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ExxonMobil Corp. has been hit with its third massive jury verdict in six months. This time, it’s a $1.06 billion award in Louisiana over the alleged radioactive contamination of a 33-acre plot of land owned by a retired state judge. In December, an Alabama jury ordered Exxon to pay more than $3.5 billion to the state of Alabama for the underpayment of royalties on an oil and gas lease. In February, a Miami jury awarded several thousand gas station dealers more than $500 million in a class action for breach of contract. Despite the defeats, ExxonMobil will not change its approach to litigation, the company said in a written statement to The National Law Journal. “ExxonMobil’s legal strategies will continue to be dependent on the facts and circumstances of each case or series of cases,” the company said. The decisions by juries in the three states were in unrelated cases, the company pointed out. There was one common factor, however, in the Alabama and Louisiana verdicts — the huge amount of punitives. The Alabama jury awarded $3.4 billion and the Louisiana jury $1 billion in punitives. These decisions, Exxon said in its statement, “continue a trend of unwarranted punitive damage awards on both large and small businesses.” Businesses can only receive fair trials, the company contends, “when juries are given adequate instructions on the findings required to legally impose punitive damages.” Exxon claims that the Louisiana jury was not given adequate instructions. Exxon is appealing all three verdicts. The plaintiffs in the latest case, retired Louisiana judge Joseph Grefer and his three siblings, claimed that Exxon was responsible for the radioactive contamination of their land. The Grefers had leased their property near New Orleans to Intracoastal Tubular Services Inc., which contracted with Exxon to clean and refurbish pipes Exxon used in oil drilling, says plaintiffs’ attorney Stuart Smith of New Orleans’ Sacks & Smith. Intracoastal, known as ITCO, “handled 180,000 tons of pipe per year for Exxon.” During drilling, Smith says, “scale would build up in the pipes, restricting the flow of oil.” This residue contained radioactive material, radium 226 and radium 228. “As a result of the pipe cleaning process, large amounts of dust blew onto the adjacent neighborhood. Millions of pounds (of dust) containing radioactive material were deposited on the property and buried,” contaminating the Grefer tract, Smith says. The plaintiffs contended that Exxon had known since the 1950s that oil wells generated radioactive materials and that these materials accumulated as scale in the pipes. “In 1986, Exxon admitted the problem but did not warn ITCO until March 1987,” says Smith. ITCO subsequently went out of business. The plaintiffs sought $50 million to clean up the property, but Exxon contended that there was no substantial contamination. “The position of Exxon is that out of 1.4 million square feet of property, less than approximately 8/10 of 1 percent was contaminated above that of background levels of radiation,” says defense counsel Gregory C. Weiss of New Orleans’ Weiss & Eason, Exxon’s lead trial counsel in the case. “These small areas were the only areas that needed to be remediated, at a cost of $46,000. The remaining part of the Grefer tract is clear.” EXPERT WITNESSES Weiss says that at trial the plaintiffs’ experts contended that the entire property was contaminated. But, he says, Exxon had conducted a subsurface survey of the property in early 2001, at a cost of $330,000, which indicated limited contamination above expected naturally occurring levels of radioactivity. “We dug over 1,000 bore holes to try to find the contamination and couldn’t find it,” he says. Except for five small patches of land, the property was not above the standards for background levels of radioactive material set by the Louisiana Department of Environmental Quality, Weiss claims. Overall, he adds, “if you took the top two feet of dirt on this property and replaced it, you’d still have the same background levels of naturally occurring radioactive material.” Exxon presented this survey at trial, he says, “but I can’t believe the jurors paid any attention to the evidence.” On May 22, the New Orleans jury, after a five-week trial and 1-1/2 days of deliberation, awarded the Grefers $56 million for restoration of the property, $125,000 in general compensatory damages, plus $1 billion in punitives, $2 billion less than the plaintiffs had asked for. Grefer v. Alpha Technical Services Inc., No. 97-15003 (Dist. Ct., Orleans Parish, La.). Exxon called the verdict unwarranted and outrageous and vowed to appeal. “We have no understanding as to what could have propelled any human beings to award a judgment of that magnitude,” says Weiss. “It was clearly not justified by the evidence. The only thing that I can conclude is that they hit Exxon because it’s Big Oil.” Exxon contends that there were no grounds for punitives. The company did not become aware of the contamination until 1986, Weiss says. “When we discovered it, we stopped sending the pipes for cleaning.” What about bifurcation? A factor in the jury’s verdict could have been that the trial was not bifurcated, allowing the jury to hear evidence about liability and damages in one trial, instead of two separate proceedings. During the trial, Weiss says, “the plaintiffs were able to introduce into evidence the size of the corporation.” ExxonMobil is the largest U.S. corporation, according to the most recent Fortune 500, and has gross annual revenues of more than $200 billion. “The plaintiffs’ attorneys explained that $1 billion in damages wouldn’t affect the company at all,” he says. But he adds that he does not know if the lack of a bifurcated trial hurt Exxon in this case. “With this jury, I doubt whether anything would have been helpful,” he says. Smith says the punitive verdict was spurred not by evidence of Exxon’s size, but by Exxon’s conduct. “They’re a callous, arrogant company that’s been allowed to grow too big. They think they can do anything they want.” Exxon will file post-trial motions to set aside the verdict, Weiss says. Exxon contends, however, that the plaintiffs’ claim was barred by the Louisiana statute of limitations. The pipe company ceased operations in 1992, and the plaintiffs “knew well before 1992″ about the radioactive contamination, says Weiss. The lawsuit was not brought until 1997. A hearing on Exxon’s statute-of-limitations claim is scheduled for late June.

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