent more than that. Last month, a jury ruled in favor of Macpherson Oil, but a second jury will have to decide damages, and the original verdict might be appealed by the city.

It is believed that over 20 million barrels of oil could be collected.

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