Murphy Oil Fairness Hearing 01-04-07

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1 UNITED STATES DISTRICT COURT

2 EASTERN DISTRICT OF LOUISIANA
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PATRICK JOSEPH TURNER, ET AL * Docket 05-CV-4206-L
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versus * New Orleans, Louisiana
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MURPHY OIL USA, INC. * January 4, 2007
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PROCEEDINGS BEFORE THE
9 HONORABLE ELDON E. FALLON
UNITED STATES DISTRICT JUDGE
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11 APPEARANCES:
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For the Plaintiffs: Law Offices of Sidney D. Torres
13 BY: SIDNEY D. TORRES, ESQ.
8301 W. Judge Perez Drive
14 Suite 303
Chalmette, Louisiana 70043
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16 For the Plaintiffs: Gainsburgh, Benjamin, David,
Meunier & Warshauer
17 BY: GERALD MEUNIER, ESQ.
Energy Centre
18 1100 Poydras St.
Suite 2800
19 New Orleans, Louisiana 70163-2800
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21 For the Defendants: Frilot, Partridge, Kohnke
& Clements
22 BY: KERRY J. MILLER, ESQ.
ALLEN J. KROUSE, III, ESQ.
23 1100 Poydras Street, Suite 3600
New Orleans, Louisiana 70163
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25 Also Present: Governor Kathleen Babineaux Blanco
JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
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Official Court Reporter: Jodi Simcox, RMR
2 500 Poydras Street, Room HB-406
New Orleans, Louisiana 70130
3 (504) 589-7780
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Proceedings recorded by mechanical stenography, transcript
7 produced by computer.
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1 PROCEEDINGS
2 (January 4, 2007)
3 THE DEPUTY CLERK: All rise.
4 THE COURT: Be seated, please. Good morning, ladies
5 and gentlemen. Call the case, please.
6 THE DEPUTY CLERK: Civil Action 05-4206. Patrick
7 Joseph Turner versus Murphy Oil USA, Inc.
8 THE COURT: Counsel, make your appearances for the
9 record.
10 MR. MILLER: Kerry Miller on behalf of Murphy Oil
11 USA, Your Honor.
12 MR. TORRES: Your Honor, Sidney Torres on behalf of
13 the plaintiffs steering committee.
14 THE COURT: Okay. This case involves claims
15 regarding property damage arising from an incident in
16 St. Bernard Parish, Louisiana that occurred sometime during the
17 week following landfall of Hurricane Katrina in 2005.
18 On September the 3rd, 2005, the defendant,
19 Murphy Oil, notified the federal government that an oil spill
20 had been detected at the Mereaux refinery in St. Bernard and at
21 least 25,000 barrels of crude oil escaped from the above-ground
22 storage tank located on the Murphy property, which apparently
23 floated and became dislodged.
24 Some of the oil traveled into the neighborhoods
25 surrounding the refinery. The plaintiffs are homeowners and

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1 business owners in St. Bernard Parish who claim to have

2 suffered property damage as a result of this tragic spill.
3 On September the 9th, 2005, the first lawsuit
4 was filed. On October the 4th, 2005, this Court granted the
5 plaintiff's motion to consolidate cases and provided that all
6 future cases would be automatically consolidated. This
7 resulted in some 27 consolidated class action lawsuits.
8 On October the 12th, 2005, the Court designated
9 plaintiffs liaison and defendants liaison counsel and
10 established a plaintiffs executive committee and steering
11 committees to manage the litigation.
12 On January the 12th, 2006, the Court held a
13 two-day hearing regarding class certification at which counsel
14 presented extensive evidence both for and against class
15 certification.
16 After reviewing the evidence, as well as the
17 expert opinions offered by the parties, this Court certified a
18 class composed of all persons and entities who sustained
19 injuries, loss and/or damage as a result of the spill at the
20 defendant's property on or about August 29th, 2005, who are
21 residents of or owned property or businesses within a certain
22 defined geographical area that the Court drew after listening
23 to the experts.
24 On February the 6th, this Court issued an order
25 approving a notice for distribution to class members pursuant

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1 to the appropriate federal rules, and held that class members

2 would be afforded a right to opt out of the class lawsuit
3 pursuant to the appropriate Rules of Federal Procedure.
4 Finally on March the 3rd, 2006, this Court
5 adopted a trial plan for the class action, bifurcating the
6 trial into two different phases. Phase 1 was to concern common
7 issues of liability and general causation; and Phase 2
8 concerned successive trials on specific causation and, of
9 course, compensatory damages.
10 The Phase 1 trial was scheduled to commence
11 October the 2nd, 2006. An effort was made to push this matter
12 as quickly as we could, recognizing that the people would be
13 devastated if this case were on a regular track.
14 It takes us, generally, five years to resolve
15 cases of this nature. We didn't have time for five years to go
16 by. There would be no parish. There would be no one there.
17 So with the help of counsel, with the help of the litigants,
18 this was able to be put on a faster track.
19 The trial was to begin October 2nd, 2006.
20 However, on September the 25th, 2006, the parties, following
21 extensive negotiations, executed a memorandum of understanding,
22 stating that they had come to an amicable resolution in the
23 case and the trial was, therefore, canceled.
24 On October the 10th, 2006, the parties filed a
25 final settlement agreement and notice program to the Court,

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1 which the Court preliminarily approved. The Court set the

2 fairness hearing for the final approval, and that fairness
3 hearing is to take place today.
4 Numerous and appropriate notices of the
5 settlement program and this fairness hearing have been mailed,
6 as well as posted. Ample and appropriate opportunity has been
7 afforded to opt out, any objectors to the settlement program to
8 make their feelings known.
9 The Court has appointed Judge Robert Klees,
10 formerly of Louisiana 4th Circuit Court of Appeals, to serve as
11 a special master to assist the Court in resolving allocation
12 disputes and/or objections. Any settlement program, of course,
13 must be approved by this Court before it can be effective. For
14 approval, it is appropriate and necessary to conduct a hearing
15 to consider the fairness of the program.
16 The purpose of the fairness hearing is to afford
17 the Court an opportunity to determine whether the proposed
18 settlement is fair, reasonable and adequate. The proponents of
19 the settlement have the burden of showing that the proposed
20 settlement is fair, reasonable and adequate.
21 At this hearing, we will hear from the
22 proponents of the settlement; next, I will hear from Judge
23 Klees; and, finally, I will hear from any outstanding
24 objectors. But, first, I would like to recognize and hear from
25 the Governor of our great state of Louisiana, and I recognize

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1 the Governor at this time.

2 GOVERNOR BLANCO: Thank you, Your Honor.
3 Judge Fallon, it's certainly an honor to be here
4 on behalf of the citizens of Louisiana who have suffered so
5 greatly. It's a privilege to address this Court in these
6 extraordinary times.
7 Our people have suffered immensely, Your Honor,
8 as you know. So I want to say that today's Murphy Oil
9 settlement marks a significant victory for the people of
10 St. Bernard Parish. It brings urgent relief to an estimated
11 6,000 households; and it does so without the extended delays of
12 a trial, as you noted, would have taken, some five years, I
13 believe, you noted and going through the appeals process.
14 So I really want to say thank you, Judge, for
15 driving this settlement, for helping to make sense out of what
16 our people often know has been a senseless experience. The
17 results make clear that your negotiations put the interests of
18 our people first.
19 Judge Fallon, please accept the State's
20 commendation for your fair handling of the Murphy Oil
21 settlement. Thank you for expediting this work. Murphy Oil, I
22 would like to thank you for your cooperation in reaching an
23 agreement that includes environmental cleanup and settlements
24 to assist impacted families. I think this is extremely
25 important for us.

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1 Three days or so after Hurricane Katrina hit,

2 St. Bernard Parish was hit again by an oil spill. Today's
3 court actions give affected homeowners the additional leg that
4 they need to recover from these two disasters that hit them in
5 such a short period of time.
6 As Governor, I led a ten-month fight for the
7 federal funding needed to run Louisiana's Road Home Program.
8 Our program compensates people for damages resulting from
9 Hurricanes Katrina and Rita. It's an attempt to get homes back
10 up.
11 I have been working with HUD to insure that
12 homeowners affected by the Murphy Oil spill recognize the full
13 benefits of both the settlement and the Road Home money. The
14 moment that you, Judge Fallon, approve the settlement, 891
15 options letters will be sent to affected homeowners in this
16 particular case.
17 At my request, HUD has approved the inclusion of
18 an official notice guaranteeing full benefits to Road Home
19 applicants in the Murphy Oil area. The notice states, and let
20 me quote: That the U.S. Department of Housing and Urban
21 Development has determined that homeowners who receive
22 settlement funds for damages caused by the oil spill may also
23 receive Road Home grants.
24 The money received by the homeowner in the
25 settlement will not reduce the Road Home grant as a duplication

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1 of benefit. This was something that we thought needed to be

2 clarified. HUD's determination does not include grants for
3 homeowners who choose to sell their property to Murphy Oil
4 under the limited buyout option of the class action settlement.
5 Homeowners who are located in the Murphy
6 designated buyout area will receive separate notice about their
7 eligibility based on Murphy's offer of a buyout. That is the
8 statement that HUD has given us, and that will be transmitted
9 to the homeowners.
10 I believe it's in line with this Court's
11 actions, that we do not count the settlement proceeds against
12 families who are seeking Road Home awards to rebuild in the
13 same area.
14 The State will work very closely with homeowners
15 to insure that they receive the greatest amount of funding
16 possible to get back into their homes. I know when it comes to
17 recovery, that every dollar counts for the families that have
18 been so severely impacted.
19 So in closing, I would like to thank all parties
20 for the progress that you have accomplished. What has happened
21 with people who will consider selling their homes is it gives
22 them another option. They can still sell to the program, or
23 they can sell to Murphy Oil, or they can sell out on the free
24 market. So it becomes one more option and they can choose the
25 option that benefits them the most.

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1 But I want to thank you, once again, Judge

2 Fallon, and all of the teams of people, for this
3 extraordinarily rapid decision-making process. It's going to
4 help our people. I just want to thank you because I wanted to
5 say to the people of St. Bernard Parish: They and many members
6 of the parishes in the southeast region were severely impacted
7 and our challenges are great.
8 I've been working day and night for a year and a
9 half now trying to help people make sense out of their lives.
10 I think this is going to go a long way toward helping many,
11 many people, and it's going to help move St. Bernard further.
12 Thank you so much.
13 THE COURT: Thank you, Governor. We appreciate your
14 being here; and, of course, we appreciate your well kind
15 comments.
16 I've practiced law longer than I've been a judge
17 and I know that it is the lawyers who guide the settlement and
18 who bring it about, and I've been fortunate to have outstanding
19 lawyers working on this case on both sides. It's a tribute to
20 them and I recognize that and I thank them for all of their
21 help, but we're certainly obliged that you would take the time
22 out of your busy schedule and visit with us today.
23 Thank you very much.
24 GOVERNOR BLANCO: I appreciate it.
25 THE COURT: All rise while the Governor leaves.

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1 (WHEREUPON, the Governor exited the courtroom.)

2 THE COURT: I'll hear now from the proponents of the
3 settlement because they have the burden so they go first.
4 MR. TORRES: Your Honor, Sidney Torres on behalf of
5 the plaintiffs steering committee, the plaintiffs class.
6 Mr. Miller and I will share in a Powerpoint overview and then
7 we will present and introduce our evidence in support of the
8 fairness of the proposed settlement.
9 I would just like to take this moment, Your
10 Honor, to reflect back to the first meeting we had in Houston,
11 Texas, when this court was displaced as a result of the
12 hurricane, and the executive committee and myself visited Your
13 Honor and so did the defendants.
14 And the tone was set at that time for what has
15 been discussed this morning and, that is, the timely resolution
16 of this case. I'd just like to thank the Court for driving
17 this case.
18 At that meeting Your Honor made it clear that
19 whoever was going participate in this case had to be prepared
20 to commit their time and resources to the case, and both sides
21 made that commitment. The Court appointed a PSC, and all of
22 the attorneys who worked on this case made that commitment. It
23 was the constant reminder of this Court that this community,
24 basically, needed us to help in the recovery in St. Bernard
25 Parish.

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1 I don't think there was a meeting that I

2 attended with this Court where Your Honor didn't look to both
3 sides, in particular, Danny Dysart, who is on the defense side
4 and actually lives in the area that was affected by the spill,
5 and to myself, and ask us how things were going in St. Bernard.
6 Your Honor visited the site with us. We drove through, and you
7 saw firsthand and touched it.
8 I would like, Your Honor, before we make our
9 overview presentation just to ask Your Honor's permission for
10 the plaintiffs steering committee and of all the attorneys who
11 participated to stand at this time. Because they are here
12 today in support of the settlement.
13 And what's important is this case was settled on
14 the eve of trial. I concur that, generally, a case like this
15 could take up to five years. There was condensed litigation
16 within a period of one year, which resulted, as Your Honor
17 knows, into intense litigation and participation by both sides,
18 which literally committed us to the case for the whole year.
19 So we're here today in recommending this
20 settlement. We don't take that lightly. We understand what it
21 means to settle the case. We're here today to let you know
22 that we were well informed, both sides; and that we have
23 prominent attorneys, not only in this area, but nationally.
24 At this time, Your Honor, I would like the
25 members of the PSC, if they would, to please stand.

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1 (WHEREUPON, the members of the PSC stood in recognition.)

2 MR. TORRES: Thank you.
3 THE COURT: I've said it before: I do appreciate all
4 of the work that each of you have done. I'm aware of it. I've
5 walked in your shoes many years and I know what it takes. I
6 know sometimes how thankless your job is, but you need to know
7 that this Court appreciates it and thanks you for your work and
8 recognizes that it was very helpful to the resolution of this
9 litigation, and you're to be applauded for that.
10 MR. TORRES: At this time, Your Honor, Mr. Kerry
11 Miller will be here and, likewise, there was a team of
12 attorneys on his side. I was thinking yesterday as I looked
13 out the window in the Energy Center that I had observed every
14 holiday and every major event.
15 As a matter of fact, when the Saints first came
16 back to New Orleans, we were in there working on the case. We
17 were there yesterday with the Sugar Bowl and I think every
18 event in between, including Christmas and New Year's.
19 Kerry?
20 MR. MILLER: Two Christmases and New Year's,
21 actually.
22 Your Honor, thank you. Kerry Miller on behalf
23 of Murphy. I want to share the comments Your Honor has made
24 earlier this morning, as well as the comments made by the
25 Governor and Mr. Torres about the collective efforts of a whole

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1 bunch of people, Your Honor, in putting this thing together and

2 getting the relief out to the communities really as fast as it
3 possibly could have been done. We all think that's a great
4 outcome, Your Honor.
5 Some folks or some institutions not mentioned
6 who went through Herculean efforts to go ahead and put this
7 thing together, I'd like to mention right now.
8 The entity that has been administering claims
9 voluntarily for Murphy and is now the court-appointed
10 disbursing agent first set up claims offices in October of
11 2005. It was sort of like doing it in the Flintstone's era.
12 There were no phones. There were no computers. And they did a
13 great effort of putting together a claims system that worked.
14 They are right now located in the heart of the
15 class area at 2626 Charles Drive in a space that's most
16 convenient for the class members who were there who were
17 cleaning their properties and rebuilding their lives to be able
18 to go in and file their claims. So they deserve a lot of
19 credit for helping, assisting, and getting this money and
20 benefits into the community.
21 As well, Your Honor, as the entities and groups
22 who have worked on the remediation. A lot of remediation work
23 has occurred. It is hoped that it will be completed in short
24 order, Your Honor, that the whole area will be remediated and
25 will be tested and confirmed clean by the Department of

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1 Environmental Quality and the EPA. And they deserve credit,

2 Your Honor.
3 EPA and DEQ have been on the scene literally
4 since September 5th, 2005, and they're there every day. And
5 they're working on behalf of the community and the citizens and
6 making sure that the area is properly cleaned up. So they
7 deserve some credit, Your Honor.
8 They're out there living in trailers, very
9 difficult circumstances, as well as the remediation people at
10 Murphy and Murphy's contractors. They've been living in
11 trailers in St. Bernard since September of 2005 to make sure
12 that the job one, as we've always called it, get the area
13 cleaned up, is done. And they need to be, I think, recognized
14 at this time, Your Honor, because we've made great progress on
15 that.
16 And along with Sidney's team, our team has
17 worked very hard and very diligently, put personal issues and
18 other things aside, to work on what we all consider job one.
19 This was a job to us, too. But we all took a
20 very personal stance in this and we wanted to do good and do
21 right by the community and the people of St. Bernard, and I
22 think we've done that, Your Honor. I really do. I think this
23 is something we all ought to be proud of. And I know certainly
24 on Murphy's side we are. I know Sidney and I have had a number
25 of discussions and they are too. So this is a good thing.

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1 We're happy to be here today.

2 At this point we'll go ahead and start giving
3 our presentation on the fairness hearing, and Mr. Torres and I
4 will do a joint presentation.
5 THE COURT: Okay.
6 MR. TORRES: Your Honor, in this case, the class
7 action settlement requirements have been met. Rule 23
8 requirements of numerosity, commonality, typicality, adequacy
9 of representation, predominance and superiority were shown at
10 the certification hearing. This was addressed, as Your Honor
11 has stated, in January of 2006.
12 We will be requesting that the record from the
13 certification hearing be adopted and incorporated into the
14 fairness hearing record. The settlement negotiations in this
15 case are non-collusive. They were conducted at arm's length
16 with mediation and court involvement.
17 As this Court knows, settlements are favored.
18 The Rule 23(e)(3) factors in the settlement have been met.
19 Again, there was no collusion; the complexity and expense and
20 duration of this litigation have to be taken into
21 consideration; the stage of the proceedings, amounts of
22 discovery that have been completed; the probabilty of
23 plaintiffs' success on the merits, and the range of possible
24 recovery; and the opinion of class representatives and class
25 counsel and class members has to be considered.

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1 MR. MILLER: Your Honor, Murphy certainly joins in

2 Mr. Torres' observations of those points. On one issue, the
3 stage of the proceedings has been talked about a good deal this
4 morning, and this is the absolute perfect time to do it, Your
5 Honor, scheduling the way that we were able to do things, it is
6 not too early, nor is it too late.
7 Had something been done early, then maybe all
8 the work that we've done to, literally, look under every rock
9 and make sure that the program we have in place is the right
10 program, may have been skipped.
11 You know my senior partner, Mr. George Frilot.
12 I know you've known him for a long time. He turns over every
13 stone when he gets involved in a case, and that has been done,
14 Your Honor.
15 We have made sure that the remediation program
16 is right. We have made sure that the benefits that we are
17 paying is right, and that takes some time. But there's been a
18 lot of consultation with experts from all over the country.
19 We've looked at this, reviewed it, analyzed it and endorse this
20 program, Your Honor.
21 The next point we'd like to talk about is the
22 notice program. And we really did strive for excellence in
23 everything that we did and I think we accomplished that. I
24 notice, Mr. Todd Hilsee, who is in court this morning, and if
25 Your Honor has any questions, he is certainly available to

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1 testify about notice. But he was our notice adviser and he is

2 one of the country's foremost notice advisers, and we put
3 together a first-class notice program.
4 Your Honor, one of the benefits we had in this
5 case is we researched and analyzed, had a lot of information,
6 both on the addresses -- Governor Blanko talked about
7 approximately 6,000 residents -- I think total properties, when
8 you add businesses and schools and churches into that is about
9 6,500. We went and we got information, address information at
10 the time of the hurricane on all of those properties.
11 We have that notices were sent to all them, all
12 that information separately. A lot of contact with the people
13 in the class on Murphy's side, on the PSC's side, FEMA had
14 information. We resourced all those databases. And what we
15 did, Your Honor, is we sent a notice -- three notices,
16 actually, to every single address we had on file for people who
17 lived in that spill area.
18 We sent it to all the Chalmette addresses, and
19 we sent it all the new address information, people who moved to
20 Ponchatoula and Covington and Bayside and Picayune and places
21 like that. We researched all that. So all together, more than
22 14,000 notice packets received. If anything, would have heard
23 from people is: Why did I get three? Because they would get
24 one at the Chalmette address, which would be forwarded. They'd
25 get one at the new address and that kind of thing. So we did

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1 cover the waterfront.

2 The types of information they received, Your
3 Honor, again, was, with the assistance of Mr. Hilsee to make
4 sure that it was understandable, Rule 23 now talks about plain
5 English notice: It's direct; it's not legalese; it's not
6 complex; it's not burdensome; make sure that people understood
7 what the settlement was all about.
8 And so we think we had a real effective
9 communication package. So what we would include was a summary
10 notice, certainly a detailed notice, where all the rights were
11 laid out. As Your Honor knows, people were given the
12 opportunity to rejoin the class, and about 70 percent of people
13 who opted out did rejoin. They liked what they saw.
14 Information we provided on the allocation plan
15 once Your Honor approved the allocation plan, as required by
16 Rule 23, common benefit fee application filed by the PSC was
17 provided to the class, and information on the remediation plan
18 was also provided to the class, Your Honor.
19 Not only did we send out 14,000 direct mail
20 payouts -- direct mail submissions, but we also supplemented
21 that, Your Honor, with newspaper publication. Again, this was
22 a joint effort. Mr. Hilsee assisted us in deciding what
23 newspapers, when and where, how to publish it, what the add
24 needed to look like.
25 And, again, this was not a USA Today,

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1 Wall Street Journal microscopic type, legalese type notice. It

2 was large. It was direct. It was written in plain English,
3 and it directed people if they wanted more information to go to
4 Web sites. But at any rate, what we thought was the best thing
5 to do was to concentrate notice, get it out, you know, in
6 November so people knew about their rights all at one time.
7 And what we recognized, Your Honor, is that the
8 vast majority of people in St. Bernard were either back in
9 St. Bernard or were living in south Louisiana, south
10 Mississippi so that's where we focused our notice campaign.
11 And here are the papers that we targeted: The
12 Times Picayune; The Morning Advocate in Baton Rouge; the two
13 local papers in St. Bernard, which have loyal readership,
14 St. Bernard News and St. Bernard Voice, USA Today, you know,
15 because you do have a small percentage of people who were
16 disbursed nationally; the paper in Hammond, Lafayette, Biloxi,
17 Gulfport, Hattiesburg, Jackson and Pascagoula where we think
18 most of the people are residing now who are displaced.
19 An additional supplementation of notice, and
20 it's probably a good way to do it now, is on the Internet.
21 Many, many, many, many of these people stayed together on the
22 Murphy situation, FEMA, insurance, other issues by having chat
23 rooms on the Internet. So we had a real effective, I think,
24 Internet notice campaign. The Court's Web site, as Your Honor
25 knows, many people have thanked Your Honor in objections and

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1 other correspondence by keeping up a Web site, very simple,

2 easy to understand, easy to manipulate, where information about
3 the case was constantly posted. A great assistance.
4 Murphy's Web site was very effective in
5 communicating information about the event, about the
6 settlement, about proof of claims, about deadlines, dates,
7 maps, what have you.
8 St. Bernard Parish was a great assistance,
9 SBPG.net or .org is the Web site. And that Web site, Your
10 Honor, was sort of meeting place, if you will, for people of
11 St. Bernard to obtain information about what was happening in
12 the parish, those people who were displaced, and so that was a
13 great resource.
14 And in the local media here, Your Honor, covered
15 the settlement, the case, many different times. And in the
16 recent weeks and months really ran some very good articles
17 focusing on the deadlines, how to get a proof of claim form in,
18 really class member-friendly, claimant-friendly, reminding
19 people if they want to get benefits to submit a claim.
20 So they've done a good work, too, on behalf of
21 the community, Your Honor.
22 THE COURT: I should say that I've met with counsel
23 on a number of occasions and discussed the notice, even the
24 wording of the notice, and it satisfied the Court that the
25 words were appropriate, that the notice was appropriate, and

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1 that the dissemination of the notice was appropriate.

2 So I was intricately involved and intimately
3 involved in this, and I found it appropriate during the time
4 and I find it appropriate now.
5 MR. TORRES: Your Honor, as to the class settlement
6 benefits, one of the main things, and certainly an overriding
7 concern in this litigation, was class area remediation. In
8 this case, the soil, air, structures and ground water were all
9 tested extensively.
10 The plaintiffs, Murphy, and EPA, LDEQ conducted
11 more than 18,000 tests on more than 5,500 separate properties.
12 The LDEQ dismissed it's ground water contamination
13 intervention. The remediation plan was approved by the
14 governmental regulatory agencies: EPA, LDEQ, ATSDR and LDHH.
15 The remediation in this case is to be supervised
16 by the government regulators with the Court's oversight. All
17 remediated properties will be tested, EPA, LDEQ, before any
18 re-occupancy. Important to note, Your Honor, is that there's
19 no cap on the cost of remediation.
20 The properties in this area will be remediated.
21 Murphy, it's insurers, have guaranteed that they will be
22 cleaned in accordance with the regulators and this Court's
23 supervision and they will bear the costs of remediating the
24 properties so that our people can return to a safe and healthy
25 community.

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1 MR. MILLER: If you don't mind, just one comment I'd

2 like to make on that. On the issue of remediation, Your Honor,
3 there are some residences that have been reoccupied since going
4 through this plan, the testing, the cleaning, the sampling by
5 EPA and LDEQ. The plan that we have in place has worked
6 successfully in 100 percent of the cases where people have
7 re-occupied.
8 I want Your Honor to understand and to stress
9 that there will be no re-occupancy until it's tested, cleaned,
10 tested again and approved by the EPA and LDEQ for re-occupancy.
11 That's occurred. It's working well, and we plan on really
12 accelerating that process this spring, Your Honor.
13 MR. TORRES: Yes, Your Honor. I will join in that by
14 noting that in instances where we had concerns of complaints,
15 which Your Honor is familiar with, Murphy did, in fact, go out
16 and remediate it and insure that the property was safe for the
17 people to return.
18 The compensation program is fair. There are
19 four allocation zones. The zones were based upon environmental
20 sampling, analysis, regulatory oversight conducted by the EPA
21 and the LDEQ. The environmental sampling and analysis
22 conducted by CTEH on behalf of Murphy and Marco Kaltofen on
23 behalf of the plaintiffs class, reviewed the property records
24 obtained from the assessor's office, the property records
25 obtained through several independent resources and databases

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1 and property records obtained during the Murphy voluntary

2 settlement program.
3 There was extensive evaluation done by the
4 plaintiffs steering committee and Murphy in counting and
5 evaluating properties in the class area, including the manual
6 counting of the properties on several occasions.
7 Quantitive analysis performed on behalf of the
8 PSC was done by Bourgeois Bennett, LC, a local accounting firm.
9 Quantitive analysis on real estate prices and sales were
10 performed on behalf of Murphy by Dr. Wade Ragas, a local
11 economist and expert in the St. Bernard real estate market from
12 UNO, and by Dr. John Kilpatrick, an expert in real estate
13 property damage claims who was retained on behalf of the
14 plaintiffs class.
15 Quantitive analysis were also compiled by Global
16 Risk Solutions, the now court-appointed disbursing agent in
17 this case. And as Governor Blanko pointed out, which is quite
18 an achievement, there will be no deduction on a compensatory
19 part of the settlement from LRA.
20 And as Your Honor well knows, we've been talking
21 about that issue for some time. Because the LRA, there was an
22 issue in there about was it possibly duplication of benefits.
23 There were many discussions with the LRA, with
24 the Governor's Office, with the congressional offices, and
25 we're very pleased that this all sort of came together at the

25
1 same time, that we were to get a declaration at this time from

2 the Governor that it would not be considered a duplication of
3 benefits on the compensatory part.
4 And as Governor Blanko pointed out, in the
5 buyout area, it would merely give an opportunity for those
6 selling to have an additional opportunity and to choose
7 whichever one provides them with the most money.
8 MR. MILLER: Your Honor, what we have next, just to
9 supplement Sidney's comments, is this is the zone map, if you
10 will, Your Honor, which outlines the four zones in the class
11 area.
12 Zone 1, which is here in the pink, is the buyout
13 zone. A couple things about the buyout zone that are
14 important. First of all, the buyout zone, Your Honor, people
15 are able to sell their properties to Murphy for $40 a square
16 foot of living area.
17 Now, that number, Your Honor, $40 a square foot
18 of living area, is the absolute top end of the range of real
19 estate sales occurring in St. Bernard overall. It's not oil
20 impacted properties. We have examined, Dr. Ragas has examined,
21 every single real estate sale in St. Bernard since the
22 hurricane, as well as every single real estate sale in
23 similarly impacted area of Orleans Parish, New Orleans East,
24 Gentilly and Lakeview.
25 What he's determined is that there has been a

26
1 deduction from storm surge in excess of 50 percent. Prior to

2 the hurricane, the average properties were selling for $80 a
3 square foot in this area, and so $40 a square foot is on the
4 upper end of the range. In actuality, Dr. Ragas' study of the
5 St. Bernard real estate market indicates an average sales price
6 in the area of about $25 a square foot on the average. So
7 people are compensated fairly.
8 Now, it's not for everyone, the buyout. If you
9 don't want to sell to Murphy, you don't have to. But you still
10 are allowed to participate in the compensation part of the
11 settlement. Murphy is offering $19.25 a square foot, plus
12 $3,375 per occupant at the time of the hurricane for people in
13 this area. So you could get either both the buyout and the
14 compensation, or just the compensation if you so choose.
15 Similar compensation is being paid to businesses in Zone 1.
16 Zone 2, Your Honor, which is in the blue, offers
17 compensation at $14.39 a square foot to residences, plus $3,375
18 per occupant. Again, similar compensation is being paid to
19 businesses. There was a lot of cleanup activity already
20 accomplished in Zone 1 and Zone 2, and certainly more to come
21 this spring. We hope to wrap it up.
22 Zone 3, Your Honor, is the next zone.
23 Homeowners in that area are offered $10 a square foot, plus
24 $2,500 per occupant. Again, we think that's very fair.
25 Businesses are being treated similarly in Zone 3. And Zone 4,

27
1 finally, Your Honor, sort of the outer ring of the area that
2 was certified, there is a 15,000 flat rate being paid to owners
3 of property; tenants receive an additional $2,500 who were
4 living or renting business space in Zone 4.
5 Your Honor, this allocation diagram is a product
6 of a lot of objective and scientific evidence. We didn't come
7 up with it willy nilly by any means. Many months was spent
8 with scientists, with real estate experts, with people who were
9 on the ground after the hurricane and knew where the oil got
10 and where the oil didn't get and where it was thick and where
11 it wasn't thick. And this was the product of thousands of
12 hours of research and analysis.
13 In Zone 1 what you have here, Your Honor, is you
14 have the area that the EPA had determined was heavily
15 contaminated. EPA observed every single house, you know, in
16 this area, Your Honor, and they charted it, red, orange, green,
17 blue, and all but a fraction of red properties are in this
18 area.
19 Separately, Mr. Torres mentioned the 5,500
20 properties have been tested. The applicable health base
21 standard applied by the EPA and LDEQ is known as a RECAP MO-1
22 standard. The vast, vast majority of RECAP MO-1 exceeds are in
23 this area.
24 So what we're doing by virtue of the buyout,
25 Your Honor, is: Number one, we're creating a buffer between

28
1 the refinery, which is located right here and the community.

2 There's no operational activity near the refinery right here,
3 Your Honor. It's all here towards St. Bernard Highway. So
4 that buffer is being created. Then we can go ahead and
5 remediate the most impacted properties and create some nice
6 green space, which we think will benefit the community as a
7 whole.
8 The next, the blue area, Your Honor, what that
9 is is that is the outer perimeter of the area that Murphy
10 itself tested and found there to be a high propensity of impact
11 to oil, as well as the EPA and LDEQ's findings. So, again, a
12 lot of science, a lot of testing goes into that. Not drawn
13 willy nilly at all.
14 The green area indicates the outer perimeter of
15 where positive oil findings from the Murphy crew was found
16 after all these 18,000 tests were run. And then the Zone 4
17 represents the outer edges of the class -- of the area that was
18 certified.
19 On the issue of buyout, Your Honor, I talked
20 about most of this, but here it sort of outlines what we think
21 are the main high points of the buyout. And, Your Honor,
22 what's really incredible about the buyout so far, and certainly
23 the assistance of the LRA, I think, will be helpful moving
24 forward, and the cooperation of settlement will helpful in
25 moving forward.

29
1 But, Your Honor, this is a focused, closeup map

2 of the buyout area: St. Bernard Highway, 20 Arpent Canal on
3 this side, Judge Perez in the middle. And a green dot over a
4 property indicates, Your Honor, interest by the homeowner in
5 the buyout program.
6 So what we're hoping to do, Your Honor, pursuant
7 to a previous motion that's been submitted, is if Your Honor
8 does promptly go ahead and approve the fairness, is to begin
9 title abstracting work so that when the final settlement date
10 is reached per the settlement agreement, which means the appeal
11 period's elapsed, Murphy can start doing closings with people
12 and start moving forward.
13 So the interest has just been overwhelming and
14 this is just based upon the people we've met with so far.
15 There were meetings scheduled and we anticipate a very high
16 level of participation in the buyout area, which is good.
17 MR. TORRES: The settlement, Your Honor, has been
18 embraced by the community. As, Your Honor is aware, subsequent
19 to the filing of the first lawsuit, Murphy began to settle
20 cases in what's called the Murphy settlement area.
21 That settlement program was successful in the
22 sense that approximately 70 percent of the properties in that
23 area settled with Murphy, including some of the people who were
24 included in the original lawsuit and were class
25 representatives.

30
1 The current program expands the area, as Your

2 Honor defined it after the certification hearing, to include
3 the area from Parish Road to the refinery, from the 40 Arpent
4 Canal to St. Bernard Highway and one street on the east side of
5 the refinery.
6 This settlement now provides benefits for people
7 who live in the area where the Murphy oil predominated. So it
8 opens up the settlement, essentially doubles the area to more
9 than 3,000 properties. Currently, all the properties in the
10 area, approximately 6,500 properties. This part of the
11 settlement involves approximately 3,800 class member
12 properties. There were 20 to 25 objections, which Judge Klees
13 will address, and I think most of those have been resolved.
14 They had questions and concerns.
15 Out of the entire area of approximately 6,500
16 properties, there are 251 opt-outs, and these are people who
17 chose to hire their own attorney and to do it on their own. So
18 we have a huge percentage of the people who have participated
19 in the process.
20 Needless to say, with the devastation of the
21 hurricane and all of the uncertainties that have existed in all
22 areas as a result of Hurricane Katrina, the people in that area
23 had a lot of questions, and not all of them had to do
24 specifically with the Murphy oil spill. The plaintiffs
25 steering committee -- and we spent a lot of time trying to

31
1 address as many of the questions as we could.

2 There were many issues that arose during that
3 time related to, when can I have my house gutted, torn down, I
4 need permission to get it torn down. Those are all additional
5 things that were discussed and handled; and, as a result of
6 that, people had the opportunity to have a clear understanding
7 of what was happening.
8 As of January 2nd, we show that there were 4,200
9 proof of claim forms that have been received by the claims
10 office. And as we appear here in this courtroom today, the
11 claims office is functioning. As in every instance in this
12 case, there's always something going on in multiple venues. So
13 as we speak, people, I'm sure, are still filling out the proof
14 of claim forms and they have until January 31st to complete the
15 proof of claims process.
16 Your Honor, at this time we would like to go
17 ahead and present and introduce our evidence in support of the
18 fairness, and I would ask Mr. Meunier to assist in this
19 process.
20 MR. MEUNIER: May it please the Court, Jerry Meunier
21 for the PSC. Your Honor, we have previously furnished you with
22 a bench book and that bench book includes an index of the
23 record and the exhibits which we offer into evidence today in
24 support of our request for approval of the class settlement.
25 Tab 2 in your binder, Judge, would be the

32
1 affidavits of various experts. These are both plaintiff and

2 defendant experts who have all come together within their
3 various fields of expertise to voice support for the settlement
4 and, specifically, for that aspect of the settlement which
5 falls within their expertise.
6 Those experts are Todd Hilsee,
7 Dr. John Kilpatrick, Dr. Marco Kaltofen, Dr. Paul Templet,
8 John Perry, Mike Perrullo, Jim Wallwork, Dr. Glenn Millner, and
9 Dr. Wade Ragas. Those affidavits are now offered into evidence
10 jointly by the parties as Joint Exhibit 1A through I, each
11 letter corresponding to the experts I've mentioned.
12 THE COURT: Is that 1 or 2?
13 MR. MEUNIER: I'm sorry, 2, Your Honor. They would
14 be 2A through I, yes, sir.
15 THE COURT: I'll admit them into evidence.
16 MR. MEUNIER: Tab 3 in the binder contains the
17 affidavits of class representatives. There are five
18 representatives, Robin Clark, Fernand Marsolan, Phyllis Michon,
19 Cherie Perez, and James Shoemaker. These are all designated as
20 class representatives in this Court's decision to certify a
21 class.
22 Each has submitted an affidavit expressing their
23 familiarity with the settlement, with the litigation, with
24 their responsibilities as class representatives. And those
25 affidavits in support of the settlement are offered as Joint

33
1 Exhibit 3A through E.
2 THE COURT: Let those be admitted.
3 MR. MEUNIER: Tab 4 in the binder, Judge, would be
4 the affidavits of class counsel.
5 And we have done our best to furnish in the
6 record today all of the affidavits from all class counsel who,
7 because of scheduling, et cetera, were able to do so. And you
8 will see each class counsel identified in the index and by
9 affidavit.
10 They are Madro Bandaries, Daniel Becnel,
11 Robert Becnel, William Bradley, Walter Dumas, Val Exnicious,
12 Michael Hingle, Hugh Lambert, Gerald Meunier, Ronnie Penton,
13 Carroll Rogers, Michael Stag and Sidney Torres.
14 And then there is a Joint Exhibit, Your Honor,
15 from Robert Becnel and Jerald Andry, which specifies
16 information for the Court on the claims process, which is, as
17 Mr. Torres said, an ongoing process. And that affidavit
18 furnishes additional information on the claims process.
19 The other affidavits all express the views of
20 class counsel, that they have examined the settlement, they are
21 familiar with the litigation and their responsibilities as
22 court-appointed class counsel, and they find and support the
23 settlement as being fair and adequate and in the best interest
24 of class members.
25 And we would offer as Joint Exhibit 4A through N

34
1 the affidavits referred to.

3 MR. MEUNIER: What that then follows in the bench
4 book, Judge, at Tab 5 is a stipulation of facts. This
5 stipulation --
6 THE COURT: O, P, Q and R of 4.
7 MR. TORRES: Jerry, those were the additional ones
8 received this morning.
9 MR. MEUNIER: Oh, we have some received this morning,
10 Your Honor. I apologize. We would offer Exhibit 4O, P, Q, and
11 R.
13 MR. MEUNIER: Tab 5, Judge, is the stipulation of
14 facts that has been confected by counsel for the parties.
15 What we've attempted to do with this stipulation
16 is direct it to facts pertinent to be put in the record by
17 agreement -- put into evidence by agreement that are relevant
18 to and supportive of the request to approve the settlement as
19 fair.
20 I would mention that some of the facts also
21 pertain and are relevant to the pending motion of the PSC for
22 the assessment and award of class counsel fees and expenses.
23 THE COURT: Let that be admitted. That's Tab 5.
24 MR. MEUNIER: Judge, Tab 6 are findings of fact,
25 conclusions of law, and Tab 7, proposed judgments. We don't

35
1 purport to give exhibit numbers to those. We would simply

2 offer them into the record for the Court to consider in making
3 its required findings of facts and conclusions of law in
4 support of the approval of the settlement.
5 And the proposed judgments, there are three of
6 those, Your Honor. They're self-explanatory. One is a
7 judgment just approving the class-wide settlement. The other
8 is a proposed judgment that would do that, as well as provide
9 for the payment of common benefit fees and expenses. And the
10 third judgment would pertain to individual objections.
11 THE COURT: We'll make that a part of the record.
12 That's 6, 7, 8 and 9. 8 is a docket sheet of plaintiff
13 counsel, and 9 is a docket sheet of all case activity. That
14 will be a part of the record.
15 MR. MEUNIER: Thank you, Your Honor. The final tabs
16 are 8 and 9, those are the docket sheet, and listing all
17 plaintiff counsel of record would be Tab 8, and the docket
18 sheet listing all case activity would be Tab 9.
19 Your Honor, we felt that those documents were
20 important to put in the record to show the scope of the
21 activity and the involvement of plaintiffs counsel. And so we
22 would like to attach -- or rather assign joint exhibit numbers
23 to both of those docket sheets; and consistent with the index
24 in the bench book, those will be Joint Exhibit 8, the docket
25 sheet listing plaintiffs counsel of record; and Joint Exhibit

36
1 9, the docket sheet listing all case activity.

2 THE COURT: That will be a part of the record. I
3 won't introduce it into evidence, but it will be a part of the
4 record.
5 MR. MEUNIER: Your Honor, going back to, if the Court
6 will allow me, to class counsel affidavits. I did mention the
7 affidavits of Richard Arsenault and Joseph Bruno, which are
8 included.
9 We also would ask the Court to allow us to
10 supplement the record by, say, of close business tomorrow with
11 some additional class counsel affidavits that are in the
12 process of being --
13 THE COURT: That's fine. I'll do that.
14 MR. MEUNIER: And, Judge, we'll be putting stickers
15 on these various originals and giving them to your staff.
16 Thank you, Judge.
17 THE COURT: Anything more from the participants?
18 MR. MILLER: That's it, Judge.
19 THE COURT: We'll take a ten-minute break at this
20 time and then come back and then I'll hear from Judge Klees and
21 then I'll hear from any objectors.
23 (WHEREUPON, the Court took a recess.)
25 THE COURT: Be seated, please. Now I'll hear from

37
1 Judge Klees.
2 MR. MEUNIER: Your Honor, excuse me. Jerry Meunier.
3 Before Judge Klees addresses the Court, I
4 neglected to mention that one of the matters that we'd like to
5 place in the record of this hearing is the record of the class
6 certification hearing before Your Honor January 12th and
7 13th of 2006, and we respectfully incorporate and adopt the
8 record of the transcript of that hearing.
9 THE COURT: That will be made a part of the record.
10 Let me hear from Judge Klees. As I mentioned, I appointed
11 Judge Klees as a special master in this matter to assist the
12 court in discussing the objections, as well as other areas.
13 I appreciate all of the work that he's been
14 doing in this matter. I know you worked very hard on it and
15 you have the Court's appreciation. I'll hear from Judge Klees
16 at this time.
17 JUDGE KLEES: Your Honor, first, I would like to
18 thank you very much for allowing me to participate in this
19 process. As a resident of St. Bernard Parish, I have been
20 affected; and it has always bothered me that I had very little
21 input into the process and you included me and I truly
22 appreciate what you did.
23 We were able to meet with 21 persons whom we had
24 objections from. We met on January 2nd and 3rd of this year.
25 I was able to have Mr. Sal Gutierrez, Mickey Landry and

38
1 Jay Andry for the PSC present, as well as Mr. Sidney Torres,
2 Mr. A.J. Krouse and Daniel Dysart from Murphy Oil Corporation.
3 So I found it was a very good thing for the
4 people to have both sides of the fence there, as well as the
5 Murphy Oil representative, and we were able to work out
6 solutions for a lot of people.
7 We talked to 21 people. The first was Arthur
8 and Sondra Arseneaux, and their objection has been withdrawn.
9 We talked to Terrence Meyer, and his objection was withdrawn.
10 Bernie and Linda Deschamp, their objection has been withdrawn.
11 Mr. Gregory Faia, who is present in court today,
12 presented an objection because he showed me that he was the
13 registered land owner of property in the area. Unfortunately,
14 the previous land owner had made a settlement with Murphy and
15 there is some confusion there.
16 My recommendation to you is that he be allowed
17 to remain as a member of the class and present his claim. But
18 I'm sure you're going to hear from the other representatives
19 and they'll make their spiel to you in a moment.
20 Mr. Wayne Duchmann was also present and his
21 objection could not be resolved. He was invited to appear here
22 today and make his presentation to the Court. Mr. James
23 Philpot also was present and his objection has been withdrawn.
24 Peter and Betsy Harrison, their objection has
25 been withdrawn. Kevin Karcher, objection has been withdrawn.

39
1 Blaise and Sandra Sauro, represented by Mr. Van Robichaux and

2 Bruce Kingsdorf, their objection was withdrawn with
3 reservations. And John and Joyce Thonn were also represented
4 by Mr. Robichaux and Bruce Kingsdorf and their objection was
5 withdrawn with reservations.
6 Daniel Bourgeois with his objection was
7 withdrawn. Raymond and Darlene Albert, represented by
8 Lance Licciardi, their objection was withdrawn. Ronald and
9 Rosemary Caruso with their daughter, Cheryl, their objection
10 was withdrawn.
11 Jules Dixon and Jacob Borrouso represented by
12 Mr. Mumprey and Clayton Conner, their objection was withdrawn
13 because they wanted to opt out and join the other class of
14 people, and my recommendation would be that they be allowed to
15 opt out at this time.
16 Glenn and Cindy Gabb, represented by Mr. Lance
17 Licciardi, their objection was withdrawn. Cathy Bowers,
18 objection was withdrawn. Michael Ginart, Alice Ginart, and
19 Julie Ginart, their objection was withdrawn. Daniel and
20 Nathalie -- I don't have their last name on my report --
21 THE COURT: Does anyone have that?
22 JUDGE KLEES: -- Frederick. They were determined not
23 to be a member of the class. Cheryl Migliore, the objection
24 was withdrawn. Ryan Casey, who had previously sold out to
25 Murphy, was determined not to be a member of the class. And

40
1 Sherri and William Follette, their objection was withdrawn.

2 I just want to say that it was a pleasure to
3 deal with all of the persons who were there. They all had
4 their story to tell. I think it was very important that they
5 were able to tell their stories and vent and let the persons
6 who they thought were responsible to know how they felt.
7 But, as you can see, at the end of the day, all
8 objections were withdrawn except for the two people that I
9 mentioned. That's my report. I have it here. I'll be happy
10 to submit it to the Court to include in the record.
11 THE COURT: Submit it in writing. And with regard to
12 the people whose objection has been withdrawn, I will allow
13 that and approve their withdrawal in accordance with the
14 federal rules. With regard to the opt-outs, they need not have
15 my approval, they can officially opt out, and they have done so
16 and will not be a part of the settlement.
17 With regard to the two individuals who have
18 not -- who are still objecting, I will hear from them at this
19 time. Is it Mr. Faia, or how does he pronounce his name?
20 JUDGE KLEES: Faia, F-A-I-A.
21 THE COURT: Mr. Faia, would you come forward, sir,
22 and explain to the Court your position?
23 MR. FAIA: Good morning, Judge.
24 THE DEPUTY CLERK: Please state your name for the
25 record.

41
1 MR. FAIA: My name is Gregory, initial G, Faia,

2 F-A-I-A.
3 And, Judge, I apologize. As of yesterday
4 afternoon, I was not of the belief that I had to be here today
5 because we had a meeting with the special master and I believed
6 that we had an agreement.
7 And at the time when I left, I was unaware that
8 I was going to have appear today. So if --
9 THE COURT: Well, Mr. Faia, as I understand from the
10 special master's report, you owned a piece of property and it
11 was placed in someone else's name and you had a counter-letter,
12 I assume or not?
13 MR. FAIA: Well, no, sir. It wasn't a
14 counter-letter. What actually happened was there was an
15 individual -- and this is all spelled out in the complaint that
16 I submitted. There was an individual who worked for me who --
17 a husband and wife, and they had some difficult financial
18 problems because of medical issues.
19 And their home on Volpe Drive was in foreclosure
20 for being in arrears for two years. She approached me about it
21 was going to sale in approximately two days. This was in 2003.
22 I put the money up in order to get the house out of foreclosure
23 for her so that she could continue to live there.
24 At that time we did an act of sale and
25 assumption to one of my companies, CGF Holding.

42
1 THE COURT: From her or to --

2 MR. FAIA: From her to my company, CGF Holding.
3 THE COURT: All right.
4 MR. FAIA: At that time I paid approximately $15,000
5 to the foreclosing lender to get her current. And it was with
6 the idea that she was going to buy the property back in --
7 within six months when her husband received his disability
8 settlement because he was a disabled Vietnam vet.
9 That transfer, which was done before a notary
10 and was all done as it's indicated on its face, was to be
11 recorded by her. Obviously, she was an internal secretary.
12 She handled all the recording in my office. She also lived in
13 St. Bernard. So when we had recordings in St. Bernard, she was
14 the one who took it down there and got it recorded.
15 It is my understanding that that initial sale
16 and assumption was not recorded until I recorded it in January
17 of '06.
18 THE COURT: I see.
19 MR. FAIA: Okay. But the sale itself, the transfer
20 of ownership, took place in 2003. Murphy, at some point prior
21 to the litigation or once the litigation began, she ran to them
22 and got them to settle with her unbeknownst to me, obviously,
23 and they paid her some money.
24 I'm not aware of how much or what was done in
25 that regard. Subsequent to that, I went to the claims office

43
1 to file my claim; and when I did, they accepted the claim.

2 They said there was -- you know, at that point we were informed
3 that other people -- that she had actually made a claim and was
4 paid. Pardon me. She had not made a claim. She was settled
5 with prior to the lawsuit itself is my understanding of it.
6 At that point they said, we understand that that
7 took place and that's an awful shame; but, of course, we're
8 accepting your claim, there's no problem, everything's fine. I
9 left. Some time passed. I'm not exactly sure of the exact
10 dates right now.
11 And then I got a call saying, well, can you give
12 us an affidavit stating of what the facts were and how it went
13 down. I said, absolutely. So I did that affidavit and it's
14 attached to my objection as well. And it wasn't until -- I
15 didn't hear back from them. It wasn't until I received the
16 notice of denial, which came on the exact date of whatever the
17 date to opt out of the class was.
18 Then -- forgive me if I go off on the dates, but
19 I filed the objection because, in my review of it and in my
20 looking at the definition of what the -- in other words, under
21 the legal notice of the class settlement, it clarifies that all
22 persons and/or entities who have sustained injuries, loss or
23 damages as a result of the 2000 spill -- and I'll jump ahead --
24 and who which on October 29th were residents or owned
25 properties in the following area.

44
1 Well, I always felt I was in that class. I

2 didn't know at any point in time that there was an issue that's
3 different. I understand now that they've made some different
4 argument regarding public record. But there's no doubt that I
5 was the owner of that property and I'm the one who sustained
6 the injury.
7 And for that reason, and in addition, in the way
8 that they've handled my claim, I felt that on numerous
9 occasions I was told one thing and then something else took
10 place. And I'm sure it's a theme, not only for me, but for
11 other people who have been involved in this.
12 So that was the reason for my objection, and I
13 think it's set forth in my --
14 THE COURT: Right, it is. Anything from Murphy?
15 MR. KROUSE: Good morning. Yes, Your Honor. A.J.
16 Krouse on behalf of Murphy Oil USA, Inc. And with all due
17 respect to the special master and Mr. Faia, we opposed the
18 special master's recommendation on this issue.
19 I don't believe the facts are in dispute here.
20 In April of 2003 this transaction took place and the property
21 at issue was 2428 Volpe Drive. Murphy paid to a Georgia
22 Valenzo on December 5, 2005 and settled the claim on this
23 property. As Mr. Faia admits, the property transaction was not
24 recorded until after that on January 13th, 2006.
25 And it's black letter law in Louisiana that we

45
1 have a right to rely upon the public records; and the public
2 records indicated that on that date, the date of the
3 settlement, Ms. Valenzo was, according to the public records,
4 the owner of that property. So on that basis, we would
5 respectfully disagree with the special master's ruling.
6 If the Court would like to have this briefed
7 within seven to ten days, we can do that. By all the means, we
8 do not want to hold up anything with the fairness hearing, but
9 we believe that we need to state our opposition here.
10 THE COURT: Yeah, I understand the issue. Mr. Faia,
11 I think it's fair. There's no question in my mind in looking
12 at the material that the wrong person was paid. The issue is
13 who's responsible for the wrong person being paid.
14 There there's some interplay with the public
15 records doctrine in Louisiana, which is somewhat peculiar to
16 Louisiana, but it's a part of the civil law tradition that
17 provides that third-parties to a transaction can rely on public
18 records.
19 Now, there's certain requirements before that
20 public record doctrine is in play. I understand you're a well
21 recognized real estate attorney, so you probably know this
22 better than anybody in this courtroom. But I think it would be
23 fair to give both of you an opportunity just to focus me on
24 whether or not the public records doctrine has any play in this
25 case.

46
1 I'd be interested in your views on it. I will

2 mark, for the record, an objection and I won't rule on the
3 objection. I will give you an opportunity to explore and focus
4 me on that issue, give me your views on whether or not it
5 applies, and if so whether or not they have proved access to
6 it.
7 And you do it within seven days and I'll give
8 the defendant three days to respond so that I'll have the whole
9 thing before me within ten days.
10 MR. KROUSE: Thank you, Your Honor.
11 THE COURT: Thank you very much for being here. I
12 appreciate it.
13 MR. FAIA: Thank you, Judge.
14 THE COURT: Okay. We have another objector. Anybody
15 other than Mr. Duchmann? Any other objectors other than
16 Mr. Duchmann? Okay. Mr. Duchmann, come forward, please.
17 Mr. Duchmann, I ask that you tell me
18 specifically your objection, introduce anything into the
19 record, but I'm not going to be watching any movies in open
20 court. I'll do so in chambers, but I'm not going to be
21 watching any movies.
22 MR. DUCHMANN: I appreciate that, Your Honor.
23 THE COURT: I'll Make it a part of the record. I'll
24 accept it as part of the record.
25 Also, first, tell us your name and your standing

47
1 in being here. What do you represent?

2 MR. DUCHMANN: I'm a property owner on Jacob Drive.
3 THE COURT: Your name is what, sir?
4 MR. DUCHMANN: Wayne Duchmann.
5 THE COURT: Okay. And you say you're a property
6 owner. Does the record show that you're a property owner?
7 MR. DUCHMANN: My mom just passed away two months ago
8 and we didn't open up succession. But prior to that, we opened
9 up succession from my dad and get the opportunity that my mom
10 could opt out and take this money for health care that was
11 needed at that time.
12 Since then my mom's passed on since the last
13 time I appeared before you, Your Honor.
14 THE COURT: When your dad's succession was opened,
15 were you put in possession of his share of the property?
16 MR. DUCHMANN: I waived my share to my mom for the
17 simple right she needed this money to continue her health care.
18 THE COURT: And your mother died recently?
19 MR. DUCHMANN: Sir, she died two months ago.
20 THE COURT: What's the address?
21 MR. DUCHMANN: It's 2224 Jacob Drive. It is inside
22 the buyout area.
23 THE COURT: And you're objecting and what's the basis
24 of your objection?
25 MR. DUCHMANN: First off, I will call it to the

48
1 Court's attention, and I would request that Mr. Kerry Miller

2 stand up and come forward.
3 THE COURT: Why is that, sir?
4 MR. DUCHMANN: Well, as you well know, I fired Sidney
5 Torres, but it was under false pretense-s.
6 THE COURT: Let me just say something to you,
7 Mr. Duchmann --
8 MR. DUCHMANN: Well, it lays a foundation on my
9 objection, Your Honor.
10 THE COURT: Fine. But you're here, and I respect
11 that, and you have a right to speak as an objector. But you'll
12 notice that this is a court of law and people handle themselves
13 with dignity in a court of law and they do not cast aspersions
14 or say anything of ill will against the other person.
15 MR. DUCHMANN: No, sir. I --
16 THE COURT: This is from the governor of the state of
17 Louisiana to private citizens. I expect that.
18 MR. DUCHMANN: Your Honor, this has relevance on
19 objection itself.
20 THE COURT: All right. So you're not represented?
21 You're representing yourself and you're objecting --
22 MR. DUCHMANN: Unfortunately, I am, yes, sir.
23 THE COURT: And the basis of your objection is you
24 feel you're not being paid enough money?
25 MR. DUCHMANN: The fairness of this situation is that

49
1 the people across the street received three times more money
2 being in the fairness of this settlement and these people walk
3 and they have a normal life and they also live in a house right
4 now.
5 My mama didn't have that opportunity. She's
6 paid only one-third of what they would get -- what they have
7 received. And is that fair?
8 THE COURT: That's your objection?
9 MR. DUCHMANN: No, my objection goes on to -- well, I
10 filed a memorandum in support of my objection.
11 THE COURT: And I will make that a part of the
12 record.
13 MR. DUCHMANN: And also that, and this video will
14 show, 16 years ago that Murphy Oil failed to comply with state,
15 federal and local regulations.
16 As of three weeks ago, they also failed to let
17 the fire foreman inside the refinery. They stopped him from
18 going into the refinery. They locked the gate. And that just
19 shows you that they have no intention to ever, ever comply with
20 any laws and regulations set forth by this court or the state.
21 And if Kerry Miller would stand up and come
22 forward, I'd like to address the Court because I did file a
23 notice in judge chambers, and it wasn't in reference to the
24 attorneys we fired, it was in reference to Mr. Kerry Miller and
25 his conduct, disobeying a court order.

50
1 THE COURT: Okay. I'm not going to do that,

2 Mr. Duchmann. I'll take your material on the record. I do
3 mark, for the record, that you object to the --
4 MR. DUCHMANN: I strongly object, Your Honor.
5 THE COURT: And as you say, you strongly object.
6 I'll take that into consideration and I'll rule on that in due
7 course.
8 Anything other than the video and the documents
9 that you --
10 MR. DUCHMANN: Well, I did have some witnesses, but
11 since President Junior Rodriguez's attorney for St. Bernard
12 Council called me and told me that Mr. Rodriguez would be in a
13 meeting with the Army Corps of Engineers. And I told him that
14 it was most important that he would come here today. He was
15 served.
16 THE COURT: Well, for the record, you served him, and
17 you served him in the 11th hour when he's going into a meeting.
18 I officially quashed the subpoena, so he need not be here.
19 MR. DUCHMANN: Well, then what you're saying is that
20 I don't have no witnesses to call now?
21 THE COURT: You have no witnesses to call.
22 MR. DUCHMANN: So my next course is the Fifth Circuit
23 Court of Appeals.
24 THE COURT: Well, we'll see --
25 MR. DUCHMANN: Your Honor, I'd rather not have to do

51
1 this. I'd rather not be here today. I'm only here today
2 because of 3,009 Americans lost their life defending the
3 Constitution, which I'm here today to uphold this Constitution.
4 I think it is my duty as an American to be here for those who
5 cannot be here.
6 THE COURT: Okay. I appreciate your being here.
7 MR. DUCHMANN: Okay. I will file an appeal and take
8 it from there.
9 THE COURT: All right. Thank you very much.
10 MR. DUCHMANN: Your Honor, you did say you would like
11 to see the video and --
12 THE COURT: No, I've put the video into evidence.
13 I'll accept the video as evidence and I'll make it a part of
14 your objection; and also the documents that you have filed,
15 I'll make that a part of the record.
16 MR. DUCHMANN: Can you also make part of the record
17 that Mr. Kerry Miller did meet with me when you had a court
18 order to stop him from meeting with residents in the buyout
19 area?
20 THE COURT: What are you --
21 MR. DUCHMANN: It was under a court order that he
22 disobeyed.
23 THE COURT: Okay. All right. Thank you very much.
24 MR. DUCHMANN: So that doesn't mean nothing to you?
25 THE COURT: Anything else from anybody?

52
1 MR. MILLER: Yes, Your Honor, briefly. Murphy would

2 like to respond to the objection of Mr. Duchmann.
3 Your Honor, it is black letter law that in order
4 to make an objection you must be a class member.
5 THE COURT: You may have a seat Mr. Duchmann. Sit
6 right at the -- make sure we get that document. Are you going
7 to give us the video?
8 MR. DUCHMANN: Yeah, I have a copy entered into the
9 record, Your Honor.
10 THE COURT: I'll give you an opportunity to
11 supplement the record.
12 MR. MILLER: Your Honor, Kerry Miller on behalf of
13 Murphy in response to what we just heard from Mr. Duchmann. It
14 is black letter law, Your Honor, in order to make a proper
15 objection to a class settlement that the objector need to be a
16 class member as well.
17 That's the law of the Federal Rules of Civil
18 Procedure in the Fifth Circuit and the U.S. Supreme Court, I
19 think in the Epstein case. That was what was contained in the
20 class action settlement agreement in the section on objections.
21 It was very specific that in order to make an objection, you
22 had to qualify as a class member. That was also what was
23 contained in the notice that Your Honor approved that went out.
24 I quote, Your Honor, the legal notice that
25 Mr. Duchmann apparently received read as follows, and this was

53
1 a legal notice of class-wide settlement:

2 Number one, it requires objectors to be class
3 members. And, number two, it requires that in the objection,
4 quote: Proof of residency and/or property ownership in the
5 class area as of August 29th, 2005, be provided, closed quotes.
6 Your Honor, you will note that Mr. Duchman's
7 objection contained no such proof of ownership or residency in
8 the class area as of August 29th, 2005.
9 MR. DUCHMANN: Objection, Your Honor.
10 MR. MILLER: In fact, Your Honor --
11 THE COURT: I'll give you just a moment. He's
12 speaking now. Nobody objected when you were speaking.
13 MR. MILLER: Thank you, Your Honor. In fact, Your
14 Honor, you will note that Mr. Duchman's objection on the
15 certificate lists his address as 3209, Number 2, Cleary Avenue,
16 Metairie, Louisiana 70002, which is obviously outside of
17 St. Bernard Parish. It's in Jefferson Parish.
18 Additionally, Your Honor, I would like to file
19 into the record.
20 THE COURT: I'm talking to the Marshal now. Nobody
21 speak. Marshal, I don't want anybody to be speaking and
22 interrupting this person.
23 MR. MILLER: Additionally, Your Honor, we would like
24 to file into the record an affidavit we think adequately
25 demonstrates that Mr. Duchmann had no ownership interest at all

54
1 in the property that he referenced located on Jacob Drive.

2 What we've conducted, Your Honor, is a search of
3 the records over in St. Bernard Parish which indicates that
4 property was owned on Jacob Drive by Mr. Duchman's parents;
5 that Mr. Duchman's father's succession was opened; that
6 Mr. Duchmann renounced his rights to that succession; and that
7 no succession has been opened on behalf of his mother's estate,
8 Your Honor.
9 Given that, it is the law of Louisiana that
10 Mr. Duchmann does not have standing to present a claim on
11 behalf of his mother or her estate, Your Honor.
12 THE COURT: Okay. Thank you.
13 MR. MILLER: That is detailed in our memo; and we
14 would like to file into the court record, Your Honor, we'll
15 mark as the next exhibit an affidavit containing evidence that
16 Mr. Duchmann has no ownership interest in the property.
17 THE COURT: I'll make it a part of the record.
18 Mr. Duchmann, you can respond to that.
19 MR. MEUNIER: For the record, the PSC joins in the
20 objection to lack of standing by this gentleman.
21 MR. MILLER: Your Honor, this is a joint exhibit and
22 we'll mark it as Exhibit Number 10 to today's hearing.
23 THE COURT: That's fine. Mr. Duchmann, you have an
24 opportunity to respond.
25 MR. DUCHMANN: Your Honor, as you well know, I

55
1 appeared before the special master, which is present today in

2 this court. Also my brother was there who has power of
3 attorney to speak for my mother. He also at the time, you can
4 ask the special master, said that Wayne speaks for my family.
5 That is the person that has the executive of my
6 mama's estate at that time. The special master is right there.
7 And if you think that I'm here, for some reason, trying to
8 mislead the court, and I'm not. I'm here to protect the
9 individual rights of all Americans.
10 THE COURT: Okay. Fine. Thank you very much,
11 Mr. Duchmann.
12 MR. DUCHMANN: So the statement that he's made should
13 be stricken from the record.
14 THE COURT: Okay. Thank you, sir. All right. Any
15 other objectors? Any other objectors? Seeing no other
16 objectors --
17 MR. MEUNIER: Your Honor, just to complete the record
18 with respect to objections, we were in receipt of certain
19 letters from potential objectors and I would now, respectfully,
20 move for the dismissal of these objections for the failure to
21 appear today.
22 Letters of objection were received from Howell
23 Robertson, III, Daniel Bourgeois and Carrie Bourgeois, Daniel
24 Paul Bourgeois, Melissa and Edwin Macost, Donna LaBouf,
25 Kathleen O'Brien Bauers and Kim LaPara. And for the failure to

56
1 appear, we respectfully move for the dismissal of those

2 objections.
3 THE COURT: I did set certain rules regarding
4 objectors and also I received a report from the special master
5 regarding objectors. I made those a part of the record and I
6 will rule on them in due course.
7 This concludes the settlement hearing. Let me
8 say that it's apparent to the Court after listening to all of
9 the information and reviewing all of the records as I have
10 done, that the settlement negotiations in this case were
11 conducted on an arm's length basis.
12 There's no evidence of fraud or collusion on the
13 parties. Extensive discovery was, obviously, taken in this
14 matter. Counsel worked literally around the clock to achieve
15 settlement within one year of the lawsuit being filed. Both
16 sides worked diligently and carefully assessed the risks and
17 potential rewards of trial versus settlement.
18 Notice was adequately given. I participated in
19 the design of the notice and made sure that it was given
20 throughout the area, the larger area. The response among the
21 class members has been overwhelming. With the exception of two
22 objections, it's been overwhelmingly in favor of the
23 settlement.
24 It's my inclination to, obviously, conclude that
25 the settlement is fair, reasonable and adequate. However, I do

57
1 believe that it would be appropriate to give formal reasons for

2 the approval of the settlement. I want to discuss it in detail
3 and give the Court, and counsel, the benefit of my thinking on
4 this matter in rendering my opinion.
5 I hope to have my opinion out very shortly.
6 I've already taken the common benefit fund issue under
7 submission. I will be ruling on that expeditiously also. This
8 concludes the settlement fairness hearing and I thank the
9 parties, as well as counsel, for their participation.
10 The court will stand in recess.
12 (WHEREUPON, the Court was adjourned.)
13 CERTIFICATE
14 I, Jodi Simcox, RMR, Official Court Reporter for the
15 United States District Court, Eastern District of Louisiana, do
16 hereby certify that the foregoing is a true and correct
17 transcript, to the best of my ability and understanding, from
18 the record of the proceedings in the above-entitled and
19 numbered matter.
20
21
22 /s/Jodi Simcox, RMR
Jodi Simcox, RMR
23 Official Court Reporter
24
25


Murphy Oil Fairness Hearing 01-04-07

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1

1 UNITED STATES DISTRICT COURT

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 business owners in St. Bernard Parish who claim to have

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 to the appropriate federal rules, and held that class members

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 which the Court preliminarily approved. The Court set the

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 the Governor at this time.

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 Three days or so after Hurricane Katrina hit,

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 of benefit. This was something that we thought needed to be

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 But I want to thank you, once again, Judge

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 (WHEREUPON, the Governor exited the courtroom.)

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 I don't think there was a meeting that I

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 (WHEREUPON, the members of the PSC stood in recognition.)

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 bunch of people, Your Honor, in putting this thing together and

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 Environmental Quality and the EPA. And they deserve credit,

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 We're happy to be here today.

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 MR. MILLER: Your Honor, Murphy certainly joins in

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 testify about notice. But he was our notice adviser and he is

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 cover the waterfront.

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 Wall Street Journal microscopic type, legalese type notice. It

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 other correspondence by keeping up a Web site, very simple,

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 that the dissemination of the notice was appropriate.

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 MR. MILLER: If you don't mind, just one comment I'd

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 and property records obtained during the Murphy voluntary

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 same time, that we were to get a declaration at this time from

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 deduction from storm surge in excess of 50 percent. Prior to

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 the refinery, which is located right here and the community.

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 But, Your Honor, this is a focused, closeup map

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 The current program expands the area, as Your

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 address as many of the questions as we could.

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

1 affidavits of various experts. These are both plaintiff and

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER