Exxon's secrecy unjustified, says plaintiffs' memo

A federal judge should unseal at least two Exxon Mobil documents because the company "has worked an effective fraud upon the public" and has not justified the secrecy surrounding those documents and other information, attorneys for the plaintiffs in a class-action lawsuit against the oil giant argued in a new court filing.

"Exxon has not provided any justification to shroud the documents in secrecy," attorneys in the lawsuit wrote in a partially redacted memorandum.

"Compelling public policy considerations, as well as public health and safety concerns, demand that this charade come to an end," they argued in the memo.

In an email Tuesday, Exxon Mobil spokesman Christian Flathman said, "ExxonMobil strongly denies the plaintiff's [counsels'] claim of fraud on the public, and will respond in court to allegations as we have in the past."

The memo, filed late Monday in U.S. District Court, addressed what the plaintiffs' attorneys described as "the impropriety of" continuing to seal documents related to a Texas laboratory's report that determined a 2013 oil spill in Mayflower resulted from manufacturing defects in the Pegasus pipeline. The report said the cracks had likely worsened over the years since the pipeline was made shortly after World War II.

The pipeline ruptured March 29, 2013, and spilled an estimated 210,000 gallons of heavy crude into the Northwoods subdivision, drainage ditches and a cove of Lake Conway.

The memo said plaintiffs' attorneys have "become aware that the conduct of Exxon with respect to particular issues has worked an effective fraud upon the public, rendering certain of these exhibits especially undeserving of judicial protection under doctrines like the crime-fraud exception to the attorney-client privilege."

Citing previous case law, the attorneys wrote that such privilege "'takes flight if the relationship is abused. A client who consults an attorney for advice that will serve him in the commission of a fraud will have no help from the law.'"

Attorneys for the plaintiffs added italics for emphasis in several parts of the filing.

Exxon Mobil hired Hurst Metallurgical Research Laboratory in Euless, Texas, to examine the pipe segment that ruptured and investigate the cause. That report became public in July 2013, but the memo said information related to the report remains secret and should be released.

In July 2013, the memo said, Exxon Mobil announced that it and the federal Pipeline and Hazardous Materials Safety Administration had received the "'results of an independent assessment conducted by Hurst.'"

The plaintiffs argued that the documents at issue do not include trade secrets or other information that should be confidential. Nor are the documents related to Exxon Mobil's "core business," they said.

"Exxon may more generally contend that release of the exhibits will result in its 'embarrassment' and public ridicule, but this is a non-starter," the memo said. Citing another court case, the memo said such embarrassment must be "'particularly serious'" when it is a defendant's chief concern.

"All told, Exxon should be embarrassed of its conduct here, and [federal rules] offer the company no refuge from the consequences of its own actions," the attorneys wrote.

The class-action lawsuit is set for trial the week of Aug. 10 in U.S. District Court in Little Rock.

In August, Judge Brian Miller ruled that Arnez and Charletha Harper of Mayflower could represent people who currently own property that is subject to an easement for the Pegasus pipeline and that is physically crossed by the pipeline running from Corsicana, Texas, to Patoka, Ill.

The lawsuit seeks either cancellation of the easements and removal of the pipeline from the class members' property or a requirement that Exxon replace the pipeline.

State Desk on 01/14/2015