Thursday, November 15, 2001

Judge opens court
records in oil case

Senior U.S. District Judge Samuel
King says he is 'very nervous'
about firms' secrecy request

By Tim Ruel

Senior U.S. District Judge Samuel King has demanded that key documents in the state's $2 billion federal price-fixing lawsuit against Hawaii's major oil companies be removed from secrecy and opened to the public.

In his ruling yesterday, King said he was "very nervous" about allowing the companies' multiple motions for summary judgment to remain hidden. The defendants filed the papers under seal around late September. Four days ago, the Sunday Star-Bulletin ran a column in which a mainland attorney called the amount of secrecy "extraordinary."

A summary judgment motion allows a defendant to seek dismissal of specific counts, or even an entire case, based on grounds that the evidence is too weak to merit a trial. Summary judgments rely upon the facts of a case, King said, and he did not want to make a decision when the public could not see the facts.

"The whole thing should be unsealed," King said during yesterday's hearing.

The bulk of the documents in the three-year court case have been filed under seal, records show. The remainder of the files will not be unsealed by yesterday's ruling.

The oil companies have until tomorrow to come up with a plan to unseal the summary motion documents. The companies will still be able to keep specific pieces of information hidden from public scrutiny by blocking the passages in the documents.

"Clean 'em all up and open 'em out," King said.

Roughly 95 percent of the material in the documents would be open for review, said Robert Mittelstaedt, a San Francisco attorney representing defendant Chevron Corp.

The secrecy of the case has led to another recent controversy.

In the same Sunday column, the Star-Bulletin also questioned why another motion by the oil companies -- to move the entire case to another state -- was filed under seal in late October and hidden from the public. Legal experts have said they had never heard of such a move.

The court removed that motion from seal this week without explanation, opening it to public review. In the motion, the oil companies argued that any jury in Hawaii would be too biased to serve on the case because every local resident has a significant and direct financial interest in the outcome.

Every one of Hawaii's 1.21 million residents stands to get about $1,116 apiece if the state wins a base claim of $1.35 billion, the companies said. That figure does not include potential punitive damages. If you only count Hawaii's 769,383 motorists, the amount comes to about $1,755 apiece, the motion said.

To back their argument, the oil companies cite the $15 million settlement paid by two of the seven defendants who were originally named in the suit but removed last year -- BHP Hawaii Inc. and Tesoro Petroleum Corp. Hawaii consumers were named as partial beneficiaries of the settlement, though no payments to local residents have been made.

The defendants' change-of-venue motion argues that even if the state does not intend to distribute any award from the case, all Hawaii residents still stand to benefit because the state sued specifically on their behalf.

A hearing on the change of venue motion is scheduled for Jan. 18.

The state's suit, filed in October 1998, alleges that the oil firms conspired to make excessive profits in Hawaii by dividing up the market. The state also alleges that the companies fraudulently concealed the collusion as a way of hindering investigation.

The remaining defendants -- Chevron, Shell Oil Co., Texaco Inc., Union Oil Co. and Unocal Corp. -- dispute the state's case.

A hearing on their summary judgment motions is scheduled to begin this morning and continue tomorrow. Both sides in the case have been discussing what information to withhold from open testimony during the hearing. For example, the hearing may exclude references to Chevron's profitability figures.

Chevron must protect certain competitive information as a matter of business, Mittelstaedt said in court.

But Judge King countered that much of the case rests on the specific question of how profitable Hawaii has been for the companies.

Spencer Hosie, lead attorney for the state's case, declined to comment.

The case's scheduled trial date of Feb. 5 is likely to be pushed back.

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