Executives at five major oil companies are likely celebrating today following a court ruling last week that threw out about $7.5 million in punitive damages in one phase of a massive toxic tort case involving Lockheed Corp.’s secretive Skunk Works plant.

The unpublished ruling by California’s 2nd District Court of Appeal not only reversed the damages awarded to a group of Lockheed employees, but also took the far-reaching step of finding in favor of the oil companies on that issue and ordering that it not be retried. The appellate holding in Arnold v. Ashland Chemical Co., B121434, possibly foreshadows more bad news for plaintiffs, who, in a subsequent phase of the Skunk Works case, were awarded hundreds of millions of dollars in punitives. That phase of the case is pending before the 2nd District.

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