Petition for Writ of Certiorari — Exxon Mobil Corp. v. Grefer (No. 07-1055)

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® 071055FEB1 4 2008

No. 07- OFFICE OF THE CLERK

IN THE

Supreme Court of the Gnited States

EXXON MOBIL CORPORATION,

Petitioner,

Vv.

JOSEPH GREFER ET AL.,

Respondents.

On Petition for a Writ of Certiorari

to the Louisiana Court of Appeal,

Fourth Circuit

PETITION FOR A WRIT OF CERTIORARI

GLEN M. PILIE WALTER DELLINGER

RONALD J. SHOLES (Counsel of Record)

Louis C. LACOUR, JR. MATTHEW M. SHORS

MARTIN A. STERN KATHRYN E. TARBERT®

ADAMS AND REESE LLP O’MELVENY & MYERS LLP

4500 One Shell Square 1625 Eye Street, N.W.

New Orleans, Louisiana Washington, D.C. 20006

70139 (202) 383-5300

(504) 581-3234

*Admitted only in Wisconsin;

supervised by principals at the

firm

Attorneys for Petitioner

QUESTIONS PRESENTED

Although a jury held ExxonMobil liable for purely

economic harm to a $1.5 million piece of industrial

property, it awarded $1 billion in punitive damages

based entirely on the threat of physical harm to non-

parties. The Court of Appeal reduced that punitive

damages award to $112 million. This Court granted

ExxonMobil’s petition for a writ of certiorari, vacated

the Court of Appeal’s judgment, and remanded the

case for reconsideration in light of Philip Morris

USA v. Williams, 127 S. Ct. 1057 (2007). The Court

of Appeal “st[oo]d by its initial decree.” The ques-

tions presented are as follows:

1. Whether the Court of Appeal on remand de-

nied due process when it continued to punish

ExxonMobil for harm to nonparties, left intact a pu-

nitive damages award without finding that Exxon-

Mobil’s conduct was reprehensible as it affected

plaintiffs, and held that the jury could “consider the

harm suffered by both parties and non-parties re-

gardless of the type or similarity of harm suffered.”

2. Whether, contrary to the decisions of other

federal and state appellate courts, a court may rem-

edy a concededly tainted punitive damages trial by

affirming the maximum punitive damages award

due process permits, rather than by ordering a new

trial.

3. Whether due process permits punitive dam-

ages twice the amount of compensatory damages in a

case of economic injury when compensatory damages

are $56 million and plaintiffs’ actual harm is no

greater than $1.5 million.

PARTIES TO THE PROCEEDING

Petitioner is Exxon Mobil Corporation, one of two

defendants-appellants below. Intracoastal Tubular

Services, Inc. was the other defendant-appellant be-

low and is a respondent under this Court’s Rule 12.6.

Other parties named as defendants in the trial court

— none of whom were parties on appeal — were Alpha

Technical Services, Inc.; Chevron, U.S.A., Inc.;

Conoco, Inc.; Homeco Inc.; HuntPetroleum Corp.;

Hassie Hunt Exploration Co.; Mobil Exploration &

Producing Southeast, Inc.; Phillips Oil Co.; Sexton

Oil & Mineral Corp.; Shell Offshore, Inc.; Shell Oil

Co.; Shell Western E&P, Inc.; System Fuels, Inc.;

Texaco, Inc.; Tubular Corp; OFS, Inc.; and Oilfield

Testers, Inc.

Plaintiffs-appellees below, Joseph Grefer, Camille

Grefer, Rose Marie Grefer Hassi, and Henry Grefer,

are respondents under this Court’s Rule 12.6.

RULE 29.6 DISCLOSURE

Exxon Mobil Corporation has no parent corpora-

tion and no person or entity owns 10% or more of its

stock.

ili

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED............ccccccccocsscsescssrseeees i

PARTIES TO THE PROCEEDING .................00c000008 ii

RULE 29.6 DISCLOGURE .cccccscssessesesesesssesescocnccsescece li

TATILAS OF AUFTRIO RE TG ccccccvcccsoscescesscnssesnscccccsecses Vv

PETITION FOR A WRIT OF CERTIORARI............. 1

ee IIT winrininsitishiiesiiniscsmnsdannmipnpaenieiiaaanniansioen 1

NE sistsnetiiciistinaitdecselicthadtabiniscaianiiiniasnnnnanseigendben 1

CONSTITUTIONAL PROVISION IN-

Re hashes hincsoastiabaincsinniaicsidiisiahls ens ceipitleihiigh sieandians nistaniigneie 1

STATEMENT OF THE CASE ...................2..ccceesereeees 1

A. CTE TIGOIG nannsccccenscsnsicessecesseccees 3

B. I ik ictal 5

REASONS FOR GRANTING THE PETITION........ 10

: THE JUDGMENT BELOW DEFIES

THIS COURTS PRECEDENT BY

AWARDING PUNITIVE DAMAGES

FOR HARM TO NONPARTIES ..............00006 12

Il. THE LOUISIANA COURT OF

APPEAL’S DECISION TO REDUCE

THE PUNITIVE DAMAGES RATHER

THAN ORDER A NEW _ TRIAL

DEEPENS A CONFLICT AMONG THE

SAPO ee SEE TDA seihinintnsaeieiniianiniiantianicnanneen 19

IIT.

TABLE OF CONTENTS

There Is A Conflict In The Lower

Over The Proper Remedy When A

Punitive Damages Award Is Tainted

By Improper Evidence Or Instruc-

I i snchniin

This Court Should Hold That

Judicial Reduction Of The Award To

A “Constitutional Maximum” Is Not

The Appropriate Remedy For An

Award Based On Constitutionally

Invalid Instructions. ............c.ccsscccsscsseese

THE COURT OF APPEAL’S

IMPOSITION OF A 2:1 RATIO OF

PUNITIVE TO COMPENSATORY

DAMAGES DEEPENS A DIVIDE IN

THE LOWER COURTG......... hibscaliabiniaasadeienes 26

The Decision Below Disregards State

Farm And Highlights A Split In The

Lower Courts Regarding The Per-

missible Ratio When Compensatory

Damages Are Substantial. ....................

This Court Should Grant Review

And Instruct That In This Case of

Substantial Compensatory Dam-

ages, Punitive Damages Were Not

Warranted At All, Much Less In A

CONCLUSION

SSSSSCHSTSESSEHSESSESHEEEECEHSESESHSHHHESSECESEEESESECESE

SPOSSSHSSSSSOSSSSSHSHEFSEHTSSSHSOSHSSHOOHSEHHESEEEECEHRESESESENES

Page

...20

124

ina

1009

TABLE OF CONTENTS

Page

Appendix A: Louisiana Court of Appeal Opinion on

Remand From United States Supreme Court,

PU, Diy IE iinitiicscsnaniciaihinivcinanindinin piintiieansadpaninsntii la

Appendix B: Louisiana Court of Appeal Opinion,

SO Sas isan bisa aie ihc aes th cei thcaiads 36a

Appendix C: Trial Court Judgment,

I i EO axscihenaniaiitdaiscdginidtiaehainieiibaindednanan 108a

Appendix D: Louisiana Court of Appeal Opinion

Denying Rehearing, May 16, 2005.................. 113a

Appendix E: Louisiana Supreme Court Order De-

nying Certiorari Review, March 31, 2006........ 120a

Appendix F: United States Supreme Court Order

Granting Certiorari Review, Feb. 26, 2007...... 122a

Appendix G: Louisiana Supreme Court Order De-

nying Certiorari Review, Nov. 16, 2007........... 123a

Appendix H: United States Supreme Court Order

Denying Application for Stay, May 15, 2006 ...124a

Appendix I: Jury Instructions ...............cccceseeees 125a

TABLE OF AUTHORITIES

Page

CASES

—_ Marine, Inc. v. Cont’l Carbon,

ne.,

481 F.3d 1302 (11th Cir. 2007)

petition for cert. field, 76 U.S.L.W.

3082 (U.S. Aug. 24, 2007 (No. 07-

9 URNS TEE DES Se Sol SE Oe 28

Bach v. First Union Natl Bank,

149 F. App’x 354 (6th Cir. 2005)...................ceee 30

er; v. W.H. McLeod & Sons Packing

0.,

766 F.2d 1817 (6th Cir. 1986) ........ccccccccoscccsseeees 27

Bettius & Sanderson, P.C. v. Nat'l

Union Fire Ins. Co.,

839 F.2d 1009 (4th Cir. 1988) .....................ccceee 27

Boerner v. Brown & Williamson

Tobacco Co.,

394 F.3d 594 (8th Cir. 2005)..........0.00.0000000.. 23, 28

BMW of North America, Inc. v. Gore,

ee ee a icttiiiscsnticensenntonesice passim

Bullock v. Philip Morris USA, Inc.,

--- Cal. Rptr. 3d ----, 2008 WL

240989 (Ct. App. Jan. 30, 2008).......... secssahanbioniaties 21

Cooper Indus. v. Leatherman Tool

Group, Inc.,

SE es EE, SUI CIEE ccicncnicnccnssecnsccnentéconsnnnce 24

Estate of Moreland v. Dieter,

BE Fe CAT CFO CAP. BOOB) q.ncnccccccceccocccccscosscese 28

Ford Motor Co. v. Ammerman,

705 N.E.2d 539 (Ind. Ct. App. 1999).................. 23

Gertz v. Robert Welch, Inc.,

gE ne O Ee 27

vii

TABLE OF AUTHORITIES

Hansen v. Boyd,

I wits cisiissinvacespeneccensccnntsnadiipamnesen 21

Henley v. Philip Morris Inc.,

9 Cal. Rptr. 3d 29, 71-72 (Ct. App.

2004) review granted, 88 P.3d 497

(Cal. 2004) review dismissed, 97

ee citintdatinicntncesesvncssncsccnssccestsasase 22

In re Harvey TERM Litigation,

No. 01-8708 (La. Dist. Ct. Parish of

a ssisesmanennnninaee 15

Lindsey v. Normet,

A a ecilas 12

Marbury v. Madison,

6 U5. (1 Cramema) 137 (1808)........cccccccccccssccveceeee 24

Memphis Cmty. Sch. Dist. v. Stachura,

ee I weieieiiciaectititnsterncssciccsesinacnenins 27

Merrick v. Paul Revere Life Ins. Co.,

600 F.3d 1007 (Sth Cir. 2007) ...........ccccccccccsoccees 21

People v. Ault,

Re is ID piidtcecintiinnsscasosensnenniniationiinn 22

Philip Morris USA v. Williams, |

ee I CIEE F eitintntdccasneriernensscoscencs passim

Rhone-Poulenc Agro, S.A. v. DeKalb

Genetics Corp.,

345 F.3d 1366 (Fed. Cir. 2003)..................ccc00000 29

Roman Catholic Church of the

Archdiocese of New Orleans v. La.

Gas Serv. Co.,

Es DD IT ENTTe 26

Romo v. Ford Motor Co.,

6 Cal. Rptr. 3d 793, 805 (Ct. App.

SI i dics facesias Sos sdateinnceicett balan aakaiaiaicaneistadinsnsesuinebabe 22

viii

TABLE OF AUTHORITIES

Page

Sand Hill Energy, Inc. v. Smith,

142 S.W.3d 153 (Ky. 2004)............ccccccccccccssccsceee 21

Seltzer v. Morton,

354 POG GE Cibewit. BOGT) nc cccccccssccsccssecccssssssccnss 28

Smith v. Wade,

I iaisirtiitenikntitenentsciccsennisinsamiinnnaniniartinn 25

Stamathis v. Flying J, Inc.,

389 F.3d 429 (4th Cir. 2004) .........ccccsccccecccccssees 28

State ex rel. Chemtall Inc. v. Madden,

655 S.E.2d 161 (W. Va. Nov. 15,

TED iniitiiitiidaliiahiicecdidiaitichinhiideiasiiiiddinannbsannebinenikasibtotn 16

State Farm Mutual Automobile

Insurance Co. v. Campbell,

RD SF Fe. I GD crncesncccsnnnstcnesecsccccecssocess passim

United Food & Commercial Workers

Local 100A v. John Hofmeister &

Son, Inc.,

950 F.2d 1340 (7th Cir. 1991)..............ccsesecceesees 18

White v. Ford Motor Co.,

312 F.3d 998 (9th Cir. 2002) ............c eens 20, 25

White v. Ford Motor Co.,

500 F.3d 963 (9th Cir. 2007) ..............:cseceseceeeeees 21

Williams v. ConAgra Poultry Co.,

378 F.3d 790 (8th Cir. 2004) ........ cee eeeeeeeee 17, 22

Williams v. Philip Morris,

CC 9705-03957; CA A106791; SC

S051805, 2008 WL 256614 (Or. Jan.

SF Se aden saca ahaa icles trsndiccsacinenepiaoadanion 16

Williams v. Philip Morris, Inc.,

127 P.3d 1165 (Or. 2006).............. icisimenedelgldititalenaa 29

STATUTES

La. Civ. Coto bit. Ba icikitscascttaaieiniecmeionon 7

TABLE OF AUTHORITIES

Page

OTHER AUTHORITIES

1 Dan B. Dobbs, The Law of Remedies,

i GL, ETN cseccncssusnesesecoscccsccccssccccccetes 25

Amicus Curiae Br. of La. DEQ, Grefer v.

Alpha Technical, No. 05-C-1590 (La.

ET 30

Pet. for a Writ of Certiorari, BMW of N.

Am., Inc. v. Gore,

517 U.S. 559 (1996) (No. 94-896),

1994 WL 16011916 (Nov. 17, 1994)................... 19

Petr’s Br., BMW of N. Am., Inc. v. Gore,

517 U.S. 559 (1996) (No. 94-896),

1995 WL 126508 (Mar. 23, 1995)....................... 19

CONSTITUTIONAL PROVISIONS

Pe, MIL. SEW os ciccncseseseecsbesorersenen. 2000eee 1

PETITION FOR A WRIT OF CERTIORARI

Petitioner Exxon Mobil Corporation (“ExxonMo-

bil”) respectfully petitions for a writ of certiorari to

review the judgment of the Louisiana Court of Ap-

peal, Fourth Circuit, in this case.

OPINIONS BELOW

The opinion of the Court of Appeal on remand is

reported at 965 So. 2d 511 and is reprinted in the

Appendix to the Petition (“App.”) at la-35a. The

first opinion of the Louisiana Court of Appeal is re-

ported at 901 So. 2d 1117 and is reprinted at 36a-

107a. The final judgment of the trial court is unre-

ported and is reprinted at App. 62a-66a.

JURISDICTION

The Court of Appeal issued its opinion on August

8, 2007. App. 3a. The Louisiana Supreme Court de-

nied ExxonMobil’s timely petition for certiorari re-

view on November 16, 2007. Justices Kimball and

Victory would have granted the application. Id. at

123a. This Court has jurisdiction pursuant to 28

U.S.C. § 1257(a).

CONSTITUTIONAL PROVISION INVOLVED

The Fourteenth Amendment to the Constitution

provides in pertinent part: “No State shall... de-

prive any person of life, liberty, or property, without

due process of law ....”

STATEMENT OF THE CASE

In Philip Morris USA v. Williams, 127 S. Ct. 1057

(2007), this Court held that “the Constitution’s Due

Process Clause forbids a State to use a punitive

damages award to punish a defendant for injury that

it inflicts upon nonparties or those whom they di-

rectly represent, i.e., . . . those who are, essentially,

strangers to the litigation.” Id. at 1063. This Court

granted certiorari in this case, vacated the judgment

affirming a $112 million award of punitive damages,

and directed the Court of Appeal to reconsider its de-

cision in light of Williams. App. 122a.

In response to this mandate, the Court of Appeal

reprinted a large section of its original opinion and

insisted that it had anticipated Williams, despite

having affirmed jury instructions that predicated

punitive damages on a claimed risk to public health,

see App. 9a-12a, and having rejected arguments that

ExxonMobil could not be punished solely for the po-

tential harm its conduct allegedly posed to nonparty

employees, id. at 114a. The Court of Appeal deter-

mined that ExxonMobil had acted reprehensibly

based solely upon the physical harm allegedly suf-

fered by nonparties to the litigation and held that

the jury could “consider the harm suffered by both

parties and non-parties regardless of the type or

similarity of harm suffered as a result of defendant’s

conduct.” App. 33a. The court’s clear disregard of

this Court’s precedents and its order to reconsider in

light of Williams warrants review.

In addition, the decision below exacerbates a split

among federal and state appellate courts as to

whether a court may remedy a concededly tainted

punitive damages trial by affirming the maximum

substantive punitive damages award the Constitu-

tion permits rather than by granting a new trial.

Although the Court of Appeal recognized that the

trial court erred in “allow[ing] the plaintiffs to argue

and present substantial evidence .. . of the potential

and/or alleged actual harm” to the public, the court

refused to grant ExxonMobil’s request for a new

trial. App. 26a. Instead, the court reduced the puni-

tive damages to the maximum award it believed con-

stitutionally available as a matter of due process.

That error provides this Court the opportunity to

take up the unfinished business of Williams and

BMW of North America, Inc. v. Gore, 517 U.S. 559

(1996), and resolve a split among federal and state

courts as to whether, when an award of punitive

damages rests upon improper considerations, due

process permits a court to’ remedy that error by

awarding the maximum amount of damages due

process permits.

The decision below also exacerbates a divide in

the lower courts over the amount of punitive dam-

ages that may constitutionally be awarded where

compensatory damages are already substantial. The

court here awarded $112 million in punitive dam-

ages on top of the $56 million plaintiffs received to

compensate for and remediate the damage to their

$1.5 million piece of property. That award was un-

constitutional under this Court’s decision in State

Farm Mutual Automobile Insurance Co. v. Campbell,

538 U.S. 408 (2003), which teaches that due process

does not permit the award of any punitive damages

when compensatory damages are sufficient to punish

and deter and that the highest permissible ratio in a

case of substantial compensatory damages is 1:1.

A. Factual Background

1. Plaintiffs jointly own a 33-acre tract of indus-

trial property in Harvey, Louisiana. See App. 46a &

n.8. That tract of land is worth at most $1.5 million.

Id. at 4a, 46a, 66a.

For decades, plaintiffs leased their land to ITCO,

an oil and gas service company. App. 4la. ITCO’s

services included the storage, handling, transporta-

tion, inspection, cleaning, and threading of drill

pipes used in oil production. Jd. Several oil compa-

nies, including ExxonMobil, routinely sent their

pipes to ITCO for cleaning. Jd. As part of cleaning

the pipes, ITCO sometimes removed built-up “scale”

from inside some of the pipes. Id. at 36a. Scale is

caused by mineral salts, which precipitate as oil and

gas flow through pipes from underground reservoirs

to the surface. Id. at 48a-49a. Some of the scale in-

volved here contained radium sulfate, and over sev-

eral decades, the pipe cleaning activities led to the

accumulation of naturally occurring radioactive ma-

terial (“NORM”) on plaintiffs’ property. See App.

36a.

2. Although ExxonMobil and other oil companies

sent pipes to ITCO for cleaning beginning in the

early 1950s, it was not until 1986 that ExxonMobil

learned that some of the scale in the pipes contained

low levels of NORM. App. 43a-44a. After investigat-

ing that discovery, ExxonMobil prepared a videotape

and a letter advising pipe-cleaning contractors about

the presence of NORM in its pipes and the risks as-

sociated with it. Within nine months of the discov-

ery, ExxonMobil notified ITCO and stopped shipping

pipes to it for cleaning. Jd. at 44a. ITCO continued

to store contaminated pipes on the property until

1992, when it ceased all operations on plaintiffs’

land. Id. at 4a, 24a, 46a.

B. Proceedings Below

1. In August 1997, plaintiffs sued ExxonMobil,

other oil companies, other pipe-cleaning companies,

and ITCO itself, claiming that their property had

been damaged as a result of the cleaning and storage

of pipes on the property. App. 47a-49a. Plaintiffs

asserted claims for negligence, strict liability, abso-

lute liability, nuisance, fraud, and breach of contract.

Id. at 49a.

Plaintiffs did not assert any personal injury

claims or seek any medical monitoring relief, as they

do not live near or make personal use of the prop-

erty. Rather, plaintiffs sought damages for loss of

use and remediation of the property and punitive

damages. App. 49a Only the claims against

ExxonMobil and ITCO went to trial.

2. During a five-week trial in April and May of 7

2001, plaintiffs urged the jury to award massive pu-

nitive damages against ExxonMobil, based not on

harm to plaintiffs’ property, but instead on the risks

of physical harm allegedly posed to nonparties, in-

cluding ITCO employees and the public.

This campaign to punish ExxonMobil for poten-

tial physical injury to nonparties pervaded the trial.

In his opening statement, plaintiffs’ counsel de-

scribed NORM as “a very, very, very fine powder”

that will “blow all over the place,” R.32:17,! “travel

towards the houses,” R.33:19, and infiltrate churches

_and schools, R.33:200; R.34:38. Plaintiffs showed the

1 Citations to the trial court transcript are to the record

filed with the Court of Appeal and take the form

“R.[volume]:(page].”

jury a video of schoolchildren getting on and off a

bus near their property, implying that the children

had been exposed to harmful levels of radiation.

R.33:191-99. Plaintiffs suggested that radium from

plaintiffs’ property would enter the “food chain,”

R.29:131, and would cause cancer and birth defects,

R.29:137-41; R.32:131-36. Plaintiffs compared the

conduct in this case to the Exxon Valdez oil spill and

urged the jury to bring ExxonMobil “to an altar”

again. R.56:43. In closing, plaintiffs argued that

ExxonMobil left ITCO employees and the public

“unprotected” by failing to tell them about risks

posed by NORM. R.56:42.

Although this evidence had nothing to do with

the economic losses alleged by plaintiffs, they

claimed it showed that NORM “threatened” ITCO

employees and the public and thereby asked the jury

to award massive punitive damages against Exxon-

Mobil. R.33:193; see also R.29:108-09 (stating that

the evidence went to “the quantum of punitive dam-

ages”). ExxonMobil repeatedly objected to this in-

flammatory and irrelevant evidence. The trial court

overruled those objections. See, e.g., R.29:114, 138-

41; R.33:200; R.34:38.

3. Again over ExxonMobil’s objection, the trial

court instructed the jury that it could award punitive

damages against ExxonMobil if the company was

“wanton or reckless in [its] disregard for public

safety,” meaning that ExxonMobil knew that it was

“highly probable that harm to the public would re-

sult from [its] conduct.” App. 10a. The court refused

to instruct the jury, as ExxonMobil requested, that it

“fcould) only award exemplary damages” if Exxon-

Mobil had engaged in wanton and reckless conduct

that damaged the plaintiffs. See id. at 9a-1la (quot-

ing Exxon’s proposed instructions). Instead, the trial

court described harm to the plaintiffs as “[aJnother

factor” the jury could consider in determining the

amount of the award. Jd. at 11a.

4. During deliberations, the jury foreperson

“sent a note to the trial court inquiring as to whether

any of the punitive damage award would go to com-

pensate people in the community.” App. 99a n.26.

Although the court responded that the entire puni-

tive damages award would go to plaintiffs, the jury

awarded $1 billion in punitive damages against

ExxonMobil.2 App. 5a. The jury also awarded $56

million in remediation costs, which plaintiffs are not

required to expend on their $1.5 million property,

and $145,000 in general damages. Id. The trial

court entered judgment against ExxonMobil for a

staggering total of $1.056 billion, plus interest and

costs.

5. ExxonMobil appealed. On March 31, 2005,

the Fourth Circuit Court of Appeal affirmed the trial

court’s judgment. It rejected ExxonMobil’s state-law

arguments that would have reduced the compensa-

tory damages award. See App. 52a-75a.

2 That massive punitive damages award was returned de-

spite the fact that Article 2315.3 of the Louisiana Civil Code,

the state law authorizing punitive damages, did not exist until

September 1984, almost 30 years after ITCO started cleaning

pipes for ExxonMobil, and was repealed in April 1996, one and

one-half years before this lawsuit was filed. Because Exxon-

Mobil stopped shipping pipes to ITCO by March 1987, App.

18a, the statute was only in effect for less than three years out

of the decades of conduct at issue in this case.

In reviewing the constitutionality of the punitive

damages verdict, the Court of Appeal purported to

follow BMW, 517 U.S. 559, and State Farm, 538 U.S.

408. The court determined that ExxonMobil’s con-

duct was reprehensible, not based on the “strictly

economic harm” suffered by plaintiffs, but based on

ExxonMobil’s “nine-month delay in notifying ITCO

. . . of the dangers posed from handling NORM con-

taminated equipment.” App. 94a (emphasis added).

The Court of Appeal described ITCO, a co-defendant

in the original action, as “the target of the conduct,”

and found that ExxonMobil’s conduct “involve[d] an

element of deceit” because the company withheld

from ITCO information regarding the dangers of

NORM. Zd. at 96a.

The Court of Appeal “[nJext . . . considerfed] .. .

the disparity between” the amount of punitive dam-

ages awarded and plaintiffs’ actual harm. App. 96a.

At this point, the court recognized that the jury’s de-

liberations had been tainted by plaintiffs’ repeated

references to alleged health risks to the public:

Although the plaintiffs claimed only property

damage, and no physical harm, the trial court

allowed the plaintiffs to argue and present

substantial evidence, over Exxon’s objections,

of the potential and/or alleged actual harm to

other persons who were not parties to this

suit and whose claims were not before the

jury.

App. 98a. The court recognized that such evidence

“was irrelevant and, more than likely, confused the

jury, contributing to its exorbitant punitive damage

award,” which was “neither reasonable nor propor-

tionate to the amount of harm to the plaintiffs and to

the general damages recovered.” Id. at 99a-100a.5

Nevertheless, the Court of Appeal refused to or-

der a new trial to remedy that error. Instead, and in

the face of an admittedly “substantial” compensatory

award, App. 98a, the court “reduce[d]” the jury’s

award to “twice the general damage award,” which

the court decided was the “highest figure” that could

be awarded consisterit with due process. Jd. at 98a,

115a. The Court thus affirmed a punitive damages

award of $112 million dollars — 75 times the value of

the plaintiffs’ property and twice the $56 million in

compensatory damages. App. 115a.

6. ExxonMobil petitioned for rehearing, arguing

that the court erred in affirming the award of puni-

tive damages because “harm to third parties cannot

be punished.” Pet. Reh’g, Grefer v. Alpha Technical,

No. 2002-CA-1237 8. The Court of Appeals rejected

this argument as “an incorrect and exceedingly nar-

row reading of” this Court’s decision in State Farm.

App. 109a.

7. After unsuccessfully seeking review in the

Louisiana Supreme Court, ExxonMobil petitioned

this Court for a writ of certiorari. The Court granted

the writ, vacated the judgment, and remanded for

reconsideration of Williams, 127 S. Ct. 1057. App.

117a. The Court of Appeal instead “st[oo]ld by” the

obvious errors in its initial decree. Jd. at 33a. First,

the court concluded that the trial court “set forth a

correct statement of the law” when, over ExxonMo-

3 The court did not reconcile this holding with its reliance

on the harm to ITCO employees as a justification for the puni-

tive damages verdict. See App. 94a-96a, 99a.

bil’s objection, it instructed the jury that it could

award punitive damages for alleged risks to public

health and safety. App. 10a, 12a. Next, the court

reprinted approximately 7 pages of its original deci-

sion that focused on the harm to ITCO employees,

claimed that its original decision “t{ook] into account

all of the objections and concerns raised by Exxon...

in light of [Williams],” and insisted that potential

. harm to nonparties could be considered regardless

whether plaintiffs suffered the same kind of harm.

App. 32a; see id. at 3l1a-33a. The court refused to or-

der a new trial to remedy the introduction of the

admittedly irrelevant evidence of alleged harm to the

public. App. 27a. And the court again affirmed the

$112 million punitive damages award. Id. at 35a.

REASONS FOR GRANTING THE PETITION

The jury awarded $1 billion in punitive damages

based not on plaintiffs’ solely economic injury but on

the potential physical harm ExxonMobil’s conduct

allegedly posed to numerous individuals not before

the court — qualitatively different harms against

which ExxonMobil had no way to defend. The Court

of Appeal compounded that error by affirming $112

million in punitive damages despite acknowledging

the unfairness of the proceedings. This petition

raises three important issues warranting review:

First, this case offers the Court the opportunity to

confirm, for those courts that have been unwilling to

listen, that the Court meant what it said in Wil-

liams: Due process does not allow a jury to punish a

defendant for harm or potential harm that its con-

duct has allegedly imposed upon nonparties to the

litigation. This case also gives the Court the oppor-

tunity to eliminate any doubt that a nonparty’s dis-

similar harm may not be the basis for finding that a

defendant’s conduct toward the plaintiffs was repre-

hensible and deserving of punishment.

Second, even if the Court of Appeal otherwise ap-

plied the Court’s punitive damages precedents cor-

rectly, this case offers the Court the opportunity to

consider whether due process permits a reviewing

court to remedy a faulty instruction or jury’s im-

proper consideration of evidence of nonparty harm

with a reduction of the punitive damages award to

the maximum amount the Constitution permits,

rather than a new trial. There is a clear split in au-

thority in the lower courts regarding whether such a

reduction is a permissible remedy when the review-

ing court cannot determine what portion of the

award has been tainted by improper considerations.

This Court granted review of that question in BMW,

517 U.S. 559, but did not resolve it there or in Wil-

liams, see 127 S. Ct. at 1065. This case presents an

ideal vehicle for resolving the conflict.

Third, this case also provides a vehicle for the

Court to consider the maximum punitive damages

award (if any) that is permissible where compensa-

tory damages are undeniably “substantial.” State

Farm holds that, in cases of “substantial” compensa-

tory damages, punitive damages in an amount

“equal to compensatory damages” may be the maxi-

mum permissible under the Constitution. 538 U.S.

at 425. This case provides a striking example of the

confusion in the lower courts over when that 1:1 ra-

tio of punitive to compensatory damages is required.

This Court should grant the petition to provide addi-

tional guidance on that issue.

I. THE JUDGMENT BELOW DEFIES THIS

COURTS PRECEDENT BY AWARDING

PUNITIVE DAMAGES FOR HARM TO

NONPARTIES.

Plaintiffs sued ExxonMobil solely to recover the

costs of property damage. They did not allege or

prove that ExxonMobil exposed them to physical

harm. And they did not seek personal injury dam-

ages or medical monitoring. But the trial neverthe-

less became a referendum on whether ExxonMobil

should be punished for the alleged risk of health

problems it may have imposed on individuals “not

before the court.” Williams, 127 S. Ct. at 1060. The

Court of Appeal held that the trial comported with

Williams. App. 13a. The Court of Appeal is wrong.

As this Court explained in Williams, “the Consti-

tution’s Due Process Clause forbids a State to use a

punitive damages award to punish a defendant for

injury that it inflicts upon nonparties or those whom

they directly represent, i.e., . . . strangers to the liti-

gation.” 127 S. Ct. at 1063. The Court could not

have been clearer that the “potential harm” caused

by the defendant’s conduct is relevant only to the ex-

tent “that the potential harm at issue [i]s harm po-

tentially caused the plaintiff.” Id. (emphasis in

original). This is because “the Due Process Clause

prohibits a State from punishing an individual with-

out first providing that individual with ‘an opportu-

nity to present every available defense.” Williams,

127 S. Ct. at 1063 (quoting Lindsey v. Normet, 405

U.S. 56 (1972)). A “defendant threatened with pun-

ishment for injuring a nonparty victim has no oppor-

tunity to defend against thlat] charge,” such as by

offering specific evidence to demonstrate that the

nonparty victim was not injured. Id.

Accordingly, the Court in Williams stressed that

“it is constitutionally important for a court to provide

assurance... . that juries are not asking the wrong

question, i.e., seeking, not simply to determine rep-

rehensibility, but also to punish for harm caused

strangers.” Id. at 1064. States must “avoid proce-

dure that unnecessarily deprives juries of proper le-

gal guidance,” id., and offer “protection” where there

is a “significant [risk]” that the jury might “seek to

punish the defendant for having caused injury to

others,” id. at 1065 (emphasis omitted).

The risk of improper punishment here was over-

whelming. Plaintiffs urged, and the jury returned, a

punitive damages award of $1 billion based on every-

thing except economic harm to plaintiffs’ property.

“From their opening statements onward” and con-

tinuing “throughout the litigation,” State Farm, 538

U.S. at 420-21, plaintiffs urged the jury to award

punishment based on the threat of harm NORM al-

legedly posed to the community at large, as well as

risks allegedly posed to employees of ITCO and other

pipe-cleaning contractors.

The trial court did nothing to guard against the

obvious fact that the jury might punish ExxonMobil

for that nonparty harm. On the contrary, the court

invited the jury to impose punishment for “probable

.. . harm to the public.” App. 10a. That turns Wil-

liams on its head, “addling] a near standardless di-

mension to the punitive damages equation” that left

“the jury .. . to speculate” as to harm ExxonMobil’s

conduct may have caused an unknown number of

persons. Williams, 127 S. Ct. at 1063. ExxonMobil

objected to the court’s instruction, just as it had ob

jected to the evidence of alleged harm to nonparties

that the instruction invited the jury to consider. But

the trial court admitted the evidence and instructed

the jury over ExxonMobil’s objections.

The Court of Appeal recognized that the trial

court erred in allowing the jury to consider “irrele-

vant” and “confusling]” evidence “of the potential

and/or alleged actual harm to [nonparties].” App.

26a. But the court did not go far enough. Instead, it

insisted that “Exxon should be punished for its rep-

rehensible conduct” toward ITCO employees. App.

32a; see 21a-24a (identifying as “reprehensible” only

conduct that purportedly harmed ITCO employees).

Where the Court of Appeals erred — and erred

badly — was in refusing to acknowledge that punish-

ing ExxonMobil for alleged harm to an ITCO em-

ployee is no different from punishing ExxonMobil for

harm to a neighbor. If anything, it is worse: After

all, nonparties to this case had already then filed

their own class action lawsuits against ExxonMobil,

purporting to represent thousands of putative class

4 Although plaintiffs and the court relied on ExxonMobil’s

nine-month delay in annovncing the presence of NORM to

ITCO, the NORM was not a threat to plaintiffs’ health or

safety, and the decades of NORM deposited on the property

already required, before 1986, whatever remediation was ulti-

mately necessary. Given the “potential for causing mass hys-

teria in the community if the disclosure [of NORM] was made

in less than a careful manner,” App. 104a, any decision to allow

minimal additional contamination while ExxonMobil deter-

mined the proper way to alert ITCO can in no way be deemed

reckless, much less reprehensible, toward plaintiffs.

members, including pipe-cleaning employees, af-

fected by the pipes on the plaintiffs’ property. See,

e.g., In re Harvey TERM Litigation, No. 01-8708 (La.

Dist. Ct. Parish of Orleans, Div. D). The award thus

makes concrete the risk of duplicative punishment

the Court guarded against in State Farm, 538 US.

at 423, and Williams, 127 S. Ct. at 1064-1065.

Whereas ExxonMobil will be able “to defend itself

against the [employees] chargel[s]” in the separate

suits by establishing that its actions did not harm

workers, it had no such opportunity in plaintiffs’

case. See Williams, 127 S. Ct. at 1063.5

Thus, although Williams requires a “court to pro-

vide assurance that the jury will ask the right ques-

tion, not the wrong one,” 127 S. Ct. at 1064, the

Court of Appeal affirmed instructions that awarded

damages on the basis of “public . . . risk.” App. 10a.

And although Williams limited the relevant “poten-

tial harm” to “harm potentially caused the plaintiff,”

5 Although the Court of Appeal attempted to justify its fo-

cus on the harm to ITCO employees as “done simply to show

reprehensibility,” App. 32a, and not to provide a basis for pun-

ishment, that claim is belied by the court’s own analysis. See

App. 109a (rejecting as an “incorrect and exceedingly narrow

reading” of State Farm ExxonMobil’s arguments that its con-

duct toward ITCO employees could not serve as the basis for a

punitive damages award); id. at 24a (following this Court’s in-

struction to determine if “the harm” for which the defendant is

being punished “was the result of . . . deceit,” State Farm, 538

U.S. at 419, by determining that the “danger” posed to the

ITCO workers involved “an element of deceit”); id. at 22a (de-

scribing ITCO as the “target” of the punishable misconduct, see

State Farm 538 U.S. at 419); id. at 24a (deeming reprehensible

Exxon’s failure to warn of the “direct danger to the physical

health and safety of ([TTCO) workers” — a warning completely

unrelated to plaintiffs’ harm).

127 S. Ct. at 1063 (initial emphasis omitted), the

Court of Appeal instead focused on the reprehensi-

bility of ExxonMobil’s actions toward, and harm

done to, the ITCO employees. The Court of Appeal

in all respects failed to “take[] into account . . . the

objections and concerns raised by Exxon ... in light

of [Williams],” either in its original opinion or on re-

mand. Id. at 32a.6

Indeed, the constitutional violation in this case

runs far deeper than in Williams, where the claimed

harm to nonparties at least mirrored, and therefore

“ha[d] a nexus to[,] the specific harm suffered by the

plaintiff.” State Farm, 538 U.S. at 422. Here, by

6 Unfortunately, the Court of Appeal it is not alone in its

wholesale refusal to follow Williams — although it is the most

obvious. See, e.g., State ex rel. Chemtall Inc. v. Madden, 655

S.E.2d 161, 2007 WL 4098937 (W. Va. Nov. 15, 2007) (affirming

decision to try and award punitive damages for a class before

the class was defined or certified); id. at *7 (Benjamin, J., dis-

senting in part) (explaining that a court that determines puni-

tive damages before it selects its plaintiffs clearly contravenes

Williams’ mandate, as it prevents the defendant “from present-

ing every available defense” against the charges against it);

Williams v. Philip Morris, No. CC 9705-03957; CA A106791; SC

S051805, 2008 WL 256614 (Or. Jan. 31, 2008) (refusing, on re-

mand, to offer the “protection” against the “significant [risk]”

that the jury might “seek{] to punish the defendant for having

caused injury to others” because, “even assuming that [defen-

dant’s proposed limiting instruction] . . . clearly and correctly

articulated the standard required by due process,” the instruc-

tion “contained other parts that did not state the [state] law

correctly”). These errors are indefensible and inexplicable un-

der Williams, and this case provides the Court with the perfect

opportunity to grant certiorari and make clear that the lower

courts may not ignore its precedent at will.

contrast, there is a complete disconnect between the

plaintiffs’ solely economic harm and the potential

physical injuries allegedly caused to ITCO employees

and the public.

In State Farm, this Court held that, “to have rele-

vance in the calculation of punitive damages,” evi-

dence of a defendant’s conduct toward nonparties

“need not be identical,” 538 U.S. at 423, but it “must

be closely related.” Williams v. ConAgra Poultry Co..,

378 F.3d 790, 797 (8th Cir. 2004). This case presents

the Court the opportunity to hold that the same is

true in the context of nonparty harm: Where a de-

fendant’s conduct cannot be judged reprehensible by

virtue of harm it caused or potentially caused any

party to the litigation, due process does not permit a

plaintiff to predicate his bid for punishment solely

upon dissimilar harm that may befall strangers to

the litigation.

As noted above, the Court made clear in Williams

that the “potential harm” that may be considered for

purposes of determining the reasonableness of a pu-

nitive damages award is “harm potentially caused

the plaintiff’ because “a defendant threatened with

punishment for injuring a nonparty victim has no

opportunity to defend against the charge.” 127 S. Ct.

at 1063. A defendant faces that unconstitutional

deprivation of process when confronted with an alle-

gation that its conduct was reprehensible — “the

most important indicium of the reasonableness of a

punitive damages award,” BMW, 517 U.S. at 575 —

because of dissimilar harm to a nonparty. The deci-

sion to permit a plaintiff to argue reprehensibility

for harms he did not suffer forces the defendant to

anticipate and defend against a universe of injuries

when it has only been “charged” with one. Cf.

United Food & Commercial Workers Local 100A v.

John Hofmeister & Son, Inc., 950 F.2d 1340, 1344-

1345 (7th Cir. 1991). By the same token, allowing a

plaintiff to rely upon potential, dissimilar harm that

he has not suffered also makes intolerably likely the

“possibility of multiple punitive damages awards for

the same conduct.” State Farm, 538 U.S. at 423.

Unlike most cases, therefore, the Court in this

case may decide whether any punitive damages are

constitutionally available because the allegedly rep-

rehensible conduct purportedly harmed nonparties

in a qualitatively distinct way from plaintiffs’

claimed injuries. Because plaintiffs failed to dem-

onstrate, and the Court of Appeal never found, that

ExxonMobil’s conduct toward them was in any way

reprehensible, this Court should grant certiorari and

hold that the court erred in awarding any punitive

damages whatsoever.’

Il. THE LOUISIANA COURT OF APPEAL’S

DECISION TO REDUCE THE PUNITIVE

DAMAGES AWARD RATHER THAN ORDER

A NEW TRIAL DEEPENS A CONFLICT

AMONG THE LOWER COURTS.

In the alternative, even assuming that the Court

of Appeals properly applied State Farm and Wil-

liams and was warranted in awarding punitive

damages, this Court should grant the petition for

certiorari to resolve another critical issue: whether a

reviewing court may cure a procedural infirmity,

7 Given the Court of Appeal’s manifest failure to apply Wil-

liams, the Court may wish to consider summary reversal.

such as a jury’s consideration of improper evidence,

by reducing a jury’s punitive damages award to the

Maximum amount allowed by due process rather

than by granting a new trial. The question pre-

sented by this case was accepted for review, but not

ultimately addressed, by this Court in BMW.® 517

U.S. at 586. And the issue has arisen repeatedly

since the Court’s decision in that case, provoking a

conflict among the lower courts that was neither ad-

dressed nor resolved by Williams, where the Court

stated that application of the correct standard on

remand “may lead to the need for a new trial, or a

change in the level of the punitive damages award,”

but did not clarify under what circumstances a new

trial would be necessary. 127 S. Ct. 1065.

8 BMW asked this Court to address “[w]hether the Alabama

Supreme Court, having found that the jury's $4,000,000 puni-

tive damages verdict unconstitutionally punished petitioner for

hundreds of transactions that occurred entirely outside of Ala-

bama, was obligated to provide a meaningful remedy for that

constitutional violation.” Pet. for a Writ of Certiorari at i,

BMW v. N. Am., Inc. v. Gore, 517 U.S. 559 (1996) (No. 94-896),

1994 WL 16011916 (Nov. 17, 1994) (first question presented).

The Court granted review on that question, 513 U.S. 1125

(1995), and BMW argued that the Court could provide a “mean-

ingful remedy” for the constitutional violation in one of two

ways: It could either order a new trial on punitive damages, or

it could order a remittitur that removed all of the extraterrito-

rial punishment, the amount of which was clear from the pre-

cise way in which the jury had calculated punitive damages.

Petr’s Br. 23-26, BMW of N. Am., Inc. v. Gore, 517 U.S. 559

(1996) (No. 94-896), 1995 WL 126508 (Mar. 23, 1995). The

Court left the “appropriate remedy” for the constitutional error

to “be addressed by the state court in the first instance,” BMW,

517 U.S. at 586, thereby leaving for that court the issue of rem-

edy in that particular case.

A. There Is A Conflict In The Lower Courts

Over The Proper Remedy When A Puni-

tive Damages Award Is Tainted By Im-

proper Evidence Or Instructional Error.

The decision below exacerbates a conflict in the

lower courts concerning the appropriate remedy in

situations where, as here, a procedural violation

tainted the fairness of the trial proceedings.

1. A number of courts, both before and after

Williams, have held that a reviewing court must or-

der a new trial when a jury’s award of punitive dam-

ages is based either on improper evidence or instruc-

tions. For example, in White v. Ford Motor Co., 312

F.3d 998 (9th Cir. 2002) (“White II”) the Ninth Cir-

cuit held that merely reducing a punitive damages

award to the maximum amount permitted by due

process could not cure the constitutional error in

that case (allowing the jury to award punitive dam-

ages based on extra-territorial conduct) because the

appellate court could not know what amount of dam-

ages the jury would have awarded if limited to con-

stitutional bounds:

Possibly the jury would have chosen as large

an award had it been told to vindicate only

the rights of Nevadans, but possibly it would

have chosen a substantially lower award. For

all we know, the jury would have applied a

much lower ratio than the thirty to one the

[district] court chose, or the sixty-six to one

that the jury initially chose.

Id. at 1016.

The court of appeals ordered the same remedy

when it reconsidered White after Williams. Again,

the court “conclude[d] that a new trial on punitive

damages [wa]s the proper remedy” for a district

court’s failure to instruct the jury correctly. White

v. Ford Motor Co., 500 F.3d 963 (9th Cir. 2007); see

Merrick v. Paul Revere Life Ins. Co., 500 F.3d 1007,

1017-18 (9th Cir. 2007) (vacating punitive damages

verdict for Williams violation and remanding for new

trial; noting that it could use “remittitur [to] remedy

a jury award deemed unconstitutionally excessive,”

but deciding against that approach “where the con-

stitutional error stems from misguidance regarding

the way the jury may use evidence in setting an

amount”); see also Hansen v. Boyd, 161 U.S. 397,

411-12 (1896) (remittitur is allowed only if the court

can “clearly distinguish and separate” the “erroneous

part” of the judgment).

The California Court of Appeal echoed that ra-

tionale in its recent decision in Bullock v. Philip

Morris USA, Inc., --- Cal. Rptr. 3d ----, 2008 WL

240989 (Ct. App. 2d Dist. Jan. 30, 2008), where it

rejected the plaintiffs argument that “the appropri-

ate remedy for any instructional error with respect

to punitive damages is for thle] court to reduce the

amount of punitive damages awarded by the jury by

way of remittitur.” Id. at *22. The court concluded

that a remittitur “would be inappropriate” because

the court “[could not] determine how the instruc-

tional error that [it had] found affected the amount

of the punitive damages award and [it could not]

substitute [its] own assessment of the appropriate

amount of punitive damages for that of a jury.” IJd.;

accord Sand Hill Energy, Inc. v. Smith, 142 S.W.3d

153, 157 (Ky. 2004) (determining that only a new

trial on punitive damages could remedy the jury’s

improper use of extra-territorial conduct in calculat-

ing punitive damages, and providing model jury in-

structions and verdict form to guarantee due process

in new trial).

2. Other courts like the court below, however,

have reached the opposite conclusion by holding that

a jurys consideration of improper evidence or im-

proper instructions may properly be remedied by

simply reducing the award of punitive damages to

the maximum amount due process permits. For ex-

ample, in Henley v. Philip Morris Inc., 9 Cal. Rptr.

3d 29, 71-72 (Ct. App. ist Dist. 2004), review

granted, 88 P.3d 497 (Cal. 2004), review dismissed,

97 P.3d 814 (Cal. 2004), the jury heard “substantial

evidence of wrongful conduct outside California,”

and the court nonetheless decided that “any error in

the consideration of this evidence [would be] suffi-

ciently redressed” by reducing the $50 million award

to $9 million, the amount it believed a properly in-

structed jury would choose. 9 Cal. Rptr. 3d at 71-72;

see Romo v. Ford Motor Co., 6 Cal. Rptr. 3d 793, 805,

812 (Ct. App. 2003) (holding award not limited to

party harm would be cured by a reduction to the

amount “a properly instructed jury likely would

award”), overruled in part on other grounds by Peo-

ple v. Ault, 95 P.3d 523 (Cal. 2004).

Similarly, in Williams v. ConAgra Poultry Co.,

378 F.3d at 797-98, the Eighth Circuit reduced to the

constitutional maximum an award of punitive dam-

ages that was based on “evidence of [racial] harass-

ment not suffered by [the plaintiff].”°

9 More recently, Eighth Circuit Judge Bye has criticized

that approach, arguing that “[t]he proper remedy for instruc-

In Ford Motor Co. v. Ammerman, 705 N.E.2d 539,

559-62 (Ind. Ct. App. 1999), the Indiana Court of

Appeals likewise approved the reduction of a puni-

tive damages award based on extra-territorial con-

duct, concluding that the error would be cured by

“reducling] the $58 million award to $13.8 million,

which represented Ford’s retooling costs [to make

the Bronco II more stable], along with an additional

$54.00 representing the cost for additional hardware

installed on each vehicle” — a calculation that was

never even presented to the jury as an option. Id. at

559.

There is thus a significant conflict among the cir-

cuits and the state courts over the proper remedy for

improper consideration of nonparty harm. The

Court should grant the petition and resolve this re-

curring question on which it granted review in

BMW.

B. This Court Should Hold That Judicial

Reduction Of The Award To A “Constitu-

tional Maximum” Is Not The Appropriate

Remedy For An Award Based On Consti-

tutionally Invalid Instructions.

In this case, the appellate court reduced the puni-

tive damages award to the “highest figure” it deemed

tional error is a new trial on damages.” See Boerner v. Brown

& Williamson Tobacco Co., 394 F.3d 594, 606-607 (8th Cir.

2005) (Bye, J., concurring in result) (explaining that he “[d]id

not believe the punitive damages instruction . . . sufficiently

limited the jury’s consideration to the damages suffered by [the

plaintiff],” and arguing that “a remittitur normally should not

be used to cure an instructional error” unless a defendant has

agreed to it).

consistent with due process, App. 110a, as if the only -

defect in the jury's award was that it was too high.

But the award was tainted because it was based on

improper evidence, and that problem should have

-been remedied through a new punitive damages

trial. When the Constitution has been violated,

courts must provide a remedy that redresses that

violation. See, e.g., Marbury v. Madison, 5 U.S. (1

Cranch) 137, 161-63 (1803). A reduction of punitive

damages to the highest amount allowed under the

Constitution does not cure — or even address — the

constitutional violation. The proper redress is in-

stead to allow an untainted jury to decide the proper

amount of punitive damages.

This Court’s precedents compel that conclusion.

As this Court has held in Williams, State Farm, and

BMW, an award can violate due process either be-

cause it exceeds the due-process maximum, or be-

cause it impermissibly bases punitive damages on

conduct that did not harm plaintiffs. See Williams,

126 S. Ct. at 1062-63; State Farm, 538 U.S. at 416-

17; BMW, 517 U.S. at 574-75. These two limitations

on punitive damages require different remedies. In

the first situation - substantive excessiveness — a

reviewing court may remedy an excessive award by

reducing it, because the court knows how much the

(properly charged) jury awarded, and it is the re-

viewing court’s responsibility to determine the con-

stitutional maximum. See Cooper Indus. v.

Leatherman Tool Group, Inc., 532 U.S. 424, 436

(2001) (mandating de novo review of the constitu-

tionality of punitive damages awards).

But in the second situation — improper evidence

or instructions — a reduction in the award to the con-

stitutional maximum does little to remedy the error

because the reviewing court has no way of knowing

what weight the jury gave to the improper consid-

erations and thus what portion of the verdict is in-

fected. See, e.g., White II, 312 F.3d at 1016. The

jury’s tainted verdict, of course, provides no helpful

starting point. Attempting to “cure” a jury’s consid-

eration of improper conduct in awarding punitive

damages by reducing the amount of the award is no

less unsatisfying than remedying the use of a co-

erced confession in a criminal trial by reducing the

defendant’s ultimate sentence.

The reduction of a tainted award cannot cure the

procedural errors the trial court made here. Even

assuming that there was evidence of harm to plain-

tiffs that could have justified an award of punitive

damages, the jury might have decided to award no

punitive damages — or at least an amount signifi-

cantly under the constitutional maximum — based

solely on the harm to plaintiffs’ property. See 1 Dan

B. Dobbs, The Law of Remedies, § 3.11(1), at 458 (2d

ed. 1993); see also, e.g., Smith v. Wade, 461 U.S. 30,

52 (1983) (a jury generally has the discretion to

award zero punitive damages, even when it finds

that the factual predicate for punitive damages has

been established). When a jury’s verdict is infected

by the consideration of improper evidence, reduction

of the verdict to the maximum allowed by due proc-

ess does nothing to ensure that the defendant has

not been punished based on unconstitutional consid-

erations. This Court should grant certiorari and

hold that a new trial is the appropriate remedy.

i. THE COURT OF APPEAL’S IMPOSITION

OF A 2:1 RATIO OF PUNITIVE TO

COMPENSATORY DAMAGES DEEPENS A

DIVIDE IN THE LOWER COURTS.

Apart from the Court of Appeal’s error in failing

to identify and remedy the jury’s consideration of ir-

relevant harm to nonparties, the punitive damages

award in this case is excessive. This Court recog-

nized in State Farm that compensatory damages

have a deterrent function, and that when compensa-

tory damages are substantial, a State miay have no

further interest in punishing and deterring a defen-

dant. See 538 U.S. at 419. If punitive damages may

be awarded at all in cases of substantial compensa-

tory damages, the Court suggested, the maximum

permissible ratio of punitive to compensatory dam-

ages is 1:1. Yet the lower courts remain confused

regarding when the 1:1 upper limit is appropriate.

This Court should grant the petition to provide clar-

ity on this issue.

A. The Decision Below Disregards State

Farm And Highlights A Split In The

Lower Courts Regarding The Permissible

Ratio When Compensatory Damages Are

Substantial.

The punitive damages award of $112 million was

affirmed despite the fact that plaintiffs were

awarded $56 million in remediation costs, which far

exceeded the actual loss of the $1.5 million value of

their property.!° The Court of Appeal’s approval of a

10 Louisiana law permits a jury to award as damages the

cost of remediating a property, even if that cost exceeds the

value of the property itself. See App. 63a-67a (discussing Ro-

man Catholic Church of the Archdiocese of New Orleans v. La.

Gas Serv. Co., 618 So. 2d 874 (La. 1993)).

2:1 ratio of punitive damages cannot be squared with

State Farm, which teaches that, at most, a 1:1 ratio

is appropriate in this case.

In State Farm, this Court addressed the purposes

served by punitive damages awards: punishment

and deterrence. It recognized that, where “compen-

satory damages are substantial,” there is significant

punishment and deterrence even before any amount

of punitive damages are awarded. 538 U.S. at 425

(finding substantial $1 million compensatory award).

In the amount of a “substantial” compensatory

award, therefore, “[i]t should be presumed a plaintiff

has been made whole for his injuries by compensa-

tory damages, so punitive damages should only be

awarded if the defendant's culpability, after having

paid compensatory damages, is so reprehensible as

to warrant the imposition of further sanctions to

achieve punishment or deterrence.” 538 U.S. at 419

(emphasis added).1

11 Indeed, this Court has made clear that, where the State’s

legitimate interest in punishment and deterrence is fully vindi-

cated by a compensatory award, a court has no legitimate basis

on which to award punitive damages at all. See Memphis

Cmty. Sch. Dist. v. Stachura, 477 U.S. 299, 307 (1986)

(“(djeterrence .. . operates through the mechanism of damages

that are compensatory”); Beliz v. W.H. McLeod & Sons Packing

Co., 765 F.2d 1317, 1332-33 (5th Cir. 1985) (deterrence “may be

achieved without awarding exemplary damages” if compensa-

tory damages are large); see also Gertz v. Robert Welch, Inc.,

418 U.S. 323, 349-50 (1974) (holding punitive damages uncon-

stitutional in certain defamation actions because they are

“wholly irrelevant to the state interest that justifies a negli-

gence standard for private defamation actions”); Bettius &

Sanderson, P.C. v. Natl Union Fire Ins. Co., 839 F.2d 1009,

1016-17 (4th Cir. 1988) (punitive damages unrecoverable

against insurance company where a different doctrine of state

But even assuming that some punitive damages

are necessary for punishment and deterrence even

after a substantial compensatory verdict, State Farm

teaches that “a lesser ratio, perhaps only equal to

compensatory damages, can reach the outermost

limit of the due process guarantee.” 538 U.S. at 425.

The lower courts have given varying weight to this

aspect of State Farm, with some strictly adhering to

a maximum ratio of 1:1 in cases of substantial com-

pensatory damages, and others disregarding it en-

tirely. For example, several courts have limited the

ratio of punitive to (substantial) compensatory dam-

ages to roughly 1:1, even in cases involving serious

physical harm or intentional misconduct. See, e.g.,

Estate of Moreland v. Dieter, 395 F.3d 747, 757-58

(7th Cir. 2005) ($27.5 million in punitives on $29

million in compensatories for beating and death);

Boerner, 394 F.3d at 602-03 ($5 million in punitives

on $4 million in compensatories for design defect

that caused illness and death); Stamathis v. Flying

J, Inc., 389 F.3d 429, 443 (4th Cir. 2004) ($350,000

in punitives on $250,000 in compensatories for

defamation and malicious prosecution).

By contrast, other courts have sanctioned much

higher ratios, effectively ignoring State Farm. See,

e.g., Action Marine, Inc. v. Cont Carbon, Inc., 481

F.3d 1302 (11th Cir. 2007) (ratio of over 5:1 based on

$3.2 million in compensatories for claims of trespass

and misrepresentation based on company’s emission

of pollutant), petition for cert. filed, 76 U.S.L.W. 3082

(U.S. Aug. 24, 2007) (No. 07-257); Seltzer v. Morton,

law already “punishe[d] the insurer for its bad faith .. . and

deter|red) similar conduct by other insurance companies”).

154 P.3d 561 (Mont. 2007) (ratio of over 18:1 based

on $1.1 million in compensatories for abuse of proc-

ess and malicious prosecution); Rhone-Poulenc Agro,

S.A. v. DeKalb Genetics Corp., 345 F.3d 1366, 1371-

72 (Fed. Cir. 2003) (3:1 ratio based on $15 million in

compensatories for patent infringement and related

claims); Williams v. Philip Morris, Inc., 127 P.3d

1165, 1182 (Or. 2006) (97:1 ratio based on $800,000

in compensatories for fraud).

B. This Court Should Grant Review And In-

struct That In This Case Of Substantial

Compensatory Damages, Punitive Dam-

ages Were Not Warranted At All, Much

Less In A Ratio Of 2:1

The Court should use this case as a vehicle to

clarify where the outermost limit of due process lies

when compensatory damages based on economic

harm are unquestionably substantial.

In this case, the $112 million punitive damages

award affirmed by the Court of Appeal far exceeds

the limits of punishment and deterrence allowed un-

der the Due Process Clause. It is undisputed that

plaintiffs suffered only economic injury, App. 55a,

and the $56 million compensatory award allows (but

does not require) them to completely remediate their

$1.5 million property to their own standards — stan-

dards far above anything that even the Louisiana

Department of Environmental Quality (“DEQ”)

deemed necessary.!2 Given the solely economic in-

2 The DEQ entered this litigation in support of ExxonMobil

to point out that the “faillure) to follow or apply DEQ regula-

tions in cases involving environmental remediation” results in

inflated compensatory damages awards like the one here,

jury and the substantial compensatory damages

award that afforded “complete compensation” — and

then some — this is the paradigm case in which no

punitive damages are necessary to punish or deter.

State Farm 538 U.S. at 426.

Certainly the amount awarded bears no “reason-

able relationship” to plaintiffs’ injury. BMW, 517

U.S. at 580. As the Court explained in State Farm,

the careful balancing between punitive and compén-

satory damages is intended to ensure that any pun-

ishment imposed is proportionate to the “harm suf-

fered by the plaintiff.” 538 U.S. at 418 (emphasis

added). That balancing requires an accurate as-

sessment of the plaintiffs harm, not rote multiplica-

tion of a “compensatory” award that does far more

than compensate. See id. at 426 ( “The compensa-

tory damages for the injury suffered . . . likely were

based on a component which was duplicated in the

punitive award.”); Bach v. First Union Nati Bank,

149 F. App’x 354, 366 (6th Cir. 2005) (describing ra-

tio of over 6:1 “alarming” and noting that “much of

the compensatory damage award must be attribut-

able to [plaintiffs] pain and suffering,” which “com-

pelfled] the conclusion that the punitive damage

award [wa]s duplicative”). Allowing punitive dam-

ages to be based on the multiplication of an already-

exaggerated award distorts the balance between

which in turn result in inflated punitive damages awards.

Amicus Curiae Br. of La. DEQ 5, Grefer v. Alpha Technical, No.

05-C-1590 (La. June 23, 2005). The cost to remediate plaintiffs’

property to DEQ standards for unrestricted use was far less

than the $56 million award: $46,000 according to ExxonMobil’s

expert and $1,387,310 according to one of plaintiffs’ witnesses.

App. at 35-36a.

punishment and compensation and allows plaintiffs

to circumvent the limitations of State Farm and

BMW by seeking inflated compensatory damages in

the first instance. |

In this case, plaintiffs’ actual harm for ratio pur-

poses is at most the value of the $1.5 million prop-

erty, not the $56 million awarded for plaintiffs might

use to remediate it. At any rate, no additional pun-

ishment or deterrence is necessary beyond the $56

million “compensatory” award.

If this Court’s precedent does permit punishment

beyond the compensatory damages awarded here,

certainly the maximum permissible ratio is 1:1. The

Court of Appeal recognized that the $56 million

award is undeniably “substantial” within the mean-

ing of State Farm, acknowledged State Farm’s teach-

ing that a 1:1 ratio is the maximum allowed under

such circumstances, and all but sanctioned a 1:1 ra-

tio of punitive to compensatory damages when it

stated that, in light of the “substantial” compensa-

tory award and the fact that “plaintiffs claimed only

property damage,” “a punitive damages award cioser

to the amount of compensatory damages” was ap-

propriate. Jd. at 25a, 26a. The Court of Appeal

nonetheless imposed, without any explanation, a 2:1

ratio instead. That award cannot be justified by any

need for punishment or deterrence, and this Court

should grant certiorari to reiterate that State Farm

does not permit it.

* * *

The punitive damages award in this case defies

Williams and raises serious constitutional questions

left unanswered by Williams, BMW, and State Farm.

Those questions have percolated in the lower courts

for a number of years and created significant splits

in authority. This Court should grant. the petition

and (1) hold that plaintiffs are not entitled to any

award of punitive damages when the alleged harm

that served to make the defendant’s conduct repre-

hensible was suffered (if at all) only by nonparties to

the case and not by plaintiffs; (2) set forth the proper

remedy for improper reliance upon harms to nonpar-

ties; and (3) consider the substantive limits on an

award of punitive damages when compensatory

damages are substantial. Given the Court of Ap-

peal’s manifest failure to apply Williams, this Court

could summarily reverse.

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted,

GLEN M. PILIE WALTER DELLINGER

RONALD J. SHOLES (Counsel of Record)

LOUIS C. LACOUR, JR. MATTHEW M. SHORS

MARTIN A. STERN KATHRYN E. TARBERT*

ADAMS AND REESE LLP O’MELVENY & MYERS LLP

4500 One Shell Square 1625 Eye Street, N.W.

New Orleans, Louisiana Washington, D.C. 20006

70139 (202) 383-5300

(504) 581-3234

“Admitted only in Wisconsin;

supervised by principals at the

firm

February 14, 2008

APPENDIX A

LOUISIANA COURT OF APPEAL OPINION ON

REMAND FROM UNITED STATES SUPREME

COURT

No. 2002-CA-1237

COURT OF APPEAL, FOURTH CIRCUIT

STATE OF LOUISIANA

* AK KOK

JOSEPH GREFER, CAMILLE GREFER, ROSE

MARIE GREFER HASSI AND HENRY GREFER,

ALPHA TECHNICAL, ET AL.

KKK *

APPEAL FROM

CIVIL DISTRICT COURT,

ORLEANS PARISH

NO. 97-15004, DIVISION “A”

HONORABLE CAROLYN

GILL-JEFFERSON, JUDGE

* KOK Ok

JUDGE LEON A. CANNIZ-

ZARO, JR.

ke KK HH

(COURT COMPOSED OF JUDGE MICHAEL E.

KIRBY, JUDGE MAX N. TOBIAS, JR., JUDGE

LEON A. CANNIZZARO, JR.)

ON REMAND FROM THE SUPREME COURT

OF THE UNITED STATES

ANDREW B. SACKS

JOHN K. WESTON

LAW OFFICES OF ANDREW B. SACKS AND AS-

SOCIATES

114 OLD YORK ROAD

JENKINTOWN, PA 19046

AND

STUART H. SMITH

MICHAEL G. STAG

SMITH & STAG, L.L.C.

365 CANAL STREET

2850 ONE CANAL PLACE

NEW ORLEANS, LA 70130

AND

STEPHEN B. MURRAY

ARTHUR M. MURRAY

MURRAY LAW FIRM

909 POYDRAS STREET

SUITE 2550

NEW ORLEANS, LA 70112-4000

AND

RON A. AUSTIN

AUSTIN & ASSOCIATES, L.L.C.

400 MANHATTAN BOULEVARD

HARVEY, LA 70058-4442

AND

JACK W. HARANG

HARANG & BARKER, L.L.C

3500 NORTH HULLEN STREET

METAIRIE, LA 70002

AND

RALPH R. ALEXIS III

PORTEOUS, HAINKEL & JOHNSON, LLP

704 CARONDELET STREET

NEW ORLEANS, LA 70130-3774

COUNSEL FOR PLAINTIFFS, JOSEPH GRE-

FER, ET AL.

GLEN M. PILIE

RONALD J. SHOLES

LOUIS C. LACOUR, JR.

MARTIN A. STERN

ADAMS AND REESE LLP

701 POYDRAS STREET

4500 ONE SHELL SQUARE

NEW ORLEANS, LA 70139

COUNSEL FOR APPELLANTS, EXXON MOBIL

CORPORATION

AMENDED, AND AS AMENDED, AFFIRMED

AUGUST 8, 2007

The Supreme Court of the United States (“U.S.

Supreme Court”) vacated our judgment previously

rendered in Grefer v. Alpha Technical, 2002-1237

(La. App. 4 Cir. 3/31/05), 901 So. 2d 1117, and re-

manded the matter for our further consideration in

light of its decision in Philip Morris USA v. Wil-

liams, 549 U.S.___, 127 S. Ct. 1057 (2007).

Factual Summary and Procedural History

The plaintiffs, Joseph Grefer, Camille Grefer,

Rose Marie Grefer Haase and Henry Grefer (“the

Grefers”), filed suit in August of 1997 against the de-

fendants, Exxon Mobil Corporation (“Exxon”) and

Intracoastal Tubular Services, Inc. (“ITCO”), among

others, to recover damages for the contamination of a

33-acre tract of land with radioactive material.2 Be-

tween 1968 and 1992, ITCO, an oil field service com-

pany, had leased the land from Mrs. Camille Grefer

for its business operations, which included the clean-

ing, inspecting, testing, threading, transporting and

storage of oil well tubulars (pipe) for Exxon and

other oil companies.

The Grefers asserted causes of action in negli-

gence, strict liability, absolute liability, nuisance,

1 Exxon Mobil Corporation. v. Grefer, 549 U.S. ____—, 127 S.. Ct.

1371, 167 L. Ed. 2d 156 (2007).

2 The immovable property at issue was part of a larger tract of

land purchased by the plaintiffs’ great grandfather in 1875 and

since then has remained in the Grefer family. The plaintiffs

acquired the naked ownership of three-fourths (3/4ths) of the

immovable property in February 1945 upon the death of their

father, Archibald J. Grefer, Sr., and full ownership of the entire

tract in March 1996 upon the death of their mother, Camille

Claire Antoine Grefer.

- fraud, and breach of contract. They sought compen-

satory damages for the loss of use and remediation of

the property as well as punitive damages pursuant

to La. C.C. art. 2315.3.3 After a five-week trial, the

jury returned a verdict in favor of the Grefers and

awarded them compensatory damages in the amount

of $ 56,145,000.00, which included $ 145,000.00 in

general damages and $ 56,000,000.00 in restoration

costs (special damages), as well as exemplary (puni-

tive) damages in the amount of one billion dollars.

The jury allocated 85% of the fault to Exxon, 5% to

ITCO, and 10% to two absent defendants. The jury

also found that “ITCO [was] entitled to recover ‘rom

Exxon all amounts awarded against ITCO under its

counterclaim against Exxon[.]” After the trial court

held a separate hearing to consider the merits of an

exception of prescription filed by Exxon, the trial

judge rendered a judgment denying the exception

and a judgment in accord with the jury’s verdict.

Exxon, ITCO and the Grefers appealed. On appeal,

we amended the judgment reducing the one billion

dollar punitive award to $ 112,290,000.00, an

3 La. C.C. art. 2315.3 was originally enacted as La. C.C. art.

2315.1 by Acts 1984, No. 335, § 1. It was redesignated as Arti-

cle 2315.3 under the authority of the Louisiana State Law In-

stitute in 1986. It was repealed by Acts 1996, lst Ex. Sess., No.

2, § 1, effective April 16, 1996. Article 2315.3 had provided:

In addition to general and special dam-

ages, exemplary damages may be awarded, if it is

proved that plaintiffs injuries were caused by the

defendant’s wanton or reckless disregard for pub-

lic safety in the storage, handling, or transporta-

tion of hazardous or toxic substances. As used in

this Article, the term hazardous or toxic sub-

stances shall not include electricity.

amount equal to twice the compensatory award, and

affirmed the judgments in all other respects. See

Grefer, supra. The Grefers and Exxon applied for

Writs of Certiorari to the Louisiana Supreme Court,

which were denied.

Exxon subsequently filed motions to stay the exe-

cution of the judgment with both the Louisiana Su-

preme Court and the U.S. Supreme Court, which

were denied.

Thereafter, Exxon applied to the U.S. Supreme

Court for a Writ of Certiorari, which the Court

granted, vacating our decision and remanding the

matter for further consideration. See n. 1, infra.

The Philip Morris case

In Philip Morris, the U. S. Supreme Court va-

cated the decision of the Oregon Supreme Court that

had upheld an award of punitive damages against

Philip Morris. The U.S. Supreme Court found that

although a plaintiff who seeks punitive damages

may show harm to others who are nonparties to the

litigation as a means of demonstrating the reprehen-

sible nature of the defendant’s conduct, a jury may

not use punitive damages to punish a defendant “di-

rectly on account of harms it is alleged to have vis-

ited on nonparties.” Philip Morris, 549 U.S. at___,

127 S. Ct. at 1064. The Court additionally found that

the Due Process Clause of the United States Constitu-

tion requires that the States make assurances that

4 Grefer v. Alpha Technical, 2005-1590, 2005-1259 (La.

3/31/06), 925 So. 2d 1248.

juries are not basing punitive damage awards on

improper precepts. That is, although a jury may con-

sider the reprehensibility of the defendant’s conduct

in determining that punitive damages are war-

ranted, it may not consider and ultimately punish a

defendant for the harm caused to those who are not

parties to the litigation.

The Philip Morris case arose out of the death of

Jesse D. Williams, a heavy cigarette smoker. The

plaintiff, Mr. Williams’ widow, Mrs. Mayola Wil-

liams, represented his estate in the lawsuit filed in

Oregon state court against Philip Morris, the manu-

facturer of Marlboro, the decedent’s favorite brand of

cigarette. The plaintiff sought compensatory and pu-

nitive damages against Philip Morris.

At the conclusion of the trial, Philip Morris had

requested that the trial court give to the jury an in-

struction with regard to punitive damages. The re-

quested instruction prohibited the jury from making

an award of punitive damages for the impact of the

defendant’s alleged misconduct on other persons who

may bring their own lawsuits in which juries can re-

solve their claims and award punitive damages for

those harms as such juries see fit. The trial court re-

fused to give the instruction and Philip Morris ob-

jected. This was the sole basis upon which the U.S.

Supreme Court granted Philip Morris’ writ applica-

tion. We are to now consider the Philip Morris deci-

sion in resolving Grefer as the U.S. Supreme Court

directed.

The jury instructions in Grefer

At the trial in Grefer, Exxon proposed two jury

instructions with respect to exemplary damages. The

first, Exxon’s Proposed Instruction 17, reads as fol-

lows:

EXEMPLARY DAMAGES -- GENERALLY

In this particular case, Louisiana law permits

you to consider an additional element of damages

called exemplary damages (or called “punitive dam-

ages” in other states).

You may only award exemplary damages if the

plaintiffs prove, by a preponderance of the evidence,

that:

(1) the defendant’s conduct was

wanton and reckless;

(2) the danger created by the de-

fendant’s wanton and reck-

less conduct threatened or

endangered public safety;

(3) the defendant’s wanton and

reckless conduct occurred in

the storage, handling, or

transportation of hazardous

or toxic substances; and

(4) the plaintiffs’ damages were

caused by the defendant’s

wanton and reckless conduct.

The phrase “wanton and reckless” means a con-

scious indifference to consequences, amounting al-

most to a willingness that harm to the public safety

would follow. Stated another way, wanton and reck-

less conduct is that which amounts to intentional

and deliberate action that has the character of out-

rage frequently associated with crime.

Unless you find that the defendant acted with

almost a willingness that harm to the public safety

would follow, then you may not award exemplary

damages.

Even if you decide that the plaintiffs are entitled

to exemplary damages, you may not award such

damages for conduct that the defendants engaged in

before 1984 or after 1996. Under Louisiana law, the

plaintiffs are not entitled to exemplary damages for

conduct that the defendants engaged in before 1984

or after 1996. [footnote omitted]

The second instruction, Exxon’s Proposed In-

struction 18, states,

EXEMPLARY DAMAGES -- DISCRETIONARY

Exemplary damages are within your discretion.

This means that even if you find that the defendants’

conduct was wanton or reckless, you are not required

to award exemplary damages to the plaintiffs. [foot-

note omitted]

The trial judge rejected the aforementioned in-

structions proposed by Exxon and instructed the jury

on exemplary damages as follows:5

5 For ease of reference, we have numbered the paragraphs in

the jury instructions.

10a

(1) Under our law, in addition to the

award of damages to compensate a plaintiff

for the injuries suffered, you may award ex-

emplary damages against a defendant when

the plaintiff shows that the defendants were

wanton or reckless in their disregard for pub-

lic safety in the storage, handling or trans-

port of hazardous or toxic substances.

(2) For the purposes of awarding exem-

plary damages, “wanton” and “reckless”

mean something more than mere negligence.

The defendant must have known that public

safety was at risk or should have known it

was highly probable that harm to the public

would result from his conduct. In other

words, in order to find “wanton” or “reckless”

conduct, a plaintiff must prove the defen-

dant’s alleged acts and omissions of negli-

gence were accompanied by a conscious indif-

ference to consequences amounting almost to

a willingness that harm to the public safety

would follow.

(3) Exemplary damages are regarded as a

fine or penalty for the protection of the public

interest. Such damages are given to the

plaintiff over and above the full compensa-

tion for the plaintiffs losses for the purpose

of punishing the defendant, of teaching the

defendant not to do it again, and of deterring

others from following the defendant’s exam-

ple. Exemplary damages are not awarded to

benefit the injured party but to compel the

wrongdoer to have due and proper regard for

the rights of the public. You should award an

amount of exemplary damages which you

lla

feel will be reasonably likely to accomplish

that purpose in this case.

(4) Another factor you may consider in de-

termining the amount of exemplary damage

award is the nature and the extent of the

harm to the plaintiffs. You may also consider

each defendant’s financial position when de-

termining the amount of exemplary damages

to be awarded because the award is meant to

be meaningful enough to actually deter

wrongful conduct.

(5) Even if you decide that the plaintiffs

are entitled to exemplary damages, you may

not award such damages for conduct that the

defendants engaged in before 1984 or after

1996.

(6) Exemplary damages are within your

discretion. This means if you find that the

defendant’s conduct was wanton or reckless,

you are not required to award exemplary

damages to the plaintiffs.

Discussion

The trier of fact may consider the following fac-

tors in awarding exemplary damages:(1) the nature

and extent of the harm to the plaintiff; (2) the repre-

hensibility of the defendant’s conduct; (3) the wealth

or financial position of the defendant; (4) the imposi-

tion of punishment on the defendant; (5) the deter-

rent effect, i.e. whether it will deter future or similar

conduct by the defendant and others. See Cooper In-

dustries, Inc. v. Leatherman Tool Group, Inc., 532

U.S. 424, 439, n. 12, 121 S. Ct. 1678, 1688, n. 12, 149

12a

L. Ed. 2d 674 (2001); Restatement (Second) of Torts

§ 908, Comment e (1979).

In instructing the jury with respect to whether

exemplary damages should be awarded to the Gre-

fers, the trial judge set forth a correct statement of

the law. The trial judge referred to harm or the po-

tential (risk of) harm to nonparties resulting from

the defendant’s conduct when she referred to the

public safety in her explanation of “wanton” and

“reckless” conduct. As the reprehensible nature of

the defendant’s conduct is a factor which the jury

may consider in deciding whether exemplary dam-

ages are warranted and, if so, the amount that

should be awarded, this instruction was permissible

under the standards set forth by the U.S. Supreme

Court in Philip Morris (a plaintiff may show harm to

others in order to demonstrate reprehensibility).

The trial judge’s only other reference to nonpar-

ties occurred when she instructed the jury that ex-

emplary damages were awarded not to benefit the

plaintiff but to punish the defendant, to compel the

defendant to have “proper regard for the rights of the

public,” and to deter others from following the de-

fendant’s example. The U.S. Supreme Court has

found no constitutional violation in imposing puni-

tive damages “to further a State’s legitimate interest

in punishing unlawful conduct and deterring its

repetition.” Philip Morris, 549 U.S. at ____ , 127 S.

Ct. at 1062, citing BMW of North America, Inc., v.

Gore, 517 U.S. 559, 568, 116 S. Ct. 1589, 134 L. Ed.

2d 809 (1996). Thus, the trial court’s reference to

nonparties within the context of the public’s interest

and safety did not violate the defendant’s rights to

due process.

Essentially, paragraphs two and three of the trial

13a

judge’s instructions on exemplary damages ex-

plained reprehensibility, i.e. “wanton” and “reckless”

conduct as well as informed the jury that the award

should punish the defendant and deter similar con-

duct. All three of these factors are permissible under

the standards set forth by the U.S. Supreme Court

and the courts of this state.

Lastly, in paragraphs four, five and six, the trial

judge charged the jury that they were to consider the

harm done to the plaintiff, the defendant’s financial

condition, the time periods for which exemplary

damages were to apply, and that an award for such

damages was solely within their discretion. None of

these factors is objectionable or prohibited.

When we consider the totality of the trial court’s

jury instructions on exemplary damages, we find

they are both permissible and constitutional. More-

over, even though the record does not include the ob-

jections made by Exxon to the instructions during

the jury charge conference, two facts should be

noted. First, unlike the defendant in Philip Morris,

Exxon raised no assignment of error on appeal as to

either the trial court’s jury instructions or to the

trial court’s refusal to give Exxon’s proposed jury in-

structions. Second, for all intents and purposes, the

trial court’s instructions tracked almost verbatim

Exxon’s proposed instructions. Thus, we find the

trial court’s jury instructions herein pass constitu-

tional muster.

The question we are ultimately asked to decide

is whether Exxon received a fair trial. In other

words, in light of Philip Morris, was Exxon afforded

all of the constitutional protections available under

the Due Process Clause of the U.S. Constitution? We

answer this “yes.”

14a

Exxon’s Wanton and Reckless Conduct

Exxon argued in the first appeal that the jury’s

award of exemplary damages must be vacated be-

cause the record does not support a finding that

Exxon engaged in wanton and reckless conduct as

required under La. C.C. art. 2315.3.

The statute providing for exemplary damages for

wanton and reckless disregard for public safety in

the storage, handling or transportation of hazardous

or toxic substances must be strictly construed, as it

imposes a penalty. Bonnette v. Conoco, Inc., 2001-

2767, p. 27 (La. 1/28/03), 837 So. 2d 1219, 1236-37.

To obtain an award of exemplary or punitive dam-

ages under La. C.C. art. 2315.3, the plaintiff must

prove:(1) that the defendant’s conduct was wanton

and reckless by proving that “the defendant pro-

ceeded in disregard of a high and excessive degree of

danger, either known to him or apparent to a rea-

sonable person in his position,” or that the defendant

engaged in “highly unreasonable conduct, involving

an extreme departure from ordinary care, in a situa-

tion where a high degree of danger is apparent;” (2)

that the danger created by the defendant’s wanton or

reckless conduct threatened or endangered public

safety; (3) that the defendant’s wanton or reckless

conduct occurred in the storage, handling or trans-

portation of hazardous or toxic substances; and (4)

that the plaintiffs injury was caused by the defen-

dant’s wanton or reckless conduct. Id.; Billiot v. B.P.

Oil., Co., 93-1118, pp. 16-17 (La. 9/29/94), 645 So. 2d

604, 613.

As set forth in our prior opinion, our review of the

record disclosed sufficient evidence to support the

jury’s finding that Exxon had engaged in wanton and

15a

reckless conduct. Exxon first learned of NORM§ con-

tamination in oilfield drilling equipment in 1981,

when Occidental Petroleum, another oil company,

discovered it on its platforms in the North Sea. At

that time, Dr. Andrew Lloyd Smith, a Scottish envi-

ronmental consultant, was working for Occidental

Petroleum in the U.K., and following the discovery,

was a member of the United Kingdom Offshore Op-

erators Association (UKOOA) Safety Committee that

drafted and published the UKOOA safety guidelines

and Reference Manual that were given to all oil

companies operating in the North Sea. ITCO offered

Dr. Smith as a health and safety expert witness at

trial. According to Dr. Smith, the reference manual

was extensive and covered both the identification of

radioactive scale and the procedure to follow up on

such identification. The guidelines, promulgated by

the oil and gas industry and approved by the U.K.’s

National Radiological Protection Board (“NRPB”),

recommended the specific steps to minimize or

eliminate the effect of NORM on public health and

the environment.

Though Exxon was abreast of the problem, it took

no action to survey its wells elsewhere. The deposi-

tions of Mr. John Rullman, Director of Exxon’s East-

ern Division Environmental and Regulatory Affairs,

and of Mr. Everett C. Hutchinson, Exxon’s Assistant

Director of Environmental and Regulatory Affairs,

were introduced into evidence and read to the jury at

trial. Mr. Rullman testified that he had obtained a

copy of the UKOOA safety guidelines and found they

were very onerous, restrictive, and inflexible. He also

6 “NORM” is the acronym for Naturally Occurring Radioactive

Material.

l6a

admitted that he was not sure if at that time Exxon

had the same problem in the U.S. Mr. Hutchinson,

too, believed the UKOOA guidelines were unreason-

able for Exxon’s production operations in the U.S.

Mr. Booher, Exxon’s industrial hygienist, admitted

that if Exxon had surveyed its wells prior to the

Chevron discovery in the U.S. in 1986, then it would

have discovered radium in its wellheads much

sooner.’

In May 1986, after learning of Chevron’s NORM

discovery in Mississippi, Exxon surveyed its Missis-

sippi well sites and found radiation accumulation in

its equipment. Twice Exxon officials were notified

that the cleaning contractors had to be informed of

the radioactivity, as it posed a health and safety

hazard, but they still did nothing to warn them.

The evidence further disclosed that by August

1986 Exxon was clearly worried about governmental

regulation and losing the produced water exemption,

which allowed it to dispose of the by-product in an

unregulated manner. A memo written on August 28,

1986, by Mr. Howard Collier, Exxon’s director of En-

vironmental and Regulatory Affairs, stated, “Chev-

ron has taken a very high profile approach to han-

dling their discovery of radiation in Mississippi and

many agencies are now involved.” Mr. Collier ex-

pressed an interest in “[getting] the industry and the

regulatory agencies to slow down.” Then he admit-

ted,

Chevron’s discovery is nothing new. After all,

if there wasn’t some radiation in down-hole

7 On April 10, 1986, Chevron identified radium-266 in oil filed

equipment at a well site in Brookhaven, Mississippi.

17a

formations, it would be difficult to run a

gamma ray log. My primary concern is the

current investigation and analysis not un-

duly influence the EPA who is in the process

of deciding under RCRA [Resource Conserva-

tion Recovery Act] whether produced water

should be classified as a hazardous waste

and handled as such.

Mr. Booher’s notes taken from comments made by

Mr. Collier at an Exxon NORM meeting in Houston

on January 8, 1987, indicate the cost of losing the

RCRA exemption for produced water as $ 750 million

in the first year and $ 150 million for each year

thereafter. At that same meeting, several Exxon offi-

cials concluded that notifying the cleaning contrac-

tors would be “premature.”

The evidence also disclosed that Exxon was con-

cerned about litigation arising from the NORM dis-

covery in Mississippi. Street, Inc., a pipe yard com-

pany in Mississippi, had filed suit against Chevron

and other oil companies (not Exxon), for $ 35 million,

claiming negligence for failure to advise that pipe

delivered to it was contaminated with radioactive

material. Mr. Hutchinson, in an internal memo cop-

ied to Mr. Rullman, recognized the possible “need to

manage the disposal of large accumulations of con-

taminated scale, such as could occur at a pipe yard.”

Mr. Rullman, in a confidential memo dated October

14, 1986, noted ITCO was a potential “look alike” to

Street, Inc., and stated, “If potential exists for radio-

active material accumulation, perform low key ra-

diation exposure measurements;” “Coordinate ITCO

plan with Eastern Division;” and “Consider advisory

letter to ITCO with Headquarters involvement.”

18a

Still, Exxon did nothing to notify ITCO.

Eventually, Exxon sent the letter notifying the

cleaning contractors of the NORM problem in March

1987, ten months after it had identified the problem

at its domestic well sites. On March 27, 1987, Exxon

representatives met with Mr. John Hooper, presi-

dent of ITCO, and other ITCO employees and gave

them a video and a set of procedural guidelines to

follow when handling NORM contaminated equip-

ment. According to Mr. Hooper, Exxon’s videotape

made the health risks associated with NORM scale

sound minor and the safety procedure guidelines

merely suggested taking precautions to avoid breath-

ing or ingesting airborne dust. At that time, Exxon’s

representatives made no mention of the likely

buildup of radioactive scale on ITCO’s premises even

though Exxon knew the pipe scale had been accumu-

lating on the premises for years and had learned in

June 1986 that it was hazardous.

Exxon maintained that no reasonable juror could

have concluded that it knew about the NORM

buildup in domestic oil production tubing before

1986. We disagreed. Although the 1981 discovery of

NORM inside drilling equipment was limited to the

North Sea area, by that time Exxon already knew

that Shell Oil had found radioactive material in

equipment at a refinery in the U.K. The jury could

have concluded that Exxon knew or should have

known of the likelihood of NORM contamination in

domestic oilfield production equipment well before

Chevron’s Mississippi discovery in 1986 based on

Exxon’s knowledge that radioactive material had

been found in both drilling and refining equipment

in the North Sea region coupled with the fact that

just a few years earlier Exxon had discovered radio-

19a

active deposits inside equipment at several Texas

gas plants. Also, in view of Mr. Collier’s August 28,

1986 memo, stating, “Chevron’s discovery is nothing

new,” the jury reasonably could have concluded that

Exxon knew about the NORM deposits in its domes-

tic oilfield equipment before 1986, and its failure to

act sooner was wanton and reckless.

Exxon argued, too, that it acted to protect the

public safety after Chevron’s 1986 NORM discovery.

Exxon emphasized that after the discovery it had

conducted a nationwide NORM survey of all its fa-

cilities; it began screening used tubing for NORM at

production sites and the contaminated tubing was

stored -- not cleaned; it began to screen tubing at

central storage facilities like ITCO; it recommended

safety procedures; and it began to develop a new

cleaning process that would allow for the previously-

stockpiled, NORM contaminated pipe to be cleaned

safely.

We found no merit to Exxon’s argument. Clearly,

the evidence indicated that the action taken by

Exxon after the Chevron discovery was to benefit

Exxon, not the general public. As a result of the dis-

covery, Exxon was faced with unprecedented envi-

ronmental, legal, economic, and financial challenges.

It had no choice but to act. In any event, we found

Exxon’s most egregious act was failing to notify

ITCO of the NORM hazard immediately after it

tested the Exxon Mississippi wells and discovered

NORM at the well sites. Although Exxon’s represen-

tatives claimed that to notify the cleaning contrac-

tors immediately would have been “premature” until

they knew the extent of the problem and they did not

want to “alarm” the public, we concluded that their

failure to do so was inexcusable. Exxon executives

20a

had been warned that NORM posed a human safety

hazard to anyone exposed to it, but they waited nine

months to send the warning letter to the contractors

and to meet with ITCO. Exxon’s delay in notifying

ITCO of the danger was wanton and reckless.

Upholding the jury’s finding that punitive dam-

ages were warranted in this case, we then consid-

ered whether the jury’s one billion dollar award was

constitutional.

Constitutionality of Punitive Damage Award

Exxon had assigned as error in the first appeal

that the $ 1 billion punitive damage award was un-

constitutional as it violated Exxon’s Fourteenth

Amendment right to due process of law.

In recent years, the U.S. Supreme Court has con-

sidered several cases raising exemplary damage is-

sues. In BMW of North America, Inc. v. Gore, 517

U.S. 559, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996),

the Court ruled that exemp’ary damage awards that

are “grossly excessive” violate the Due Process

Clause of the Fourteenth Amendment. The Court

then provided three “guideposts” for gauging when

an exemplary damage award crosses the constitu-

tional line:(1) the reprehensibility of the defendant’s

conduct; (2) the ratio between the exemplary damage

award and the harm the defendant’s conduct caused,

or could have caused; and (3) the size of any civil or

criminal penalties that could be imposed for compa-

rable misconduct.

The constitutional constraints on the amount of

exemplary awards were again considered in Cooper

Industries, Inc., supra, 532 U.S. 424, 121 S. Ct. 1678,

wherein the Court ruled that state and federal ap-

pellate courts must conduct a de novo review of ex-

emplary damage awards challenged as being grossly

2la

excessive under the Due Process Clause of the Four-

teenth Amendment to the United States Constitu-

tion. Id. at 433-434, 121 S. Ct. at 1685-1686. In

mandating a de novo review, the Court reasoned

that “[uJnlike the measure of actual damages suf-

fered, which presents a question of historical or pre-

dictive fact, the level of punitive damages is not

really a ‘fact’ ‘tried’ by the jury.” Jd. at 437, 121 S.

Ct. at 1686.

In State Farm Mutual Automobile Insurance

Company v. Campbell, 538 U.S. 408, 123 S. Ct. 1513,

155 L. Ed. 2d 585 (2003), the Court further tightened

the permissible limits of exemplary awards, holding

that appellate “courts must ensure that the measure

of punishment is both reasonable and proportionate

to the amount of harm to the plaintiff and to the

general damages recovered.” Id., 538 U.S. at 426,

123 S. Ct. at 1524.

Keeping in mind the principles outlined in BMW

of North America, Inc., v. Gore, the U.S. Supreme

Court’s decision in State Farm Mutual Automobile

Insurance Company v. Campbell, we conducted a de

novo review of the jury’s exemplary damage award.

Our findings as a result of that de novo review were

set forth in our prior opinion and read as follows.

“(T]he most important indicium of the

reasonableness of a punitive damages award

is the degree of reprehensibility of the defen-

dant’s conduct.” Gore, supra, at 575, 116 S.

Ct. 1589. In determining the reprehensibility

of a defendant, courts are instructed to con-

sider whether: the harm caused was physical

as opposed to economic; the tortious conduct

evinced an indifference to or a reckless dis-

regard of the health or safety of others; the

22a

target of the conduct had financial vulner-

ability; the conduct involved repeated actions

or was an isolated incident; and the harm

was the result of intentional malice, trickery,

or deceit, or mere accident. 517 U.S. at 576-

577, 116 S. Ct. 1589. The existence of any

one of these factors weighing in favor of a

plaintiff may not be sufficient to sustain a

punitive damages award; and the absence of

all of them renders any award suspect. It

should be presumed a plaintiff has been

made whole for his injuries by compensatory

damages, so punitive damages should be

awarded only if the defendant’s culpability,

after having paid compensatory damages, is

so reprehensible as to warrant the imposi-

tion of further sanctions to achieve punish-

ment or deterrence. Jd. at 575, 116 S. Ct. at

1589.

In this case, it is undisputed that the

plaintiffs suffered strictly economic harm,

i.e., property damage. While Exxon’s conduct

resulted in 10 physical harm to them, it cer-

tainly evinced an indifference to or reckless

disregard of the health and safety of others.

As stated above, Exxon’s nine-month delay

in notifying ITCO and the other cleaning

contractors of the dangers posed from han-

dling NORM contaminated equipment cer-

tainly put their employees at risk. Even

though ITCO no longer cleaned NORM con-

taminated piping/tubulars after March 1987,

Exxon was well aware that NORM contami-

nated equipment remained stockpiled on

23a

ITCO’s property. This posed a health hazard

to those on the premises.

We also find that the target of the con-

duct was financially vulnerable. ITCO had

leased the property from the Grefer family

for many years and during that period oper-

ated a very successful business cleaning oil-

field equipment. After Exxon discovered the

NORM contamination in its drilling equip-

ment and finally realized the extent of the

problem, the oil company sought to wipe its

hands clean and leave ITCO with the mess.

Notably, on April 19, 1989, Mr. Rullman sent

a memo to Mr. Roger Koerner, Exxon’s top

manager for the Eastern Division, regarding

“ITCO Contract Recommendations.” The

memo stated in part:

RAE [Exxon’s Regulatory Affairs

Engineering] concurs with the sugges-

tion to screen other contractors to as-

certain their abilities to decontami-

nate NORM material, ...The develop-

ment of alternative cleaning/disposal

options would help soften their stance

[on contract negotiations] and may be

needed anyway if the ITCO procedure

does not provide sufficient cleaning.

The continued use of the ITCO yard

could complicate any potential per-

sonal injury liability claims since it

would be difficult to determine when

the exposure occurred that caused the

injury. Resuming cleaning with a new

contractor would clearly establish the

earliest date of potential exposure,

24a

and Exxon could better contractually

minimize its exposure with the new

contractor. This would not, however,

help Exxon with any claims from past

activities at ITCO.

- Shortly thereafter, ITCO’s business

steadily declined while Exxon sent its used

oilfield equipment to new cleaning contrac-

tors. After ITCO ceased operations, termi-

nated its lease and vacated the premises,

Exxon’s NORM scale remained on the prem-

ises. In addition to ITCO’s failure, the Gre-

fers are now financially burdened with the

task of remediating the property.

Furthermore, we find Exxon’s repeated

conduct from 1985 through 1992, when ITCO

finally shut down, did involve an element of

deceit. Again, as mentioned above, from June

1986 to March 1987 Exxon officials inten-

tionally withheld information regarding

NORM contamination in the piping/tubulars

even though they knew the scale posed a di-

rect danger to the physical health and safety

of those workers who continued to handle the

NORM contaminated equipment on a daily

basis. Also, after learning of the danger

posed by the NORM contaminated scale,

Exxon took no step to remove the radioactive

material from ITCO’s premises. In our opin-

ion, Exxon’s conduct was reprehensible.

Next we consider the second Gore guide-

line, the disparity between actual or poten-

tial harm suffered by the plaintiff and the

punitive damage award. For potential harm

25a

properly to enter into the ratio, it must be di-

rectly attributable to the misconduct and not

to lawful or unrelated causes. See Cooper In-

dustries, 532 U.S. at 441, 121 S. Ct. at 1688.

In Campbell, the Utah Supreme Court

justified a punitive award of $ 145 million in

a case in which the plaintiff was awarded $ 1

million in compensatory damages for State

Farm’s bad-faith failure to settle, fraud, and

intentional infliction of emotional distress.

On appeal, the U.S. Supreme Court consid-

ered the award under the Gore guideposts

and concluded that the award was neither

reasonable nor proportionate to the wrong

committed, and it was an irrational and arbi-

trary deprivation of the property of the de-

fendant. Campbell, 538 U.S. at 429, 123 S.

Ct. at 1526. While the Court declined to im-

pose a bright-line ratio which punitive dam-

ages cannot exceed, it noted that its juris-

prudence and the principles set forth therein

demonstrate that, in practice, few awards

exceeding a single-digit ratio between puni-

tive and compensatory damages will satisfy

due process. The Court recognized that al-

though “there are no rigid benchmarks,” a

higher ratio could be justified only if “a par-

ticularly egregious act has resulted in only a

small amount of economic damages.” Jd., 538

U.S. at 425, 123 S. Ct. at 1524. The Court

also noted that the converse is true, “[w]hen

compensatory damages are substantial, then

a lesser ratio, perhaps only equal to compen-

satory damages, can reach the outermost

limit of the due process guarantee.” Jd. The

26a

Court found the compensatory award of $ 1

million was “substantial,” and concluded that

the Gore guideposts “would [only] justify a

punitive damages award at or near the

amount of compensatory damages.” Id., 538

U.S. at 429, 123 S. Ct. at 1526. The Court

also rejected the Utah Supreme Court’s ref-

erence to State Farm’s enormous wealth to

justify the award, stating, “[t]he wealth of a

defendant cannot justify an otherwise uncon-

stitutional punitive damages award.” Jd., 538

US. at 427, 123 S. Ct. at 1525.

This case leaves little doubt that there is

a presumption against an award that has an

18 to 1 ratio. In our opinion, the compensa-

tory award in this case was substantial; the

Grefers were awarded $ 56,145,000.00 for a

piece of property worth at most $

1,500,000.00. Although the plaintiffs claimed

only property damage, and no physical harm,

the trial court allowed the plaintiffs to argue

and present substantial evidence, over

Exxon’s objections, of the potential and/or al-

leged actual harm to other persons who were

not parties to this suit and whose claims

were not before the jury. For example, in

their opening statement, the plaintiffs’ coun-

sel referred to the “community” and

“churches immediately next to” the Grefer

property. He described radium particles in “a

very, very, very fine powder” being blown “all

over the place.” A video was shown to the

jury that depicted elementary school children

getting on and off a bus. Witnesses were then

asked questions designed to foment the fear

27a

of a radium dust cloud blowing over houses,

churches, and schools near the Grefer prop-

erty. The trial court also allowed plaintiffs’

counsel to question witnesses about the po-

tential harm of radiation to children and un-

born children even though this case is

strictly a claim for damage to immovable

property. Likewise, the trial court allowed

plaintiff, Rose Grefer Haase, a former nurse,

to testify regarding the effects of x-ray radia-

tion and the protections taken by those work-

ing with x-ray machines to avoid personal in-

jury. The trial ended with a neighbor, Ms.

Thelma Benjamin, testifying on rebuttal

about the DEQ and Exxon failing to test her

property or the property of others in the

neighborhood. Plaintiffs’ counsel likened the

harm suffered by the Grefers with damages

caused in the 1989 EXXON-VALDEZ oil

spill. Much of this evidence was irrelevant

and, more than likely, confused the jury, con-

tributing to its exorbitant punitive damage

award. (footnote omitted)

The plaintiffs also put on substantial evi-

dence regarding Exxon’s wealth. The jury

heard that Exxon is the largest corporation

in the world and had assets of $ 251 billion;

that its revenue for the year 2000 was $

228.439 billion; and that its total net worth

in 2000 was $ 173 billion. In addition, evi-

dence was presented of the salaries, bonuses,

stock options, etc., of Exxon’s corporate ex-

ecutives. The jury heard that the only way to

punish a big corporation like Exxon for its

reprehensible behavior was to hit its bank

28a

account. Plaintiffs’ counsel stated that Exxon

could satisfy a large punitive judgment in

very little time with the interest that accrues

on its $ 72 billion in shareholders’ equity and

that it likely would never feel the effect of

the judgment because it would be passed on

to the consumers at the gas pumps. Counsel

also pointed out that Exxon recently had

been cast in judgment for several other large

punitive damage awards, including a case in

which an Alabama jury awarded the plain-

tiffs punitive damages of $ 3.4 billion and

compensatory damages of $ 87 million. Such

assertions bore no relationship to the harm

suffered by the plaintiffs. Although the jury

could consider Exxon’s wealth, the company’s

wealth could not provide an open-ended ba-

sis for inflating the punitive award. With

this in mind, we find the $ 1 billion dollar

punitive damage award is neither reasonable

nor proportionate to the amount of harm to

the plaintiffs and to the general damages re-

covered. Considering the substantial com-

pensatory damages awarded in this case, in

our opinion a lesser single-digit ratio would

be appropriate.

The third guidepost in Gore is the dispar-

ity between the punitive damages awarded

and the civil penalties authorized or imposed

in comparable cases. The Court in Campbell

noted that criminal penalties may also be

considered, as the existence of a criminal

penalty does have bearing on the seriousness

with which a State views the wrongful ac-

tion. Campbell, 538 U.S. at 428, 123 S. Ct. at

29a

1526. When used to determine the dollar

amount of the award, however, the criminal

penalty has less utility. Jd. Great care must

be taken to avoid use of the civil process to

assess criminal penalties that can be im-

posed only after the heightened protections

of a criminal trial have been observed, in-

cluding, its higher standard of proof. Id. Pu-

nitive damages are not a substitute for the

criminal process, and the remote possibility

of a criminal sanction does not automatically

justify a punitive award. Id.

Exxon argues that it did not violate any

state laws or regulations because the DEQ

did not establish NORM regulations until

1989 (footnote omitted) and therefore the

punitive damage award is not warranted. It

also argues that the maximum civil penalty

under Louisiana law for willful conduct

would not exceed $ 1,000,000.00, and thus if

punitive damages are imposed, the amount

should not exceed $ 1,000,000.00.

In the case of In re New Orleans Train

Car Leakage Fire Litigation, 2000-0479, p. 1

(La. App. 4 Cir 6/27/01), 795 So. 2d 364

(hereinafter “CSX”), we affirmed the trial

court’s reduction of a jury’s punitive damage

award from $ 2.5 billion to $ 850 million.

That case involved personal injury claims by

8,047 class members for injuries arising out

of a burning train car carrying a hazardous

substance. In reaching our result, we recog-

nized the large number of claimants, their

personal injury, the potential that many city

blocks could have been destroyed by an ex-

30a

plosion, and the evacuation of thousands

during the night because of the danger posed

by burning chemicals. Like Exxon, the de-

fendant argued in CSX that because the

maximum civil penalty under Louisiana law

for its violation was slightly more than $

1,000,000.00 that should have been the

amount of the jury’s punitive award. We dis-

agreed, noting that “the BMW Court did not

select and use the term ‘guideposts’ without

reason”, and that term does not “connote or

suggest a cumulative series of three ‘tests’ or

‘elements’ which must be met.” CSX, at p. 33,

795 So. 2d at 386. We then specifically re-

jected the notion “that the third guide. .

‘caps’ punitive damages.” Jd. at p. 33, 795 So.

2d at 386-87.

The plaintiffs point to various criminal

fines for violations of Louisiana statutes and

regulations and give examples in which fines

of tens of thousands of dollars a day would be

imposed every day for the years Exxon was

in violation of the law. Notably, in Cooper,

the Court rejected an effort, similar to the

plaintiffs’ here, to suggest that the maximum

fine provided by an Oregon statute would

have been imposed each time a piece of pro-

motional literature was distributed, 532 U.S.

at 442-43, 121 S. Ct. at 1689, while in

Campbell the Court rejected an attempt to

justify a large award based on speculation

about whether, in a criminal prosecution, the

defendant might have lost its business, li-

cense, been imprisoned, or been required to

disgorge all profits.

3la

The fact that Louisiana had no regula-

tions governing NORM until 1989 does not

excuse Exxon’s reprehensible action. And

Louisiana’s maximum civil penalty for will-

ful misconduct, alone, cannot limit a punitive

damage award. Nonetheless, based on our

review of the record, we find that $ 1 billion

punitive award in this case is exorbitant and

must be reduced.

In summary, we find that an application

of the Gore guideposts to the facts of this

case, especially in light of the substantial

compensatory damages awarded, likely

would justify a punitive damages award

closer to the amount of compensatory dam-

ages. The punitive damage award of $ 1 bil-

lion, therefore, was neither reasonable nor

proportionate to the wrong committed, and it

was an irrational and arbitrary deprivation

of Exxon’s property. Therefore, we will

amend the jury’s award to reduce it to an

amount that we have determined is both

reasonable and proportionate to the amount

of harm suffered by the Grefers and to the

general damages of $ 56,145,000.00, which is

$ 112,290,000.00 or twice the general dam-

age award.

Grefer, supra, 2002-1237 at p. 46-53, 901 So. 2d at

1148-1152.

Clearly, as noted above, the conduct of Exxon sat-

isfied the wanton and reckless requirement, i.e. it

was reprehensible. Any reference to harm suffered

by nonparties, which Exxon finds objectionable, was

used in the foregoing discussion merely to demon-

32a

strate the reprehensibility of Exxon’s conduct and

nowhere in the opinion do we use any evidence of

harm suffered by nonparties as the basis to award

an amount for exemplary damages to the Grefers.

Again, any discussion of harm to nonparties was

done simply to show reprehensibility. The record

amply supports the finding that Exxon’s conduct was

reprehensible.

Second, our opinion takes into account all of the

objections and concerns raised by Exxon herein in

light of Philip Morris. We noted those objections and

essentially sustained them in our review. We find

that many of the improper arguments and evidence

contributed to the verdict which in no way reflected

the harm suffered by the plaintiffs and the compen-

satory damages which were awarded.

Third, our de novo review resulted in a drastic

reduction of the jury’s $ 1 billion punitive damage

award. In reviewing the matter de novo, we disre-

garded the evidence of and references to harm suf-

fered by nonparties and considered only the harm

done to the Grefers in determining the amount of the

punitive damage award.

Fourth, although our de novo review essentially

awards exemplary damages based on the State Farm

multiplier and the compensatory award, we still con-

sider the reprehensibility of Exxon’s conduct as well

as the degree of reprehensibility in our award of ex-

emplary damages. Additionally, the punitive damage

award rightfully takes into account the fact that

Exxon should be punished for its reprehensible con-

duct and deterred from repeating it. The fact that

Exxon is one of the wealthiest companies in the

world was another factor that we properly consid-

ered.

33a

Summary

In this opinion we elaborate and expand on the

thought process that went into our earlier opinion.

But after reviewing this record and the Philip Morris

decision, we stand by our initial decree with regard

to the award of exemplary damages.

We interpret the remand from the U.S. Supreme

Court to affect our decision as it relates to the exem-

plary damages and it is our opinion that the decision

in no way mandated that we review the remaining

assignments of error urged by Exxon and that it in

no way affects our initial decision with regard to the

compensatory award. Furthermore, the U.S. Su-

preme Court remand and the Philip Morris decision

do not mandate that we order a new trial but instead

allow us to correct any procedural and or substantive

errors by our constitutionally delegated authority of

de novo review. This court is constitutionally allowed

to review both law and facts. La. Const. art. V, § 10

(B).

As a final thought on the issues of reprehensibil-

ity and harm to the plaintiff, we note that during the

oral argument, Exxon’s attorney suggested that with

regard to harm to nonparties, when considering rep-

rehensibility, the trier of fact can only consider the

harm to nonparties that is similar to the harm or in-

jury suffered by the plaintiff. That analysis is not

supported by Philip Morris, State Farm, or BMW.

In determining the reprehensibility of the defen-

dant’s conduct for the purpose of awarding exem-

plary damages, the trier of fact may consider the

harm suffered by both parties and nonparties re-

gardless of the type or similarity of harm suffered as

a result of that conduct. On the other hand, the trier

34a

of fact may consider the nature and extent of the

harm suffered by the plaintiff only in determining

the amount of exemplary damages to award that

particular plaintiff.

Finally, Exxon cites the decision in Embry v. Geo

Transportation of Indiana, Inc., 478 F. Supp. 2d 914

(E.D. Ky. 2007), arguing that the punitive damage

award cannot stand in this case because Exxon’s de-

lay in warning persons of the NORM danger did not

cause the plaintiffs property damage but rather only

potential harm to nonparties.

In Embry, the defendant’s truck crossed the me-

dian into oncoming traffic and caused multiple

deaths and injuries. The defendant truck driver ad-

mitted that after taking a sip of coffee he choked and

lost control of the truck, causing the accident. The

plaintiffs argued that the defendant truck driver had

fraudulently concealed his negative medical history

on his job application, including that he was a recov-

ering alcoholic, and alleged on this basis that the de-

fendants were liable for punitive damages.® Citing

Philip Morris, the court granted summary judgment

dismissing the plaintiffs’ punitive damage claims ex-

plaining that none of the alleged fraudulent acts or

omission proximately caused the plaintiffs’ damages

and, therefore, did not satisfy the “constitutional

nexus requirement.” Jd. at 924.

The Embry case is distinguishable from the case

before us. The court clearly recognized that the de-

fendant truck driver’s failure to disclose his medical

® Punitive damages are available under Kentucky law if a

plaintiff proves by clear and convincing evidence that a defen-

dant acted with oppression, fraud or malice. Ky. Rev. Stat.

Ann. § 411.184(2) (West 2006).

35a

history in applying for his job and commercial

driver’s license several years earlier did not cause

the accident. The court also noted that the plaintiffs

failed to demonstrate that it was foreseeable from

the fraudulently concealed medical information that

the defendant would choke on coffee while driving,

so as to establish that the fraud was a proximate

cause of the accident. Here, we found that Exxon’s

failure to disclose the NORM hazard to ITCO in 2

timely manner demonstrated the reprehensibility of

its conduct, a factor we could consider in awarding

exemplary damages to the Grefers. Although Exxon’s

delay in disclosing the NORM hazard did not cause

the Grefers physical harm, it increased their eco-

nomic damages by allowing the continual accumula-

tion of NORM scale on their property.

DECREE

Accordingly, for the reasons set forth herein, the

judgment of the trial court rendered in accord with

the jury verdict in favor of the Grefers is amended,

in part, to reduce the $ 1 billion award for punitive

iiamages to $ 112,290,000.00 to comply with the Due

Process Clause of the Fourteenth Amendment of the

United States Constitution. In all other respects, the

judgment is affirmed. Furthermore, the trial court

judgment denying Exxon’s exception of prescription

is affirmed.

AMENDED AND, AS AMENDED, AFFIRMED

36a

APPENDIX B

LOUISIANA COURT OF APPEAL OPINION

No. 2002-CA-1237

COURT OF APPEAL, FOURTH CIRCUIT

STATE OF LOUISIANA

* OK OK

JOSEPH GREFER, CAMILLE GREFER, ROSE

MARIE GREFER HASSI AND HENRY GREFER,

ALPHA TECHNICAL, ET AL.

ROKK

APPEAL FROM

CIVIL DISTRICT COURT, ORLEANS PARISH

NO. 97-15004, DIVISION “A”

HONORABLE CAROLYN GILL-JEFFERSON,

JUDGE

** KK

JUDGE LEON A. CANNIZZARO, JR.

*** * *

(COURT COMPOSED OF JUDGE MICHAEL E.

KIRBY, JUDGE MAX N. TOBIAS, JR., AND

JUDGE LEON A, CANNIZZARO, JR.)

MARCH 31, 2005

ANDREW B. SACKS

JOHN K. WESTON

37a

SACKS, WESTON, SMOLINKSKY, ALBERT &

LUBER

510 WALNUT STREET

SUITE 400

PHILADELPHIA, PA 19106

AND

STUART H. SMITH

MICHAEL G. STAG

SMITH & STAG

365 CANAL STREET

2850 ONE CANAL PLACE

NEW ORLEANS, LA 70130

AND

STEPHEN B. MURRAY

ARTHUR M. MURRAY

MURRAY LAW FIRM

909 POYDRAS STREET

SUITE 2550

NEW ORLEANS, LA 70112-4000

AND

RON A. AUSTIN

SPEARS & SPEARS

1555 POYDRAS STREET

SUITE 1710

NEW ORLEANS, LA 70112

AND

WILLIAM A. PORTEOUS, III

PORTEOUS, HAINKEL & JOHNSON, L.L.P.

704 CARONDELET STREET

NEW ORLEANS, LA 70130-3774

AND

38a

JACK W. HARANG

HARANG & BARKER, LLC

365 CANAL STREET

SUITE 2850

NEW ORLEANS, LA 70130

COUNSEL FOR PLAINTIFFS, JOSEPH GRE-

FER, ET AL.

SAM A. LEBLANC, III

RON A. SHOLES

GLEN M. PILIE

LOUIS C. LACOUR, JR.

MARTIN A. STERN

ROBERT N. MARKLE

ADAMS AND REESE LLP

701 POYDRAS STREET

4500 ONE SHELL SQUARE

NEW ORLEANS, LA 70139

AND

MITCHELL J. LANDRIEU

1100 POYDRAS STREET

SUITE 2950

NEW ORLEANS, LA 70163

COUNSEL FOR DEFENDANT, EXXON MOBIL

CORPORATION

THOMAS A. BALHOFF

JUDITH R. ATKINSON

ROEDEL PARSONS KOCH BLACHE BALHOFF &

MCCOLLISTER

8440 JEFFERSON HIGHWAY

SUITE 301

BATON ROUGE, LA 70809-7652

39a

COUNSEL FOR DEFENDANT, = INTRA-

COASTAL TUBULAR SERVICES, INC.

HERMAN ROBINSON, GENERAL COUNSEL

PERRY M. THERIOT

APRIL SNELLGROVE

LOUISIANA DEPARTMENT OF _ ENVIRON-

‘MENTAL QUALITY

LEGAL AFFAIRS DIVISION

P.O. BOX 82282

BATON ROUGE, LA 70884-2282

AMICUS CURIAE, DR. HALL BOHLINGER,

SECRETARY OF THE DEPARTMENT OF EN-

VIRONMENTAL QUALITY AND MURPHY J.

FOSTER, JR., GOVERNOR, STATE OF LOU-

ISIANA

AMENDED AND, AS AMENDED,

AFFIRMED

The defendants, Exxon Mobil Corporation

(“Exxon”) and Intracoastal Tubular Services, Inc.

(“ITCO”), and the plaintiffs, Joseph Grefer, Camille

Grefer, Rose Marie Grefer Haase,! and Henry Grefer

(“the Grefers”), appeal from a district court judgment

rendered in accord with a jury verdict, awarding the

Grefers compensatory and punitive damages as a re-

sult of the defendants’ contaminating their immov-

able property? with radioactive material. Exxon also

1 The plaintiffs’ original petition refers to Rose Marie Gre-

fer Haase as Rose Marie Grefer Hassi.

2 The immovable property at issue was part of a larger tract

of land purchased by the plaintiffs’ great grandfather in 1875

and since then has remained in the Grefer family. The plain-

tiffs acquired the naked ownership of three-fourths (3/4ths) of

40a

appeals from the district court judgment denying its

exception of prescription.

BACKGROUND HISTORY

The operations of most major oil companies are

integrated to include exploration and production, re-

fining, and marketing of oil and gas. In the produc-

tion phase, a well is drilled down to oil bearing sand,

casing is cemented in the hole, tubing is run down

the hole, and the tubing and casing are perforated at

the level of the oil bearing sand to help bring the oil

and natural gas to the surface. A section of the tub-

ing is 2 to 3 inches in diameter and 30 feet long. The

tubing is screwed together, and depending on the

depth of the hole, could involve a string of tubing

thousands of feet deep. Pressure underground forces

oil and gas through the perforated casing and tubing

up to the wellhead at the surface. At that point,

separator tanks are used to separate the oil and gas,

the oil is piped to a refinery for further processing

into gasoline, diesel fuel, jet fuel, etc., and the natu-

ral gas is sent to a gas processing plant to separate

the various components.

As time goes by, water from underground also

mixes with and comes to the surface with the oil and

gas. The water usually only appears in mature

fields since it is heavier than oil and is generally not

“produced” until much of the oil reservoir has be-

come depleted. This water is referred to as “pro-

duced water” since it is “produced” up through the

well. “Produced water” historically has been

their father, Archibald J. Grefer, Sr., and full ownership of the

entire tract in March 1996 upon the death of their mother,

Camille Claire Antoine Grefer.

4la

pumped back into the ground, or discarded in estuar-

ies.

In the early 1900s, the oil industry discovered

that the underground water leached certain mineral

salts out of the earth’s crust and the “produced wa-

ter” then carried those mineral salts in solution up

the tubing toward the surface. As the water came

through the perforations and rose up the tubing, the

change in pressure and temperature caused those

mineral salts to precipitate out of solution and form

a scale or crust on the inside of the tubing, and also

in the separator tanks at the surface near the well-

head. As scale built up inside the tubing, the pro-

duction rate of oil and gas slowed down as the flow

path became increasingly constricted. When this oc-

curred the oil company extracted the tubing from the

well and sent it to a pipe yard where a cleaning con-

tractor mechanically reamed the inside of the tubing

to return it to its original diameter.

As early as 1914, the oil companies were aware

that the chemical composition of the scale was pri-

marily “barium sulfate.” In the 1940s, chemical dic-

tionaries identified “radium sulfate” as commonly

being a co-precipitate with “barium sulfate.” Several

years later, in 1953, in a geological study done for

the United States Atomic Energy Commission, ra-

dium sulfate was identified as the radioactive scale

precipitate in oil field equipment used in southeast-

ern Kansas oil fields. It was then that the oil indus-

try learned that radium sulfate in small percentages

was being co-precipitated with the scale’s chief com-

ponents, non-radioactive barium sulfate, strontium

sulfate, calcium sulfate, and calcium carbonate.

424

In July 1971, representatives from Phillips Pe-

troleum Company notified Exxon that it had found

low-level radioactive deposits inside production

equipment in its gas plants. Thereafter, Exxon un-

dertook an investigation of its own gas plants. Dur-

ing the course of its investigation, Exxon found low-

level radioactive deposits in varying amounts inside

pumps and compressors in most of the gas plants.

Exxon concluded that the source of the radioactivity

was a radioactive gas entering the gas plants with

the natural gas stream coming from the wellhead.

Several years later, in 1977, the oil companies, in-

- cluding Exxon, learned that other radioactive mate-

rials had been identified in equipment in a Shell Oil

refinery in the United Kingdom (“U.K.”).

In 1981, in a routine well logging operation on

two Occidental Petroleum Corporation platforms in

the North Sea, drillers registered elevated levels of

radioactivity from the radioactive scale in equipment

on the platforms and the tubing in the well holes.

The levels of radiation required Occidental to report

the discovery to U.K. governmental authorities. The

National Radiological Protection Board (“NRPB”),

under contract to the U.K. government, did further

testing and identified the radioactive component as

radium-226, in the form of radium sulfate, co-

precipitated with barium sulfate, calcium sulfate,

and strontium sulfate. Radium-226 has a half-life’

of approximately 1,600 years.

3 Half-life is the time required for half of the atoms of a ra-

dioactive substance to decay. No two substances have the same

half-life. For example, uranium-238 has a half-life of approxi-

mately .5 billion years; thorium-234 has a half-life of 24 days;

and tellurium has a half-life of 4.2 minutes. Nearly all decay

43a

All major oil companies operating in the North

Sea, including Exxon, were immediately made aware

of Occidental’s discovery through the United King-

dom Offshore Operators Association (“UKOOA”), the

oil industry trade association. As a result of the dis-

covery, the U.K. Government held a major confer-

ence in 1983 for the oil companies dedicated solely to

the NORM‘ problem. In 1985, the UKOOA Safety

Committee published NORM safety guidelines and a

NORM Reference Manual, which were distributed to

all oil companies.5

On April 10, 1986, Chevron identified radium-226

in oilfield equipment at a well site near Brookhaven,

Mississippi. As a result of Chevron’s discovery,

Exxon conducted surveys at four Exxon Mississippi

well sites in June 1986 and found radium-226 at

those sites. Later that month, Exxon representa-

tives met with other oil company representatives at

the Alabama/Mississippi Mid-Continent Oil & Gas

Association meeting to discuss the radioactive scale

problem. Following the meeting, Exxon industrial

hygienist, Mr. Lindsay Booher, reported to Mr. M.F.

Terrell, a production manager for Exxon’s Eastern

Division, which covered Louisiana, Mississippi, Ala-

products are themselves radioactive, giving rise to decay chains

that eventually en. in a stable nuclide.

4 “NORM” is the acronym for Naturally Occurring Radioac-

tive Material.

5 The UKOOA NORM safety guidelines covered the trans-

portation and disposal of contaminated equipment, training of

personnel, and the use of qualified and experienced de-scaling

contractors. The NORM Reference Manual outlined the sys-

tematic approach oil companies were to follow to identify wells

with radioactive scale.

44a

bama, and Florida, advising him what he had found.

In a letter dated June 19, 1986, Mr. Booher informed

Mr. Terrell that where oilfield equipment was

opened up for maintenance, inspection, and cleaning,

there would be a human health concern, and if

equipment contaminated with radioactive scale was

turned over to contractors for cleaning, those con-

tractors had to be notified of the presence of radioac-

tivity. ITCO was Exxon’s main cleaning contractor.

Over the next several months, Exxon prepared a

videotape and a letter advising cleaning contractors

of the NORM problem and how to manage it.

On March 27, 1987, Exxon representatives met

with Mr. John Hooper, president of ITCO, and other

ITCO employees, to inform them of the NORM prob-

lem. At that time, Exxon played the video and gave

them a set of procedural safety guidelines prepared

by Mid-Continent Oil & Gas Association to follow

when handling NORM contaminated equipment.

The focus of the Exxon video and safety procedures

was on precautions to prevent workers from breath-

ing or ingesting airborne dust. At that time, Exxon’s

representatives made no mention of the possible

buildup of radioactive scale on ITCQ’s premises even

though it knew the pipe scale had been accumulating

on the premises for years and had learned in June

1986 that it was hazardous.

Following the meeting, Mr. Hooper decided that

ITCO would not clean any more piping/tubulars that

contained NORM, and he informed Exxon of his de-

cision. According to its guidelines, Exxon determined

that piping/tubulars with NORM levels reading

5pCi/g (five picoCuries per gram) “above back-

45a

ground’ were deemed contaminated.? Mr. Hooper

then had the Exxon piping/tubulars monitored as

they entered the ITCO yard to verify that they were

below the 5pCi/g threshold. Piping/tubulars that

were above the threshold were segregated to an area

in ITCQO’s lower yard that was leased to Exxon. This

area was fenced off and posted. Mr. Hooper also

surveyed the piping/tubulars in the pipe racks on the

premises to determine if they registered any ele-

vated NORM levels. The piping/tubulars in the

racks that had elevated levels of radioactivity were

moved to the segregated area. The survey of the

ITCO yard, which included the Grefer tract, did not

of the two following areas: 1) the ground near an in-

spection shed outside of tlie Grefer property, and 2)

the ground where the pipe cleaning machine was

situated on the Grefer property. f

6 Under certain conditions, the levels of radiation caused by

the radium in scale exceed the normal background levels of ra-

diation from the earth and the sun, to which everyone is ex-

posed.

7 Three types of radiation measurement acronyms are im-

portant to an understanding of this case. The first is microent-

gens per hour (ulVhr), which is the reading one would get from

a geiger-type counter or survey meter, measuring the amount

of radiation in the air at any specific point. See, James R. Cox,

Naturally Occurring Radioactive Materials in the Oil Field:

Changing the NORM, 67 Tul. L. R. 1197 (1993), note 6 at 1202.

This less thorough measurement may be taken anywhere in the

field and is known as an external dose rate. Jd. The second

measurement is picoCuries per gram (pCi/g), which measures

the radioactivity of solid media such as soil or scale, and this

test must be performed with sophisticated laboratory tech-

niques. Id. at 1201. The third measurement is millirems (mR),

which concerns the dose of radiation to the body. Id. at 1202.

46a

Shortly thereafter, ITCO built a Controlled Envi-

ronmental Cleaning (“CEC”) unit to clean NORM

contaminated pipe. The unit had a special dust col-

lection vacuum system, and ITCO demonstrated it

for Exxon hygienists and engineers in the summer of

1987. Exxon requested several minor modifications,

which ITCO made. However, no one from Exxon

ever informed Mr. Hooper that the unit had been

approved. Thus, ITCO never used it commercially.

Sometime thereafter, ITCO’s business began to

steadily decline, and Mr. Hooper decided to shut

down operations.

FACTS AND PROCEDURAL HISTORY

OF THE CASE

ITCO was founded in 1935 as an oil and gas ser-

vice company. The business was located on Peters

Road adjacent to the Harvey Canal in Harvey, Lou-

isiana. Initially, ITCO stored and warehoused oil

field production pipe for Humble Oil & Refining

Company (a predecessor to Exxon). Eventually,

ITCO expanded its services to include the cleaning,

inspecting, testing, threading and transporting of

pipe for Exxon and other oil companies. To accom-

modate its expanding operation, in 1968, ITCO be-

gan leasing several parcels of adjacent land from

Mrs. Camille Antoine Grefer (“Mrs. Grefer”). Be-

tween 1968 and 1992, ITCO had leased eight sepa-

rate tracts of the Grefer property. Beginning in

8 The Grefer property is a continuous tract of land measur-

ing 1,426,500 square feet, or approximately 33 acres, that runs

from 16th Street to Breaux Avenue and from Peters Road to

Pailet Avenue in Harvey, Louisiana. The leased tracts are re-

ferred to as G-1 through G-4 and G-6 through G-9; there was no

G-5 lease.

47a

1984, however, ITCO chose not to renew five of the

leases because it had purchased an adjacent 240-

acre tract of land for its pipe yard activities.

Due to the decline in business, in June 1992, Mr.

Hooper met with Judge Joseph Grefer to discuss

terminating ITCO’s three remaining leases, G-2, G-3

and G-6. Mr. Hooper informed Judge Grefer that he

wanted to cease ITCO’s business operations at the

end of August 1992. He told Judge Grefer that he

would pay the monthly rentals through that date,

and asked Judge Grefer if his mother, Mrs. Grefer,

would forego the additional three years of rental

payments due under the leases. Judge Grefer

agreed to recommend this to his mother.

After discussing the matter with her son, Mrs.

Grefer agreed to terminate ITCO’s remaining leases

in exchange for $23,193.51. Mr. Hooper then con- |

tacted ITCO’s attorney, Daniel Lund,® who prepared

a “Release, Settlement and Termination Agreement”

for the parties to sign. After reviewing the proposed

release agreement and finding it insufficient, Judge

Grefer spoke to Mr. Lund sometime between June 30

and July 2, 1992, and asked him at that time to in-

sert a clause in the release agreement to reserve the

lessor’s rights and claims against third parties. Ed-

mond Haase, III, Mrs. Grefer’s grandson and a col-

league of Mr. Lund, brought the revised release

agreement to Judge Grefer and suggested that he

call Mr. Hooper about possible radiation on the

property. Shortly thereafter, Judge Grefer called

Michael Hooper, Mr. Hooper’s son, who assured him

9 Daniel Lund, P.L.C., is a partner in the Law Offices of

Montgomery, Barnett, Brown, Read, Hammond & Mintz.

48a

that an inspection of the property disclosed no radio-

active contamination. Based on Michael Hooper’s

assurances, Judge Grefer approved the revised re-

lease agreement and Mrs. Grefer signed it on July

13, 1992. Judge Grefer then returned the signed

agreement to Mr. Lund, who forwarded it to Mr.

Hooper for his signature. The fully executed agree-

ment was then recorded in the Conveyance Records

of Jefferson Parish.

Several years later, in September 1996, an attor-

ney representing a former ITCO employee contacted

Judge Grefer, seeking permission to enter the prop-

erty formerly leased to ITCO to test for radioactive

contamination. Judge Grefer allowed the property to

be tested and the following month he received the

sampling report and laboratory analysis confirming

that the property was contaminated with radium.

In August 1997, the Grefers filed suit against

Exxon, ITCO, and Alpha Technical Services, Inc.

(“Alpha Technical”),!° among others, alleging that

they had recently discovered their property was con-

taminated with Technologically Enhanced Radioac-

tive Material (“TERM”)'! from scale deposited on

10 Alpha Technical, an oilfield service company, also had

leased property from the Grefers.

11 The plaintiffs’ use the acronym TERM to refer to the ra-

dioactive scale deposits found in the used oilfield tubulars. The

defendants, on the other hand, refer to the deposits as NORM.

As mentioned, infra, the radioactive scale consists of radium-

226, radium-228, and their daughter products. To the extent

radium is found in used oilfield tubulars, it is naturally occur-

ring and may be technologically enhanced. It is sometimes re-

ferred to as Technologically Enhanced Naturally Occurring Ra-

dioactive Material (“TENORM7”), which is defined as “natural

49a

used oilfield piping/tubulars that were cleaned

and/or maintained by ITCO and Alpha for Exxon

and other oil companies. They claimed that the de-

fendants knew that the TERM contained hazardous,

toxic and carcinogenic substances and was present in

both inshore and offshore oil producing wells but

never informed the public of the safety hazard. As to

Exxon and the other defendants, the plaintiffs as-

serted causes of action in negligence, strict liability,

absolute liability, nuisance, and fraud and sought

compensatory damages for loss of use and remedia-

tion of the property as well as punitive damages pur-

suant to La. C.C. art. 2315.3. The plaintiffs also as-

serted a breach of contract claim against ITCO.

ITCO subsequently filed a cross-claim against

Exxon, alleging that pursuant to its contracts with

Exxon, Exxon was required to provide ITCO with

any pertinent information on any known toxic and

hazardous substances contained in its oilfield pip-

ing/tubulars. Exxon was also required to meet with

ITCO on a regular basis to determine whether any

changed condition or specific health or safety haz-

ards would be encountered by ITCO during its pipe

cleaning operations. ITCO also alleged that these

contracts provided a “Distribution or Risks” between

the parties wherein Exxon contractually assumed

the risk for its own negligence, willful misconduct,

and/or strict liability. ITCO claimed that Exxon sent

the majority of its used tubulars from its Eastern

and Offshore Divisions to ITCO to clean, and that

sources of radiation which would not normally appear without

some technological activity not expressly designed to produce

radiation.” LAC33:XV.1417.A.1.

50a

Exxon had knowledge of radioactive scale deposits in

some of the piping/tubulars prior to March 27, 1987,

the date Exxon first disclosed to ITCO the existence

of NORM in the tubulars. ITCO alleged a claim

against Exxon for the NORM deposited during

ITCO’s pipe/tubular operations at ITCO’s owned or

operated sites based upon Exxon’s breach of the

health and safety disclosure provisions of the

ITCO/Exxon contracts. ITCO further alleged that in

the event it would be cast in judgment in favor of the

Grefers on the main demand, it would be entitled to

full indemnity and/or contribution from Exxon.

Prior to trial, the plaintiffs dismissed all defen-

dants other than [TCO and Exxon. After a five-week

trial, the jury returned a verdict in favor of the Gre-

fers and awarded them compensatory damages in

the amount of $56,145,000.00, which included

$145,000.00 in general damages and $56,000,000.00

in restoration costs (special damages), as well as ex-

emplary (punitive) damages in the amount of

$1,000,000;000.00 (one billion dollars). In answers

to the jury interrogatories, the jury allocated 85% of

the fault to Exxon, 5% to ITCO, 5% to Alpha Techni-

cal and 5% to OFS, Inc. The jury also answered

special interrogatory number 11 in favor of ITCO,

holding that “ITCO is entitled to recover from Exxon

all amounts awarded against [TCO under its coun-

terclaim against Exxon[.]” A month after the jury

returned its verdict, the trial court held a separate

12 [TCO also had filed a third party demand against OFS,

Inc. and Oilfield Testers, Inc., alleging that these two licensed

NORM handling facilities conducted operations near or adja-

cent to the Grefer tract that resulted in NORM contamination

to the property.

Sla

hearing to consider the merits of Exxon’s exception

of prescription. Following the hearing, the trial

court rendered a judgment denying the exception

and a judgment in accord with the jury’s verdict. It

is from these judgments that Exxon, ITCO and the

Grefers appeal.

ASSIGNMENTS OF ERROR

Exxon raises the following seven assignments of

error on appeal:

The trial court erred in denying Exxon’s ex-

ception of prescription;

. The trial court judgment is based on an

unlawful jury verdict;

. The trial court erred in refusing to instruct

the jury on the Louisiana Department of En-

vironmental Quality (“DEQ”) standards gov-

erning NORM limits for unrestricted-use land;

. The trial court erroneously instructed the jury

on exemplary damages though the plaintiffs’

cause of action accrued before the legislature

enacted Louisiana Civil Code article 2315.3;

The jury's award of exemplary damages was

manifestly erroneous because the evidence

does not support a finding that Exxon engaged

in wanton or reckless conduct;

The jury’s punitive damages award is uncon-

stitutional, excessive, and must be vacated or

reduced to comport with due process; and

The trial court erron usly instructed the jury

on ITCO’s indemnity ciaim.

52a

ITCO's single assignment of error is that the jury

erred in finding it at fault. The Grefers sole assign-

ment of error is that the trial court erred in refusing

to attach prejudgment interest to the jury’s punitive

damage award.

DISCUSSION

Prescription

Exxon argues on appeal that the plaintiffs’ claims

had prescribed four years before they filed suit in

1997. Specifically, it argues that Judge Grefer ad-

mitted that he had acquired knowledge from his

nephew, Mr. Haase, that there might be a problem

with radiation on the property during ITCO’s nego-

tiations to terminate the three remaining leases and

transfer the property back to Mrs. Grefer in 1992.

This knowledge, Exxon contends, was sufficient to

excite attention, prompt further inquiry, and com-

mence the running of the one-year prescriptive pe-

riod at that time.

The plaintiffs, on the other hand, contend that

Judge Grefer made a reasonable inquiry in 1992

when, at the suggestion of his nephew, he asked Mr.

Michael Hopper about the possibility of radiation on

the property. Invoking the doctrine of contra non

valentem, they argue that prescription could not

have commenced at that time because Exxon had

withheld from ITCO the results of subsurface sur-

veys conducted at the ITCO yard prior to 1992 that

disclosed radioactive contamination on the property.

Also, the plaintiffs argue that because the radioac-

tive material was hidden randomly, subsurface, they

had no way of knowing their property was contami-

nated until they obtained actual knowledge of the

53a

contamination when Judge Grefer received the re-

sults of the radiation study conducted in October

1996.

When damage is caused to immovable property,

the one-year prescriptive period commences to run

from the day the owner of the immovable acquired,

or should have acquired, knowledge of the damage.

La. C.C. art. 3493.

When an exception of prescription is filed, the

burden of proof is on the party pleading prescription.

Lima v. Schmidt, 595 So. 2d 624, 628 (La. 1992). If,

however, prescription is evident on the face of the

pleadings, then the burden shifts to the plaintiff to

show that the cause of action has not prescribed.

Eastin v. Entergy Corporation, 2003-1030, p. 5 (La.

2/6/04), 865 So. 2d 49, 54.

The rule of prescription is subject to the discovery

rule of contra non valentem agere nulla currit

praescriptio, which suspends the running of pre-

scription during the period in which the cause of ac-

tion was not known by or reasonably knowable by

the plaintiff. Plaquemines Parish Commission.

Council v. Delta Development Company, Inc., 502 So.

2d 1034 (La. 1987). The Louisiana Supreme Court

set forth four instances where contra non valentem is

applied to prevent the running of prescription: (1)

where there was some legal cause which prevented

the courts or their officers from taking cognizance of

or acting upon the plaintiffs action; (2) where there

was some condition coupled with the contract or

connected with the proceedings which prevented the

creditor from suing or acting; (3) where the debtor

himself has done some act effectually to prevent the

54a

creditor from availing himself of his cause of action;

and (4) where the cause of action is not known or

reasonably knowable by the plaintiff, even though

this ignorance is not induced by the defendant. Id.

at 1054-55. The Court, in Jordan v. Employee

Transfer Corp., 509 So. 2d 420 (La. 1987), clarified

its application of contra non valentem, stating:

Prescription will not begin to run at the earliest

possible indication that a plaintiff may have suf-

fered some wrong. Prescription should not be

used to force a person who believes he may have

been damaged in some way to rush to file suit

against all parties who might have caused that

damage. On the other hand, a plaintiff will be

responsible to seek out those whom he believes

may be responsible for a specific injury.

When prescription begins to run depends on the

reasonableness of a plaintiffs action or inaction.

. Id., 509 So. 2d at 423. Constructive knowledge or

notice sufficient to commence the running of pre-

scription, however, requires more than a mere ap-

prehension that something might be wrong. Landry

v. Blaise, Inc., 2002-0822, pp. 5-6 (La. App. 4 Cir.

10/23/02), 829 So. 2d 661, 665-66. Prescription will

commence only when the plaintiff knew or should

have known by exercising reasonable diligence that

tortious conduct occurred and that certain parties

are responsible. Jd. at 666.

At the post-trial prescription hearing, in addition

to Judge Grefer’s testimony, Exxon introduced into

evidence the deposition testimony of Mr. Lund taken

on January 9, 2001, and proffered the testimony of

Mr. Haase as well as several documents evidencing

55a

Mr. Haase’s legal representation of ITCO.4% Exxon

also asked the court to consider an affidavit executed

by Mr. Lund.14

Judge Grefer testified at the prescription hearing

that Mr. Hooper came to him in June 1992 to discuss

terminating the leases because he was closing his

business. He further testified that his nephew, Mr.

Haase, who was representing ITCO at the time,

brought him the final document prepared by the

Montgomery Barnett law firm to formally terminate

the leases and suggested that he contact Michael

18 Exxon had subpoenaed both Mr. Haase and Omer F.

Kuebel, Jr., another attorney from the Montgomery Barnett

law firm, to testify but the trial court quashed the subpoenas

because Exxon failed to list them as witnesses on the pre-trial

witness list. As a result, Exxon was precluded from calling

them as witnesses at the prescription hearing. Nonetheless,

the trial court allowed Exxon to proffer statements that it be-

lieved Mr. Haase would have testified to if he had been allowed

to testify. The proffered testimony provided that Mr. Haase

had represented ITCO in several matters during his employ-

ment with the Montgomery Barnett law firm, including assist-

ing ITCO in NORM related matters and negotiations with

Exxon regarding the remediation of ITCO’s upper yard; despite

his knowledge of the radioactive contamination on the property,

he did not inform his family that it might have contaminated

their adjacent land.

14 Mr. Lund executed an affidavit on November 28, 2000

that ITCO submitted in support of its motion for summary

judgment and exception of prescription filed in December 2000.

In the affidavit Mr. Lund averred that in 1992 during negotia-

tions with Judge Grefer regarding the cancellation of the ITCO

lease, Judge Grefer expressed concern about radiation on the

property and asked him to include a reservation of rights

clause in the termination agreement. After the trial court de-

nied the motion for summary judgment, ITCO abandoned its

exception of prescription.

56a

Hooper to discuss whether there was a problem with

radiation on the property. Judge Grefer then called

Mr. Michael Hooper, who assured him that he, per-

sonally, had inspected the property and found no ra-

diation. According to Judge Grefer, he accepted Mr.

Michael Hooper’s representation and, based on their

families’ close business and personal relationship,

had no reason to doubt his word. Judge Grefer also

acknowledged that he had spoken to Mr. Lund after

reviewing an initial draft of the lease termination

agreement because he was concerned about reserv-

ing his mother’s rights against any third parties who

might be responsible for damage to the property.

However, he testified that he did not recall ever dis-

cussing with Mr. Lund his concern about radiation

or other environmental damage to the Grefer prop-

erty.15 Also, Judge Grefer denied ever visiting the

ITCO premises in 1992 to observe the cleaning and

6 At a January 3, 2001 deposition, Judge Grefer testified

that Mr. Haase told him to call Mr. Michael Hooper because

“there may be a problem with the property.” When asked

whether or not Mr. Haase had told him there was a potential

problem with radiation on the property, Judge Grefer replied,

“J don’t recall.” Likewise, when asked whether the word “ra-

diation” was ever used in his conversation with Mr. Michael

Hooper, Judge Grefer again replied, “I don’t recall.” At a Janu-

ary 29, 2001 deposition, when questioned by Exxon’s counsel

about his conversations with Mr. Lund regarding the release

for ITCO and whether there was a potential for environmental

contamination on his family’s property, Judge Grefer stated,

unequivocally, “No, I had no conversation with Dan Lund about

environmental contamination on the property.” Exxon’s coun-

sel then asked, “But just to make sure I understand, it’s not

that you don’t recall the conversation? You know you didn’t

have one?” Judge Grefer again responded, “I didn’t have one.”

57a

remediation of an area around the pipe-cleaning ma-

chine.

Mr. Lund testified at his deposition that he had

several phone conversations with Judge Grefer in

late June and early July 1992 during which Judge

Grefer asked him to include a reservation of rights

provision in the release, settlement and termination

agreement because he was concerned about radioac-

tive contamination. Mr. Lund told Judge Grefer that

ITCO had advised him that they had found an area

on the property with a radioactivity reading above

acceptable background levels in an area near the

pipe cleaning machine; that the machine had been

cleaned and that the area around it had been

scraped with a bulldozer and the dirt was moved to

another site. According to Mr. Lund, Judge Grefer

then told him that he had been to the property him-

self and observed the work being done.1®

16 The exhibits attached to Mr. Lund’s deposition included

correspondence and notes from Mr. Lund’s ITCO file, which the

plaintiffs obtained through discovery. Mr. Lund identified two

handwritten notations that he had made at the time he spoke

to Judge Grefer. The first notation, which appears on a copy of

the June 19, 1992 cover letter that Mr. Kuebel wrote to Judge

Grefer advising him to review an attached draft of the revised

settlement agreement, read “6/30 — Tel Joe — is Holding the

Check what about environmental ~—.” Mr. Lund explained that

the notation, made on June 30, 1992, indicated that he had

telephoned Judge Grefer, who was holding ITCO’s check and

was inquiring about environmental conditions on the property.

The second handwritten notation, Mr. Lund explained, was

made during a telephone conversation with Judge Grefer on

July 2, 1992 and read “Telephone Joe Grefer, 10:00 a.m., told

Joe — says he’s concerned about radiation, put in agreement.

No indication at this time. This is not intended to release or

waive any rights against any party who may have responsibil-

58a

After considering the evidence from the trial and

the post-trial prescription hearing, the trial court de-

termined that prescription was not evident on the

face of the plaintiffs’ petition and that Exxon had the

burden of proof but did not satisfy its burden. In

reasons for judgment, the trial court stated that she

found both Judge Grefer and Mr. (John) Hooper

were credible witnesses.'7 She determined that

when Mr. Haase informed Judge Grefer of possible

contamination in 1992, Judge Grefer made a reason-

able inquiry of Mr. Michael Hooper and due to the

long-term business and professional relationship be-

tween them, Judge Grefer was reasonable to rely

upon Mr. Michael Hooper’s representations that the

ity.”

17 Mr. Michael Hooper did not testify at trial but the parties

stipulated that had he testified his testimony would have been

the same as Mr. John Hooper’s testimony. Mr. John Hooper

testified at trial that after Exxon disclosed the NORM problem

to ITCO in March 1987, ITCO discontinued the cleaning of any

used piping/tubulars that were above the safe threshold. He

further testified that ITCO surveyed its yard, including the

Grefer tract, to determine if there were any elevated NORM

readings on site. Piping/tubulars found in pipe racks that had

elevated levels of radioactivity were moved to a segregated area

in ITCO’s lower yard. According to Mr. Hooper, the ITCO yard

did not register above background levels with the exception of

two areas, one outside an inspection shed and the other where

the pipe-cleaning machine was situated on the Grefer property.

Mr. Randy Minton, ITCO’s radioactive safety officer, reported

those areas presented no hazards since the primary safety con-

cern discussed by Exxon with ITCO was the airborne dust

which could be ingested by workers. Mr. Hooper testified that

ITCO never knowingly cleaned any NORM contaminated pipe

after March 27, 1987, and that when he transferred the prop-

erty back to Mrs. Grefer in mid-1992, he was not aware of any

unacceptable levels of radioactive scale on the property.

59a

property had been tested and there was no radioac-

tive contamination. The trial court doubted that

Judge Grefer, an attorney and former judge, would

have allowed ITCO to terminate the lease three

years early and as compensation receive only the

rent due through August 1992 and a reservation of

rights as to third parties if he had any knowledge of

contamination in 1992. She also questioned the ve-

racity of Mr. Lund’s testimony that he told Judge

Grefer in 1992 that ITCO knew that an area of the

property was contaminated. The court opined that

Mr. Lund’s statement was against his client’s

(ITCO’s) interest and “defied belief.”18

When findings are based on determinations re-

garding the credibility of witnesses, the manifest er-

ror — clearly wrong standard demands great defer-

ence te the trier of fact’s findings, for only the fact-

finder can be aware of the variations in demeanor

and tone of voice that bear so heavily on the lis-

tener’s understanding and belief in what is said.

Rosell v. ESCO, 549 So. 2d 840, 844 (La. 1989). If

the trial court’s findings are reasonable in light of

18 Mr. Lund initially made the sworn statement in his affi-

davit in November 2000, which ITCO submitted in support of

its motion for summary judgment and exception of prescription.

At that time, ITCO was making the same argument that Exxon

made at the post-trial prescription hearing and asserts in this

appeal, i.e., Judge Grefer knew or should have known by exer-

cising reasonable diligence that the property was contaminated

and that the defendants were responsible. Mr. Lund’s state-

ment certainly was not against his client’s interest; rather it

reinforced ITCO’s claim that Judge Grefer had knowledge suffi-

cient to commence the running of prescription in July 1992. In

any event, whether or not the statement was against [TCO’s

interest is not germane to the issue at hand.

60a

the record reviewed in its entirety, the court of ap-

peal may not reverse even though convinced that

had it been sitting as the trier of fact, it would have

weighed the evidence differently. Id.

After reviewing the record, we find the trial court

was correct in determining that prescription was not

evident on the face of the plaintiffs’ petition and that

Exxon had the burden of proof but did not satisfy its

burden by a preponderance of the evidence. Fur-

thermore, we cannot say the trial court was clearly

wrong in determining that Judge Grefer acted rea-

sonably in relying on Mr. Michael Hooper’s assur-

ances that the Grefer property did not contain unac-

ceptable levels of radioactive waste. The trial court

made findings of fact based on her determination

that both Judge Grefer and Mr. Hooper were credi-

ble witnesses, and her findings, are supported by

evidence in the record. Thus, we cannot disturb the

trial court’s judgment overruling the defendants’ ex-

ception of prescription.

Unlawful Jury Verdict

In its second assignment of error, Exxon argues

that the judgment is based on an unlawful jury ver-

dict, and the trial court reformed the verdict without

legal justification. Specifically, Exxon contends that

the transcript from the original jury polling disclosed

that on interrogatory number 2 (whether Exxon’s

fault caused damage to the plaintiffs’ property) only

seven jurors answered, “yes.” After reviewing his

audiotapes, the court reporter, Mr. Joseph Catalano,

amended the transcript to reflect that eight jurors

voted “yes” and four voted “no.” Mr. Catalano then

certified the transcript as being “true and correct.”

6la

Exxon subsequently obtained a copy of the certified

transcript and discovered the vote tally on interroga-

tory number 2 was deficient, as only eight “yes” votes

were recorded. Exxon notified the court of the defi-

ciency. Meanwhile, the plaintiffs had filed a motion

to correct the record pursuant to La. C.C.P. art. 2132

to reflect that juror number three, Mr. Emile Fer-

bos,!9 voted affirmatively to interrogatory number 2.

Nearly a year after the jury rendered the verdict, the

trial court granted the plaintiffs’ motion and

amended the official transcript to reflect that nine

jurors had voted affirmatively on interrogatory

number 2.

The plaintiffs argue that Exxon cannot contest

the trial court’s correction of the erroneous jury poll

transcript because Exxon failed to make a contempo-

raneous objection to the vote count. on interrogatory

number 2 at the time the jury was polled. Also, the

plaintiffs point out that the trial court corrected the

transcript based upon her recollection of the jury poll

and the notes taken by Exxon’s counsel at that time,

which were consistent with the evidence proffered at

the hearing on the motion to correct the record.

Louisiana Code of Civil Procedure article 1797(B)

provides, “[iJf trial is by a jury of twelve, nine of the

jurors must concur to render a verdict unless the

parties stipulate otherwise.” Article 2132 of the

Code of Civil Procedure provides that a record on

appeal which is incorrect or contains misstatements,

irregularities or informalities may be corrected by

19 The original jury poll transcript of May 22, 2001 refers to

Mr. Ferbos as “Mr. Provost” and the amended transcript of May

22, 2001 refers to him as “Mr. Ferbost.”

62a

the parties by stipulation, by the trial court or by the

order of the appeilate court. Furthermore, Code of

Civil Procedure article 2088 confers upon the trial

court jurisdiction to “correct any misstatement ir-

regularity, informality, or omission of the trial re-

cord, as provided in Article 2132.”

After the jury’s verdict was read in open court,

Exxon’s counsel requested that the trial court poll

the individual jurors as to each interrogatory. The

original transcript of the jury poll reflects that ini-

tially seven jurors voted “yes” and five jurors, includ-

ing Mr. Ferbos and Ms. Huyen Bui (juror number

8)2° voted “no” on jury interrogatory number 2. At

completion of the polling, Exxon’s counsel informed

the court that he had a problem with the vote on jury

interrogatory number 9 regarding the cost to restore

the plaintiffs’ property; only eight jurors had voted

“yes.” The trial court met with counsel outside the

presence of the jury and apparently determined the

problem pertained to Ms. Bui’s vote. When the tria

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