On January 30, 2007, a class action settlement was approved in Turner v. Murphy Oil U.S.A., Inc., 05-4206 (E.D. La). The Turner case asserted claims for property damage resulting from a release of oil from tanks located at Murphy’s Meraux, Louisiana refinery after Hurricane Katrina. The $330 million settlement includes a $55 million buyout program, a $120 million compensation program, a credit for $83 million in compensation already paid, and a $71 million remediation program (including credit for $51 million already expended for remediation). In addition, Murphy agreed to pay plaintiffs’ attorneys fees, which the court set at $33.7 million. The Governor of Louisiana, Kathleen Blanco, testified in favor of the settlment at the Fairness Hearing. To view the Court’s order approving the settlement, click here.
As a result of the breaches and overtopping of levees during Katrina, floodwaters up to 12 feet high swept into the Murphy Refinery, dislodging Tank 250-2, which ultimately ruptured. Approximately 25,000 barrels of oil were released, and washed by floodwaters into the residential neighborhoods surrounding the refinery. The court found that at least 1,800 properties were affected.
Numerous suits were filed, and 27 class actions were consolidated under the Turner caption. The court certified a class of residents and property owners within a designated geographic area. The claims certified for class treatment included negligence, strict liability, violation of obligations of neighborhood, nuisance, trespass and groundwater contamination. Plaintiffs’ claims under the Resource Conservation and Recovery Act (RCRA) and Oil Pollution Act (OPA) were dismissed as premature. The court also dismissed claims for “fear of cancer” damages and allegations of fraud. The court bifurcated the case into two phases: trial common issues of liability and causation, to be followed by successive trials of specific causation and damages. However, the parties reached settlement before trial.
While the settlement amount was established in the Settlement Agreement, the amount of attorneys fees was not agreed upon. The agreement provided only that Murphy would pay attorney fees and expenses on top of the settlement amount. Plaintiffs’ counsel requested a 35% contingency fee, or $115 million, and Murphy countered that $13.6 million would be appropriate. The court awarded $33.7 million in fees and $2.6 million in expenses.