Arabie v. Citgo Petroleum Corp.

• Decision Date: 04 May 2012
• Docket Number: No. 2010–C–2605.,2010–C–2605.
• Citation: 89 So.3d 307
• Parties: Craig Steven ARABIE, et al. v. CITGO PETROLEUM CORPORATION, et al.
• Court: Louisiana Supreme Court

89 So.3d 307

Craig Steven ARABIE, et al.

v.CITGO PETROLEUM CORPORATION, et al.

No. 2010–C–2605.

Supreme Court of Louisiana.

March 13, 2012.

Rehearing Denied May 4, 2012.

Simien Law Firm, Marshall Joseph Simien, Jr., Lake Charles, LA, Barrasso, Usdin, Kupperman, Freeman & Sarver, LLC, Richard Edward Sarver, Craig Robert Isenberg, Meredith Anne Cunningham, Michael Kevin Powell, Jonathan R. Bourg, New Orleans, LA, Scofield, Gerard, Singletary & Pohorelsky, Richard E. Gerard, Jr., Robert E. Landry, John B. Scofield, William B. Swift, LLC, Willam Brock Swift, Lake Charles, LA, for Applicant.

Pascal F. Calogero, Jr., New Orleans, LA, Baggett, McCall, Burgess, Watson & Gaughan, Wells Talbot Watson, Cox, Cox, Filo, Camel & Wilson, Richard Elliott Wilson, Lake Charles, LA, Donohue Patrick PLLC, Kirk Albert Patrick, III, Baton Rouge, LA, Peter J. Butler, LLC, Peter J. Butler, for Respondent.

CLARK, Justice.

[2010-2605 (La. 1]We granted this writ application in order 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. For the reasons which follow, we affirm in part, reverse in part, and render judgment.

FACTS and PROCEDURAL HISTORY

On the night of June 18 and the morning of June 19, 2006, southwest Louisiana experienced a severe rainstorm. As a consequence of the storm, the stormwater drainage and storage system, including the wastewater treatment facility, at the Lake Charles, Louisiana, refinery of defendant, CITGO Petroleum Company (CITGO), was filled beyond available capacity and overflowed, resulting in a major oil spill. The system was designed to collect the water used in day-to-day operations at the refinery and the runoff from most areas of the refinery due to rainfall.

The system contained two 10 million gallon storage tanks with floating roofs, in which water was to be collected until it could be treated and released. The two tanks were equipped with “skimmers,” which were to remove any “slop oil” ¹ from the wastewater. In addition, the tanks had fittings which would allow excess [2010-2605 (La. 2]oil to be drained from the tanks into vacuum trucks. According to the CITGO standard operating procedure, the level of liquid in the tanks was to be maintained at five feet or less to maximize capacity. The tanks were enclosed in a concrete-floored area surrounded by concreted levees or “dikes.” This area was designed to contain any overflow from the tanks.

Due to the ongoing construction of a third tank of similar capacity, a portion of the concrete dike system had been removed and the enclosed area was enlarged. The part of the dike surrounding the newly enclosed area was made of earth, as was its “floor.” Cementing of the floor and of the dike walls was not scheduled until after the third tank was completed. A pipeline ran under the newly enclosed area and a “junction box” was installed where the pipeline made a ninety degree turn. The junction box was made of cement and the cement cover was not sealed against leaks. The junction box was covered with unpacked earth. In addition, there were several pipes going through the dike wall.

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. R. at 25,978. Of the 4.2 million gallons of slop oil which escaped, over 1 million gallons were released into the Calcasieu River. R. at 25,979. 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.

The fourteen plaintiffs, employees of Ron Williams Construction (RWC) working at the Calcasieu Refining Company (CRC) located 2.7 miles south of the CITGO refinery, filed suit against CITGO and R & R Construction, Inc. (R & R), in the Fourteenth Judicial District Court in Calcasieu Parish, alleging various injuries due to their exposure to noxious gases emanating from the spill. CITGO and R & R [2010-2605 (La. 3]stipulated that they were liable for the spill and agreed to “pay plaintiffs for all their compensatory damages assessed to CITGO and R & R, if any, that plaintiffs are able to prove to the Court were proximately caused by such release from the CITGO refinery in Calcasieu Parish, Louisiana, on or about June 19, 2006.”

After a two week bench trial, the district court ruled that plaintiffs had proved their injuries, more likely than not, were caused by CITGO's admitted negligence in allowing the spill. The court awarded plaintiffs general damages, including damages for fear of developing cancer in the future, ranging from $7000 to $15,000. Determining that Louisiana's choice of law statutes favored the imposition of either Texas' or Oklahoma's punitive damages laws, the court further awarded each plaintiff $30,000 in punitive damages. The court of appeal affirmed, holding that the district court's finding the spill caused plaintiffs' injuries was not an abuse of discretion, the fear of future disease award was supported by the record, there was no evidence of fault on the part of either plaintiffs or their employer, the application of the punitive damages law of Texas was not error, and that, as required for recovery under Texas' punitive damages law, CITGO was grossly negligent. Arabie v. CITGO Petroleum Corp., 10–244 (La.App. 3 Cir. 10/27/10), 49 So.3d 529. Defendants filed in this Court a Writ of Certiorari and/or Review, which was granted. Arabie v. CITGO Petroleum Corp., 2010–2605 (La.2/4/11), 56 So.3d 981.

DISCUSSION

CITGO asserts five assignments of error: (1) Louisiana law should apply to plaintiffs' punitive damage claims, (2) the award of punitive damages violates CITGO's due process rights under the United States Constitution, (3) the damage award changes the burden of proof in chemical exposure cases, (4) the lower courts failed to follow this Court's jurisprudence in awarding damages for fear of future injury, and (5) the lower courts did not allocate fault to all individuals responsible [2010-2605 (La. 4]for plaintiffs' alleged injuries.

Standard of Review

It is well-settled that a reviewing court may not disturb the factual findings of the trier of fact in the absence of manifest error. Rosell v. ESCO, 549 So.2d 840, 844 (La.1989); Arceneaux v. Domingue, 365 So.2d 1330, 1333 (La.1979). In Arceneaux, we set forth a two-part test for the appellate review of facts: (1) the appellate court must find from the record that there is a reasonable factual basis for the finding of the trial court, and (2) the appellate court must further determine that the record establishes the finding is not clearly wrong or manifestly erroneous. Arceneaux, 365 So.2d at 1333;see also Mart v. Hill, 505 So.2d 1120, 1127 (La.1987). If the trial court's findings are reasonable in light of the record reviewed in its entirety, the appellate court may not reverse. Sistler v. Liberty Mutual Ins. Co., 558 So.2d 1106, 1112 (La.1990). Consequently, when there are two permissible views of the evidence, the factfinder's choice between them cannot be manifestly erroneous. Stobart v. State, Through Department of Transportation and Development, 617 So.2d 880, 883 (La.1993); Sistler, 558 So.2d at 1112.

Punitive Damages Claims

Our analysis of whether Louisiana law or another state's laws should be applied with regard to punitive damages is controlled by Louisiana Civil Code Book IV, Conflict of Laws, Title VII, Delictual and Quasi–Delictual Obligations, Articles 3542 through 3548. The fundamental question in all cases involving statutory interpretation is legislative intent. City of DeQuincy v. Henry, 2010–0070 (La.3/15/11), 62 So.3d 43, 46. Further, according to the general rules of statutory interpretation, our interpretation of any statutory provision begins with the language of the statute itself. In re Succession of Faget, 10–0188, p. 8 (La.11/30/10), 53 So.3d 414, 420. While the Official Revision Comments are not the law, they may be helpful in determining legislative intent. See, e.g., [2010-2605 (La. 5]State v.Jones, 351 So.2d 1194, 1195 (La.1977).

We recently reiterated many of the rules of statutory interpretation, stating:

When [a] provision is clear and unambiguous and its application does not lead to absurd consequences, its language must be given effect, and its provisions must be construed so as to give effect to the purpose indicated by a fair interpretation of the language used. Unequivocal provisions are not subject to judicial construction and should be applied by giving words their generally understood meaning.

Words and phrases must be read with their context and construed according to the common and approved usage of the language. “The word ‘shall’ is mandatory and the word ‘may’ is permissive.” Further, every word, sentence, or provision in a law is presumed to be intended to serve some useful purpose, that some effect is given to each such provision, and that no unnecessary words or provisions were employed. Consequently, courts are bound, if possible, to give effect to all parts of a statute and to construe no sentence, clause, or word as meaningless and surplusage if a construction giving force to and preserving all words can legitimately be found.

Where two statutes deal with the same subject matter, they should be harmonized if possible, as it is the duty of the courts, in the construction of statutes, to harmonize and reconcile laws. However, if there is a conflict, the statutespecifically directed to the matter at issue must prevail as an exception to the statute more general in character.

McGlothlin v. Christus St. Patrick Hospital, 2010–2775 (La.7/1/2011), 65 So.3d 1218, 1228–29 (citations omitted).

The trial court, in its reasons for judgment, began its analysis of whether...