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By Brenda Sapino Jeffreys
Texas Lawyer
11-09-2006

The first trial stemming from the fatal explosion in 2005 at the BP refinery in Texas City kicks off next week in Galveston, Texas, but the verdict in the suit won't set a market rate for settlements, which is what typically happens in mass tort suits.

BP already has negotiated settlements with more than 1,000 people who claim injury from the explosion on March 23, 2005, that killed 15, injured at least 180 on the refinery site, and allegedly caused personal injuries or property damage to hundreds in the area. The British company has set aside $1.6 billion to pay claims.

Instead of setting a market rate for settlement, the trial in 212th District Judge Susan Criss' court may help 22-year-old plaintiff Eva Rowe, whose parents were killed in the explosion, force BP and other energy companies to improve safety practices at refineries.

Rowe's attorney, Beaumont, Texas, plaintiffs lawyer Brent Coon, says settlement negotiations remain open, but BP and Rowe haven't come to an agreement that would avert a trial he expects to last up to two months. Coon says Rowe wants a guarantee from BP that the company will make specific safety improvements at all of its refineries and wants the company to support her efforts to mandate changes throughout the industry. She also wants BP to make public all documents in the litigation, he says.

"She made requests to BP other than for money," Coon says, adding that BP's response is that the company has made some safety improvements Rowe advocates, but doesn't want safety improvements as a condition of settlement.

Neil Chapman, a spokesman for BP North America in Houston, says BP has "accepted responsibility" for the explosion and is working hard to settle the claims of people injured by the explosion and to improve safety and safety management at all of its operations.

"It's a comprehensive range of actions in order to implement the lessons we've learned, having investigated the terrible tragedy thoroughly," Chapman says.

While BP hasn't come to terms with Rowe, it has been on a settlement binge, most significantly by settling claims with the families of the 13 other individuals who died as a result of the explosion.

"Within a couple weeks of the explosion, I met with them [lawyers for BP] and at the very first meeting, within a couple weeks, their attitude was we want to resolve these cases," says John Eddie Williams, a plaintiffs lawyer in Houston who negotiated settlements for his entire docket of 155 explosion clients, which included the family of one individual who died in the explosion.

The ink is barely dry on the settlements, but already some disgruntled plaintiffs who accepted settlements with BP are suing their lawyers. A group of 32 individuals filed a breach of fiduciary duty suit alleging their lawyers didn't fully disclose "all matters involving other plaintiffs within the same suit as they are required to do under Arce v. Burrow," and charged unreasonably high contingent fees.

The defendants in Michael Medina, et al. v. Ammons Law Firm LLP, et al., which is filed in the 212th District Court in Galveston, are the Ammons Law Firm, founder Robert Ammons, former Ammons Law Firm attorney Arthur Gonzalez, Sprain Law Firm and Michael L. Sprain. All are of Houston.

As alleged in the Plaintiffs' First Amended Original Petition in Medina, filed on Oct. 24, the plaintiffs were represented by the defendants during the period from March 2005 through July 2006 to handle their claims related to the explosion.

The plaintiffs bring negligence and breach of fiduciary duty claims against the "Ammons defendants." The plaintiffs allege they were not provided with full disclosure regarding all of the settlements by the Ammons defendants, and "were not given benefit of the full extent of the defendants' knowledge regarding how much similar cases were settling for," were told not to get second opinions and expressly told not to talk with other plaintiffs in the litigation.

The plaintiffs also allege they were pressured to accept their settlements, some were charged a 40 percent contingent fee instead of a one-third fee when there was no necessity to file a suit, and some of the claims were settled for amounts that are less than what could have been obtained if they had been "diligently prosecuted."

The plaintiffs also bring a gross negligence cause of action against the defendants.

The plaintiffs seek fee forfeiture, actual damages representing the difference between the amount of their settlement and the "true value of their cases as compared to other similar cases," and unspecified punitive damages.

A lawyer for the Medina plaintiffs, Jimmy Williamson, a partner in Williamson & Rusnak in Houston, was out of the office on Nov. 2 and could not be reached for comment.

Ammons and Sprain did not return telephone calls seeking comment. Gonzalez, who left the Ammons Law Firm in March 2006 and is now managing attorney for Brent Coon & Associates in Houston, refers comment to his attorney, Dale Jefferson.

Jefferson, a partner in Martin, Disiere, Jefferson & Wisdom in Houston, speaking generally about the allegations, says, "It's always easier for a plaintiff who has gotten the benefit of an earlier settlement to come back later on and second-guess about whether or not they should have waited or held out for more money. If they hear other people did in fact get more money, the mere fact that other plaintiffs may have gotten more money doesn't mean there was a breach of fiduciary duty."

The timeline for the litigation is not typical, according to three plaintiffs lawyers with clients who sued BP over the explosion. The normal progression of events in mass tort litigation calls for a few suits to go to trial to set a market rate for settlement. In the BP explosion litigation, the paradigm is turned on its end, with Rowe's trial coming after a majority of the claimants already have come to terms with BP.

"What's unusual is the fact that BP has come forward, immediately accepted responsibility openly and made a Herculean effort to resolve this matter in what I believe to be a pretty fair way," says Ron Simon, a partner in the Houston plaintiffs firm Simon & Luke who has negotiated settlements for some of his 40 clients. "You don't see that very often these days. I think BP assessed its risk and liability."

Simon and three other plaintiffs lawyers who represented people injured in the explosion say BP was unusually willing to negotiate.

"They pretty much stood on their word and put money on the table," says James Nebout, a partner in Burwell, Burwell & Nebout in Texas City who settled the last of his 86 claims on Nov. 1. "The money was the amount I thought was a reasonable amount for my clients, and my clients certainly agreed was reasonable."

While terms of the settlements are confidential, BP has offered "reasonable" settlements, says plaintiffs lawyer Randall Sorrels, who represents 40 individuals who reached settlement agreements with BP by August.

"BP does not want to try these cases. They are offering very reasonable dollars because they have admitted liability in their own [internal] findings," says Sorrels, a partner in Abraham, Watkins, Nichols, Sorrels, Matthews & Friend in Houston. "By reasonable dollars, I mean that a lawyer could not go to his client and say, "I could get you more with a jury.'"

Williams, of Williams Bailey Law Firm, says BP executives and defense lawyers know that the plaintiffs lawyers built a good case and "had them in the cross hairs."

"In 29 years [of practice], it's the best liability case I've seen, and the settlements reflected the severity of their conduct," Williams says.

Anthony Buzbee, a plaintiffs lawyer in Friendswood, Texas, reached settlements with BP on behalf of about 150 clients. His clients suffered injuries ranging from post-traumatic stress disorder with no physical injuries, to minor burns to multiple back and neck injuries.

While Buzbee, of the Buzbee Law Firm, says he is pleased to be able to put his docket of Texas City explosion suits behind him, he believes Rowe is resolute about going to trial.

"Based on my experience dealing with BP, I just seem to think that if the case were going to settle, it would have settled already." In Rowe's suit, there's more at issue than money, Buzbee says.

"It's her call," says Rowe's lawyer Coon, of Brent Coon & Associates, who has settled 30 or 40 of the more than 100 suits he filed against BP on behalf of people injured in the explosion. "I feel like it's going to go. We've been preparing all along for trial."

Rowe's upcoming trial isn't all that's keeping the Texas City explosion in the news. On Oct. 29, CBS news program "60 Minutes" reported that BP officials knew years before the accident about delayed maintenance at the refinery, which put the plant's safety at risk. On Oct. 31, a federal investigative agency looking into the Texas City explosion issued a report calling on the petroleum industry to improve safety practices at refineries.

Criss signed an order on Oct. 19 allowing television coverage of the trial, but that status was up in the air as of Texas Lawyer's press time on Nov. 2, because Justice Elsa Alcala of Houston's 1st Court of Appeals issued a temporary stay of Criss' order. An attorney for Court TV, Laura Lee Prather, a partner in Sedgwick, Detert, Moran & Arnold in Austin, says she planned on Nov. 2 to file an objection to Alcala's Oct. 30 order granting BP's request for an emergency motion to stay.

Jury selection in Eva Rowe, Individually and As Representative of the Estates of James Rowe and Linda Rowe, Deceased v. BP Products North America Inc., et al. is set to begin today, and opening arguments are slated for Nov. 13. Like most of the plaintiffs, Rowe has filed a petition in intervention in the first suit filed, Miguel Arenazas, et al. v. BP Amoco Chemical Co., et al.

In her Third Amended Petition in Intervention, filed on Oct. 30, Rowe alleges BP neglected important maintenance and modifications at the refinery by failing to install a "closed relief vent flare system" to manage excess hydrocarbon liquids and vapors instead of a "Blowdown Drum and Stack" system that is designed to vent hydrocarbon liquids and vapors to the atmosphere. Rowe alleges BP knew years ago that it should have installed the safer flare system, but chose not to for cost reasons.

"Proper and safe procedures and prudent industry standards and practices require that any such excess hydrocarbons be vented to a closed system and then to a flare, rather than to atmosphere," Rowe alleges in her petition.

Rowe is suing BP Products North America Inc., plant manager Don Parus and contractor JE Merit Constructors Inc., the Pasadena, Calif.-based company that employed her parents. James and Linda Rowe were in a trailer located near the site of the explosion.

Rowe brings negligence causes of action against the defendants; premises liability against BP and Parus; assault against BP by deliberately and intentionally exposing Rowe's parents and other workers to hazards; and gross negligence against BP and Parus. Alternatively, if BP is not wholly responsible for the explosion, Rowe asserts a claim of gross negligence against JE Merit Constructors.

Rowe seeks up to $1.6 billion in actual and punitive damages. Chapman says BP has set aside a reserve of $1.6 billion to settle all of the litigation.

The defendants deny the allegations in Rowe's suit.

BP defense lawyer Otway Denny, a partner in Fulbright & Jaworski in Houston, refers comment to a BP spokesman. BP defense lawyers James Galbraith, a partner in McLeod, Alexander, Powel & Apffel in Galveston, and Kenneth Tekell, a partner in Tekell, Book, Limmer & Matthews in Houston, did not return telephone calls seeking comment.

Coon says Judson Starr, a partner in Venable in Washington, D.C., represents Parus. Starr did not return a telephone call seeking comment before press time.

According to plaintiffs lawyers who negotiated the settlements, BP senior attorney William Noble of Chicago negotiated the deals with assistance from defense counsel including Denny, Galbraith and Tekell.

James Ebanks, a partner in Ebanks, Smith & Carlson in Houston who represents defendant JE Merit Constructors, says, "We have very vigorously denied any responsibility for the deaths, since they are our employees."

Ebanks says BP has indemnified his client in the Rowe suit.

"BP has control of the settlement negotiations, and I don't really think the case is going to settle," Ebanks says.

Chapman, the BP spokesman in Houston, says BP has "accepted responsibility for the explosion" and is working hard on improving safety at the plant, and also worked to settle the claims stemming from the explosion.

BP did admit liability early on. In May 2005, less than two months after the explosion, BP announced results of an internal investigation that said a "series of failures by BP personnel" during the startup of a process unit in the refinery led to the explosion and fire.

BP also said its investigation team determined that the presence of workers in temporary trailers near the process unit greatly increased the number of deaths and injuries.

"The investigation team also concluded the use of a flare system, instead of a blow-down stack, would have reduced the severity of the explosion," BP wrote in a press release in May 2005.

In a statement at that time, Ross Pillari, president of BP Products North America Inc., said the company regrets that its mistakes caused so much suffering and apologizes to those who were harmed.

"Our goal is to provide fair compensation without the need for lawsuits or lengthy court proceedings," Pillari said in that statement, which has proven to be a forecast that BP would settle early and often.

But a U.S. Chemical Safety Board investigation into the incident is continuing. On Oct. 30, the board announced preliminary findings that found that the venting system on the tower was overfilled with flammable liquid hydrocarbons, causing the explosion and fire.

On Oct. 31, the CSB issued new safety recommendations calling on the U.S. oil industry to improve safety practices for refinery pressure-relief systems and eliminate the type of atmospheric vent that caused the hydrocarbon release and explosion in Texas City.

Coon says Rowe wants state or federal legislation requiring safety improvement to all refineries, and wants BP to help lobby for it.

"We wanted agreements from them to work with her, to be a willing participant in legislation to mandate these types of changes throughout the industry. They do not want to negotiate those types of considerations as part of the settlement," Coon says. "Eva has chosen to make [her trial] an example to better publicize the conditions."