Arabie v. CITGO Petroleum Corp.

As a consequence of a June 2006 storm, the stormwater drainage and storage system (including the wastewater treatment facility) at the Lake Charles refinery of Defendant CITGO Petroleum Company (CITGO), was filled beyond available capacity and overflowed, resulting in a major oil spill. Over 21 million gallons of waste, including 17 million gallons of contaminated wastewater and 4.2 million gallons of slop oil, escaped from the two existing wastewater storage tanks into an area around the tanks which was surrounded by levees or dikes. The oil spill, which was described at trial as "major" and "catastrophic," eventually contaminated over 100 miles of shoreline along the Calcasieu River, and required several months to clean up. Fourteen plaintiffs, employees of Ron Williams Construction (RWC) working at the Calcasieu Refining Company (CRC) south of the CITGO refinery, filed suit against CITGO and R&R Construction, Inc. (R&R) alleging various injuries due to their exposure to noxious gases emanating from the spill. CITGO and R&R stipulated that they were liable for the spill and agreed to pay plaintiffs for all their compensatory damages assessed to CITGO and R&R. After a two week bench trial, the district court ruled that plaintiffs had proved their injuries were caused by CITGO's admitted negligence in allowing the spill. The court of appeal affirmed, holding that the district court's finding the spill caused plaintiffs' injuries was not an abuse of discretion. The Supreme Court granted review of this case to determine whether the courts below erred as to the allocation of fault, in awarding damages for fear of future injury, and in awarding punitive damages. In sum, the Court held that Louisiana's conflict of laws statutes did not provide for the application of the punitive damages laws of Texas or Oklahoma under the facts of this case, that plaintiffs proved that their damages were caused by their exposure to toxic chemicals contained in the oil spill, that plaintiffs are entitled to damages for fear of contracting cancer, and that CITGO did not produce at the hearing on summary judgment factual support sufficient to establish that it would be able to satisfy its evidentiary burden of proof at trial. The Court affirmed in part, and reversed in part. The case was remanded for further proceedings. View "Arabie v. CITGO Petroleum Corp." on Justia Law