Class-action case sought over Katrina oil spill

By Ellen Wulfhorst

NEW ORLEANS (Reuters) – Attorneys argued in federal court
on Thursday over whether homeowners whose property fell victim
to an oil spill from Hurricane Katrina can band together and
sue Murphy Oil Corp in a class-action lawsuit.

At the hearing before U.S. District Court Judge Eldon
Fallon, attorneys for residents of St. Bernard Parish, where
the spill occurred, argued Murphy is responsible for oil damage
to some 10,000 houses in an area of about 6 sq. miles.

Murphy’s attorneys told the judge that the spill, which the
company has blamed on an “act of God,” affected fewer homes and
that those residents do not constitute the legal basis for a
class-action lawsuit.

The judge is expected to issue a written ruling deciding
whether the case should become a class-action lawsuit following
the hearing, which was slated to continue through Friday.

In a class action, one suit is filed on behalf of a large
number of people who have similar claims.

The spill sent some 85,000 barrels of crude oil from a
storage tank at Murphy’s Meraux refinery in St. Bernard into
the surrounding community and drenched houses in several feet
of oily sludge.

St. Bernard Parish, which lies to the east of New Orleans
and had a pre-storm population of almost 70,000 people, was
devastated by the August 29 hurricane and the flooding that
followed.

“The release of crude oil from Murphy Oil turned a
community otherwise contaminated by floodwater into a community
contaminated by toxicants,” said Joe Bruno, an attorney for the
residents. “The dominant issue is the necessity of a
community-wide clean-up.”

Local officials have said at least half the 27,000 homes in
the parish may have to be razed, and others will need extensive
clean-ups or major repairs.

About two dozen people already have filed individual
lawsuits against the El Dorado, Arkansas-based Murphy that
could be merged into a class-action case.

Murphy’s attorney Kerry Miller said the company has settled
privately with about 5,400 people in about 1,800 homes, paying
out about $50 million to residents and $13 million to clean up
public property.