Lawyers for Texaco Inc., claiming the company is the victim of a Texas jury run amok, today asked Judge Solomon Casseb to overturn the jury verdict last month that awarded Pennzoil $10.53 billion in its lawsuit against Texaco.
After a full day of arguments by lawyers for the two oil companies, Casseb abruptly adjourned the hearing until Friday.
As a state court judge, he has the power to approve the award, reduce it, or -- as Texaco urged -- throw it out altogether. Casseb didn't indicate when he will rule, but he made it clear he wants to wind the case up. "I'm not going to request [legal] briefs and spend the rest of my life reading" them, he said today.
If the judge affirms the maximum award and related interest charges, Texaco would have between two and three months to post a bond of as much as $12 billion while it appeals the case, lawyers said -- an amount that "portends the destruction" of Texaco, its attorney, Gibson Gayle Jr., said today.
While they sought outright dismissal of the full award, Texaco's lawyers also tried to lay groundwork for a dramatically reduced judgment of $500 million, saying that Pennzoil lost no more than that when Texaco outbid it for control of the Getty Oil Co. last year.
The principal architect of Pennzoil's staggering legal victory, veteran personal injury lawyer Joseph D. Jamail Jr., countered that the judgment was right, the jury was right, and Casseb had been right in crafting his instructions to the jury on how they were to consider the evidence in the four-month-long trial.
"This was not a run-amok jury," Jamail said, looking straight at Casseb, a long-time friend. If Texaco is able to win a reduction in the amount of the award, the message will be "if you steal big enough . . . don't worry, corporate people, nobody will make you pay it," Jamail said.
Texaco, he said, had deliberately violated an "agreement in principle" that entitled Pennzoil to buy just over 40 percent of Getty Oil stock, together with access to Getty's oil reserves, for $3.4 billion. Forty-eight hours after that Jan. 3, 1984, agreement, publicy announced by Getty but not formally signed, Texaco topped Pennzoil's offer with a $10.2 billion price for all of Getty.
Stung by the Nov. 19 jury verdict, Texaco rolled out some new artillery yesterday -- David Boies of the New York City firm Cravath, Swaine & Moore, who led CBS Inc.'s side in its libel fight with former Army general William Westmoreland, and two attorneys from the prominent Houston firm Fulbright & Jaworski. The scope of the case and the heavyweight personalities of the contesting attorneys helped pack the small courtroom with onlookers. And some were not looking just for tips on trial work. Some in the audience said they were representing financial investment interests hungry for some clue to the fate of Texaco.
It fell primarily to Boies, the New Yorker, to persuade Casseb that he had made fundamental errors in instructing the jury on the essential points of New York law governing a key issue, the question of whether Pennzoil and Getty Oil had reached a binding agreement before Texaco suddenly entered the bidding and wrested Getty away. Because the negotiations occurred in New York City, both sides agreed that that state's law applied to that issue.
Boies argued that his reading of New York law required Pennzoil to prove that there had been a binding, enforceable contract between Pennzoil and Getty, that Texaco had "actual knowledge" of such a binding agreement, and that Texaco then actively induced Getty to violate it.
Among other factors, the "agreement in principle" between Getty and Pennzoil left major issues unsettled, Boies said, evidence that it was not binding. But before instructing the jury on its deliberations, Casseb had essentially sided with an interpretation of New York law presented by Pennzoil's attorneys, over Texaco's objections, he said.
Pennzoil's lawyers said many of Texaco's arguments today should have been made to the jury, but weren't. And Jamail quoted the testimony of Texaco officials and advisers, and their notes written in the heat of the Getty negotiations, saying that their disclosure of Texaco's intent is clear.