Arabie v. CITGO Petroleum Corporation

(Client: CITGO Petroleum Corporation)

In a landmark decision on choice of law and punitive damages, the Louisiana Supreme Court has held that corporate decisions made at a company’s out-of-state headquarters did not warrant a choice of a foreign state's punitive-damages law in a case involving a major oil spill at a large Louisiana refinery. The decision –Arabie v. CITGO Petroleum Corporation, No. 2010-2605 (La.03/13/2012), -- So. 3d --, reh’g denied – marks the first time that the Louisiana Supreme Court has addressed in detail Louisiana’s 20-year-old rules governing choice of law for punitive damages. Arabie involved 14 personal-injury plaintiffs who claimed they were exposed to oil spilled to the Calcasieu River in 2006. The lower courts applied Texas, rather than Louisiana, law and ruled that the plaintiffs were entitled to separate punitive-damage awards of $30,000 apiece. Reversing both lower courts, the Louisiana Supreme Court held that Louisiana’s bar on punitive damages governed the plaintiffs’ claims, even though the plaintiffs contended corporate decision-making outside Louisiana caused their alleged injuries within the State. 

Arabie reaffirmed Louisiana’s long-held public policy interest against punitive damages and rejected the notion that Louisiana courts may import foreign states’ punitive-damages law based merely on the location where executive-level, corporate decisions are made. Before the Supreme Court’s decision, plaintiffs’ attorneys had begun using the lower-court decisions in Arabie as authority to allow punitive-damages claims in Louisiana courts as a matter of course. 

Barrasso Usdin handled the case at both the trial and appellate levels. Richard Sarver and Craig Isenberg were lead trial counsel in the district court and Richard Sarver argued before the Supreme Court.