Chevron Petitions Supreme Court
Chevron announced last week it has filed a petition asking the
U.S. Supreme Court to hear a $742 million breach-of-contract case
first brought against Gulf Oil Co. in 1982 by Cities Service Co.,
which was bought by Occidental in 1984. Dawn Soper, a Chevron
spokesperson, said it is now up to the court to rule on the
"There were grievous errors in the Oklahoma proceedings and we
believe this petition is based on strong arguments worthy of U.S
Supreme Court consideration," said Ken Derr, Chevron Corp. CEO.
Chevron has said it would petition the Supreme Court since last
June. On March 2, the Oklahoma Supreme Court upheld the Oklahoma
trial court's 1996 damage award of $742 million from the alleged
breach of contract. Chevron filed a brief asking the state supreme
court to reconsider, but was denied. In its filing with the Supreme
Court, Chevron contends that the trial judge improperly precluded
Chevron from proving its main defense and the court proceedings in
Oklahoma failed to ensure due process.
"There were numerous errors in the trial proceedings, and those
errors resulted in a miscarriage of justice," said Derr after the
March 2 hearing. "That's why we find the Oklahoma Supreme Court
ruling so shocking."
The case dates back to 1982 when Cities Service Co., a Tulsa oil
company, filed suit against Gulf Oil Corp. after Gulf terminated an
agreement to merge with Cities, which was trying to avoid a hostile
takeover by Mesa Petroleum. Cities Service was subsequently
acquired by Occidental Petroleum in 1982 and Gulf was acquired by
Chevron in 1984.
At the time, Cities repurchased $225.5 million worth of its
stock from Mesa, in order to merge with Gulf. The Oklahoma trial
court ruled that Chevron should pay Occidental the $225.5 million,
plus $542 million in subsequent interest.
©Copyright 1999 Intelligence Press, Inc. All rights
reserved. The preceding news report may not be republished or
redistributed in whole or in part without prior written consent of
Intelligence Press, Inc.