On April 2, Texas State Judge Solomon Casseb Jr. stood up before an audience of Los Angeles lawyers to speak for the first time in public about the monumental Texaco-Pennzoil trial over which he presided.
Just before he started, someone put a tape recorder in front of him. A week later, Texaco Inc.'s public relations firm, Hill & Knowlton, was quietly distributing copies of the tape and a transcript of Casseb's remarks to selected news reporters.
By the time the judge's words got into print, he had become, once again, the focal point of the $11.1 billion dispute and, very possibly, the key to its outcome.
Last week, Texaco filed its appeal of the verdict handed down by the jury in Casseb's Houston courtroom, arguing that Casseb had mishandled the trial, the instructions to the jury and the post-trial legal motions. Texaco hopes to persuade the Texas Court of Appeals that the judge's errors were so numerous and so grave that the jury's verdict cannot stand.
"The special issues and instructions that were presented to the jury were adopted virtually verbatim from Pennzoil's submissions," Texaco's appeals brief said. " They are tainted with numerous direct comments on the weight of the evidence and assumptions of disputed issues of fact.
"The charge Casseb's jury instructions on how to interpret the evidence did not just 'tilt' or 'nudge,' but shoved the jury toward Pennzoil's desired result," Texaco said.
Casseb's speech to the Los Angeles lawyers this month was a ringing endorsement of the jury, which found that Texaco had interfered with Pennzoil Co.'s January 1984 agreement to buy 42 percent of Getty Oil Co. The jury awarded Pennzoil $7.5 billion in actual damages as compensation for the 1 billion barrels of Getty oil that Pennzoil lost when Texaco made a higher, successful bid for Getty. Punitive damages and prejudgment interest charges brought the judgment to $11.1 billion.
The news stories about Casseb's speech centered on his comment that he might have erred in his instructions to the jury. Texaco lawyer David Boies contended last week that the judge's remarks also support Texaco's claim that he favored Pennzoil during the trial and didn't fulfill his judicial obligations to read the trial record and briefs.
"One problem we've had is his refusal to write opinions in denying motions by Texaco's counsel . We never had an explanation of his reasons until his speech. When he says he didn't read the record, he didn't read the briefs, he only read three cases, . . . I think those are likely to be the matters of long-run significance," Boies said.
Whether Boies is right remains to be seen. As Pennzoil noted recently, Texaco tried two months ago to get a court hearing on its motion to disqualify Casseb. A three-judge panel of the Texas Court of Appeals rejected the request.
While not budging from his support of the jury, Casseb spoke of his own efforts to get the two sides to settle, suggesting that the size of the award troubles him as well.
In the speech, the 70-year-old judge and attorney, who came out of retirement to handle the case, had a good time with his role in the trial. At other moments, he spoke reverently of the jury's place in American justice.
"Unlike what my former mother-in-law said -- that I got a percentage of the judgment -- I did not even get full compensation and reimbursement for my expenses," Casseb said. "They allowed me $35 a day for a room in Harris County Houston and I wouldn't stay in that fleabag that they had, so I paid $65. So the difference I paid out of my pocket. They allowed me $23 a day for my meals. I drink Chivas and soda more than $23 worth before I sit down to eat," he said, as a tongue-in-cheek way of noting the sacrifices he and other judges make.
Casseb, who took over the trial in midstream, after the original judge had to leave because of illness, noted the mountain of evidence and transcripts. "Fortunately, . . . I did read parts of the record," he said, but he also depended upon the lawyers for both sides to see that the record he had not read was not misrepresented to the jury, he said.
The central issue, as Casseb instructed the jury, was whether Getty's directors and Pennzoil officials "intended to bind themselves into an agreement," he said -- an agreement that Texaco then interfered with by offering a richer price for Getty.
Casseb reminded the Los Angeles audience that both companies had agreed to abide by New York law in determining whether an agreement had been reached, because the negotiations had taken place in New York City.
On that issue, various New York courts have defined contracts in different terms. As University of Chicago Professor Richard A. Epstein wrote recently, "Normally, contracts are enforceable only when their terms are sufficiently definite."
The Pennzoil-Getty agreement was not signed, although champagne was poured in celebration and a press release issued.
"Here the basic transaction was a complex reverse triangular merger necessarily containing countless terms that were nowhere captured by a champagne toast or a handshake. If squads of lawyers still had hours of paperwork in front of them, many hidden issues were sure to surface. If some of these proved insurmountable, then the deal would be off, without either side's being in breach," Epstein wrote in Regulation, a journal of the American Enterprise Institute.
Texaco argues that, under New York law, all of these unresolved issues stamped the Pennzoil-Getty agreement as something less than a binding contract.
But Casseb said that, as he understood New York law, "It did not have to be a definite agreement. It did not have to be prepared by the lawyers and all the i's dotted and t's crossed."
"Now if it was in Texas, you have to have that baby in writing all the way and signed. . . . But under New York law, and under those cases which I've cited, if you read those, you see it's as long as you've got intent and you've got overt manifestations and you've got some writings, even though it may not be the actual contract . . . that is as good as waiting for the lawyer to prepare it and put it in all the legal language, back and forth and so forth."
Although Casseb at several points expressed confidence he will be upheld on appeal, he also said he might not have interpreted New York law correctly. "So I feel that there is a good chance that perhaps I may have read the cases wrong and not have applied it correctly, and as I've said, you know, it was my first experience in trying to analyze New York law after I did 46 years with Texas, so you could see that can happen to any judge. . . . "
Casseb said Pennzoil realizes that there was "no way" it could expect a settlement that resembles the size of the judgment. "I am satisfied that everyone is stunned by the amount of the verdict and the judgment," the judge said. "But they cannot reduce it in any which way, apparently, without finding something in my charge or my application of New York law. . . . And I'm not one to say I was perfect. . . . "