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Chevron Fights $1.5 Billion Claim Over Nigerian Gas Rig Blast

Citing problems with fraud, a lack of evidence and obstacles to enforcing a U.S. court's judgment overseas, a Chevron attorney on Friday urged a federal judge not to certify a class of Nigerian residents seeking $1.5 billion in damages over a 2012 gas rig explosion.


SAN FRANCISCO (CN) - Citing problems with fraud, a lack of evidence and obstacles to enforcing a U.S. court's judgment overseas, a Chevron attorney on Friday urged a federal judge not to certify a class of Nigerian residents seeking $1.5 billion in damages over a 2012 gas rig explosion.

Lead plaintiff Dr. Foster Ogola sued Chevron in January 2014, claiming an estimated 65,000 residents of the Niger Delta Region in Southern Nigeria suffered health problems and loss of income from fishing and farming due to contamination caused by the blast.

The KS Endeavor, an offshore natural-gas drilling well six miles off the coast of Southern Nigeria in North Apoi Field, exploded on Jan. 16, 2012, igniting a fire that burned for 46 days.

During a hearing Friday, Chevron attorney Robert Mittelstaedt ticked off a long list of reasons why U.S. District Judge Susan Illston should deny class certification, starting with obstacles in verifying individual claims of income loss, property damage and health problems.

Chevron received 5,630 claims for damages from potential class members as of mid-September and found fraudulent signatures or thumbprints on several of the claims forms, according to the oil giant's opposition brief.

"Some of the claims were people who had been deceased before the incident," Mittelstaedt said.

He added that the class’s counsel, Jacqueline Perry, had acknowledged there would be "bad apples" because Nigeria is a "corrupt place."

"The only way to weed out the bad apples is to go one by one," Mittelstaedt argued.

Proving how much Nigerian fishermen actually lost in income due to alleged water contamination poses another challenge, Mittelstaedt said, because no records exist to verify their income.

Mittelstaedt said Nigerians "rarely" file income tax returns, and that Chevron has received no tax filings from those claiming damages, despite repeated requests.

But Illston did not seem totally convinced. "It's troublesome here that because of the way a country conducts its business, they could never have recourse," she said. "That they could never have recourse because of the way they live feels wrong."

Mittelstaedt said the court must rely on the plaintiffs' testimony as evidence, but he pointed out several inconsistencies from Nigerian fishermen's depositions.

He showed the judge excerpts from two deposition videos to illustrate his point.

The Chevron attorney also argued plaintiffs should press their claims in the proper venue - Nigerian court - where at least 70 lawsuits over the 2012 gas rig explosion have already been filed, including one class action.

"I assume Chevron is not embracing Nigeria's jurisdiction over it," Illston replied.

The judge acknowledged there could be problems ensuring class members would be precluded from pursuing claims over the explosion in Nigerian court if a U.S. court had already awarded damages.

Turning to the debate over environmental harm, Mittelstaedt sought to discredit two of the plaintiffs' expert witnesses as plagiarizers.

The plaintiffs asked the court in November for permission to substitute one expert, Professor Jasper Abowei, whom Chevron accused of "self-plagiarizing work from an earlier study," with another expert, Professor Eyiwunmi Falaye.

But Mittelstaedt also hurled accusations of plagiarism at the plaintiff's proposed substitute expert, claiming Falaye copied a report from the Deepwater Horizon spill in the Gulf of Mexico and simply changed the words "oil spill" to "gas blowout."

Moving past plagiarism, Mittelstaedt contended that neither expert cited any data related to the gas rig explosion in their reports. He also argued the plaintiffs' analyses of seabed samples failed to identify "in any reasonably scientific way" the impact caused by the blast or its zone of impact.

In a reply brief to Chevron's opposition to class certification, the plaintiffs said sonar imaging shows gas has likely continued to seep from the seafloor because of the blast, and that a study of seabed samples "unequivocally" shows the blowout "had long-term, persistent impacts on the surrounding marine habitat."

The plaintiffs also say an analysis of roundworms found in seabed samples shows the seafloor habitats were "subject to persistent and ongoing" stress.

After about 90 minutes of debate, Illston took the arguments under submission.

The plaintiffs filed a fourth amended complaint in September 2015 after now-retired U.S. District Judge Samuel Conti dismissed the suit with leave to amend last year.

Ogola and four others were terminated as named plaintiffs in September 2015. Natto Iyela Gbarabe, a fisherman from the Koluama community in the Southern Ijaw Local Government area of Bayelsa State in the Niger Delta, now serves as the sole named plaintiff.

Potential damages for the gas rig explosion could exceed $1.5 billion, according to the fourth amended complaint.

Chevron, which Forbes names as the world's third-largest oil and gas company, earned $129.9 billion in revenue and $4.58 billion in profits last year, according to the company's 2015 annual report.

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Categories / Energy, Environment, International

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