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Judge refuses punitive damages in oil field case

Plaintiffs in an oil field pollution trial will not be allowedto seek punitive damages against Chevron U.S.A. after Judge KeithStarrett ruled Wednesday that a second phase of the trial wasunwarranted.

A jury on Nov. 28 awarded four Lincoln County plaintiff familiesa total of $88,500 in compensatory damages for activity related toChevron’s decades of oil exploration and production in theBrookhaven Oil Field.

During an evidentiary hearing in the days following the verdict,plaintiff attorneys had been trying to persuade the judge to allowa punitive damages phase to proceed. With the judge’s ruling,efforts to secure punitive damages were unsuccessful.

“We were very disappointed, number one, and number two, wethought the ruling was inconsistent with the evidence that waspresented to the court,” said Jeff Thompson, lead attorney for theplaintiffs.

Thompson said an appeal is planned.

“On appeal, we are hopeful it will be set right,” he said,adding that the trial was just the “first battle.” “We’re going tokeep fighting for the people of Brookhaven against Chevron and whatthey did out in that field.”

According to state law, punitive damages may be awarded whenthere is “clear and convincing evidence” that a defendant acted”with actual malice; gross negligence, which evidences a willful,wanton or reckless disregard for the safety of others; or committedactual fraud.”

“We are very pleased with the judge’s ruling,” said BobbyMeadows, Chevron’s lead attorney in the case. “Frankly, I don’t seehow it could be criticized.”

Meadows said Starrett had given both sides ample time to presenttheir cases during the evidentiary hearing.

“In the end, the judge said they didn’t have the proof,” Meadowssaid.

Starrett cited three factors in making his ruling.

Regarding potential groundwater dangers, the judge said Chevrondid not try to conceal those. He pointed to the company’s workingwith the Lincoln Rural Water Association to lay a new water line inresponse to potential problems.

Starrett also sounded his approval of Chevron’s quick responseto the discovery of Naturally Occurring Radioactive Materials(NORM) in oil field pipe in Smith County and later Lincoln County.Within two days of the Smith County discovery, the judge saidChevron contacted state and regulatory agencies and the news mediain an effort to develop a remedy to the new problem.

“This problem went to highest levels of Chevron,” Starrett said.”They addressed it quickly, publicly and thoroughly.”

Finally, Starrett said he found to validity to the plaintiffs’claim that Chevron in 1990 sold its interest in the Brookhavenfield to an irresponsible operator.

Ray Galvin, former president of Chevron U.S.A. ProductionCompany, testified during the hearing Wednesday about the company’splans in the late 1980s for divesting itself of marginal oilfields. He also addressed alleged environmental reasons behind thesale.

“The environmental condition would not have anything to do withthe decision to sell,” Galvin said about the Brookhaven field. “Thecondition would have an effect on what we sold the field for — thesale price.”

In 1990, Chevron sold the field to Florabama for $1.17 million.Five years later, Florabama sold the field to COHO Resources Inc.,which continues to operate the field, for $6 million.

Galvin testified about Chevron’s initial reluctance to sell thefield to Florabama, the high bidder, because of concerns about thecompany’s young age and operational experience.

Meadows said Galvin’s testimony was “extremely important” inshowing how Chevron acted in a right and responsible way inchecking Florabama’s background and operational abilities beforeselling the field to them. The attorney also mentioned theimportance of a physician’s testimony during the hearing about theproperty’s being good and safe.

The possibility of an appeal by the defendants over the originalverdict was unclear Wednesday.

“I think everybody’s looking at their options and where we gofrom here,” said Bob Allen, the Brookhaven attorney whoparticipated in Chevron’s defense.

Allen said the initial verdict was realistic and reasonable.However, Chevron had not conceded that verdict, he said, addingthat it was sticking to its contention that the remediation planconducted on the field was sufficient to address concerns.

Other Brookhaven Oil Field-related cases, which involve hundredsof plaintiffs, are still pending. Trials in some of those cases areexpected to proceed next year.