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CASE TYPE: Personal injury CASE: Torres v. The Coastal Corp., No. 99-2786 (Nueces Co., Texas, Dist. Ct.) PLAINTIFFS’ ATTORNEYS: Craig M. Sico, Mikal C. Watts and Juan Mejia of Corpus Christi, Texas’ Harris & Watts DEFENSE ATTORNEY: Darrell L. Barger of Corpus Christi’s Barger, Hermansen, McKibben & Villarreal JURY AWARD: $122.59 million, increased to $137.32 million Daniel Torres, William Bourland and David Natividad were working at the Coastal Refining and Marketing refinery in Corpus Christi, Texas, in May 1999, when naphtha released from a corroded pressure vessel reached an ignition source and exploded, said their attorney, Craig M. Sico. All three sustained second- and third-degree burns over more than 70 percent of their bodies in the resulting fire, he said. None has been able to return to work. The explosion occurred because the side walls of the vessel containing the naphtha had corroded “beyond minimum thickness,” Sico said. An inspection should have detected the flaw, he contended, but “this refinery had a significantly lower number of inspectors — only two in-house and two outside contractors,” as compared with the norm of 10 inside and 30 outside inspectors. They were unable to sue their employer, Coastal Refining, directly because of workers’ compensation laws, although all three have been drawing workers’ compensation benefits since the accident, Sico said. But in discovery taken while handling the case of a worker for a subcontractor who was injured in the same explosion, the plaintiffs’ attorneys identified another possible defendant — The Coastal Corp., Coastal Refining’s parent. “The parent had budgetary control over safety and maintenance,” Sico said. The plaintiffs’ team decided that Coastal Corp. was specifically responsible for the explosion, he said, “because Coastal had control over the budget for safety inspectors.” To put a parent, holding or related company on the hook for injuries sustained by workers at a subsidiary — and thus skirt the bans on lawsuits against employers — requires massive pretrial research, Sico said. “In a case like ours, you have to look for financial information regarding the budget. See if the employer corporation is standing alone and making its own financial decisions,” or if another entity is “making decisions on key budgetary line-item issues.” While researching Coastal, he said, the plaintiffs’ team discovered that Coastal Refining required approval by Coastal Corp. to make capital expenditures. But, he added, “this was no smoking gun. Our strongest testimony came from their chief inspector, who agreed that if Coastal Refining had more money for inspectors and inspections, they probably would have used it.” Coastal Corp. denied any responsibility, said defense attorney Darrell L. Barger. As a matter of law, he said, the company could not be charged by the plaintiffs. “They were employees of a Coastal subsidiary who were covered by workers’ compensation.” In addition, he said, “the parent company had nothing to do with the budget.” The court denied Coastal’s motion for a directed verdict as a matter of law, and on Sept. 5, a Corpus Christi jury awarded $48.87 million to Torres, $41.24 million to Bourland and $32.48 million to Natividad. On Oct. 17, prejudgment interest was added to the award, bringing the total judgment to $137.32 million. The court denied Coastal’s motions to set aside the award. Barger said that the defense was not surprised by the adverse verdict. “We expected to have a hard time with the jury,” he said, but he added that the appellate courts may look less favorably on the plaintiffs’ theory of Coastal Corp.’s liability. “The parent had nothing to do with the approval of [Coastal Refining's] budget,” Barger said. “For the plaintiffs to prevail on appeal, they’d have to change Texas law.” Coastal has appealed. Ultimately, Barger said, “we expect a reversal.”

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