Jury Verdict for Kerr McGee Corp Oil Whistle-Blower is Overturned

Juliet@LaBovick.com (LaBovick Law) — Thu, 12 Apr 2007 22:48:00 -0500

Judge Phillip Figa, a federal judge in Denver, overturned a jury verdict in favor of Bobby Maxwell, a whistle-blower at the Interior Department who charged that the Kerr-McGee Corporation cheated the government out of millions of dollars for oil and gas it pumped in publicly owned coastal waters.

According to a Denver Post article citing the ruling, Kerr-McGee's attorney, Scott Barker "Judge Figa's order is a vindication of Kerr-McGee's position from the very outset of the case. This result is especially appropriate since ... Kerr-McGee had properly and fully paid all the royalties that were due." Bobby Maxwell's attorney, Richard LaFond states "They will definitely appeal. A jury determined in January that Kerr-McGee underpaid $7.6 million. With additional fines and penalties, Kerr-McGee was liable for up to $39 million in damages, according to LaFond.

The ruling could have big implications for whistle-blowers, as well as for the oil and gas industry. According to a New York Times article (subscription required), three other federal auditors in Oklahoma City have filed similar fraud lawsuits against more than a dozen oil companies; those auditors also say that they were ordered by superiors to stop making their accusations.

]]>In the New York Times (subscription required), Judge Figa is noted as saying "the False Claims Act requires that a person first ''voluntarily disclose'' any evidence of fraud to the government before filing a lawsuit". Mr. Maxwell presented his evidence of fraud in 2002, and the judge noted that his supervisor in Denver agreed in principle that Kerr-McGee had probably violated the law. But senior lawyers for the Interior Department in Washington said they did not want to proceed, and ordered Mr. Maxwell to retreat.

Bobby Maxwell - Whistleblower Law Blog

Jury Verdict for Kerr McGee Corp Oil Whistle-Blower is Overturned