Opposition Brief — Exxon Mobil Corp. v. Grefer (No. 07-1055)
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No. 07-1055 MAR 1 7 2008
OFFICE OF THE Crier:
In The SUPREME COURT, U.S.
Supreme Court of the Anited States
EXXON MOBIL CORPORATION,
Petitioner,
V.
JOSEPH GREFER, ET AL..,
Respondents.
On Petition For A Writ Of Certiorari
To The Louisiana Court Of Appeal,
Fourth Circuit
¢
BRIEF IN OPPOSITION
$
STUART H. SMITH STEPHEN B. MURRAY
MICHAEL G. STAG (Counsel of Record)
SMITH STAG, L.L.C. ARTHUR M. MURRAY
365 Canal Street, Suite 2850 MURRAY LAW FIRM
New Orleans, LA 70130 909 Poydras Street,
(504) 593-9600 Suite 2550
‘ New Orleans, LA 70112
(504) 525-8100
Attorneys for Respondents
| Additional Counsel On Inside Cover]
COCKLE LAW BRIEF PRINTING CO (800) 225 6964
OR CALL COLLECT (402) 342-2831
ANDREW B. SACKS
JOHN WESTON
LAW OFFICES OF ANDREW B. SACKS AND ASSOCIATES
114 Old York Road
Jenkintown, PA 19046
(215) 925-8200
RALPH R. ALEXIS, III
PORTEOUS, HAINKEL AND JOHNSON, L.L.P.
704 Carondelet Street
New Orleans, LA 70130
(504) 581-3838
RON A. AUSTIN
AUSTIN & ASSOCIATES, L.L.C.
400 Manhattan Avenue
Harvey, LA 70058
(504) 436-7844
JACK W. HARANG
HARANG & BARKER, L.L.C.
3500 N. Hullen Street
Metairie, LA 70002
(504) 456-8658
D.
i
QUESTIONS PRESENTED FOR REVIEW
DID EXXON’S FULL, VOLUNTARY AND
UNCONDITIONAL PAYMENT OF THE PUNI-
TIVE DAMAGE AWARD EFFECT A WAIVER
OF ANY ISSUES ON APPEAL AND RENDER
THIS PETITION MOOT”?
DID EXXON’S FAILURE TO PRESERVE ANY
WILLIAMS OBJECTIONS WAIVE THOSE IS-
SUES?
DOES WILLIAMS EXPLICITLY PERMIT
CONSIDERATION OF HARM TO THIRD
PARTIES IN ASSESSING THE REPREHEN-
SIBILITY OF EXXON’S MISCONDUCT?
DID THE LOUISIANA COURTS PROVIDE
EXXON FULL DUE PROCESS PROTECTION
—~ EVEN THOUGH EXXON DID NOT RE-
QUEST IT?
DOES WILLIAMS REQUIRE A RETRIAL?
IS ANY STATE FARM RATIO ISSUE BEYOND
THE SCOPE OF THIS COURTS REMAND,
WAS IT RAISED IN THE COURTS BELOW,
AND IS IT EVEN ARGUABLY MERITORI-
OUS?
l
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED FOR REVIEW ........ i
ae GO GPIB eveccsncncccccssevsessesnssacsvegence li
TAB CF BU aie BD sons vce ccnssnsinnscsciccsccenace v
STATEMENT OF THE CASE..................cceccseceeees 1
A. FACTUAL BACKGROUND....................0... 1
(1) Exxon Has Unconditionally Paid The
Punitive Damage Award Contested
| RRA RANTES NORE LORIE PEO OER TOT Te 1
(2) The Greter Promerey ........25.005s000se0e00es. 1
(3) Exxon’s Conduct, Its Motivations and
the Effect on the Grefer Family and
FE I oii sivitttierxeserreshiccrersve 3
B. PROCEEDINGS BELOW...................0..000.. 7
REASONS FOR DENYING THE PETITION ..... 10
A. EXXON’S FULL, VOLUNTARY AND
UNCONDITIONAL PAYMENT OF THE
PUNITIVE DAMAGE AWARD = EF-
FECTED A WAIVER OF ANY ISSUES
ON APPEAL, AND RENDERED THIS
PR ee vices nvnesddnnassntsaveoens 10
(1) Exxon’s Payment of the Punitive
Damage Award Was Unconditional..... 10
(2) Exxon’s Payment of the Punitive
Damage Award Was Voluntary............ 12
(3) Exxon’s Unconditional and Voluntary
Payment of the Punitive Damage
Award Renders This Petition Moot..... 13
ll
TABLE OF CONTENTS — Continued
Page
EXXON’S FAILURE TO PRESERVE ANY
WILLIAMS OBJECTIONS WAIVED THOSE
NP icaiasssninnek aakuenictsincnsarsanveniaaniessnen
(1) The Trial Court’s Instructions Were
Proper, and Exxon Never Asked for
the Relief It Now Demands.................
(2) Exxon’s Failure to Request a Wil-
liams Instruction Waived the Issue ....
(3) Exxon Also Waived the Williams Is-
sue Under Louisiana Law ...................
(4) Exxon Made No Due Process Objection
to Evidence of Third-Party Harm...........
WILLIAMS EXPLICITLY PERMITS
CONSIDERATION OF HARM TO
THIRD PARTIES IN ASSESSING THE
REPREHENSIBILITY OF EXXON’S
PANTER sex sniscsnkasdchacnvhnceceessncabvessonken
THE LOUISIANA COURTS PROVIDED
EXXON FULL DUE PROCESS PRO-
TECTION —- EVEN THOUGH EXXON
EPREP TOPE GRMP MN T UPE BA ic sckiccnccstanncididnaniunss
WILLIAMS DOES NOT REQUIRE A
ee BRR BARE Coe EO UT OTE” rt eee
ANY STATE FARM RATIO ISSUE IS
BEYOND THE SCOPE OF THIS
COURT’S REMAND, WAS NOT RAISED
IN THE COURTS BELOW, AND IS NOT
EVEN ARGUABLY MERITORIOUG.........
15
16
18
18
19
20
25
28
1V
TABLE OF CONTENTS — Continued
Page
(1) Exxon’s 1:1 Ratio Argument Is Be-
yond the-Scope of This Court’s Re-
mand and Was Not Preserved on
oe cad Higcil adanindnideasnncuneaniin 34
(2) Exxon’s 1:1 Ratio Argument, Even if
It Could Properly Be Raised at This
Time, Does Not Merit This Court’s
ee alee esa yadicaminkineia 35
a. The 2:1 Ratio In This Case Is En-
tirely Consistent With State Farm .... 35
ead Tadinsues cesistnay cca vapuscueeccneanshsdacss 39
TABLE OF AUTHORITIES
Page
CASES
' Action Marine, Inc. v. Continental Carbon
Incorporated, 481 F.3d 1302 (11th Cir. 2007)......... 21
American Motor Insurance Co. v. American
Rent-All, Inc., 617 So.2d 944 (1993)...................068. 10
BMW of North America, Inc. v. Gore, 517 U.S.
559, 116 S. Ct. 1589, 134 L.Ed.2d 809 (1996)... passim
Buckbee v. United Gas Pipe Line Co. Inc., 561
se aliases nds banieannnensues 33
Bullock v. Philip Morris USA, Inc., 159
Cal.App.4th 655 (Cal. Ct. App. 2d Dist.
CT can dndeheikinnens 30, 31
Campbell v. State Farm Mut. Auto. Ins. Co., 98
P.3d 409 (Utah 2004), cert. denied, 543 U-E.
874, 125 S. Ct. 114, 160 L.Ed.2d 123 (2004)....29, 36
Cooper v. AMT, Inc., 454 So.2d 156 (La.App. 1
Cir. 1984), writ denied, 459 So.2d 539 (La.
Delaney v. Whitney, 703 So.2d 709 (La.App. 4th
Cir. 1997), writ denied, 715 So.2d 1211 (La.
ee Sac Sinuhaasahedtwkesbnioasesne 18
ExxonMobil v. Grefer, Joseph, et al., No.
AGE ol ean RRS ES ay
ExxonMobil Corp. v. Grefer, 126 S.Ct. 2056
a Lin ivnagbenacnivGeebncass 9
ExxonMobil Corp. v. Grefer, 127 S.Ct. 1371
vi
TABLE OF AUTHORITIES — Continued
Page
Gonzales v. Xerox Corp., 320 So.2d 163 (La.
TEP i cciwinsnsenndpnsncesacecacinincebid aiienhcaatbeaisinodsadeubaakinn 33
Grefer v. Alpha Technical, 901 So.2d 1117
(La.App. 4th Cir. 2005) ....................00 2, 8, 22, 23, 26
Grefer v. Alpha Technical, on remand, 965
So.2d 511 (La.App. 4th Cir. 2007)....................... 9, 34
Griffin v. International Insurance Company,
727 So.2d 485 (La.App. 3d Cir. 1998)............... 13, 14
Kauffman v. Maxim Healthcare Services, Inc.,
509 F.Supp.2d 210 (E.D. N.Y. 2007)...................08. 18
Merrick v. Paul Revere Life Ins. Co., 500 F.3d
ee ee Ge EE os eioits i estneccnctnscatecerenndcdvadanetcci: 30
Philip Morris USA v. Williams, 549 U.S. __.,
127 S. Ct. 1057, 166 L.Ed.2d 940 (2007)........ passim
Riley v. Salley, 874 So.2d 874 (La.App. 4th Cir.
BE in ciceenacapcst sus eekoniaddingins neta, puaadanaitesubsabaniae ss 33
Rodriguez v. Taylor, 468 So.2d 1186 (La. 1985) ........ 33
Roman Catholic Church of the Archdiocese of
New Orleans v. Louisiana Gas Serv. Co., 618
mT Ge Ci Thien kn ctccecccceanesccnacedccocensdeessnscans 38
Saint Charles Parish Sch. Bd. v. GAF Corp.,
ALE O31. 24 OO |. y 5 en 14,15
Sand Hill Energy, Inc. v. Smith, 142 S.W.3d
153 (Ky. 2004)......cc.cceccssccsceccosscsssessecsossesscessnseceesees 32
Southstar Funding, LLC v. Sprouse, 2007 U.S.
Dist. LEAIS 22585 (D. N.C. 2007)..............0.s0cccsesses 18
vii
TABLE OF AUTHORITIES — Continued
Page
State Farm Mutual Automobile Ins. Co. uv.
Campbell, 538 U.S. 408 (2008)..................000 passim
Stevens v. Snow, 191 Cal. 58, 214 P. 968 (1923)........ 31
Temple v. Liberty Mutual Ins. Co., et al., 330
OG GP) Cah: FI i iccetiitctnnicnicehtcanieamees 32
White v. Ford Motor Company, 500 F.3d 963
COR CRE, FID svsiscsticndnssecneedonennnmenaee 30
STATUTES
Louisiana Civil Code art. 2047 ...........ccccccessccceeeeeeeeees 11
Louisiana Civil Code art. 2315.3 ...............ssccsecsscsseceees 8
Lae. Come Ga Fart: DO cnshancumnucmeanncwee 14
Louisiana Code of Evidence art. 105 ...........0....... 18-19
CONSTITUTIONAL PROVISIONS
Lam. Conk. ort. V, SOC vccssinssesissaniscsemmmasicana 32, 33
RULES
U.S. Supreme Court Rule 10....0..............cccccceseees 27, 40
U.S. Supreme Court Rule 14(g)(i).............00....00... 34-35
OTHER AUTHORITIES
Webster’s Ninth New Collegiate Dictionary
AID»: nivsston'annssbiisirCasiéawadstialoenoupesaninaneneect na eaal enn 11
1
STATEMENT OF THE CASE
A. FACTUAL BACKGROUND
(1) Exxon Has Unconditionally Paid The Pu-
nitive Damage Award Contested Here.
At the outset, we note that after a series of
discussions and negotiations by and between counsel
for the Grefers and Exxon Mobil Corporation (herein-
after “Exxon”), reflected in correspondence by and
between said counsel, Exxon “unconditionally” paid to
the Grefers the full punitive damage award.’ (Resp.
App. la-26a). As Respondents assert hereinafter, this
payment renders Exxon’s Petition moot.
(2) The Grefer Property.
The instant suit involves a large tract of land
owned by the Grefer family for over 125 years which,
due to the wanton, reckless, and reprehensible con-
duct of Exxon, was thoroughly inundated with radio-
active waste. The damage to this property began in
1968 when Intracoastal Tubular Services, Inc.
(“ITCO”) first leased the Grefer property from the
Grefer family in order to operate a pipe yard for trans-
porting, storing, cleaning, and inspecting Exxon’s
oilfield pipe.
During the many years of operations on the
Grefer tract, Exxon sent ITCO millions of sections of
' Exxon had previously paid the Grefers the full compensa-
tory damage award, which is not atis 2.
2
oilfield pipe encrusted with radioactive scale from
Exxon’s onshore and offshore oil production opera-
tions. R. 33:16.’ This scale consisted of concentrated
Radium-226, Radium-228, and their daughter prod-
ucts, collectively known as Technologically Enhanced
Radioactive Material (TERM).’ At Exxon’s direction,*
ITCO cleaned Exxon’s pipes and allowed the waste to
enter the environment in an uncontrolled fashion, as
the radioactive scale fell from the pipes onto the
ground when the pipes were transported in and
around the yard, were off-loaded by crane or forklift,
and were cleaned by both portable and stationary air
rattling machines. R. 33:14-18, 34:48-52; R. 33:38-41,
34:49; Pl. Ex. 40-50. These rattling machines used
high pressure air compressors that generated radio-
active dust clouds. R. 33:17-19, 34:38. Aside from the
deposit of scale from ITCO’s cleaning operations, the
radioactive scale in the pipes was also randomly
* Citations to the trial court transcript are to the record
filed with the Court of Appeal and take the form
“R.[volume}):[page].”
* The acronym “TERM” refers to the radioactive scale
deposits found in used oilfield drilling pipe. The acronym
“NORM?” is also used to describe that condition. Grefer v. Alpha
Technical, 901 So.2d 1117, 1128, n.11 (La.App. 4th Cir. 2005);
Petr. App. 48a. The decay of radium also generates Radon gas,
which is a known human carcinogen.
* Exxon maintained offices at ITCO for its employees who
managed materials, oversaw quality control, and supervised
ITCO. R. 33:11-12, 46:40-41. The Grefers had no involvement
with the industrial activities conducted by ITCO and Exxon on
the property. R. 39:115-18.
3
buried and used as road and pipe rack building
materials throughout the yard during all years of
operations. R. 33:39-41, 34:48-52; ITCO Ex. 193(D).
Estimates of the average amount of scale indicate
that as much as 1.5 million pounds of scale per
cleaning machine was dispersed in the yard each
year. R. 33:26, 29:10. This waste was never removed
from the yard, nor was there any record of a cleanup
(of any sort).
(3) Exxon’s Conduct, Its Motivations and
the Effect on the Grefer Family and
Their Property.
The Fourth Circuit concluded that Exxon’s ac-
tions in despoiling the Grefer property resulted from
Exxon’s “callous, calculated, despicable and reprehen-
sible conduct during the time-period in question”
(Petr. App. 114a), which showed that Exxon had no
concern for human safety, “and even less concern
about the property damage that it caused” to the
Grefer family. Petr. App. 1l4a. Indeed, the facts
clearly support that finding:
Exxon has long known of NORM contamination in
oilfield equipment. Petr. App. 42a-43a. This knowl-
edge pre-dated 1985, but in that year the United
Kingdom Offshore Operators’ Association — of which
Exxon was a member — published safety guidelines
and a reference manual that were distributed to all
oil companies. The manual extensively covered the
identification of radioactive scale in wells and the
4
procedure to follow up on such identification. Petr.
App. 43a. Exxon officials felt that the guidelines were
too onerous, restrictive, inflexible and unreasonable
for Exxon’s production operations in the United
States. Petr. App. 88a.
Chevron discovered NORM contamination in its
well sites in Mississippi in 1986. In May, 1986, after
learning of Chevron’s discovery, Exxon surveyed its
Mississippi well sites and confirmed the presence of
radiation in its equipment. Exxon’s own hygienist
admitted that had Exxon surveyed its U.S. wells
sooner than 1986, it would have discovered radium in
its wellheads sooner. Petr. App. 88a. Twice Exxon
officials were notified that its cleaning contractors
had to be informed of the radioactivity, since it posed
a health and safety hazard, but Exxon still did noth-
ing to warn them. Petr. App. 88a.
In fact, an internal memorandum written in
August, 1986 by Exxon’s then Director of Environ-
mental and Regulatory Affairs showed that Exxon’s
“primary concern” after Chevron’s NORM discovery
was not health, safety or property clean-up — it was to
get the oil industry and federal regulatory agencies to
“slow down” the investigation into NORM contamina-
tion out of fear that the Environmental Protection
Agency (“EPA”) would increase its regulation and
would eliminate the “produced water” exemption
under the Resource Conservation Recovery Act
(“RCRA”). Under that exemption oil companies such
as Exxon are allowed to dispose of water produced
5
during drilling operations in an unregulated manner.
Petr. App. 88a-89a.
Exxon’s entirely selfish motivations were further
demonstrated when the same Exxon official,” at a
meeting of Exxon executives concerning NORM in
January, 1987, calculated that the loss to Exxon if it
were to lose its produced water exemption would be
$750 million in the first year and $150 million for
each subsequent year. Petr. App. 89a.
At the same meeting, several Exxon officials
concluded that notifying pipe-cleaning contractors
such as ITCO about the health and safety risks of
NORM was “premature.” Petr. App. 89a. This was
contrary to the advice of an Exxon hygienist who had
earlier opined that cleaning contractors such as ITCO
had to be notified of the presence of radioactivity.
Petr. App. 43a-44a.
Another confidential memo written by another
Exxon executive in October, 1986 showed that Exxon
wanted to downplay the NORM problem because of
Exxon’s potential exposure to litigation. The memo
noted that litigation against Chevron by one of its
pipe yard contractors had followed Chevron’s disclo-
sure of NORM contamination. The same memo noted
that ITCO was a potential “look alike” to the Chevron
contractor and suggested Exxon perform “low key”
* The same Exxon official also wrote that Chevron’s discov-
ery was “nothing new.” Petr. App. 89a-91a.
6
radiation exposure measurements. Petr. App. 89a-
90a.
Exxon did not send any notification to ITCO until
March, 1987 (five months after the October, 1986
memo, and ten months after it had identified the
NORM problem at its domestic well sites), causing
further (and still unrestricted) contamination of the
Grefer property. Even then, Exxon downplayed the
problem. In a videotape played for ITCO’s president,
Exxon portrayed the health risks associated with
NORM as minor, and the safety procedure guidelines
as merely suggestive of taking precautions to avoid
breathing or ingesting airborne dust. Petr. App. 90a.
Exxon’s inadequate warning did nothing to protect the
Grefer property from further contamination or to
address the problem already existing at the property.
Even after Exxon no longer used ITCO as a
cleaning contractor, Exxon was aware that contami-
nated equipment remained stockpiled on the Grefer
property and was further aware of the danger posed
by NORM-contaminated scale; yet Exxon took no step
to remove its radioactive material from the Grefer
property. Petr. App. 94a-95a.
At no point did Exxon notify or warn the Grefer
family about the contamination at their property. R.
20:4946-48. Rather, Exxon knowingly and intention-
ally left the Grefer family with a huge mess. As a
result of the radioactive contamination described
above, the Grefers’ long-held family property was
despoiled. Petr. App. 95a. Exxon’s actions financially
7
burdened the Grefers with the tusk of cleaning up the
property. Petr. App. 95a. That burden, according to
the jury, was $56 million (not the $1.5 million market
value of the land asserted by Exxon). (Pet. 31.) This
was less than the estimate of plaintiffs’ expert, Mr.
Stanley Waligora, and more than that of Exxon’s
expert.” Petr. App. 74a-77a. The Fourth Circuit de-
termined that there was sufficient evidence to sup-
port the jury’s award. Petr. App. 107a; 113a-115a.
That judgment is now final and has been satisfied.’
Exxon’s actions have not only exposed the Grefers
to the expense of defending claims brought by third
parties as a result of the contamination of the Grefer
property but have also exposed the Grefers to signifi-
cant potential liabilities. Petr. App. 117a-118a. In fact,
a number of suits have already been instituted
against the family.
B. PROCEEDINGS BELOW.
The Grefers filed the instant suit in August of
1997 to recover damages for the burial, concealment
and disposal of radioactive scale throughout the
Grefer tract, a large (32.75 acre) property, located in a
suburb of New Orleans. Trial Record Volume 34, pp.
* R. 29:22, 29:36, 33:163-64, 33:166.
* Indeed, Exxon has unconditionally paid that amount, with
interest, to the Grefer family. See Exxon’s Motion For Stay and
Renewed Motion For Stay, ExxonMobil v. Grefer, Joseph, et al.,
No. 05A981.
8
35-36 (“R34:35-36”); Plaintiffs’ Exhibit No. (“Pl. Ex.”)
13; Pl. Ex. 35-39; ITCO Exhibit No. (“ITCO Ex.”)
193(A). They sought compensatory damages for the
costs of restoration, general damages associated with
the damage to the Grefer tract, and exemplary (puni-
tive) damages under Louisiana Civil Code art. 2315.3.
Petr. App. 5a. After a five-week trial, the jury found
Exxon 85% at fault, ITCO 5% at fault, and two absent
defendants 10% at fault. The jury rendered a verdict
of: (1) $56,000,000.00 for the cost of remediating the
contamination at the Grefer tract; (2) $145,000.00 in
general damages associated with the damage to the
Grefer tract; and (3) one billion dollars in punitive
damages assessed against Exxon.
The Fourth Circuit affirmed the judgment in its
entirety but reduced the punitive award to an amount
equal to twice the compensatory damage award.
Grefer v. Alpha Technical, 901 So.2d 1117 (La.App.
Ath Cir. 2005) (“Grefer I”); Petr. App. 107a; 113a-115a.
Both the plaintiffs and Exxon applied for Writs of
Certiorari to the Louisiana Supreme Court. The
Louisiana Supreme Court denied both Writ Applica-
tions on March 31, 2006. Petr. App. 120a-121a.
On April 5, 2006, seeking to stay execution of the
punitive damage award, Exxon filed in the Supreme
Court of Louisiana an “Emergency Motion to Stay
Execution of Judgment.” The court denied the Motion
on April 24, 2006.
On April 27, 2006, Exxon filed a Motion to Stay
in this Court. Justice Scalia denied the Motion on
9
May 1, 2006. ExxonMobil Corporation v. Grefer,
Joseph, et al., No. 05A981. Exxon filed a Renewed
Motion to Stay, which was referred to all members of
this Court, and was also denied. ExxonMobil Corp. v.
Grefer, 126 S. Ct. 2056 (2006).
Exxon then applied to this Honorable Court for a
Writ of Certiorari to the Louisiana Court of Appeal,
Fourth Circuit. On February 26, 2007 this Court
granted the writ, vacated the Fourth Circuit’s deci-
sion, and remanded the case to the Fourth Circuit
“for further consideration in light of Philip Morris
USA v. Williams, 549 U.S. ____ (2007).”
The Fourth Circuit, after exhaustively reviewing
its prior decision, the record of this case, and this
Court’s Philip Morris decision, elaborated and ex-
panded on its “thought process” that went into its
earlier opinion and reaffirmed its initial decree with
regard to its award of exemplary damages. Grefer v.
Alpha Technical, on remand, 965 So.2d 511, 526
(La.App. 4th Cir. 2007) (“Grefer IT”); Petr. App. 33a.
Exxon applied for writs of certiorari to the Lou-
isiana Supreme Court. That Court denied the appli-
cation on November 16, 2007. Petr. App. 123a. Exxon
now seeks review in this Honorable Court.
¢
10
REASONS FOR DENYING THE PETITION
A. EXXON’S FULL, VOLUNTARY AND UN-
CONDITIONAL PAYMENT OF THE PUNI-
TIVE DAMAGE AWARD EFFECTED A
WAIVER OF ANY ISSUES ON APPEAL, AND
RENDERED THIS PETITION MOOT.
Exxon has voluntarily and unconditionally paid
the full amount of the punitive damages award
included in the judgment entered below. Under
applicable state law, that payment waived all issues
on appeal. Exxon’s petition is moot.
(1) Exxon’s Payment of the Punitive Dam-
age Award Was Unconditional.
Exxon “unconditionally” tendered to the Grefers
the full punitive damages award contained within the
June 22, 2001 judgment. This is clearly demonstrated
by the letters attached, in globo, as Resp. App. la-
26a. That correspondence demonstrates that the
Grefers insisted at the time that, in order to stop the
accumulation of interest, any payment must be
“unconditional,” and cited pertinent jurisprudence
such as American Motor Insurance Co. v. American
Rent-All, Inc., 617 So.2d 944 (1993).° In his letter of
May 18, 2006, Exxon attorney, Glen M. Pilié, wrote to
Grefer attorney, Michael G. Stag:
° Correspondence dated May 18, 2006 from Grefer attorney
Michael G. Stag to Exxon attorney Glen M. Pilié. Resp. App. 5a-
6a.
11
ExxonMobil hereby makes an unconditional
tender of full payment of the punitive dam-
age component of the judgment and all legal
interest thereon as of May 24, 2006...°
Exxon thereafter unconditionally paid the Gre-
fers the full amount of the punitive damage award,
including legal interest." The correspondence thus
clearly shows that Exxon tendered and the Grefers
accepted nothing less than an unconditional payment.
Exxon’s choice of the word “unconditional” was un-
qualified. Louisiana Civil Code art. 2047 provides
that “the words of a contract must be given their
generally prevailing meaning.” Webster’s Dictionary
defines “unconditional” as “not limited: absolute,
unqualified ... ”'' Exxon uses the word “uncondi-
tional” or “unconditionally” in its correspondences dated
May 18, 2006 and May 22, 2006, respectively. Resp.
App. 7a-8a; 15a-16a. Because the Grefers had previ-
ously provided Exxon with pertinent jurisprudence
which demonstrated that only an unconditional
tender would stop the running of interest, Exxon
knew, when it employed the word “unconditional,”
that the law imposed certain consequences on the use
of the term. Exxon’s transmission of funds, against
* Resp. App. 7a-8a.
'° Correspondence dated June 16, 2006, Stuart H. Smith to
Mr. Pilié. Resp. App. 19a-20a; correspondence dated June 20,
2006, from Glen M. Pilié to Stuart H. Smith. Resp. App. 21a-22a.
'' Webster’s Ninth New Collegiate Dictionary (1986)
(emphasis added).
12
this background, is proof of Exxon’s deliberate and
informed acceptance of the consequences of uncondi-
tional payment.”
(2) Exxon’s Payment of the Punitive Dam-
age Award Was Voluntary.
The correspondence reveals that Exxon was
eager to terminate the accrual of interest on the
punitive damage award. Exxon even asserted that it
would attempt to deposit the funds into the registry
of court if the Grefers refused to accept payment.”
Coincident with its “unconditional” payment, Exxon
asked for and obtained the Grefers’ acknowledgment
of the payment, allowing Exxon to release the sus-
pensive appeal bond which it had posted."
In short, Exxon paid the Grefers so that it could
end its obligation to pay legal interest on the underly-
ing judgment and premiums on the suspensive appeal
bond. To achieve these savings, Exxon had to pay the
money “unconditionally,” and that is precisely what it
did.
Exxon performed a simple risk analysis, balanc-
ing its chances of obtaining certiorari and a reversal
‘* Exxon did not respond to Mr. Smith’s letter (in which he
accepted Exxon’s “unconditional” tender) to clarify that the
payment Exxon was making was not “unconditional.”
Correspondence dated May 18, 2006 from Mr. Stag to Mr.
Pilié. Resp. App. 6a.
* Correspondence from Mr. Pilié to Mr. Smith dated June
20, 2006. Resp. App. 21a.
13
of the punitive damage award against the certainty of
further accumulation of interest and bond premiums.
Exxon opted to save the money.” This was a clear and
deliberate choice, a choice which garnered Exxon an
immense savings in interest and bond premium
payments — a choice which Exxon was not just will-
ing, but anxious, to make. Exxon thus benefitted from
its “unconditional” tender in the form of legal interest
and bond premiums saved, and clearly paid the
money to obtain those benefits.
(3) Exxon’s Unconditional and Voluntary
Payment of the Punitive Damage Award
Renders This Petition Moot.
The “unconditional” and voluntary payment by
Exxon to the Grefers renders this petition moot
because, under Louisiana law, the payment extin-
guished the action. In Griffin v. International Insur-
ance Company, 727 So.2d 485 (La.App. 3d Cir. 1998),
the defendants paid the full amount of the judgment
with accrued interest and court costs into the registry
of court, executing a document which asserted that
the tender was “unconditional” and was made to
“eliminate the continued accrual of legal interest
pending plaintiff’s delay for appeal and/or pending
an appeal if taken.” The defendants then appealed
'* Obviously, Exxon hoped it could pay the money and,
nevertheless, seek to “vindicate” a legal principle, which is why
it filed its Application for Writ of Certiorari with the US.
Supreme Court.
14
the judgment. The Louisiana Third Circuit dismissed
the appeal as moot:
... to permit such an appeal would directly
contradict La. Code Civ. P. art. 2085, which
reads:
An appeal cannot be taken by a party
who confessed judgment in the proceed-
ings in the trial court or who voluntarily
and unconditionally acquiesced in a
judgment rendered against him. Confes-
sion of or acquiescence in part of a di-
visible judgment or in a favorable part of
an indivisible judgment does not pre-
clude an appeal as to other parts of such
judgment.
We find that Abbeville and International In-
surance voluntarily and unconditionally ac-
quiesced in this judgment. Therefore, we find
that although they have halted the accrual of
interest on the amount of the judgment ten-
dered, they are prohibited from appealing.”
The unconditional payment of the punitive award
in this case renders Exxon’s petition moot, as under
Louisiana law there is no longer a justiciable contro-
versy. Saint Charles Parish Sch. Bd. v. GAF Corp.,
512 So.2d 1165, 1170 (La. 1987). It is well settled that
'* Griffin at 489. Emphasis added. It is instructive that in
Griffin the defendant thought it could voluntarily and uncondi-
tionally pay the judgment and still prosecute its appeal.
15
courts will not decide abstract hypothetical or moot
controversies. /d. at 170.
Accordingly, this Court should deny review for
this reason alone.
B. EXXON’S FAILURE TO PRESERVE ANY
WILLIAMS OBJECTIONS WAIVED THOSE
ISSUES.
The Williams opinion sets forth a three-step
analysis:”
e First, the court must find that there
was a significant risk that the jury
might utilize punitive damages to pun-
ish the defendant for misconduct to third
parties.
e Second, the defendant must request a
cautionary instruction.
¢ Third, the defendant must be afforded
“some form of protection” to ensure that
the jury’s punitive damage award calcu-
lation does not include money meant to
'’ “In particular, we believe that where the risk of that
misunderstanding is a significant one — because, for instance, of
the sort of evidence that was introduced at trial or the kinds of
argument the plaintiff made to the jury — a court, upon request,
must protect against that risk. Although the States have some
flexibility to determine what kind of procedures they will
implement, federal constitutional law obligates them to provide
some form of protection in appropriate cases.” Philip Morris
USA v. Williams, 127 S. Ct. at 1065.
16
punish the defendant for harm to third
parties.
Regardless of whether or not the first element
existed in this case,-Exxon clearly failed to comply
with the second element. The Fourth Circuit found
that Exxon failed to request a cautionary instruction.
Petr. App. 8a-9a; 13a. Despite this failure, the courts
of Louisiana went out of their way to ensure that the
final punitive damage award included only damages
related to the Grefers’ loss.
(1) The Trial Court’s Instructions Were
Proper, and Exxon Never Asked for the
Relief It Now Demands.
Indeed, Exxon does not (and cannot) actually
argue that the instructions which were given mis-
stated the law. A comparison of the instructions
requested by Exxon reveals that they differ very little
— and, for purposes of this petition, not at all — from
the instructions actually given by the trial court. The
essence of the argument Exxon does make is that the
trial court should have given the jury additional
instructicns, instructions which explicitly informed
the jury that it could not include in its award sums
meant to punish third parties — instructions which
Exxon never requested, as is required under Williams.
The Fourth Circuit quickly and soundly dis-
patched this argument:
Moreover, even though the record does not
include the objections made by Exxon to the
17
instructions during the jury charge confer-
ence, 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 instructions. Second, for all intents and
purposes, the trial court’s instructions
tracked almost verbatim Exxon’s proposed
instructions.”
As the Fourth Circuit recognized, the single most
glaring fact of this case is that Exxon never requested
the relief at trial which it now demands (nor did it
timely raise the issue on appeal). The charge Exxon
asked for was — “almost verbatim” — the charge which
was given. Despite Exxon’s assertion that it objected
to the court’s charge to the extent it did not include a
“Williams instruction,” nothing in the record supports
that claim.” Pet. 9-10; 14. Tellingly, Exxon’s proposed
instructions contained nothing resembling a “Wil-
liams instruction” — an instruction which, this Court
held, must only be furnished “upon request.” Wil-
liams, 127 S. Ct. at 1065.
* Petr. App. 13a.
In its writ application, Exxon does not point to an actual
objection to the trial court’s charge. At the Fourth Circuit, Exxon
acknowledged that no such objection was in the record but
suggested that the court should “assume” that it was made. To
say the least, it is disingenuous of Exxon to suggest that it “may
have” objected to the absence of something in the trial court’s
instructions that Exxon did not bother to include in its proposed
instructions.
18
(2) Exxon’s Failure to Request a Williams
Instruction Waived the Issue.
There is no concept of “fundamental error” in the
Williams opinion, or in any other opinion addressing
the subject. Post-Williams cases uniformly recognize
that a failure to raise the matter is a waiver of the
issue. See, e.g., Kauffman v. Maxim Healthcare Ser-
vices, Inc., 509 F.Supp.2d 210 (E.D. N.Y. 2007) (de-
fendant failed to request the instruction; issue
waived); Southstar Funding, LLC v. Sprouse, 2007
U.S. Dist. LEXIS 22585 (D. N.C. 2007), n.2 (defen-
dant failed to request the instruction; issue waived).
The fact is that Exxon focused on different issues in
its punitive damage trial, and only discovered the
Williams principles when those tactics failed. Exxon
did not request the relief it now demands, and it,
therefore, failed the second prong of the Williams
analysis.
(3) Exxon Also Waived thé Williams Issue
Under Louisiana Law.
This is consistent with Louisiana procedural law.
A party who does not propose a jury instruction or
who does not object to the omission of an instruction
waives any right to appeal that issue. Delaney v.
Whitney, 703 So.2d 709, 719 (La.App. 4th Cir. 1997),
writ denied, 715 So.2d 1211 (La. 1998). The Louisiana
Code of Evidence likewise required Exxon to propose
a limiting jury instruction:
19
When evidence which is admissible as to one
party or for one purpose but not admissible
as to another party or for another purpose is
admitted, the court, upon request, shall re-
strict the evidence to its proper scope and in-
struct the jury accordingly. Failure to restrict
the evidence and instruct the jury shall not
constitute error absent a request to do so.
Louisiana Code of Evidence art. 105 (empha-
sis added).
Thus, the failure of Exxon to propose a limiting
jury charge and/or to preserve that issue on appeal,
constitutes an independent state ground for affirming
the judgment without even reaching any federal
question asserted by Exxon.
(4) Exxon Made No Due Process Objection
to Evidence of Third-Party Harm.
Exxon’s failure to request a limiting jury instruc-
tion was not its only failure to preserve the issue.
Despite Exxon’s assertion that evidence of alleged
harm to non-parties was admitted into evidence over
its objections, Exxon has cited not one instance in the
trial record where it objected to evidence of harm to
third parties on due process grounds, or where Exxon
asked that the jury be instructed to limit its consid-
eration of that evidence, much less an instance where
such an objection was overruled.” Exxon’s failure to
*’ Exxon’s argument about the admission of evidence of the
risk posed to third parties is eviscerated by what concurrently
(Continued on following page)
20
object on due process grounds constituted a failure to
preserve its rights to assert error on that basis. See,
e.g., Cooper v. AMI, Inc., 454 So.2d 156, 161 (La.App.
1 Cir. 1984), writ denied, 459 So.2d 539 (La. 1984).
(“Different grounds for objection cannot be asserted
on appeal.”)
C. WILLIAMS EXPLICITLY PERMITS CONSID-
ERATION OF HARM TO THIRD PARTIES IN
ASSESSING THE REPREHENSIBILITY OF
EXXON’S MISCONDUCT.
Following remand, the Fourth Circuit carefully
analyzed the actual punitive damage instruction
given to the jury. Although Williams prohibits an
award which includes money meant to punish the
defendant for harm to third parties, Williams also
makes clear that harm to third parties is very much a
part of the reprehensibility analysis:
transpired at tral: R. 32:17 (no objection); R. 32:122 (no objec-
tion); R. 32:131 (no objection); R. 33:19 (objection and motion to
strike, no grounds stated, sustained); R. 33:200 (no objection);
R. 34:38 (no objection); R. 29:131 (no objection); R. 29:137-41
(objection, foundation, sustained); R. 32:153 (objection, no
grounds stated, sustained). The same is true of Exxon’s asser-
tion that plaintiff counsel’s argument relating to the risks posed
to third parties was improper: R. 56:36 (no contemporaneous
objection); R. 56:42 (no objection); R. 56:43 (objection, relevance
and prejudice, Grefers’ counsel instructed not to mention
incident); R. 56:51 (no objection); R. 56:53 (no objection); R. 56:84
(no objection); R. 56:95 (no objection).
21
Evidence of actual harm to nonparties can
help to show that the conduct that harmed
the plaintiff also posed a substantial risk of
harm to the general public, and so was par-
ticularly reprehensible — although counsel
may argue in a particular case that conduct
resulting in no harm to others nonetheless
posed a grave risk to the public, or the con-
verse.”
Indeed, this Court has stressed that reprehensi-
bility is the most crucial aspect of a punitive damage
award analysis. BMW of North America, Inc. v. Gore,
517 U.S. 559, 575, 116 S. Ct. 1589, 1599, 134 L.Ed.2d
809 (1996) (“Perhaps the most important indicium of
the reasonableness of a punitive damages award is
the degree of reprehensibility of the defendant’s
conduct.” BMW, 517 U.S. at 575); see also Action
Marine, Inc. v. Continental Carbon Incorporated, 481
F.3d 1302 (11th Cir. 2007).
Considering the reprehensibility of Exxon’s
misconduct, the Fourth Circuit observed:
In reviewing an award of punitive/exemplary
damages, we have the responsibility of look-
ing to the callous, calculated, despicable and
reprehensible conduct of Exxon during the
time period in question. Even though this
case is not a personal injury claim by the
ITCO workers, the mindset of Exxon should
be considered in deciding whether the sum
” Williams, 127 S. Ct. at 1064.
Pcs +
22
awarded was appropriate. The fact that
Exxon showed no regard for ITCO’s workers,
i.e., no concern for human safety, certainly
demonstrates that it had even less concern
for the property damage that it caused, thus -
further demonstrating the morally culpable
nature of its conduct.”
That Exxon had little, if any, regard for human
life and even less regard for the value of property is
an appropriate and significant factor in determining
whether punitive damages were warranted. The
Fourth Circuit’s conclusion that a nexus existed
between Exxon’s conduct towards non-parties and the
harm to the Grefers is amply supported by the record.
For instance, Exxon’s failure to tell anyone about the
contamination at the Grefer tract (whether for one
year in the case of ITCO, or never in the case of the
Grefers) not only put ITCO’s workers and the sur-
rounding neighbors at risk but also led to further
contamination of the Grefer tract.” Additionally,
” Grefer I at 1154-55. Petr. App. 114a.
“ Exxon contends that by 1986 the property already
required whatever remediation it was ever going to require. Pet.
14, n.4. Exxon then concludes, based on this contention, that the
fact that it allowed further radioactive material to be dumped
throughout the Grefer tract after learning of the NORM problem
did not harm the Grefers. This is simply ridiculous. First, the
disposal costs associated with the Grefers’ clean-up plan (nota-
bly, the most expensive component of that plan) necessarily
correlate with the amount of radioactive material in the soil.
When Exxon dumped more radioactive material on the site, the
Grefers’ disposal costs (harm) went up. Second, allowing the
property to be further contaminated increased the Grefers’
(Continued on following page)
23
Exxon’s failure to properly warn ITCO (when a warn-
ing finally was given) and its failure to implement
adequate screening and handling procedures at the
yard, not only put ITCO’s workers and the surround-
ing neighborhood at risk but also led to even more
contamination of the Grefer tract, leaving the Grefers
with a huge mess. Perhaps most important, Exxon’s
misconduct delayed the remediation of the property,
allowing a hazard to remain on the Grefers’ land and
in their neighbors’ community.”
Additionally, the risk posed by Exxon’s conduct
towards ITCO’s workers and the surrounding
neighbors was directly related to the potential harm
to the Grefers. Because the Grefers are potentially
liable to third parties under Louisiana law (as owners
of the contaminated property), the nature and extent
of the risks posed to third parties increased the
potential liability of — and thus harm to — the Grefers,
exposure to lawsuits and regulatory enforcement actions,
subjecting them to further potential harm.
* This was clearly a fact the Fourth Circuit considered
during its reprehensibility analysis. When discussing the
financial vulnerability factor, the court found that the Grefers
“are now financially burdened with the task of remediating the
property.” Grefer I at 1149; Petr. App. 96a. Later in its reprehen-
sibility analysis, the court also found that “Exxon took no step to
remove the radioactive material” from the Grefer tract. Jd. at
1149; Petr. App. 96a. Exxon’s suggestion at Pet. 8 that the
Fourth Circuit found Exxon’s conduct reprehensible based solely
on a “nine-month delay in notifying ITCO” is flatly contradicted
by these portions of the court’s reprehensibility analysis.
24
a valid consideration under the second BMW guide-
post. State Farm Mutual Automobile Ins. Co. v.
Campbell, 538 U.S. 408, 425 (2003) (confirming that
the second BMW guidepost considers the ratio be-
tween the “harm, or potential harm, to the plaintiff
and the punitive damages award”).
Exxon’s central argument is that because Exxon’s
misconduct threatened a different type of harm to
third parties than the harm suffered by the Grefers,
the jury could not consider the threat to the third
parties. This is an incorrect statement of the law.
State Farm holds that “a defendant’s dissimilar acts,
independent from the acts upon which liability was
premised, may not serve as the basis for punitive
damages (538 U.S. at 423).” Exxon confuses “dissimi-
lar acts” with “dissimilar harm.” There is no require-
ment that in the reprehensibility analysis the
applicable third parties must have suffered the same
harm, but only that the misconduct to the third
parties be similar to the misconduct to the plaintiff:
Evidence of actual harm to nonparties can
help to show that the conduct that harmed
the plaintiff also posed a substantial risk of
harm to the general public, and so was par-
ticularly reprehensible — although counsel
may argue in a particular case that conduct
resulting in no harm to others nonetheless
25
posed a grave risk to the public, or the con-
verse.”
Here, although the Grefers suffered a different
“harm” from third parties such as ITCO and its
workers, all were harmed by the similar — in fact, the
same — conduct on the part of Exxon. This was a
proper application of the reprehensibility analysis,
and confirmed the Fourth Circuit’s conclusion that
“When we consider the totality of the trial court’s jury
instructions on exemplary damages, we find they are
both permissible and constitutional.””
D. THE LOUISIANA COURTS PROVIDED
EXXON FULL DUE PROCESS PROTEC-
TION - EVEN THOUGH EXXON DID NOT
REQUEST IT.
Although Exxon’s voluntary and unconditional
payment of the entire judgment rendered the case
moot, the Fourth Circuit gave Exxon the benefit of
the doubt and analyzed the Williams due process
issue on its merits. In an opinion notable for its
extended reconsideration of the punitive damage
award, the Fourth Circuit determined that the consti-
tutional safeguards missing in Williams were provided
to Exxon. Despite the fact that Exxon never requested
any form of protection at trial, as is required, there
have been at least five different occasions upon which
*” Williams, at 127 S. Ct. 1064.
* Petr. App. 13a.
26
Exxon was, nevertheless, provided protection against
any impermissible miscalculation of punitive dam-
ages. First, the jury instructions correctly stated the
law. Second, the trial court clarified any potential
jury misunderstanding before the verdict, by inform-
ing the jurors that the entire punitive damage award
would be paid to the Grefers alone.” Third, the
Fourth Circuit itself, in Grefer I, took elaborate
precautions to cure any possible jury confusion,
slashing the billion dollar punitive damage award to
a sum directly proportional to the quantified compen-
satory damages awarded by the jury. Fourth, the
punitive damage award was reassessed by the Fourth
Circuit on rehearing. Fifth, the Fourth Circuit has
again reviewed the punitive damage award after this
Court’s remand. That is to say that the case has been
reviewed by a court of Louisiana twice since the
Fourth Circuit’s radical reduction of the punitive
damage award. Exxon’s argument that it was pun-
ished for harm to third parties, and not for harm to
the Grefers, simply has not survived this intense
appellate review. In its three separate opinions on the
*” Approximately one hour before the jury concluded its
deliberations, the trial judge issued a further instruction in
response to a jury question: “[E)xemplary damages are not
compensation ... Any exemplary damage award that you may
make will be paid to the Grefers, no matter what amount you
decide on.” R. 59:16-17. This instruction made it clear that
increasing the award based upon harm to people other than the
Grefers would not benefit those non-parties, and thus, there was
no reason for the jury to punish “directly on account of” that
harm.
27
issue, the Fourth Circuit has explained, over and over
again, that the harm to the Grefers was directly
linked to the harm to third parties. Exxon’s inexcus-
able delay in warning the Grefers, their tenants and
others of the existence and danger of radioactive
contamination allowed additional contamination of
the Grefer property, and delayed the much-needed
cleanup of the existing hazard. The Fourth Circuit
ensured this relation between misconduct and award
by molding the award to reflect a direct link of the
Grefers’ compensatory damages and the punitive
damages awarded to them.
In short, the Fourth Circuit bent over backwards
to assess, for the third time, whether Exxon received
a fair trial on this matter. These extensive review
procedures satisfied Williams’ requirement of “some
form of protection in appropriate cases.” There is,
thus, no conflict between the Louisiana courts’ appli-
cation of federal law in this case and the Williams
decision.
There is no important question of federal law
raised by this case which has not already been settled
by this Court; nor does the Fourth Circuit’s interpre-
tation of federal law conflict with any decisions of any
state court of last resort or of any United States court
of appeals. Therefore, there is not one consideration
supporting the grant of the writ petition under Rule
10.
28
E. WILLIAMS DOES NOT REQUIRE A RE-
TRIAL.
Exxon argues at great length that procedural due
process violations can only be cured by starting over
again with a new trial. Exxon claims that the lower
courts are split on this issue. Even assuming that
Exxon had requested a limiting instruction as is
required by Williams (it did not), and that the lower
courts were actually split (they are not), neither
Williams nor the post-Williams cases supports such a
draconian view of the appropriate remedy for cases
where — unlike the present case — a procedural due
process violation has occurred.
First, and most obviously, Williams itself gave
courts the option to choose how to deal with an in-
stance where the jury improperly awarded punitive
damages for harm to third parties:
Although the States have some flexibility to
determine what kind of procedures they will
implement, federal constitutional law obli-
gates them to provide some form of protec-
tion in appropriate cases... . the application
of this standard may lead to the need for a
new trial, or a change in the level of the
punitive damages award.”
This was fully consistent with the Court’s opinion
in BMW of North America v. Gore, 517 U.S. at 586:
* Williams, 127 S. Ct. at 1065. Emphasis added.
29
Whether the appropriate remedy requires a
new trial or merely an independent determi-
nation by the Alabama Supreme Court of the
award necessary to vindicate the economic
interests of Alabama consumers is a matter
that should be addressed by the state court
in the first instance.
It is also fully consistent with the Court’s opinion
in State Farm Mutual Automobile Ins. Co. v. Camp-
bell, 538 U.S. at 422, which remanded the case to the
Utah courts for a recalculation of punitive damages —
and not a retrial — where the jury instructions were
held deficient because the jury had not been in-
structed “that it may not use evidence of out-of-state
conduct to punish a defendant for action that was
lawful in the jurisdiction where it occurred.””
A rigid view that remand is the only appropriate
remedy would, of course, negate the Court’s presump-
tively deliberate language in Williams that “a change
in the level of the punitive damages award” may
satisfy the procedural safeguard requirement. This
has been implicitly recognized by all lower courts
which have addressed the issue. There is no split of
authority at all; the cases are fully consistent with this
Court’s guidance in the foregoing opinions. Although
* On remand, the Utah Supreme Court made its own
determination of an appropriate punitive damage award in
accordance with the guidelines enunciated by this Court.
Campbell v. State Farm Mut. Auto. Ins. Co., 98 P.3d 409, 411-
412, 416 (Utah 2004), cert. denied, 543 U.S. 874, 125 S. Ct. 114,
160 L. Ed.2d 123 (2004).
30
Exxon claims that “[a] number of courts, both before
and after Williams, have held that a reviewing court
must order a new trial when a jury’s award of puni-
tive damages is based either on improper evidence or
instructions,” this is plainly incorrect, and the cases
Exxon cites do not support Exxon’s statement.
Exxon cites two U.S. Ninth Circuit cases, White
v. Ford Motor Company, 500 F.3d 963 (9th Cir. 2007)
and Merrick v. Paul Revere Life Ins. Co., 500 F.3d
1007 (9th Cir. 2007). The Ninth Circuit’s conclusion
that Williams-defective jury instructions required
retrial may be explained by the fact that both cases
were going to be remanded for new trials because of
other errors anyway. Neither case held that retrial
was required whenever a jury had not been provided
with Williams guidelines, and both expressly recog-
nized that Williams permits either remand or reduc-
tion in the award.”
In the California Second District Court of Ap-
peals’ decision in Bullock v. Philip Morris USA, Inc.,
159 Cal.App.4th 655 (Cal. Ct. App. 2d Dist. 2008), the
court expressly recognized that:
The use of a remittitur by a reviewing court
is not limited to cases where the only error at
trial was in the amount of the award. Rather,
remittitur may be appropriate where in-
structional error resulted in an excessive
” White at 500 F.3d 972-973; Merrick, at 500 F.3d 1017-
1018.
31
award and the amount of the excess is ascer-
tainable . .. Moreover, in Stevens v. Snow ...
the California Supreme Court issued a re-
mittitur reducing by one-half the amount of
a judgment based on instructional error and
error in the admission of evidence despite
the Supreme Court’s express acknowledg-
ment that it could not determine how the er-
rors affected the amount of the judgment.”
The Bullock court decided that “[i]n this case, we
cannot determine how the instructional error that we
have found affected the amount of the punitive dam-
ages award and we cannot substitute our own as-
sessment of the appropriate amount of punitive
damages for that of a jury.” The reason for this was
clear: the punitive damage award was — exactly — one
million dollars for each of the 28,000 non-party Cali-
fornians who plaintiff argued had died from smoking
over the past 40 years. The lower court’s reduction of
this amount to $28 million dollars could not obscure
the fact that the entire punitive damage award was
clearly and precisely based on harm to non-parties.
By contrast, the Louisiana Fourth Circuit’s reduction
of the award in this case corresponds, equally pre-
cisely, to the compensatory damages sustained by the
Grefers, and is completely detached from any harm to
any third party.
In order to create the appearance of a “split,”
Exxon at Pet. 22-23 cites cases which did not remand
“ 159 Cal.App.4th 696.
32
for a new trial. All of these cases pre-date Williams,
and therefore do not have the advantage of this
Court’s explicit Williams analysis, nor do they dis-
cuss, or are even arguably concerned with, any “split”
of authority.” Reduction by an appellate court was
proper under State Farm; it is proper under Williams.
These cases are hardly evidence of a split of authority.
Indeed, Exxon has not cited one case which even
purports to say that there is only One True Path to
remedy a Williams violation. There is no split of
authority for this Court to straighten out.
Williams’ requires that state courts provide
appropriate protection, not necessarily state trial
courts. “Although the States have some flexibility to
determine what kind of procedures they will imple-
ment, federal constitutional law obligates them to
provide some form of protection in appropriate
cases.””
Uniquely, Louisiana’s Constitution provides for
appellate review of both law and fact. When a Louisi-
ana appellate court determines that trial errors may
have influenced a jury’s award, the appellate court is
under a duty to review de novo the law and the facts
and to render a judgment based upon that independ-
ent review. LA. Const. art. V, §10(B); Temple v. Liberty
“ This is also true of Sand Hill Energy, Inc. v. Smith, 142
S.W.3d 153 (Ky. 2004), which Exxon places in the “retrial only”
camp.
* Williams, 127 S. Ct. at 1065. Emphasis added.
33
Mutuai Ins. Co., et al., 330 So.2d 891, 892 (La. 1976)
and Riley v. Salley, 874 So.2d 874, 878 (La.App. 4th
Cir. 2004). Judicial economy, in addition to constitu-
tional authority, encourages Louisiana appellate
courts to review even factual findings because, when
the entire record is before the appellate court, re-
mand for a new trial produces “delay of the final
outcome ... while adding little to the judicial deter-
mination process.” Gonzales v. Xerox Corp., 320 So. 2d
163, 165-166 (La. 1975). The Fourth Circuit, in its
opinions below, recognized this unique function, and
held that
Furthermore, the U.S. Supreme Court re-
mand and the Philip Morris decision do not
mandate that we order a new trial but in-
stead allow wus to correct any procedural
and/or substantive errors by our constitu-
tionally delegated authority of de novo re-
view. This court is constitutionally allowed to
review both law and facts. La.Const. art. V,
§10(B).*
This is absolutely correct. The Fourth Circuit’s
review ensured the due process protection discussed
in Williams, despite Exxon’s unequivocal failure to
request it.
“ See also Rodriguez v. Taylor, 468 So.2d 1186, 1187 (La.
1985) and Buckbee v. United Gas Pipe Line Co. Inc., 561 So.2d
76 (La. 1990).
* Petr. App. 33a.
34
F. ANY STATE FARM RATIO ISSUE IS BE-
YOND THE SCOPE OF THIS COURT'S
REMAND, WAS NOT RAISED IN THE
COURTS BELOW, AND IS NOT EVEN AR-
GUABLY MERITORIOUS.
(1) Exxon’s 1:1 Ratio Argument Is Beyond
the Scope of This Court’s Remand and
Was Not Preserved on Appeal.
The Order remanding this case was clear:
The judgment is vacated and the case is re-
manded to the Court of Appeal of Louisiana,
Fourth Circuit for further consideration in
light of Philip Morris USA v. Williams, 549
US. , 127 S. Ct. 1057, 166 L.Ed.2d 940
(2007).
The Williams opinion expressly did not consider
any issue of proportionality between actual damages
and punitive damages. “Because we shall not decide
whether the award here at issue is ‘grossly excessive,’
we need now only consider the Constitution’s proce-
dural limitations.” Exxon did not raise the propor-
tionality issue in either its brief to the Fourth Circuit
or in its application for a writ to the Louisiana Su-
preme Court. Its petition for writ of certiorari to this
Court is bare of any citation to where the proportion-
ality issue has been preserved, as is required by Rule
* ExxonMobil Corp. v. Grefer, 127 S. Ct. 1371 (U.S. 2007);
Appendix 122a.
” Williams, at 127 S. Ct. 1063.
35
14(g)(i). Neither the Louisiana Fourth Circuit nor the
Louisiana Supreme Court has considered the issue
since Exxon’s first appeal — and this Court did not
deem the issue significant when it issued the GVR at
the conclusion of that first appeal. Consequently the
issue is unpreserved and should not be considered for
the first time now.
Even if Exxon had preserved the right to argue
that 1:1 ratio is the highest ratio constitutionally
permitted in this case, the issue lacks any merit and
does not justify this Court’s review.
(2) Exxon’s 1:1 Ratio Argument, Even if It
Could Properly Be Raised At This
Time, Does Not Merit This Court’s Re-
view.
a. The 2:1 Ratio In This Case Is En-
tirely Consistent With State Farm.
The State Farm decision provided the lower
courts with further guidance with respect to the
application of the BMW guidelines. For example, the
Court instructed that “in practice, few awards exceed-
ing a single-digit ratio between punitive and compen-
satory damages, to a significant degree, will satisfy
due process.” State Farm, 538 U.S. at 425 (emphasis
added). The Court also advised that “when compen-
satory damages are substantial, then a lesser ratio,
perhaps only equal to compensatory damages, can
reach the outermost limit of the due process guaran-
tee.” Id. (emphasis added). However, the Court
36
“decline[d] again to impose a bright-line ratio which a
punitive damages award cannot exceed.” /d. It reaf-
firmed that “the precise award in any case, of course,
must be based upon the facts and circumstances of
the defendant’s conduct and the harm to the plain-
tiff.” Id.
Exxon’s argument that a 2:1 ratio in this case is
excessive cuts against everything this Court held in
State Farm. This Court did not state (or even imply)
that 1:1 ratios are the absolute limit in substantial
damage cases.” If this Court had intended to do that,
it would not have said “perhaps only equal to com-
pensatory damages” and “can reach the outermost
limit of the due process guarantee.” This Court cer-
tainly would not have declined again to impose a
bright-line ratio which punitive damages cannot
exceed. Yet, again Exxon argues fervently that there
is a cap, and that it is 1:1. Pet. 27, 31. In reality, State
Farm allows for (and explains) the inconsistency in
the lower courts that Exxon argues must be “re-
solved.”
Recognizing that its argument that State Farm
imposed a 1:1 ratio limit on substantial damage
awards is a stretch among stretches, Exxon falls back
“ The history of the State Farm case after this Court
rendered its opinion supports the Grefers’ position. Following
the Utah Supreme Court’s reconsideration of the punitive award
against State Farm and consequent reduction to a 9:1 ratio, this
Court denied writs. Campbell v. State Farm Mut. Auto. Ins. Co.,
98 P.3d 409 (Utah), cert. denied, 543 U.S. 874 (2004).
37
to another (even less credible) argument. Specifically,
Exxon asserts that, because the Grefer property only
has a market value of $1.5 million, the ratio in this
case is actually much higher than 2:1. Pet. 31. This
‘argument is thoroughly flawed. To begin with, it
disregards the fact that there are no cases which have
held that actual harm, for purposes of a punitive
damage analysis, can be limited to certain portions of
a compensatory award. Indeed, both BMW and State
Farm confirm that the compensatory award, as a
whole, comprises the plaintiff’s actual harm. BMW,
517 U.S. at 580 (“[E]xemplary damages must bear a
‘reasonable relationship’ to compensatory damages”);
State Farm, 538 U.S. at 425 (“ratio between punitive
and compensatory damages”). The lower courts are
consistent on this point.”
Exxon cannot dispute that the compensatory
portion of this award, pursuant to the Louisiana
Fourth Circuit’s final and executable judgment, is
$56,145,000.00. In fact, recognizing that there is no
basis to challenge the compensatory award in this
Court, Exxon has already unconditionally paid that
amount to the Grefers. In short, the actual harm in
this case has been established. Exxon is foreclosed
from arguing to this Court that a lesser amount is
* Tellingly, all of the cases cited by Exxon at pages 28-29 of
its Petition relate to the lower courts’ consideration of the ratio
between “punitives” and “compensatories.” Pet. 28-29 (emphasis
added).
38
somehow the “true” measure of the Grefer’s harm in
this case.
Moreover, Exxon’s argument ignores the fact
that, under Louisiana law, plaintiffs are entitled to
have their property restored, even if the cost of the
remediation plan exceeds the value of the land.”
Roman Catholic Church of the Archdiocese of New
Orleans v. Louisiana Gas Serv. Co., 618 So.2d 874,
879-80 (La. 1993). In other words, Louisiana law
instructs that the Grefers actual harm is the cost of
clean-up.”
This result is sensible. Without the $56 million
restoration award in this case, the Grefers would not
be in a position to conduct a clean-up that ensures
that their entire property complies with state and
federal standards. In turn, the Grefers would be
saddled with virtually never ending liability, and
their actual and potential harm would increase with
each passing day.” The Grefers would not be able to
prevent new civil lawsuits, and they would have no
way of complying with government enforcement
actions.
“ Petr. App. 71a-80a; 113a-114a.
“ Exxon does not challenge the constitutionality of this
substantive law.
“ Radium-226 has a half-life of approximately 1600 years.
R. 32:144.
39
CONCLUSION
Exxon’s petition for certiorari should be denied,
for at least the following reasons:
e Exxon’s full payment of compensatory
and punitive damages has mooted this
controversy under state law.
e Exxon completely failed to preserve any
Williams procedural due process claim.
It requested no limiting jury charge. In-
deed, there is no meaningful distinction
between the charge Exxon requested
and the charge the trial court gave.
Moreover, Exxon never objected to any
evidence on due process grounds. Wil-
liams requires that the issue be pre-
served, and it was not. An equally
dispositive point is that Exxon failed to
raise an assignment of error on its origi-
nal appeal as to the trial court’s punitive
damage instruction.
e Despite its utter failure to preserve
these alleged due process issues on ap-
peal, the Louisiana courts have bent
over backwards to provide consideration
to Exxon. The trial court fully analyzed
the case on post-trial motions. The Lou-
isiana Fourth Circuit has now reviewed
this case three times. The Louisiana Su-
preme Court has twice rejected Exxon’s
writ applications as not meriting review.
The analyses of these courts have care-
fully examined the trial and the verdict
in exquisite detail, and have determined
40
that Exxon received the benefit of all
due process protection afforded by Wil-
liams, State Farm, Gore and Louisiana’s
own cases. In particular, Louisiana’s ap-
pellate system has ensured that any al-
leged evidence of harm to third parties
introduced at trial was utilized only to
establish reprehensibility — which is
proper under Williams. The punitive
damages assessed against Exxon were —
exactly — twice the compensatory dam-
ages suffered by the Grefers, and do not
reflect any harm to third parties.
© Exxon has provided no support for its
contention that a procedural due process
denial necessarily requires a complete
retrial. Certainly, there is no split of au-
thority in the lower courts reflecting
such a dramatic new rule. Moreover, the
Louisiana Constitution uniquely pro-
vides for appellate review of both law
and fact.
° Exxon’s State Farm proportionality issue
was not the subject of this Court’s re-
mand, and was not deemed appropriate
for separate review by this Court. Even
if it were otherwise, the 2:1 ratio of pu-
nitive damages to compensatory dam-
ages is well within the permissible scope
of constitutional limits.
In short, there are no compelling reasons for
granting certiorari under Supreme Court Rule 10.
The courts below properly applied the factors which
41
were the subject of the Williams decision — even
before this Court issued the Williams opinion. Exxon’s
petition simply asks this Court to act as one more
appellate court in this case. The petition should be
denied.
STUART H. SMITH
MICHAEL G. STAG
SMITH STAG, L.L.C.
365 Canal Street
Suite 2850
New Orleans, LA 70130
(504) 593-9600
ANDREW B. SACKS
JOHN WESTON
LAW OFFICES OF ANDREW B.
SACKS AND ASSOCIATES
114 Old York Road
Jenkintown, PA 19046
(215) 925-8200
RON A. AUSTIN
AUSTIN & ASSOCIATES, L.L.C.
400 Manhattan Avenue
Harvey, LA 70058
(504) 436-7844
Respectfully submitted,
STEPHEN B. MURRAY
(Counsel of Record)
ARTHUR M. MURRAY
MURRAY LAW FIRM
909 Poydras Street
Suite 2550
New Orleans, LA 70112
(504) 525-8100
RALPH R. ALEXIS, III
PORTEOUS, HAINKEL AND
JOHNSON, L.L.P.
704 Carondelet Street
New Orleans, LA 70130
(504) 581-3838
JACK W. HARANG
HARANG & BARKER, L.L.C.
3500 N. Hullen Street
Metairie, LA 70002
(504) 456-8658
la
ADAMS AND REESE LLP
[Names And Addresses Omitted In Printing]
May 10, 2006
Via Facsimile No. (504) 581-4069
Ralph R. Alexis, III, Esq.
Porteous, Hainkel & Johnson, L.L.P.
704 Carondelet Street
New Orleans, LA 70130-3774
Re: Joseph Grefer, Camille Grefer, Rose Marie
Crefer Hassi, and Henry Grefer v. Alpha
Technical, et al.
CDC No. 97-15004, Division “A”, Section 5
Our File No. 249-37
Dear Ralph:
In response to your letter dated May 9, 2006, this
is to confirm that in the event ExxonMobil’s renewed
request for stay is denied by the U.S. Supreme Court,
ExxonMobil will promptly pay the punitive damage
judgment, thereby satisfying the entire judgment. In
order to accomplish that, we will need to agree on a
target date to pay the judgment so we can calculate a
specific amount for the check. As with the previous
payment of the compensatory damages award, Exxon-
Mobil will need a letter on your letterhead stating the
specific amount, the instructions for electronic trans-
fer and tax identification number. I trust that this
written confirmation satisfies your requirements to
continue the hearing currently set for June 2nd. I will
be out of town attending my son’s graduation from
UGA starting tomorrow and returning on Tuesday. In
2a
my absence please direct any communications to
Martin Stern.
With kind regards, I remain
Very truly yours,
ADAMS AND REESE LLP
/s/ Glen Pilié
Glen Pilié
GMP/rye
3a
ADAMS AND REESE LLP
[Names And Addresses Omitted In Printing]
May 17, 2006
Via Facsimile No. (504) 593-9601
Michael G. Stag, Esq.
Smith Stag, LLC
365 Canal Street — Suite 2850
New Orleans, LA 70130
Re: Joseph Grefer, Camille Grefer, Rose Marie
Grefer Hassi, and Henry Grefer v. Alpha
Technical, et al.
CDC No. 97-15004, Division “A”, Section 5
Our File No. 249-37
Dear Mike:
I have received your e-mail of today stating that
because ExxonMobil plans to exercise its right to file
a petition of certiorari, Plaintiffs refuse to accept
payment of the punitive damage award and to exe-
cute a satisfaction of judgment, and that Plaintiffs
will do so only if ExxonMobil promises not to exercise
its right to file a petition of certiorari. There is no
good faith basis for Plaintiffs’ position. Moreover,
ExxonMobil has consistently made clear its intent to
file a petition for certiorari in both its motion for stay
filed with the Supreme Court of Louisiana and most
recently the Supreme Court of the United States, and
has never said anything to the contrary.
We request you reconsider your position. If you
do not agree by 12:00 noon Central Time on May 18th
to accept payment and execute a Satisfaction of
4a
Judgment by a date certain, ExxonMobil will pursue
any and all rights and we place you on notice that
this may include sanctions as well as an independent
action for any damages that may result from Plain-
tiffs’ position.
Sincerely,
ADAMS AND REESE LLP
/s/ Glen Pilié
Glen Pilié
GMP/rye
Enclosure
cc: Ralph R. Alexis, III, Esq. — via fax
Arthur Murray, Esq. — via fax
5a
LAW OFFICES
SMITH STAG, LLC
ONE CANAL PLACE
365 CANAL STREET
SUITE 2850
NEW ORLEANS, LOUISIANA 70130
TELEPHONE: (504) 593-9600
FAX: (504) 593-9601
WWW.SMITHSTAG.COM
[Names And Addresses Omitted In Printing]
May 18, 2006
Via Fax 504-566-0210
Glen Pilie
Adams & Reese
4500 One Shell Square
New Orleans, LA 70139
Re: Grefer v. Alpha Technical, et al.
CDC Case No. 97-15004, Judge Gill-
Jefferson — Division “A”, Section 9
Our File No. 200147
Dear Glen:
I write in response to your letter of May 17 and
to confirm our telephone conversation today. As I
explained, our clients are interested in a final resolu-
tion of this case. We are agreeable to meeting Exxon’s
conditions for the tender and will forego our writ
application if Exxon is prepared to likewise forego its
writ application. We have concerns that the tender
being offered by Exxon comes with certain conditions,
including indemnification from liens and a satisfac-
tion of judgment that specifically reserves Exxon’s
6a
right to continue with the appeal. Exxon has granted
us until Monday at 12:00 p.m. to let you know
whether we will accept Exxon’s conditional tender in
exchange for abandonment of our judgment debtor
rule.
You further informed me that Exxon is consider-
ing whether to deposit the funds into the registry of
the Court. Our legal research has revealed that no
procedure exists in Louisiana law for such a deposit.
Furthermore, a deposit into the registry of the court
does not constitute an unconditional tender, which is
necessary to cease judicial interest. For your refer-
ence I enclose the case entitled American Motor
Insurance Co. v. American Rent-All, Inc., 617 So.2d
944 (1993). In light of this, we ask Exxon to consider
agreeing to a full and final dismissal, whereupon we
will accept Exxon’s conditional tender. Due to the
Monday deadline for us to respond, I ask that Exxon
please let us know whether this is agreeable by 12:00
p.m. tomorrow. I remain,
Very truly yours,
SMITH STAG, LLC
/s/ MGS
Michael G. Stag
MGS/jr
cc: Stuart Smith (via mail)
Andrew Sacks (via fax)
Steven Murray, Sr. (via fax)
Ralph Alexis (via fax)
7a
ADAMS AND REESE LLP |
[Names And Addresses Omitted In Printing]
May 18, 2006
Via Facsimile No. (504) 593-9601
Michael G. Stag, Esq.
Smith Stag, LLC
365 Canal Street — Suite 2850
New Orleans, LA 70130
Re: Joseph Grefer, Camille Grefer, Rose Marie
Grefer Hassi, and Henry Grefer v. Alpha
Technical, et al. |
CDC No. 97-15004, Division “A”, Section 5
Our File No. 249-37
Dear Mike:
In order to ensure there is no confusion it this
matter, let me state ExxonMobil’s position clearly.
ExxonMobil intends to make full payment of the
judgment now and to timely seek review with the
United States Supreme Court.
ExxonMobil hereby makes an_ unconditional
tender of full payment of the punitive damage com-
ponent of the judgment and all legal interest thereon
as of May 24, 2006, the date on which the funds will
be wired to you. According to our calculations, the
amount to be paid on May 24, 2006, totals
$144,869,522.19. In order to make the payment,
ExxonMobil needs you to provide in writing on your
letterhead, no later than noon, Monday, May 22,
2006, the folloving: (a) wire instructions, (b) your
8a
firm’s tax ID, and (c) your confirmation of the full
amount to be paid.
ExxonMobil would prefer that the Grefers and
their attorneys execute a satisfaction of judgment and
another indemnity agreement regarding potential
attorneys’ fees liens (as you did without question with
respect to last month’s payment of the actual dam-
ages component of the judgment). However, we are
agreeable to dropping that request if it serves as a
stumbling block to ExxonMobil’s final payment on the
judgment.
We ask that you provide the letter with the
information requested above so that we may promptly
pay the judgment.
In light of this unconditional tender, we put you
on notice that any action taken by the Grefers to
otherwise enforce the judgment shall be considered
an abuse of process for with ExxonMobil will seek
appropriate sanctions and damages.
Sincerely,
ADAMS AND REESE LLP
/s/ Glen Pilié
Glen M. Pilié
GMP/rye
cc: Ralph R. Alexis, III, Esq., — via fax
Arthur Murray, Esq. — via fax
9a
MURRAY LAW FIRM
SUITE 2550 LL&E TOWER
909 POYDRAS STREET
NEW ORLEANS, LOUISIANA 70112-1000
May 22, 2006
[Names And Addresses Omitted In Printing]
Via Regular Mail, E-Mail and Facsimile
Glen M. Pilie
Adams and Reese
701 Poydras Street, Suite 4500
New Orleans, LA 70139
RE: Grefer v. Alpha
Dear Glen,
We acknowledge receipt of yours of May 18, 2006
offering to “unconditionally” pay the punitive damage
judgment plus interest to a date certain. We must
respectfully reject your tender. Our refusal is not
arbitrary. First, your tender is not unconditional
under Louisiana law. See, e.g., LaGraize v. Bickham,
391 So. 2d 1185, 1190-91 (La. App. 4th Cir. 1980);
Gagner v. Zummo, 487 So. 2d 721 (5th Cir. 1986); and
Green v. Industrial Helicopters, 560 So. 2d 684 (La.
App. 3rd Cir. 1990). Second, receipt of the money by
the Grefers conditioned on your further appeal sub-
jects them to potential complicated income tax conse-
quences. Third, receipt of the money, under such
circumstances, could subject the Grefers to restitution
to Exxon in the unlikely event that the United States
Supreme Court grants Exxon’s writ and, subsequently,
reverses the judgment.
10a
The Grefers make the following alternative
proposal: If Exxon pays the entire judgment plus
interest and foregoes its writ application to the
Supreme Court, the Grefers will forego their writ
application. As we only have a short time to file our
respective writs, the Grefers ask that Exxon either
accept or reject this settlement offer by Friday, May
26 at noon. The Grefers hereby give Exxon assurance
that no action will be taken adverse to its interests
during that time.
Our proposal is based on the following: When the
United States Supreme Court denied Exxon’s re-
newed application, a very clear message was sent
with respect to the outstanding judgment. Specifi-
cally, after every Justice was given the opportunity to
consider the matter, the Court indicated that it does
not believe there is a “reasonable probability” that
four Justices will grant certiorari nor a “significant
possibility” that a majority of the Court will reverse
the decision below. Indeed, both the Louisiana Su-
preme Court and the United States Supreme Court
reached that conclusion, all told, on three separate
occasions. In short, we now know that Exxon has
virtually no chance of overturning or reducing the
current judgment.
The Grefers, on the other hand, have not yet
received such a clear message from the Court with
respect to the writ application they intend to file. In
their appeal, the Grefers raised an important consti-
tutional issue before the Louisiana Supreme Court,
one that they believe would merit the Supreme
lla
Court’s review. Unlike the issues already presented to
the Court by Exxon (and found to be unworthy of a
stay), the Grefers’ issue is one that the Court has not
yet considered and one that relates to an overriding
policy concern, rather than a particularized concern
about the propriety of the judgment in this case.
While the Grefers’ argument can be found in their
writ application to the Louisiana Supreme Court, the
following is a brief summary:
Despite the fact that Cooper v. Leatherman
allows a de novo review of the constitutionality of
punitive awards, the right to a jury trial on the
amount of punitive damages remains inviolate. Todd
v. Roadway Express, Inc., 178 F. Supp. 2d 1244 (M.D.
Ala. 2001). To keep juries in the decision making
process and to protect the right to a jury trial, defer-
ence must be given to the jury’s punitive award. By
reducing the jury’s punitive award to an amount it
determined to be appropriate, rather than the highest
amount constitutionally permissible, the Fourth
Circuit failed to give the jury’s award any deference,
effectively taking the jury out of the process.
Johansen v. Combustion Engineering, Inc., 170 F.3d
at 1320 (7th Cir. 1999); Sherman v. Kasotakis, 314
F. Supp. 2d 843, 867-68 (N.D. Iowa 2004); Ross v.
Kansas City Power & Light Co., 293 F.3d 1041, 1048-
51(8th Cir. 2002); Filipovich v. K & R Express Sys.
Inc., 2003 WL 1463531 at *14-15 (N.D. Ill. Mar. 21,
2003), rev’d in part on other grounds 391 F.3d 859
(7th Cir. 2004).
12a
The Grefers are confident that the Court will
seize the opportunity to consider the very important
issue raised in Johansen, Ross, Todd, and Sherman.
In light of the Cooper decision, does a reviewing court
have to give deference to a jury’s punitive award
when it makes a due process reduction? Of course, it
bears noting that the Court often accepts individual
writ applications or specific issues within writ appli-
cations while denying the remaining applications/
issues. The Grefers are, therefore, confident that
seeking their writ application and having it granted
will not necessarily lead to Exxon’s writ application
(one the Court has indicated lacks merit) being
granted. In other words, if both sides pursue their
writ applications, there is a very real risk for Exxon
that the only issue the Court will consider is whether
the Fourth Circuit did not give enough deference to
the jury when it reduced the punitive award.
If the Court decides that issue in favor of the
Grefers, it will then have to decide what the highest
constitutionally permissible amount is in this case.
The Boeken case, in which writs were recently denied
by the United States Supreme Court, is instructive.
See Boeken v. Philip Morris, Inc., 26 Cal. Rptr. 3rd
638 (Cal. App. 2nd Dist. 2005), cert denied, 126 S.Ct.
1567 (2006). Boeken involved a 9:1 ratio between
punitive damages ($50,000,000) and compensatory
damages (approximately $5,500,000). Jd. It is similar
to this case in many relevant respects. It involved a
multi-million dollar punitive award which had been
reduced by the state appellate court to comport with
13a
due process requirements. It also involved compara-
ble misconduct and significant actual and potential
harm. The Supreme Court’s refusal to grant certiorari
in Boeken suggests that a 9:1 ratio between punitive
damages and compensatory damages in a case such
as this one would not be constitutionally excessive.
See id.; see also TXO, 509 U.S. 443 (ratio of 526:1);
Mosing, 830 So. 2d 967 (ratio of 9:1). It is, therefore,
conceivable that the Grefers’ proposed writ applica-
tion could result in a significant increase in the
judgment (potentially as high as nine times the
compensatory award — over $500,000,000).
To sum up, the risk to Exxon should it further
pursue its appeal outweighs any benefit that could
reasonably be obtained thereby. A realistic best case
scenario for Exxon is that it convinces the Court,
despite its stay denial, to grant writs and reduce the
punitive damage award to a 1:1 ratio ($56,145,000
plus interest of more than $19,000,000). Conversely,
as was discussed above, the Grefers could increase
the award to $505,305,000 plus interest of more than
$171,000,000. There is, of course, the very strong
possibility that the Supreme Court will deny both
writ applications (after $24,611.51 in interest has
accrued on the punitive award each day the parties
await that decision). These risks to Exxon clearly
outweigh the potential gains. This is especially true
when one considers the fact that it does not appear
certain under Louisiana law that Exxon can fully
tender the amount of judgment after it becomes final
and executable and still maintain its right to further
l4a
appeal. There is simply no justification for Exxon to
take such a significant gamble with its shareholders’
money (i.e. risk more than $676,000,000 in the hope
against hope that it will only have to pay $75,000,000).
The final resolution proposed by the Grefers is in
the best interest of both’ sides to this dispute, and it
should be given serious consideration. Accordingly,
pursuant to the Sarbanes-Oxley Act of 2002, plaintiffs
request that you promptly forward the foregoing
settlement offer to your client’s Executive Committee
and Board of Directors for their review. This letter
has been written for settlement purposes only and is
not to be considered an admission against interest.
The Grefers hope and trust an amicable resolution
can be reached in this case.
Looking forward to hearing from you, I remain
Very truly yours,
/s/ Stephen Murray
STEPHEN B. MURRAY
Ce: Arthur Murray
Mike Stag
Stuart Smith
Ralph Alexis
Andrew Sachs
John Weston
Jack Harang
15a
ADAMS AND REESE LLP
[Names And Addresses Omitted In Printing]
May 22, 2006
Via Facsimile No. 504-584-5249
Stephen B. Murray
Murray Law Firm
Suite 2550, LL&E Tower
909 Poydras Street
New Orleans, LA 70112-4000
Re: Joseph Grefer v. Alpha Technical, et al.
Our File No. 249-37
Dear Stephen:
This will acknowledge receipt of your correspon-
dence dated May 22, 2006, rejecting ExxonMobil’s
offer of May 18, 2006, to unconditionally pay the
punitive damage judgment plus interest as of May 24,
2006. This constitutes the second time, since the
United States Supreme Court denied ExxonMobil’s
request for stay on May 15, 2006, that the Grefers
have refused to accept ExxonMobil’s tender to pay in
full the punitive damage judgment.
As we discussed in our phone conversation today,
ExxonMobil was preparing to file certain pleadings to
protect its interests in the event the Grefers rejected
ExxonMobil’s second offer to pay the punitive damage
portion of the judgment. The purpose of the pleadings
ExxonMobil planned to file today upon rejection of its
tender offer is to prevent the Grefers from moving
forward with the judgment debtor rule filed on their
l6a
behalf and presently scheduled to be heard on June 2,
2006. It is ExxonMobil’s position that those proceed-
ings are totally unnecessary and unwarranted, given
ExxonMobil’s offer on two occasions now to fully pay
the punitive damage judgment plus interest.
From our phone conversation today, I understand
you will consult with the Grefers and recommend
that the judgment debtor rule currently pending for
June 2, 2006, be continued without date. I respect-
fully ask that you notify me by noon tomorrow, May
23, 2006, whether the Grefers have agreed and in fact
will continue the judgment debtor rule without date.
If you cannot give me that assurance by noon tomor-
row, I have no choice but to move forward with the
filing of pleadings to protect the interests of Exxon-
Mobil from what it considers to be unwarranted
judicial process.
I look forward to your response and our continu-
ing dialogue.
Very truly yours,
ADAMS AND REESE LLP
/s/ Glen Pilié
Glen M. Pilié
GMP’/rye
cc Arthur Murray, Esq.
Michael Stag, Esq.
Stuart Smith, Esq.
Ralph Alexis, Esq.
17a
ADAMS AND REESE LLP
[Names And Addresses Omitted In Printing]
May 25, 2006
Via Facsimile No. 504-584-5249
Stephen B. Murray
Murray Law Firm
Suite 2550, LL&E Tower
909 Poydras Street
New Orleans, LA 70112-4000
Re: Joseph Grefer v. Alpha Technical, et al.
Our File No. 249-37
Dear Stephen:
Thank you for following up on our phone conver-
sation of May 22, 2006 and continuing the judgment
debtor rule without date. ExxonMobil has carefully
considered your legal analysis and your proposal set
forth in your correspondence of May 22, 2006. How-
ever, ExxonMobil at this time cannot agree to forego
seeking further review with the United States Su-
preme Court. ExxonMobil fully appreciates the legal
analysis you provided in your letter and understands
that the Grefers also have the ability to seek further
review.
As we discussed, ExxonMobil also renews its
position and stands ready to completely satisfy the
punitive damage portion of the award by wiring the
appropriate funds on a date certain to an account
designated by the Grefers. In order to make that
transfer, ExxonMobil needs written instructions on
18a
your letterhead confirming the amount owed includ-
ing interest as of a certain date, instructions for wire
transfer, and your tax ID number.
I understand that the Grefers are consulting with
tax counsel and as a result may have an alternative
method they wish to propose for funding the judg-
ment on an interim base while further judicial review
is sought by the parties. ExxonMobil is willing to
consider any proposal you wish to send.
With kind regards, I remain
Very truly yours,
ADAMS AND REESE LLP
/s/ Glen Pilié
Glen M. Pilié
GMP’/rye
ec Arthur Murray, Esq.
Michael Stag, Esq.
Stuart Smith, Esq.
Ralph Alexis, Esq.
Martin A. Stern, Esq.
19a
LAW OFFICES
SMITH STAG, LLC
ONE CANAL PLACE
365 CANAL STREET
SUITE 2850
NEW ORLEANS, LOUISIANA 70130
TELEPHONE: (504) 593-9600
FAX: (504) 593-9601
WWW.SMITHSTAG.COM
[Names And Addresses Omitted In Printing]
June 16, 2006
Glen Pilie, Esquire Via Fax 504-566-0210
Adams & Reese
4500 One Shell Square
New Orleans, LA 70139
Re: Grefer v. Alpha Technical, eé al.
CDC Case No. 97-15004, Div. “A”
Our File No. 200147
Dear Glen:
This is to confirm our conversation that the
Grefer plaintiffs have accepted ExxonMobil’s uncondi-
tional offer to pay and satisfy the punitive damage
award in the case. As such, we request that you wire
ONE HUNDRED FORTY-FIVE MILLION FIVE
HUNDRED FIFTY-EIGHT THOUSAND SIX HUN-
DRED FORTY-FOUR AND 38/00 ($145,558,644.38)
DOLLARS by the close of business Wednesday, June
21st, 2006 to:
20a
Bank of America Investment Services, Inc.
ABA: xxx-Xx-xxx
Beneficiary bank: Chase Manhattan Bank,
New York, NY
For the account at: NFS, Account # xxx-xxx-xxx
For the benefit of Smith Stag, LLC (Grefer
Escrow o/b/o Joseph Grefer, Camille Grefer,
Rose Marie Grefer Hasse, Henry Grefer,
Stuart H. Smith, Michael G. Stag, Andrew B.
Sacks, Jack W. Harang, Ron A. Austin,
Stephen Murray, Sr., Arthur M. Murray,
Porteous, Hainkel & Johnson, LLP, Roger A.
Stetter, and Barry J. Cooper, Jr.)
Client Account Number: xxx-xxxxkxx
Sincerely,
SMITH STAG, LLC
/s/ Stuart Smith
Stuart H. Smith
SHS/gtm
cc:
Andrew B. Sacks
Michael G. Stag
2la
ADAMS AND REESE LLP
[Names And Addresses Omitted In Printing]
June 20, 2006
Via Facsimile No. (504) 593-9601
and United States Mail
Stuart H. Smith, Esq.
Smith Stag, LLC
365 Canal Street — Suite 2850
New Orleans, LA 70130
Re: Joseph Grefer, Camille Grefer, Rose Marie
Grefer Hassi, and Henry Grefer v. Alpha
Technical, et al.
CDC No. 97-15004, Division “A”, Section 5
Our File No. 249-37
Dear Stuart:
This will acknowledge receipt on Friday, June 16,
2006, of your written confirmation on behalf of the
Grefers of the total amount of $145,558,644.38 to be
transferred by wire on Wednesday, June 21, 2006, to
the Grefers by ExxonMobil. Upon transfer of these
funds ExxonMobil will have completely satisfied the
punitive award in this case, including judicial inter-
est thereon since tlhe date of judgment. Upon confir-
mation of successful wire transfer this Wednesday, I
ask that you have the Grefers and you as their coun-
sel sign this letter in the space provided below indi-
cating receipt of the funds and acknowledging that
the punitive damage award has been completely
22a
satisfied by ExxonMobil, thereby allowing release of
the appeal bond posted in this matter by ExxonMobil.
Very truly yours,
ADAMS AND REESE LLP
/s/ Glen M. Pilié/rye
Glen M. Pilié
GMP/rye
RECEIPT OF AND ACKNOWLEDGED ON THIS
21ST DAY OF JUNE, 2006 By:
Joseph Grefer
Stuart H. Smith, Esq.
Counsel for Plaintiffs, Joseph Grefer, Camille Grefer,
Rose Marie Grefer Hassi, and Henry Grefer
23a
LAW OFFICES
SMITH STAG, LLC
ONE CANAL PLACE
365 CANAL STREET
SUITE 2850
NEW ORLEANS, LOUISIANA 70130
TELEPHONE: (504) 593-9600
FAX: (504) 593-9601
WWW.SMITHSTAG.COM
[Names And Addresses Omitted In Printing]
June 22, 2006
Glen Pilie, Esquire Via Fax 504-566-0210
Adams & Reese
4500 One Shell Square
New Orleans, LA 70139
Re: Grefer v. Alpha Technical, et al.
CDC Case No. 97-15004, Div. “A”
Our File No. 200147
Dear Glen:
This will confirm that we have received verbal
confirmation that Exxon’s unconditional tender to
Plaintiffs in satisfaction of the Grefer punitive dam-
age judgment has been received today. We are waiting
for written confirmation of the receipt of those funds.
Upon written confirmation, this unconditional tender
will satisfy the punitive damage award with interest
in the Grefer litigation. However, we are waiting for
written confirmation as to why the $147 million plus
dollar wire was delayed by one day. Obviously, this
24a
would necessitate an additional interest payment by
Exxon if it was Exxon’s fault.
Sincerely,
SMITH STAG, LLC
/s/ Stuart H. Smith
Stuart H. Smith
SHS/gtm
cc: Andrew B. Sacks (via fax # 215-925-0508)
Michael G. Stag
25a
LAW OFFICES
SMITH STAG, LLC
ONE CANAL PLACE
365 CANAL STREET
SUITE 2850
NEW ORLEANS, LOUISIANA 70130
TELEPHONE: (504) 593-9600
FAX: (504) 593-9601
WWW.SMITHSTAG.COM
[Names And Addresses Omitted In Printing]
June 28, 2006
Glen Pilie, Esquire Via Fax 504-566-0210
Adams & Reese
4500 One Shell Square
New Orleans, LA 70139
Re: Grefer v. Alpha Technical, et al.
CDC Case No. 97-15004, Div. “A”
Our File No. 200147
Dear Glen:
This will confirm that Plaintiffs are in receipt of
ExxonMobil’s unconditional tender of ONE HUN-
DRED FORTY-FIVE MILLION FIVE HUNDRED
FIFTY-EIGHT THOUSAND SIX HUNDRED FORTY-
FOUR AND 38/00 ($145,558,644.38) DOLLARS in
satisfaction of the punitive award in the Grefer case.
Sincerely,
SMITH STAG, LLC
/s/ Stuart H. Smith
Stuart H. Smith
SHS/gtm
26a
cc: Andrew B. Sacks (via fax # 215-925-0508)
Michael G. Stag
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.