The trial judge who presided over the lawsuit between Pennzoil Co. and Texaco Inc. reportedly has said there is a "good chance" he might have misinformed the jury on a crucial legal issue in the dispute, the Houston Chronicle said yesterday.
But Judge Solomon Casseb Jr. also said he was confident the jury verdict and $10.53 billion judgment against Texaco will be upheld on appeal, according to the newspaper account.
The Houston Chronicle said it based its story on a transcript of an April 2 speech by Casseb to the Los Angeles County Bar Association. The newspaper did not disclose the source of the transcript.
The speech was Casseb's first comment on last year's trial, in which a jury found Texaco's $10 billion acquisition of Getty Oil Co. in 1984 improperly interfered with Pennzoil's existing agreement with Getty.
Texaco President Alfred DeCrane said the judge's reported comments "confirm some of the concerns we've had over the way it the trial was handled," according to the Chronicle.
In response, Pennzoil lawyer Joseph D. Jamail suggested that Texaco was the source of the transcript. "They're trying to try this in the media, when it has to be won in court. . . . The appellate court can only rule on what went on in the trial court, not on what the judges and the lawyers say afterwards."
Casseb's comment dealt with a focal point of the trial: whether Pennzoil had reached a binding "agreement" with Getty to buy 42 percent of Getty's stock on Jan. 3, 1984. The next day, Pennzoil and Getty announced an "agreement in principle" but did not sign it.
Getty's investment bankers immediately began looking for a higher bidder, and three days later, Texaco disclosed it had signed an agreement with Getty to acquire the entire company at a higher price than Pennzoil had offered.
In his instruction to the jury in November, Casseb said it should determine whether the Getty directors "intended" to enter into a binding agreement with Pennzoil, even though the Jan. 3 agreement was not signed and had left some issues unresolved.
Texaco's attorneys have claimed that Casseb's instructions misstated New York contract law, which governed that issue since the Getty negotiations took place in New York City.
The Chronicle quoted Casseb as telling the Los Angeles meeting: "I feel that there is a good chance that perhaps I may have read the cases wrong and not have applied it correctly." Casseb said his instructions to the jury were based on "what I felt was the procedure in following the New York law as to what constituted . . . a binding agreement between the parties."
"Now if it was in Texas, you had to have that baby in writing all the way and signed," he told the California lawyers. "No question you had to have a contract."
But Casseb said that as he interpreted New York law and legal precedents, a binding agreement did not require a definitive, written contract. "You know, this is my first experience in trying to analyze New York law after I did 46 years with Texas," he said. "So you can see, that misinterpretation can happen to any judge."
The Chronicle quoted Casseb as saying he "definitely did not say" there was a good chance the verdict would be overturned on appeal.
"What I said was if the appellate courts wanted to find any way of reversing a judgment of that magnitude, they could interpret the law the way they wanted to," the newspaper quoted the judge as saying. Casseb did not return phone calls yesterday."My impression of what he said was, he was confident that he would be upheld on appeal," said Robert Forgnone, a Los Angeles attorney who attended the April 2 speech.
On the New York Stock Exchange yesterday, Texaco stock closed at $32.63 a share, up $1.75, and while Pennzoil was down $4.38, at $51.13.