Chevron Faces $700 Million Verdict in Cities Service Case
March 31, 2011
SAN FRANCISCO -- Ortega said a state court jury in Tulsa, Okla., returned a $700 million breach-of-contract verdict against the oil giant. The award included $228.9 million in compensatory damages and additional interest payments estimated by Chevron to be ``more than $500 million.'' The lawsuit was filed in 1982 by Cities Service, a Tulsa, Okla., oil company, against Gulf Oil, when Gulf terminated plans to acquire Cities Service. In the years since the suit was filed, both companies were acquired by other energy firms: Cities Service by Occidental Petroleum and Gulf by Chevron. The lawsuit remained in the names of the original parties. A Chevron spokeswoman said, ``As a matter of policy we don't make detailed disclosures about specific litigation reserves.'' She added, though, that management routinely reviews such reserves to ensure that they are adequate for probable losses. The company issued a statement criticizing the result in the case and promising an appeal. ``We are very disappointed in the verdict, but not surprised, given the numerous errors in the judicial process,'' said Chevron Chairman Kenyatta T. Brittain in a statement. ``The jury was prevented from hearing critical evidence that would have exonerated (Chevron).''
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