ExxonMobil Corp. on Friday vowed to appeal a decision by a Louisiana appeals court, even though the court substantially reduced punitive damages against the oil giant in connection with a eight-year-old lawsuit brought by a family over contaminated land. Exxon said in a statement that the compensatory and punitive awards still were “excessive and unjustified.”

In May 2001, a New Orleans civil jury ordered Exxon to pay $1.06 billion in clean-up, lost property and punitive damages to former Louisiana state District Judge Joseph Grefer and his family (see Daily GPI, May 21, 2001).

According to the lawsuit, the Grefers leased 33 acres of land in Harvey, which is south of New Orleans, for about 30 years to the now-defunct Intracoastal Tubular Services. Intracoastal cleaned Exxon field pipes on the land, which were contaminated with radioactive mud. The family filed the lawsuit in 1997.

Exxon did not deny the contamination and apparently had offered to clean up the land, but the Grefer family declined its offers. Exxon said in 2001 that the award of $56 million to clean up the contamination was more than 50 times the assessed value of the Grefer property, and it claimed then that less than 1% of the land contained radiation levels above naturally occurring levels.

On Thursday, the Louisiana Fourth Circuit Court of Appeal reduced punitive damages to $112 million from $1 billion but left unchanged compensatory damages of $56 million.

“Not only were punitive damages unwarranted because ExxonMobil acted responsibly, but the court’s ruling allows punitive damages for conduct that occurred long before the punitive damages statute took affect,” said Charles Matthews, Exxon’s general counsel. “We are also disappointed that the court has upheld a jury award for a clean-up far in excess of that required by the Louisiana Department of Environmental Quality regulations (LDEQ). We intend to appeal this decision.”

The LDEQ had determined that the naturally occurring material on the Grefer property was not considered to be at dangerous levels and that it represented no threat to human health or the environment. Most of the property has no elevated levels of contamination, according to Exxon.

“Less than 1% of the land contained material that was above regulatory limits,” said the company. “ExxonMobil developed and implemented handling and safety procedures years before the state of Louisiana issued regulations governing the naturally occurring material involved, and informed and educated employees and contractors about the issue. Approximately 99% of the Grefer property exhibited contamination levels equal to or less than what is found in most soil throughout Louisiana.”

The company added, “nonetheless, ExxonMobil had always been fully prepared and willing to remediate the Grefer property to satisfy state requirements.”

According to Exxon, former Louisiana Governor Mike Foster and LDEQ had filed an amicus brief supporting ExxonMobil’s position regarding the applicability of LDEQ’s standards.

©Copyright 2005Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.