05 18 2009 Turner v Murphy Cy Pres Hearing Transcript May 18 2009[1]

8/8/2019 05 18 2009 Turner v Murphy Cy Pres Hearing Transcript May 18 2009[1]

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UNITED STATES DISTRICT COURTEASTERN DISTRICT OF LOUISIANA

NEW ORLEANS

PATRICK JOSEPH TURNER : CIVIL ACTION 05-4206: SECTION "L"

VERSUS :: New Orleans, Louisiana

MURPHY OIL USA, INC. : May 18, 2009: 9:30 a.m.

: : : : : : : : : : : : : : : :

HEARING ON OBJECTIONS OF OPT-OUT CLAIMANTSTO THE PROPOSAL

TAKEN BEFORE THE HONORABLE ELDON E. FALLON

UNITED STATES DISTRICT JUDGE APPEARANCES:

For the Plaintiff: Law Offices of Sidney D. TorresBY: SIDNEY D. TORRES, ESQUIRE

ROBERTA L. BURNS, ESQUIRE8301 W. Judge Perez Drive, Suite 303New Orleans, Louisiana 70043

and

JERALD N. LANDRY, JR., ESQUIRE

Attorney at Law710 Carondelet Street, 1st FloorNew Orleans, Louisiana

and

ROBERT MCMILLIN, ESQUIREAttorney at Law

For JP Morgan Chase: McGlinchey Stafford, PLLCBY: KYLE FERACHI, ESQUIRE301 Main Street, 14th FloorBaton Rouge, Louisiana 70825

For Murphy Oil: Frilot L.L.C.BY: KERRY J. MILLER, ESQUIRE

KYLE A. SPAULDING, ESQUIREJOSEPH N. MOLE, ESQUIRE

Energy Centre1100 Poydras Street, Suite 3700New Orleans, Louisiana 70163



2

APPEARANCES (Continued)

and

Dysart & TabaryBY: DANIEL L. DYSART, ESQUIREThree Courthouse SquareChalmette, Louisiana 70043

Reported By: Arlene Movahed, CCROFFICIAL COURT REPORTER

500 Poydras Street, Room 406New Orleans, Louisiana 70130(504) 589-7777

Proceedings recorded by mechanical stenography;transcript produced by dictation.



3

P R O C E E D I N G S1

MORNING SESSION 2

(May 18, 2009)3

(The following is a transcript of the Hearing on4

Objections of Opt-Out claimants to the Proposal taken on May5

18, 2009.)6

(Open court.)7

THE COURT: Be seated, please. Good morning,8

ladies and gentlemen. Make your appearances for the record,9

please.10

MR. TORRES: Sidney Torres, Roberta Burns and Jay11

Landry for the plaintiffs.12

MR. MILLER: Your Honor, Kerry Miller, Joe Mole,13

Kyle Spaulding and Danny Dysart for Murphy.14

THE COURT: I understand we have several15

individuals.16

MR. FERACHI: Kyle Ferachi on behalf of JP Morgan17

Chase.18

MR. MCMILLIN: Robert McMillin on behalf of19

plaintiffs.20

THE COURT: We're here today to discuss, or to21

deal with the cy pres matter. Let me set the matter in22

context for a moment.23

As we all know now on August 29th, 2005, Hurricane24

Katrina made landfall in the Mississippi-Louisiana region.25



4

And as the storm passed over Louisiana, some 20-foot storm 1

surges rolled into the Mississippi River Gulf Outlet and2

swept over and breached some 14 miles of levee system 3

intended to protect St. Bernard Parish and inundated nearly4

all the homes in that Parish causing tremendous damage.5

Two days after the storm, the flood waters built in6

and around Murphy's facility and one of the tanks floated or7

was raised, dislodged and a substantial amount of crude oil8

flowed from the tank and floated on top of the water. And9

the water drained out of the Parish and the oil remained.10

And a number of cases were filed, number of class actions11

were filed.12

I took evidence and based on the evidence that I13

heard I drew boundaries that were substantiated by the14

evidence that I heard and I declared a class. I set the15

matter for trial and I set the liability aspect of the case16

first intending to get to the damage aspect of the case later17

on, if necessary.18

The attorneys proceeded to take a substantial19

number of depositions and hired experts and prepared for the20

trial. A day or two before, or at least the week before the21

trial, a settlement was arrived at settling the case for the22

class members inside the class. The total amount of the23

settlement was upwards to $330 million based upon what was24

already paid, plus what was additional amounts of money.25



5

At that point, the focus was on distributing the1

sum and the amounts were paid, settling checks were issued.2

All of the litigants, all of the class members were paid. Or3

at least were put into the Registry of the Court.4

Notwithstanding that, there was some $5 million5

remaining after. And so I put that in the Registry of the6

Court and decided that it would be used for cy pres.7

Cy pres is a phrase used to describe funds that no8

one has claimed or is not entitled to, but they are used for9

the benefit of the individuals who were damaged, or for the10

institution that was damaged, or for the idea that was11

damaged. Historically it's used for various reasons. There12

are some cases in which it is used to give a grant to a13

university to study disease because that was the issue in14

that particular matter. It's used in some instances to study15

safety measures because that was the issue of that particular16

case. And there are various reasons all focused, in my17

judgment, on taking into consideration the damage sustained,18

the reason the damage was sustained, the people who were19

damaged, the issues both in terms of the culture as well as20

the philosophy involved in the damage.21

In this particular case, I felt that this Parish22

was just devastated and that rather than give it to an23

institution outside the Parish to study the issues of oil24

distribution or to study the issues of cleanup or to study25



6

the issues of that sort, all of which would have been1

helpful, I felt that it ought to be used and directed inside2

the Parish for the people inside the Parish. It was so badly3

damaged, badly injured. And the $5 million was the figure.4

The people outside the class were also damaged. As5

I said, 85, 95, maybe 100 percent of the Parish. Just a6

handful of homes survived this terrible flood, terrible7

disaster. So people outside of that class were badly8

damaged. Their homes were inundated. But I felt that the9

evidence did not support that the damage that they sustained10

was due to the Murphy Oil intrusion. There were some11

instances where those homes had some oil on them, but they12

were next or in the vicinity of a service station. And the13

service station had flooded and their tanks were damaged. So14

the issue was whose oil was it. I was only dealing with the15

Murphy case and the evidence did not support the intrusion of16

oil, in my opinion, outside of the Murphy class.17

But notwithstanding that, as I mentioned, a number18

of homes, a large number of homes were devastated by19

flooding. So the attorneys went to work to see whether or20

not these cases could be resolved. And a time or two, a21

meeting or two before this one, Murphy made a proposal to use22

a portion, not the $5 million, but a portion of that, namely,23

$2 million to try to remedy some of the damage sustained by24

those individuals.25



7

Now I might say that when I decided that the $51

million was to be used for that purpose, the purpose of2

assisting the people in the Parish, Murphy's view of it was3

different. Murphy's view of it was that that amount of money4

should then revert to Murphy, should go back to Murphy. That5

they put up the money to settle with the people who came6

forward and they got the money and some people didn't come7

forward. So they looked upon it as being sort of their money8

that wasn't used and they wanted it back.9

I heard from the Plaintiffs' Committee who felt10

differently. The Plaintiffs' Committee took the position11

that the money was just unused and, therefore, it should be12

used for the purposes of the individuals who were damaged. I13

heard arguments from both sides. Both sides had legitimate14

issues. Both sides were in good faith when they argued it.15

And both sides wrote very fine briefs on it. So the issue16

was sharp and I considered it. And I held against Murphy. I17

held that the money would be used for cy pres purposes. The18

$5 million would be used for cy pres purposes.19

So the question is how do you use it at this point.20

The thing that I see in this particular case, it's a little21

different than others. And that is that the area of the22

class is inside of the Parish. Before you get to the class23

crossover, the boundary of the class, you have to come24

through a substantial portion of St. Bernard Parish. The25



8

Parish was devastated. That area, that entrance of the class1

boundary is still in bad shape. Still homes are destroyed,2

unused, vacant lots, pools are vacant, weeds are growing up.3

So the issue is whether or not assisting those individuals4

assists also the Parish as a whole and whether or not a5

portion of the funds should be used for that purpose to6

satisfy the cy pres requirements.7

I felt that it was important for everybody to have8

a voice in this so I put the matter on the website and I made9

certain that notices were given throughout the Parish so that10

people could come to discuss the matter and give me the11

benefit of their views. And so we're here today for that12

purpose. Anything from the parties? From Murphy? Anything?13

MR. MILLER: Not at this time, Your Honor. We14

will wait.15

MR. TORRES: Not at this time.16

THE COURT: Chase, the bank?17

MR. FERACHI: Nothing.18

THE COURT: I notice we have some people in the19

audience. Anybody have any questions of me? Anybody want to20

make any statements that you support or differ from it?21

Ma'am, you can go first. Why don't you come22

forward and give us your name.23

MS. KNEALE: My name is Suzanne Kneale. I live at24

2114 Corinne Drive in Chalmette, St. Bernard Parish,25



9

Louisiana.1

Your Honor, my letter to the Court dated May 6,2

2009 objecting to the distribution of excess class settlement3

funds for out of class cases and to a particular proposal of4

the cy pres project. With regards to the excess class5

settlement funds, it is a deviation from the original intent6

and the provisions of the class settlement. It does not7

protect the class going forward and rewards the defendant.8

I object because the defendant, Murphy Oil,9

benefits and it is against the principles of cy pres.10

Although the nature of the settlement is that not all members11

are fully compensated, the buy-out is not completed and12

Murphy Oil has not fulfilled its obligation towards the green13

space buffer. It is unclear which funds would be used to14

close future Road Home transactions in the buy-out zone and15

how the class is protected if those transactions are not16

pursuant to Turner versus Murphy.17

My letter to the Court petitioned the Court to18

preserve the settlement agreement for green space buffer for19

voluntary buy-outs as initiated in the Fairness Hearing.20

This will buffer the adjacent neighborhoods from the refinery21

and protect the health and safety of the residents who chose22

to revitalize their community.23

The letter also suggests some cy pres projects for24

the community's consideration. And I have included some25



10

language and documents which continue on why some proposals1

or projects would be better suited to be around our2

residential neighborhoods as compared to others.3

Referring back to my letter in particular I object4

to a cy pres proposal, Item Number E as it was presented to5

the residents. I object because it is not a part of the6

original purpose to restore and revitalize the neighborhoods7

and return the quality of life which has been lowered by the8

oil spill. It neither compensates nor benefits the class.9

It does not protect the class going forward. Nor does it10

make a better buffer than the empty green space which exists11

now. In fact, it results in lowering the buffer benefitting12

the defendant and causes further damage to class members'13

restored homes and revitalize neighborhoods. Potentially it14

brings the next explosion that much closer to us all.15

And if I may, Your Honor, in conclusion, I have a16

request of the Court. I should like the Court to have an17

understanding of how troublesome it has been for our18

neighborhood to hear this term green space. For residents to19

hear the phrase green space, okay, that is what we agreed on20

and then to hear it misused or to hear it twisted with other21

points or perhaps at times to make other points when suited.22

And it is my belief that residents are looking towards the23

Court for some sort of clarification on this term and perhaps24

to see it enacted as the original intent because it is what25



11

everyone thought it was. People made decisions and1

agreements on this term and yet it was never documented that2

it is this green space that is to act as a true buffer3

between the heavy industry and residents or the residential4

district. Thank you, sir.5

THE COURT: Thank you very much. I appreciate it.6

Why don't you give that to me and I will make it a part of7

the record.8

MS. KNEALE: Thank you.9

THE COURT: Thank you. Any response from Murphy?10

MR. MILLER: Yes, Your Honor. Briefly. Your11

Honor, Kerry Miller on behalf of Murphy Oil. Initially we12

would like to state for the record that we think Ms. Kneale's13

objection, as she phrased it in the manner in which it was14

presented by a class member, is improper under Devlin versus15

Scardelletti, 536, U.S. 1, 2002, a U.S. Supreme Court case.16

In that case, the U.S. Supreme Court held that class members17

who object to provisions or to issues with respect to a class18

settlement need to intervene before coming in and making an19

objection. Ms. Kneale has not intervened in this lawsuit so20

we would like to preserve the record on that issue, Your21

Honor. The issue of Devlin, I think, and its prodigy has22

been recognized by the Fifth Circuit with respect to the23

requirement of a formal intervention.24

Secondly, Your Honor, we think many of Ms. Kneale's25



12

issues are cross-contaminated, so to speak. She's concerned1

about the Clean Air Act issues surrounding the refinery. Ms.2

Kneale has a case against Murphy in another division of this3

Court. That case is pending before Judge Vance. Murphy is a4

defendant. Ms. Kneale and her group are the plaintiffs.5

It's U.S. D.C., Number 8-4986. And issues with respect to6

what appears in her May 6th letter are being addressed in7

that litigation; air monitoring and things of that issue.8

In essence, Your Honor, we appreciate her comments9

as far as comments go. I am sure if the proposal does go10

forward and a big chunk of the money, $3 million plus is used11

for the benefit of the community and the class that due12

consideration will be given to Ms. Kneale's comments. Thank13

you.14

THE COURT: Any response to Ms. Kneale? The15

gentleman to your left, yes.16

MR. HARTMAN: Your Honor, my name is George17

Hartman.18

THE COURT: Mr. Hartman.19

MR. HARTMAN: 2609 Ventura Drive in Chalmette,20

Louisiana. I have been in my house since 1965. The only21

owner of the house.22

And I agree with everything Ms. Kneale said. I can23

almost just ditto that. I just wanted to state like it is.24

THE COURT: Were you within the class, Mr.25



13

Hartman?1

MR. HARTMAN: Yes, sir, very much so.2

THE COURT: You got paid?3

MR. HARTMAN: Yes, sir, very much so in the class.4

I am right close to the refinery. And I don't plan -- I5

don't want to leave.6

THE COURT: I hope you don't.7

MR. HARTMAN: Thank you. That's all. I just8

agree with everything Ms. Kneale said.9

THE COURT: Thank you very much. We will put you10

down as supporting her position. Anyone else? I think I see11

Mr. Duchmann. I know there is some issue as to whether he12

has standing. But I will let him speak today.13

MR. DUCHMANN: Your Honor, I request clarification14

on the issue if I am a class member or not. If I am not a15

class member, I don't belong in your Court and I will16

probably leave at this point. If I am a class member, I17

wanted it stated for the record.18

THE COURT: Yes, Mr. Miller.19

MR. MILLER: I think the rulings make it clear20

that Mr. Duchmann is not a class member. This Court in its21

January 2007 order and reasons approving the class action22

settlement and addressing the objections contains a section23

in which it holds that Mr. Duchmann did not have standing as24

a class member to present an objection in connection with the25



14

Fairness Hearing. That ruling has been affirmed by the U.S.1

Fifth Circuit Court of Appeals.2

Additionally, Mr. Duchmann took a writ certiorari3

from the Fifth Circuit affirmance of Your Honor's ruling.4

That writ was denied. Therefore, there is a final judgment5

in place finding that Mr. Duchmann does not have standing as6

a class member.7

And any subsequent attempts by Mr. Duchmann to8

address the Court as a class member, or to influence relief9

as a class member is improper because of the pending final10

judgment.11

THE COURT: Mr. Duchmann, you have any documents12

that you were planning on filing?13

MR. DUCHMANN: Yes, sir. In Patrick Joseph Turner14

versus Murphy Oil, I have a document right here that Patrick15

Joseph Turner is not even a class member right here. Comes16

off their court website, Your Honor. That is the issue like17

myself that Mr. Kerry Miller brought up that I am not a class18

member, therefore, I cannot oppose the settlement or have19

anything to do with this case.20

Now I ask for clarification from Your Honor that if21

I am a class member that I can present evidence in22

consideration and have rulings on it? As you well know I am 23

kind of lost at least right now standing here because --24

THE COURT: Let me tell you Mr. Duchmann, you know25



15

we have dealt with this issue on several occasions. I wrote1

an opinion on it and you appealed it to the Fifth Circuit.2

The Fifth Circuit affirmed me. You took a writ to the United3

States Supreme Court and they denied your writ. So you4

really are not a member of the class.5

I recognize that you're a member of the community6

of St. Bernard so I have allowed you to sit through these7

hearings because not only are you a member of the public but8

you're a member of the Parish that was badly damaged and I9

respect that. So I allowed you to come and sit here.10

Now in other instances also when you have had any11

documents I have let you put that in the record, and I will12

do so now. I will exclude that from the standpoint of the13

class. But I will put it in as a proffer that if you had14

been a class member this is what you would have introduced15

into evidence. So I will take whatever documents you have16

and I will put it as Duchmann Number 1 and I will make that a17

proffer so that any interested parties or any appellate court18

will have an opportunity to review your material.19

MR. DUCHMANN: All right. First, Your Honor,20

Exhibit B, Court designated class boundary shows Landry Court21

right here, 2.4 miles outside the class zone. He is not a22

class member neither.23

Your Honor, for clarity purpose only, if I am not a24

class member I have remedies in another jurisdiction in25



16

another court, is that correct?1

THE COURT: Well, you may or may not. I don't2

want to speak for another Court.3

MR. DUCHMANN: No, I have to speak for your Court.4

If I am not a class member, I don't want to be filing any5

more motions in your Court. But I need clarification on this6

issue. And I expect to show up. I do have pending motions,7

as you're well aware, that was considered to be an emergency8

motion that was filed early as February and the Court has9

failed yet to rule on that motion.10

THE COURT: Thank you, Mr. Duchmann.11

MR. DUCHMANN: So I won't be able to find out12

today if I am a class member or not?13

THE COURT: No, you're not.14

MR. DUCHMANN: I'm not? For the record, I will15

take my other issues into another jurisdiction. Thank you,16

Your Honor.17

THE COURT: Thank you very much. I will take this18

paper from him. Anyone else have any comments?19

MR. MILLER: One additional comment to Miss20

Kneale, and I think it was Mr. Hartman. Your Honor, I think21

they had an issue with respect to the proposal, Sub Item E on22

the first page, if I heard right, buy-out zone neighborhood23

landscaping, beautification. If that's something that they24

have an issue with, Murphy, I think, would be fine with25



17

removing that from what is under consideration for cy pres1

donations if they think that has some purpose and offends2

them. We would just take it out.3

With respect to Mr. Hartman, there's going to be no4

attempt to evict any individuals who are currently living in5

the spill area or buy-out zone or whatever.6

THE COURT: Thank you. Did you have something?7

MR. TORRES: Yes, Your Honor. Sidney Torres.8

First of all, Your Honor, let me say to Ms. Kneale and Mr.9

Hartman, it's always nice to see citizens come here who are10

committed to staying in St. Bernard. And I have always11

expressed that thought to Ms. Kneale about these issues and12

told her that this Court has been extremely sensitive to the13

feelings and the desires and how people are doing in St.14

Bernard Parish. And explained to her, as I said last time,15

and I would like to reiterate to the Court, that the16

attorneys who represented the plaintiffs in this case have17

virtually unanimously accepted the proposal that is being18

made.19

And the reason being, Number 1, it brings certainty20

to the issue because the 5 million, even though we feel21

confident and we argued vigorously to this Court that the22

money should not be returned to the defendant, the fact of23

the matter is if it goes to the Fifth Circuit there is24

uncertainty. So it brings certainty to the issue of the25



18

funds remaining available for cy pres purposes.1

And, additionally, we feel that the proposal as it2

stands does benefit the community of St. Bernard Parish. If3

the $2 million is used for purposes that are stated. And4

ultimately the disposition of those funds are committed to5

the discretion of this Court under Federal Rule of Civil6

Procedure 23. And one of the purposes of the settlement was7

not only to resolve the claims of the people who had been8

injured so that they would receive compensation for their9

injuries, but also to conclude this litigation which was10

detrimental to the future growth of St. Bernard Parish.11

If this litigation had gone on in the class action12

context even, it would have gone on for years. Likewise,13

this is sort of the tip of the tail of the litigation, so to14

speak, and this could go on for a long time. And we're at a15

point in the rebuilding and regrowth of St. Bernard Parish16

where we need to move forward, not go backwards.17

So for those reasons, Your Honor, I stand here, we18

took a tally of all the plaintiffs' attorneys, I submitted19

that to the Court, and to say that it's being recommended by20

those attorneys as being fair and reasonable. We feel that21

it serves the purpose of the overall settlement in this case22

and for those reasons we recommend it.23

THE COURT: Anyone else? The issue that I see,24

and I have the discretion to deal it, and as I see the issue25



19

of the cy pres I felt that it was for the benefit of the1

community as I mentioned.2

Murphy wrote a brief in opposition and made some3

significant arguments. I ruled against them and they4

appealed. The appeal is presently pending in the Fifth5

Circuit. Depending upon what the Fifth Circuit rules, if6

Murphy wins, then the entire $5 million will revert to7

Murphy. Now, of course, the people can take writs from that8

to the United States Supreme Court. And then the Supreme9

Court will either accept the writs or deny the writs and the10

judgment will be final. If Murphy loses, then it's cy pres11

and I have the discretion to decide what the cy pres is to be12

used for.13

It seems to me that in this peculiar situation14

anything that benefits anyone in the Parish benefits all in15

the Parish. I would not be in favor of using the entire $516

million for beautification outside of the district, outside17

of the class certification. But I do feel that some portion18

of the funds could be used outside of the area if it helps19

those inside of the area. And as I say, it's the gateway to20

that area. And I don't see how it can hurt them. And I feel21

it would also be of benefit to them.22

With regards to the $3 million, I am going to23

appoint a committee to make some recommendations to me on the24

$3 million. I will issue a written opinion on this today or25



20

tomorrow setting forth more of those matters and then I will1

set a status conference and I will tell the parties about the2

committee.3

And I want to move forward on this. This issue has4

troubled me for some time. Not only this issue, but the5

whole issue that this situation has brought. All of us in6

this courtroom know, at least the lawyers know and the7

litigants should know, that the history of class actions are8

that they go on for a long period of time. We had one9

recently with a train derailment that took over 10 years, 1510

years to resolve itself. I was adamant about this from the11

very beginning that I did not want this to last a long time.12

I felt that if we put this on a usual track then this case13

would get resolved in 10, 15, 20 years down the road and it14

wouldn't matter at that point because we would have no one in15

the Parish. We wouldn't have a parish to deal with. So I16

put this on an extremely fast track. And with the17

cooperation of the attorneys and the litigants themselves we18

were able to resolve this case in one year's time.19

This you should know from the audience standpoint20

is a record for resolving class actions. And it was due to21

the hard work of the lawyers, due to the cooperation of the22

litigants involved in this particular case. But it was23

resolved. And the Parish has benefitted from it. I am 24

delighted to see new houses and new developments and new25



21

hospitals and other areas that are springing up in the1

Parish. And it's a new day for St. Bernard.2

And, likewise, I need to get this over so that we3

can move forward in this great Parish and bring the people4

together. As long as there's controversy, people are5

divided. And a divided parish is like a divided country. It6

doesn't work. So I need to move this on.7

But I appreciate the citizens coming. I've tried8

my best to keep you advised. I have shown you great respect9

because you're entitled to it. And I appreciate all of the10

efforts that you have made to bring to the Court your views.11

And I have taken them very seriously. And I thank you for12

that.13

Court stands in recess.14

(End of proceedings.)15

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REPORTER'S CERTIFICATE



I, Arlene Movahed, Official Court Reporter, for the

United States District Court for the Eastern District of

Louisiana, appointed pursuant to the provisions of Title 28,

United States Code, Section 753, do hereby certify that the

foregoing is a full, true and correct transcript of

proceedings had in the within-entitled and numbered cause on

the date herein before set forth and I do further certify

that the foregoing transcript has been prepared by me or

under my direction.

s/ Arlene MovahedARLENE MOVAHED, CCROfficial Court ReporterUnited States District CourtEastern District of Louisiana

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05 18 2009 Turner v Murphy Cy Pres Hearing Transcript May 18 2009[1]

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