Give spill estimate, 2 Exxon firms told

But attorney work private, judge says

Subsidiaries of Exxon Mobil being sued by the federal and state governments have been fighting efforts to force the companies to disclose their best estimate on the amount of heavy crude oil that spilled from the Pegasus pipeline into a Mayflower neighborhood more than a year ago.

But earlier this month, U.S. District Judge Kristine Baker ordered Exxon Mobil Pipeline Co. and Mobil Pipe Line Co. to turn such information over to government agencies unless it is confidential because it is the product of an attorney's work -- one of the reasons the companies had argued that they shouldn't release it. The companies also had argued they still didn't have a best estimate.

The number of barrels spilled is key in determining civil penalties under the federal Clean Water Act, with the fine set at up to $1,100 per barrel unless "gross negligence" or "willful misconduct" took place. In the latter case, the penalty can rise to $4,300 per barrel.

Arkansas law provides civil penalties of $10,000 per day per violation of the Water and Air Pollution Control Act and $25,000 per day per violation of the Hazardous Waste Management Act.

In her ruling, Baker wrote, "Defendants do not seem to object to this motion to compel on any grounds other than that they have not yet computed their best estimate of the oil spilled and that certain information and documents requested are attorney work product."

The judge ordered the companies to provide documents "relating to their current, best estimate of the spill volume that are not attorney work product," to assert privilege or attorney work product as a basis to withhold information when appropriate, and to provide updated information and documents as the oil estimate "becomes more refined."

Attorney work product is similar but not the same as attorney-client privilege, Robert Steinbuch, formerly a U.S. Justice Department attorney litigating civil cases, said Tuesday.

The product principle refers to "something that the attorney has created on behalf of a client" but that has not necessarily been sent to or from the client, said Steinbuch, now a law professor at the University of Arkansas at Little Rock W.H. Bowen School of Law.

"Normally, attorney work product is confidential," he said. "There's often a debate as to whether, in fact, a document is work product."

In talking with the news media and in reports filed with a federal regulatory agency, Exxon Mobil has repeatedly put the estimate of oil spilled in Mayflower on March 29, 2013, at 5,000 barrels, or 210,000 gallons, of oil.

In an email Tuesday, Exxon Mobil spokesman Aaron Stryk said that "the spill estimate remains at 5,000 barrels."

The companies on Monday submitted responses to the lawsuit, which was filed June 13, 2013. The responses followed the court's June 9 decision not to dismiss the lawsuit and consisted primarily of a series of denials, including that they had been guilty of "gross negligence or willful misconduct."

The responses also argued, among other things, that the federal court did not have "subject matter jurisdiction over some or all of the claims" in the lawsuit.

Aaron Sadler, a spokesman for Arkansas Attorney General Dustin McDaniel, said defendants in such a case can delay filing a response to the original complaint if they are awaiting an order on a dismissal motion.

The Pegasus pipeline carried 95,000 barrels of heavy Canadian crude per day from Patoka, Ill., to Nederland, Texas. The 650-mile northernmost section of the 850-mile line remains shut down. A remedial work plan for the northern section is pending before the federal Pipeline and Hazardous Materials Safety Administration, as is a decision on whether Exxon Mobil violated federal safety regulations.

The pipeline, built in 1947-48, ruptured between two houses in Mayflower's Northwoods subdivision. Authorities ordered 22 homes evacuated there, and many residents never moved back.

In demanding that the companies tell the government how much oil was released, the Justice Department wrote in March that the defendants had "stated that their 'best and most accurate estimate of oil released' has not been determined, and that any such estimate 'will be the subject of expert testimony and information not presently available.'"

"Apparently, Defendants contend any spill volume estimate already prepared is exclusively the subject of expert opinion and any currently existing documents and information relating to existing estimates is protected by the work product doctrine -- even if prepared by an employee of one of the defendant companies in the ordinary course of business rather than in anticipation of litigation," the department wrote.

The companies' attorneys countered that the defendants were not "'withholding'" that information and said, "Defendants cannot provide what they do not have."

"Defendants agree that the amount of oil released is relevant, but disagree that they can provide any more specificity than they already have at this time," defense attorneys with the law firms of Wright, Lindsey and Jennings LLP of Little Rock and Sidley Austin LLP of Washington, D.C., wrote.

"Usually, the amount of oil discharged during an incident cannot be known with a significant degree of certainty until the pipeline is restarted," they added.

"At that time, the volume of oil remaining in the line post-incident can be measured by removing it from the line, and that amount can in essence be subtracted from the amount needed to refill the line to determine the amount released."

Without that information, the volume released can be estimated only "based on engineering judgments and calculations -- i.e., opinions from subject matter experts," the attorneys said.

The companies have not formed a "'best and most accurate estimate'" on how much oil was released, except for attorney-work product and "certain information provided" to the government before the lawsuit's filing, they argued.

In the most recent accident report filed with the safety administration, Mobil Pipe Line Co. also put down 5,000 barrels of oil and again reported that it estimated 2,000 barrels had been recovered. The company also reported an estimated 2,000 barrels had reached drainage ditches and a cove of Lake Conway.

In May 2013, an Exxon Mobil spokesman, Michael Kontos, was asked about the 2,000 barrels recovered. He said the pipeline company had to provide the federal government with an accident report with as much information as was known within 30 days of the rupture.

"This report will be revised with additional information as it becomes available," he said at the time.

Kontos also said then that the 5,000-barrel figure was a "preliminary estimate."

He added, "The estimated volume of oil recovered is a preliminary estimate that includes only barrels of recovered oil currently measured in liquid tanks. Oil recovered in the form of oiled soil, vegetation and debris, which includes sorbent booms, pads and wipes, cannot be accounted for as easily and, therefore, was not included in this [preliminary] estimate."

The latest accident report filed in January put estimated damage resulting from the rupture to the pipeline at about $75.1 million. That sum compares with $70.5 million reported Oct. 30 and $57.5 million reported Aug. 15.

Of the $75.1 million sum, Exxon Mobil said, the commodity lost had cost an estimated $300,000; property damage and repairs, $900,000; emergency response, $61.7 million; environmental remediation, $8 million; and other costs, $4.3 million.

The other costs were described as temporary housing and living expenses for people whose houses were affected by the spill. All numbers were estimates.

In another development, the first Northwoods subdivision house that Mobil Pipe Line Co. has sold since the spill went for $182,500 on May 30, according to the Faulkner County tax assessor's office. Exxon Mobil had paid $167,000 for the house on North Starlite Road in October.

Stryk said the sale price was "the offer we received for the property."

He also said the house, which was sold to a couple whose home was destroyed by an April tornado, "was the model home in the [Northwoods] neighborhood" and that Exxon Mobil had "made some improvements following our purchase."

Exxon Mobil is "evaluating other [purchase] offers in the subdivision," he added.

A Section on 06/25/2014

Upcoming Events