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Court of Appeals tweaks Exxon rulings

The state’s highest court will not change its decision to strip hundreds of Jacksonville residents and businesses of most of the damages two juries awarded in separate lawsuits against Exxon Mobil Corp., stemming from a gasoline leak that continued for more than a month in 2006.

However, the Court of Appeals did order each side to bear its own appellate costs, removing the possibility that the plaintiffs, some 700 in all, would owe Exxon nearly $1 million.

The top court’s rulings came Tuesday on motions to reconsider its February decisions in two separate cases, which struck down jury awards of $1 billion in punitive damages and nearly $650 million in compensatory damages.

The February decisions also ordered new trials on property damage and medical-monitoring claims for a small subset of Jacksonville residents and businesses whose property showed actual contamination.

In Tuesday’s rulings, the court found that a handful of plaintiffs were erroneously left off the new-trial list.

Exxon had also asked the court to make the Jacksonville plaintiffs pay $920,566 — the cost of the premium on the bond Exxon had to post in order to appeal the combined verdicts of $1.65 billion.

The court found the request “not only unreasonable, but unconscionable” under the circumstances of the case.

“[R]equiring Respondents to pay the premium costs of Exxon’s supersedeas bonds would deter future litigants in similar mass toxic tort cases from pursing meritorious claims against large corporations for fear of the high costs associated with the prosecution of an appeal of a possible judgment,” Judge Glenn T. Harrell Jr. wrote Tuesday in Exxon Mobil Corp. v. Ford et al., No. 16, Sept. 2012 Term. The same rule applied to the plaintiffs in Exxon Mobil Corp. v. Albright, No. 15, Sept. 2012 Term.

The Ford group included the members of 88 households. The Albright group included about 160 households and businesses.

Theodore M. Flerlage Jr., an attorney with the Law Offices of Peter G. Angelos who represented the Albright group in the circuit court trial, declined to comment on Tuesday’s opinions. Stephen L. Snyder of The Snyder Litigation Team in Pikesville, who represented the Ford group in circuit court and before the Court of Appeals, did not return a call for comment.

Ava E. Lias-Booker of McGuire Woods LLP in Baltimore, who represented Exxon on appeal, did not return a call for comment. Charles P. Scheeler, of DLA Piper U.S. LLP in Baltimore, who also represented Exxon, deferred to the company.

“The evidence showed that we acted appropriately after the accident and the court has reaffirmed its verdict in these cases,” Exxon said in a statement. “We have apologized to the Jacksonville community and we remain ready to compensate those who were truly damaged by this unfortunate accident. We will continue the cleanup.”

Unpersuaded

While the groups and lawsuits were separate, they were suing over the same incident: the loss of 26,000 gallons of gasoline from an underground gas line at the Jacksonville Exxon station, which contaminated the groundwater of the well-dependent region in northern Baltimore County.

Although a leak detector sounded the first day, the leak continued for more than a month before an inventory discrepancy was noticed and the leak was discovered in February 2006.

Exxon paid a $4 million settlement to the Maryland Department of the Environment in September 2008 and, at trial, did not dispute liability for negligence. However, it said the damages were excessive, unproven or not recognized by Maryland law.

The Ford group was the first to go to trial in Baltimore County Circuit Court in 2009. After hearing testimony for several months, a jury awarded $150 million in compensatory damages, but rejected claims of fraud.

The group’s damages were reduced by the Court of Special Appeals last year. The court rejected compensation for medical monitoring and fear of cancer, but allowed $60 million in property damage awards to stand.

A jury awarded the Albright group $1 billion in punitive damages and nearly $5 million in compensatory damages in 2011.

The Court of Appeals heard arguments in both cases last November. In its February ruling, the court rejected the punitive damages award, disagreeing with the jury’s finding that Exxon was guilty of fraud for failing to post information about the leak and informing the public.

The state’s top court also decided that the property damage award duplicated the award for the loss of use and enjoyment of the property.

And, while it said the state would recognize a cause of action for medical monitoring based on fear of cancer, with scant exceptions it found the evidence at trial did not support the awards to the Jacksonville residents.

Each group filed a motion for reconsideration on April 17.

In the Ford group’s motion, Snyder argued that the court should have separated the issues between the two groups and that certain facts specific to his clients had been overlooked.

Snyder also contended the Ford group never made a choice to pursue damages for diminution of value rather than loss of use and enjoyment of property and should not be limited to one or the other.

The Court of Appeals, however, disagreed.

“Respondents elected to pursue property damages for diminution in value — not loss of use and enjoyment — at trial,” Harrell wrote. “Just as we are unpersuaded by Respondents’ other arguments (most of which are re-arguments of the doctrinal merits), we deny Respondents’ Motion for Reconsideration.”

The Albright group’s motion for reconsideration contended that the state’s top court strayed from Maryland law and that its opinion relied on a version of facts presented by Exxon but rejected by the jury.

The group disagreed with the ruling on establishing a reasonable fear of disease, saying there was a precedent in Maryland for accepting emotional distress claims without expert medical testimony.

The group also argued that Exxon admitted to liability for loss of use and enjoyment damages during its closing argument in Baltimore County Circuit Court.

Not so, the unanimous court held.

“Although Exxon conceded that it owed some category of compensatory damages to the Appellees listed, Exxon preserved specifically its objection to the award of loss of use and enjoyment damages,” Harrell wrote in the Albright opinion.