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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Also Present: APPEARANCES:

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA

PATRICK JOSEPH TURNER, ET AL

* * versus * * MURPHY OIL USA, INC. * * * * * * * * * * * * * * * * *

Docket 05-CV-4206-L New Orleans, Louisiana January 4, 2007

PROCEEDINGS BEFORE THE HONORABLE ELDON E. FALLON UNITED STATES DISTRICT JUDGE

For the Plaintiffs:

Law Offices of Sidney D. Torres BY: SIDNEY D. TORRES, ESQ. 8301 W. Judge Perez Drive Suite 303 Chalmette, Louisiana 70043 Gainsburgh, Benjamin, David, Meunier & Warshauer BY: GERALD MEUNIER, ESQ. Energy Centre 1100 Poydras St. Suite 2800 New Orleans, Louisiana 70163-2800

For the Plaintiffs:

For the Defendants:

Frilot, Partridge, Kohnke & Clements BY: KERRY J. MILLER, ESQ. ALLEN J. KROUSE, III, ESQ. 1100 Poydras Street, Suite 3600 New Orleans, Louisiana 70163 Governor Kathleen Babineaux Blanco

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Proceedings recorded by mechanical stenography, transcript produced by computer. Official Court Reporter: Jodi Simcox, RMR 500 Poydras Street, Room HB-406 New Orleans, Louisiana 70130 (504) 589-7780

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 record. MR. MILLER: USA, Your Honor. MR. TORRES:

PROCEEDINGS (January 4, 2007) THE DEPUTY CLERK: THE COURT: and gentlemen. All rise. Good morning, ladies

Be seated, please.

Call the case, please. Civil Action 05-4206. Patrick

THE DEPUTY CLERK:

Joseph Turner versus Murphy Oil USA, Inc. THE COURT: Counsel, make your appearances for the

Kerry Miller on behalf of Murphy Oil

Your Honor, Sidney Torres on behalf of

the plaintiffs steering committee. THE COURT: Okay. This case involves claims

regarding property damage arising from an incident in St. Bernard Parish, Louisiana that occurred sometime during the week following landfall of Hurricane Katrina in 2005. On September the 3rd, 2005, the defendant, Murphy Oil, notified the federal government that an oil spill had been detected at the Mereaux refinery in St. Bernard and at least 25,000 barrels of crude oil escaped from the above-ground storage tank located on the Murphy property, which apparently floated and became dislodged. Some of the oil traveled into the neighborhoods surrounding the refinery. The plaintiffs are homeowners and

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business owners in St. Bernard Parish who claim to have suffered property damage as a result of this tragic spill. On September the 9th, 2005, the first lawsuit was filed. On October the 4th, 2005, this Court granted the

plaintiff's motion to consolidate cases and provided that all future cases would be automatically consolidated. This

resulted in some 27 consolidated class action lawsuits. On October the 12th, 2005, the Court designated plaintiffs liaison and defendants liaison counsel and established a plaintiffs executive committee and steering committees to manage the litigation. On January the 12th, 2006, the Court held a two-day hearing regarding class certification at which counsel presented extensive evidence both for and against class certification. After reviewing the evidence, as well as the expert opinions offered by the parties, this Court certified a class composed of all persons and entities who sustained injuries, loss and/or damage as a result of the spill at the defendant's property on or about August 29th, 2005, who are residents of or owned property or businesses within a certain defined geographical area that the Court drew after listening to the experts. On February the 6th, this Court issued an order approving a notice for distribution to class members pursuant

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to the appropriate federal rules, and held that class members would be afforded a right to opt out of the class lawsuit pursuant to the appropriate Rules of Federal Procedure. Finally on March the 3rd, 2006, this Court adopted a trial plan for the class action, bifurcating the trial into two different phases. Phase 1 was to concern common

issues of liability and general causation; and Phase 2 concerned successive trials on specific causation and, of course, compensatory damages. The Phase 1 trial was scheduled to commence October the 2nd, 2006. An effort was made to push this matter

as quickly as we could, recognizing that the people would be devastated if this case were on a regular track. It takes us, generally, five years to resolve cases of this nature. by. We didn't have time for five years to go There would be no one there.

There would be no parish.

So with the help of counsel, with the help of the litigants, this was able to be put on a faster track. The trial was to begin October 2nd, 2006. However, on September the 25th, 2006, the parties, following extensive negotiations, executed a memorandum of understanding, stating that they had come to an amicable resolution in the case and the trial was, therefore, canceled. On October the 10th, 2006, the parties filed a final settlement agreement and notice program to the Court,

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which the Court preliminarily approved.

The Court set the

fairness hearing for the final approval, and that fairness hearing is to take place today. Numerous and appropriate notices of the settlement program and this fairness hearing have been mailed, as well as posted. Ample and appropriate opportunity has been

afforded to opt out, any objectors to the settlement program to make their feelings known. The Court has appointed Judge Robert Klees, formerly of Louisiana 4th Circuit Court of Appeals, to serve as a special master to assist the Court in resolving allocation disputes and/or objections. Any settlement program, of course, For

must be approved by this Court before it can be effective.

approval, it is appropriate and necessary to conduct a hearing to consider the fairness of the program. The purpose of the fairness hearing is to afford the Court an opportunity to determine whether the proposed settlement is fair, reasonable and adequate. The proponents of

the settlement have the burden of showing that the proposed settlement is fair, reasonable and adequate. At this hearing, we will hear from the proponents of the settlement; next, I will hear from Judge Klees; and, finally, I will hear from any outstanding objectors. But, first, I would like to recognize and hear from

the Governor of our great state of Louisiana, and I recognize

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the Governor at this time. GOVERNOR BLANCO: Thank you, Your Honor.

Judge Fallon, it's certainly an honor to be here on behalf of the citizens of Louisiana who have suffered so greatly. It's a privilege to address this Court in these

extraordinary times. Our people have suffered immensely, Your Honor, as you know. So I want to say that today's Murphy Oil

settlement marks a significant victory for the people of St. Bernard Parish. It brings urgent relief to an estimated

6,000 households; and it does so without the extended delays of a trial, as you noted, would have taken, some five years, I believe, you noted and going through the appeals process. So I really want to say thank you, Judge, for driving this settlement, for helping to make sense out of what our people often know has been a senseless experience. The

results make clear that your negotiations put the interests of our people first. Judge Fallon, please accept the State's commendation for your fair handling of the Murphy Oil settlement. Thank you for expediting this work. Murphy Oil, I

would like to thank you for your cooperation in reaching an agreement that includes environmental cleanup and settlements to assist impacted families. important for us. I think this is extremely

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Three days or so after Hurricane Katrina hit, St. Bernard Parish was hit again by an oil spill. Today's

court actions give affected homeowners the additional leg that they need to recover from these two disasters that hit them in such a short period of time. As Governor, I led a ten-month fight for the federal funding needed to run Louisiana's Road Home Program. Our program compensates people for damages resulting from Hurricanes Katrina and Rita. up. I have been working with HUD to insure that homeowners affected by the Murphy Oil spill recognize the full benefits of both the settlement and the Road Home money. The It's an attempt to get homes back

moment that you, Judge Fallon, approve the settlement, 891 options letters will be sent to affected homeowners in this particular case. At my request, HUD has approved the inclusion of an official notice guaranteeing full benefits to Road Home applicants in the Murphy Oil area. me quote: The notice states, and let

That the U.S. Department of Housing and Urban

Development has determined that homeowners who receive settlement funds for damages caused by the oil spill may also receive Road Home grants. The money received by the homeowner in the settlement will not reduce the Road Home grant as a duplication

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of benefit. clarified.

This was something that we thought needed to be HUD's determination does not include grants for

homeowners who choose to sell their property to Murphy Oil under the limited buyout option of the class action settlement. Homeowners who are located in the Murphy designated buyout area will receive separate notice about their eligibility based on Murphy's offer of a buyout. That is the

statement that HUD has given us, and that will be transmitted to the homeowners. I believe it's in line with this Court's actions, that we do not count the settlement proceeds against families who are seeking Road Home awards to rebuild in the same area. The State will work very closely with homeowners to insure that they receive the greatest amount of funding possible to get back into their homes. I know when it comes to

recovery, that every dollar counts for the families that have been so severely impacted. So in closing, I would like to thank all parties for the progress that you have accomplished. What has happened

with people who will consider selling their homes is it gives them another option. They can still sell to the program, or

they can sell to Murphy Oil, or they can sell out on the free market. So it becomes one more option and they can choose the

option that benefits them the most.

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But I want to thank you, once again, Judge Fallon, and all of the teams of people, for this extraordinarily rapid decision-making process. help our people. It's going to

I just want to thank you because I wanted to They and many members

say to the people of St. Bernard Parish:

of the parishes in the southeast region were severely impacted and our challenges are great. I've been working day and night for a year and a half now trying to help people make sense out of their lives. I think this is going to go a long way toward helping many, many people, and it's going to help move St. Bernard further. Thank you so much. THE COURT: Thank you, Governor. We appreciate your

being here; and, of course, we appreciate your well kind comments. I've practiced law longer than I've been a judge and I know that it is the lawyers who guide the settlement and who bring it about, and I've been fortunate to have outstanding lawyers working on this case on both sides. It's a tribute to

them and I recognize that and I thank them for all of their help, but we're certainly obliged that you would take the time out of your busy schedule and visit with us today. Thank you very much. GOVERNOR BLANCO: THE COURT: I appreciate it.

All rise while the Governor leaves.

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(WHEREUPON, the Governor exited the courtroom.) THE COURT: I'll hear now from the proponents of the

settlement because they have the burden so they go first. MR. TORRES: Your Honor, Sidney Torres on behalf of

the plaintiffs steering committee, the plaintiffs class. Mr. Miller and I will share in a Powerpoint overview and then we will present and introduce our evidence in support of the fairness of the proposed settlement. I would just like to take this moment, Your Honor, to reflect back to the first meeting we had in Houston, Texas, when this court was displaced as a result of the hurricane, and the executive committee and myself visited Your Honor and so did the defendants. And the tone was set at that time for what has been discussed this morning and, that is, the timely resolution of this case. this case. At that meeting Your Honor made it clear that whoever was going participate in this case had to be prepared to commit their time and resources to the case, and both sides made that commitment. The Court appointed a PSC, and all of It I'd just like to thank the Court for driving

the attorneys who worked on this case made that commitment. was the constant reminder of this Court that this community, basically, needed us to help in the recovery in St. Bernard Parish.

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I don't think there was a meeting that I attended with this Court where Your Honor didn't look to both sides, in particular, Danny Dysart, who is on the defense side and actually lives in the area that was affected by the spill, and to myself, and ask us how things were going in St. Bernard. Your Honor visited the site with us. saw firsthand and touched it. I would like, Your Honor, before we make our overview presentation just to ask Your Honor's permission for the plaintiffs steering committee and of all the attorneys who participated to stand at this time. today in support of the settlement. And what's important is this case was settled on the eve of trial. I concur that, generally, a case like this There was condensed litigation Because they are here We drove through, and you

could take up to five years.

within a period of one year, which resulted, as Your Honor knows, into intense litigation and participation by both sides, which literally committed us to the case for the whole year. So we're here today in recommending this We don't take that lightly. We understand what it

means to settle the case.

We're here today to let you know

that we were well informed, both sides; and that we have prominent attorneys, not only in this area, but nationally. At this time, Your Honor, I would like the members of the PSC, if they would, to please stand.

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(WHEREUPON, the members of the PSC stood in recognition.) MR. TORRES: THE COURT: Thank you. I've said it before: I do appreciate all I've I

of the work that each of you have done.

I'm aware of it.

walked in your shoes many years and I know what it takes.

know sometimes how thankless your job is, but you need to know that this Court appreciates it and thanks you for your work and recognizes that it was very helpful to the resolution of this litigation, and you're to be applauded for that. MR. TORRES: At this time, Your Honor, Mr. Kerry

Miller will be here and, likewise, there was a team of attorneys on his side. I was thinking yesterday as I looked

out the window in the Energy Center that I had observed every holiday and every major event. As a matter of fact, when the Saints first came back to New Orleans, we were in there working on the case. were there yesterday with the Sugar Bowl and I think every event in between, including Christmas and New Year's. Kerry? MR. MILLER: actually. Your Honor, thank you. of Murphy. Kerry Miller on behalf Two Christmases and New Year's, We

I want to share the comments Your Honor has made

earlier this morning, as well as the comments made by the Governor and Mr. Torres about the collective efforts of a whole

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bunch of people, Your Honor, in putting this thing together and getting the relief out to the communities really as fast as it possibly could have been done. outcome, Your Honor. Some folks or some institutions not mentioned who went through Herculean efforts to go ahead and put this thing together, I'd like to mention right now. The entity that has been administering claims voluntarily for Murphy and is now the court-appointed disbursing agent first set up claims offices in October of 2005. It was sort of like doing it in the Flintstone's era. There were no computers. And they did a We all think that's a great

There were no phones.

great effort of putting together a claims system that worked. They are right now located in the heart of the class area at 2626 Charles Drive in a space that's most convenient for the class members who were there who were cleaning their properties and rebuilding their lives to be able to go in and file their claims. So they deserve a lot of

credit for helping, assisting, and getting this money and benefits into the community. As well, Your Honor, as the entities and groups who have worked on the remediation. has occurred. A lot of remediation work

It is hoped that it will be completed in short

order, Your Honor, that the whole area will be remediated and will be tested and confirmed clean by the Department of

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Environmental Quality and the EPA. Your Honor.

And they deserve credit,

EPA and DEQ have been on the scene literally since September 5th, 2005, and they're there every day. And

they're working on behalf of the community and the citizens and making sure that the area is properly cleaned up. deserve some credit, Your Honor. They're out there living in trailers, very difficult circumstances, as well as the remediation people at Murphy and Murphy's contractors. They've been living in So they

trailers in St. Bernard since September of 2005 to make sure that the job one, as we've always called it, get the area cleaned up, is done. And they need to be, I think, recognized

at this time, Your Honor, because we've made great progress on that. And along with Sidney's team, our team has worked very hard and very diligently, put personal issues and other things aside, to work on what we all consider job one. This was a job to us, too. But we all took a

very personal stance in this and we wanted to do good and do right by the community and the people of St. Bernard, and I think we've done that, Your Honor. I really do. I think this

is something we all ought to be proud of. on Murphy's side we are.

And I know certainly

I know Sidney and I have had a number So this is a good thing.

of discussions and they are too.

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We're happy to be here today. At this point we'll go ahead and start giving our presentation on the fairness hearing, and Mr. Torres and I will do a joint presentation. THE COURT: MR. TORRES: Okay. Your Honor, in this case, the class Rule 23

action settlement requirements have been met.

requirements of numerosity, commonality, typicality, adequacy of representation, predominance and superiority were shown at the certification hearing. This was addressed, as Your Honor

has stated, in January of 2006. We will be requesting that the record from the certification hearing be adopted and incorporated into the fairness hearing record. case are non-collusive. The settlement negotiations in this They were conducted at arm's length

with mediation and court involvement. As this Court knows, settlements are favored. The Rule 23(e)(3) factors in the settlement have been met. Again, there was no collusion; the complexity and expense and duration of this litigation have to be taken into consideration; the stage of the proceedings, amounts of discovery that have been completed; the probabilty of plaintiffs' success on the merits, and the range of possible recovery; and the opinion of class representatives and class counsel and class members has to be considered.

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MR. MILLER:

Your Honor, Murphy certainly joins in On one issue, the

Mr. Torres' observations of those points.

stage of the proceedings has been talked about a good deal this morning, and this is the absolute perfect time to do it, Your Honor, scheduling the way that we were able to do things, it is not too early, nor is it too late. Had something been done early, then maybe all the work that we've done to, literally, look under every rock and make sure that the program we have in place is the right program, may have been skipped. You know my senior partner, Mr. George Frilot. I know you've known him for a long time. He turns over every

stone when he gets involved in a case, and that has been done, Your Honor. We have made sure that the remediation program We have made sure that the benefits that we are But there's been a

paying is right, and that takes some time.

lot of consultation with experts from all over the country. We've looked at this, reviewed it, analyzed it and endorse this program, Your Honor. The next point we'd like to talk about is the notice program. And we really did strive for excellence in I

everything that we did and I think we accomplished that.

notice, Mr. Todd Hilsee, who is in court this morning, and if Your Honor has any questions, he is certainly available to

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testify about notice.

But he was our notice adviser and he is

one of the country's foremost notice advisers, and we put together a first-class notice program. Your Honor, one of the benefits we had in this case is we researched and analyzed, had a lot of information, both on the addresses -- Governor Blanko talked about approximately 6,000 residents -- I think total properties, when you add businesses and schools and churches into that is about 6,500. We went and we got information, address information at

the time of the hurricane on all of those properties. We have that notices were sent to all them, all that information separately. A lot of contact with the people

in the class on Murphy's side, on the PSC's side, FEMA had information. We resourced all those databases. And what we

did, Your Honor, is we sent a notice -- three notices, actually, to every single address we had on file for people who lived in that spill area. We sent it to all the Chalmette addresses, and we sent it all the new address information, people who moved to Ponchatoula and Covington and Bayside and Picayune and places like that. We researched all that. So all together, more than

14,000 notice packets received. from people is:

If anything, would have heard Because they would get They'd

Why did I get three?

one at the Chalmette address, which would be forwarded. get one at the new address and that kind of thing.

So we did

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cover the waterfront. The types of information they received, Your Honor, again, was, with the assistance of Mr. Hilsee to make sure that it was understandable, Rule 23 now talks about plain English notice: It's direct; it's not legalese; it's not

complex; it's not burdensome; make sure that people understood what the settlement was all about. And so we think we had a real effective communication package. So what we would include was a summary

notice, certainly a detailed notice, where all the rights were laid out. As Your Honor knows, people were given the

opportunity to rejoin the class, and about 70 percent of people who opted out did rejoin. They liked what they saw.

Information we provided on the allocation plan once Your Honor approved the allocation plan, as required by Rule 23, common benefit fee application filed by the PSC was provided to the class, and information on the remediation plan was also provided to the class, Your Honor. Not only did we send out 14,000 direct mail payouts -- direct mail submissions, but we also supplemented that, Your Honor, with newspaper publication. a joint effort. Again, this was

Mr. Hilsee assisted us in deciding what

newspapers, when and where, how to publish it, what the add needed to look like. And, again, this was not a USA Today,

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Wall Street Journal microscopic type, legalese type notice. was large. It was direct. It was written in plain English,

It

and it directed people if they wanted more information to go to Web sites. But at any rate, what we thought was the best thing

to do was to concentrate notice, get it out, you know, in November so people knew about their rights all at one time. And what we recognized, Your Honor, is that the vast majority of people in St. Bernard were either back in St. Bernard or were living in south Louisiana, south Mississippi so that's where we focused our notice campaign. And here are the papers that we targeted: The

Times Picayune; The Morning Advocate in Baton Rouge; the two local papers in St. Bernard, which have loyal readership, St. Bernard News and St. Bernard Voice, USA Today, you know, because you do have a small percentage of people who were disbursed nationally; the paper in Hammond, Lafayette, Biloxi, Gulfport, Hattiesburg, Jackson and Pascagoula where we think most of the people are residing now who are displaced. An additional supplementation of notice, and it's probably a good way to do it now, is on the Internet. Many, many, many, many of these people stayed together on the Murphy situation, FEMA, insurance, other issues by having chat rooms on the Internet. So we had a real effective, I think, The Court's Web site, as Your Honor

Internet notice campaign.

knows, many people have thanked Your Honor in objections and

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other correspondence by keeping up a Web site, very simple, easy to understand, easy to manipulate, where information about the case was constantly posted. A great assistance.

Murphy's Web site was very effective in communicating information about the event, about the settlement, about proof of claims, about deadlines, dates, maps, what have you. St. Bernard Parish was a great assistance, SBPG.net or .org is the Web site. And that Web site, Your

Honor, was sort of meeting place, if you will, for people of St. Bernard to obtain information about what was happening in the parish, those people who were displaced, and so that was a great resource. And in the local media here, Your Honor, covered the settlement, the case, many different times. And in the

recent weeks and months really ran some very good articles focusing on the deadlines, how to get a proof of claim form in, really class member-friendly, claimant-friendly, reminding people if they want to get benefits to submit a claim. So they've done a good work, too, on behalf of the community, Your Honor. THE COURT: I should say that I've met with counsel

on a number of occasions and discussed the notice, even the wording of the notice, and it satisfied the Court that the words were appropriate, that the notice was appropriate, and

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that the dissemination of the notice was appropriate. So I was intricately involved and intimately involved in this, and I found it appropriate during the time and I find it appropriate now. MR. TORRES: Your Honor, as to the class settlement

benefits, one of the main things, and certainly an overriding concern in this litigation, was class area remediation. In

this case, the soil, air, structures and ground water were all tested extensively. The plaintiffs, Murphy, and EPA, LDEQ conducted more than 18,000 tests on more than 5,500 separate properties. The LDEQ dismissed it's ground water contamination intervention. The remediation plan was approved by the EPA, LDEQ, ATSDR and LDHH.

governmental regulatory agencies:

The remediation in this case is to be supervised by the government regulators with the Court's oversight. All

remediated properties will be tested, EPA, LDEQ, before any re-occupancy. Important to note, Your Honor, is that there's

no cap on the cost of remediation. The properties in this area will be remediated. Murphy, it's insurers, have guaranteed that they will be cleaned in accordance with the regulators and this Court's supervision and they will bear the costs of remediating the properties so that our people can return to a safe and healthy community.

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MR. MILLER: like to make on that.

If you don't mind, just one comment I'd On the issue of remediation, Your Honor,

there are some residences that have been reoccupied since going through this plan, the testing, the cleaning, the sampling by EPA and LDEQ. The plan that we have in place has worked

successfully in 100 percent of the cases where people have re-occupied. I want Your Honor to understand and to stress that there will be no re-occupancy until it's tested, cleaned, tested again and approved by the EPA and LDEQ for re-occupancy. That's occurred. It's working well, and we plan on really

accelerating that process this spring, Your Honor. MR. TORRES: Yes, Your Honor. I will join in that by

noting that in instances where we had concerns of complaints, which Your Honor is familiar with, Murphy did, in fact, go out and remediate it and insure that the property was safe for the people to return. The compensation program is fair. four allocation zones. There are

The zones were based upon environmental

sampling, analysis, regulatory oversight conducted by the EPA and the LDEQ. The environmental sampling and analysis

conducted by CTEH on behalf of Murphy and Marco Kaltofen on behalf of the plaintiffs class, reviewed the property records obtained from the assessor's office, the property records obtained through several independent resources and databases

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and property records obtained during the Murphy voluntary settlement program. There was extensive evaluation done by the plaintiffs steering committee and Murphy in counting and evaluating properties in the class area, including the manual counting of the properties on several occasions. Quantitive analysis performed on behalf of the PSC was done by Bourgeois Bennett, LC, a local accounting firm. Quantitive analysis on real estate prices and sales were performed on behalf of Murphy by Dr. Wade Ragas, a local economist and expert in the St. Bernard real estate market from UNO, and by Dr. John Kilpatrick, an expert in real estate property damage claims who was retained on behalf of the plaintiffs class. Quantitive analysis were also compiled by Global Risk Solutions, the now court-appointed disbursing agent in this case. And as Governor Blanko pointed out, which is quite

an achievement, there will be no deduction on a compensatory part of the settlement from LRA. And as Your Honor well knows, we've been talking about that issue for some time. Because the LRA, there was an

issue in there about was it possibly duplication of benefits. There were many discussions with the LRA, with the Governor's Office, with the congressional offices, and we're very pleased that this all sort of came together at the

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same time, that we were to get a declaration at this time from the Governor that it would not be considered a duplication of benefits on the compensatory part. And as Governor Blanko pointed out, in the buyout area, it would merely give an opportunity for those selling to have an additional opportunity and to choose whichever one provides them with the most money. MR. MILLER: Your Honor, what we have next, just to

supplement Sidney's comments, is this is the zone map, if you will, Your Honor, which outlines the four zones in the class area. Zone 1, which is here in the pink, is the buyout zone. A couple things about the buyout zone that are First of all, the buyout zone, Your Honor, people

important.

are able to sell their properties to Murphy for $40 a square foot of living area. Now, that number, Your Honor, $40 a square foot of living area, is the absolute top end of the range of real estate sales occurring in St. Bernard overall. impacted properties. It's not oil

We have examined, Dr. Ragas has examined,

every single real estate sale in St. Bernard since the hurricane, as well as every single real estate sale in similarly impacted area of Orleans Parish, New Orleans East, Gentilly and Lakeview. What he's determined is that there has been a

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deduction from storm surge in excess of 50 percent.

Prior to

the hurricane, the average properties were selling for $80 a square foot in this area, and so $40 a square foot is on the upper end of the range. In actuality, Dr. Ragas' study of the

St. Bernard real estate market indicates an average sales price in the area of about $25 a square foot on the average. people are compensated fairly. Now, it's not for everyone, the buyout. don't want to sell to Murphy, you don't have to. If you So

But you still

are allowed to participate in the compensation part of the settlement. Murphy is offering $19.25 a square foot, plus

$3,375 per occupant at the time of the hurricane for people in this area. So you could get either both the buyout and the

compensation, or just the compensation if you so choose. Similar compensation is being paid to businesses in Zone 1. Zone 2, Your Honor, which is in the blue, offers compensation at $14.39 a square foot to residences, plus $3,375 per occupant. businesses. Again, similar compensation is being paid to

There was a lot of cleanup activity already

accomplished in Zone 1 and Zone 2, and certainly more to come this spring. We hope to wrap it up. Zone 3, Your Honor, is the next zone. Homeowners in that area are offered $10 a square foot, plus $2,500 per occupant. Again, we think that's very fair. And Zone 4,

Businesses are being treated similarly in Zone 3.

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finally, Your Honor, sort of the outer ring of the area that was certified, there is a 15,000 flat rate being paid to owners of property; tenants receive an additional $2,500 who were living or renting business space in Zone 4. Your Honor, this allocation diagram is a product of a lot of objective and scientific evidence. up with it willy nilly by any means. We didn't come

Many months was spent

with scientists, with real estate experts, with people who were on the ground after the hurricane and knew where the oil got and where the oil didn't get and where it was thick and where it wasn't thick. And this was the product of thousands of

hours of research and analysis. In Zone 1 what you have here, Your Honor, is you have the area that the EPA had determined was heavily contaminated. EPA observed every single house, you know, in

this area, Your Honor, and they charted it, red, orange, green, blue, and all but a fraction of red properties are in this area. Separately, Mr. Torres mentioned the 5,500 properties have been tested. The applicable health base

standard applied by the EPA and LDEQ is known as a RECAP MO-1 standard. this area. So what we're doing by virtue of the buyout, Your Honor, is: Number one, we're creating a buffer between The vast, vast majority of RECAP MO-1 exceeds are in

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the refinery, which is located right here and the community. There's no operational activity near the refinery right here, Your Honor. It's all here towards St. Bernard Highway. Then we can go ahead and So

that buffer is being created.

remediate the most impacted properties and create some nice green space, which we think will benefit the community as a whole. The next, the blue area, Your Honor, what that is is that is the outer perimeter of the area that Murphy itself tested and found there to be a high propensity of impact to oil, as well as the EPA and LDEQ's findings. lot of science, a lot of testing goes into that. willy nilly at all. The green area indicates the outer perimeter of where positive oil findings from the Murphy crew was found after all these 18,000 tests were run. And then the Zone 4 So, again, a Not drawn

represents the outer edges of the class -- of the area that was certified. On the issue of buyout, Your Honor, I talked about most of this, but here it sort of outlines what we think are the main high points of the buyout. And, Your Honor,

what's really incredible about the buyout so far, and certainly the assistance of the LRA, I think, will be helpful moving forward, and the cooperation of settlement will helpful in moving forward.

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But, Your Honor, this is a focused, closeup map of the buyout area: St. Bernard Highway, 20 Arpent Canal on And a green dot over a

this side, Judge Perez in the middle.

property indicates, Your Honor, interest by the homeowner in the buyout program. So what we're hoping to do, Your Honor, pursuant to a previous motion that's been submitted, is if Your Honor does promptly go ahead and approve the fairness, is to begin title abstracting work so that when the final settlement date is reached per the settlement agreement, which means the appeal period's elapsed, Murphy can start doing closings with people and start moving forward. So the interest has just been overwhelming and this is just based upon the people we've met with so far. There were meetings scheduled and we anticipate a very high level of participation in the buyout area, which is good. MR. TORRES: The settlement, Your Honor, has been As, Your Honor is aware, subsequent

embraced by the community.

to the filing of the first lawsuit, Murphy began to settle cases in what's called the Murphy settlement area. That settlement program was successful in the sense that approximately 70 percent of the properties in that area settled with Murphy, including some of the people who were included in the original lawsuit and were class representatives.

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The current program expands the area, as Your Honor defined it after the certification hearing, to include the area from Parish Road to the refinery, from the 40 Arpent Canal to St. Bernard Highway and one street on the east side of the refinery. This settlement now provides benefits for people who live in the area where the Murphy oil predominated. So it

opens up the settlement, essentially doubles the area to more than 3,000 properties. Currently, all the properties in the This part of the

area, approximately 6,500 properties.

settlement involves approximately 3,800 class member properties. There were 20 to 25 objections, which Judge Klees

will address, and I think most of those have been resolved. They had questions and concerns. Out of the entire area of approximately 6,500 properties, there are 251 opt-outs, and these are people who chose to hire their own attorney and to do it on their own. So

we have a huge percentage of the people who have participated in the process. Needless to say, with the devastation of the hurricane and all of the uncertainties that have existed in all areas as a result of Hurricane Katrina, the people in that area had a lot of questions, and not all of them had to do specifically with the Murphy oil spill. The plaintiffs

steering committee -- and we spent a lot of time trying to

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address as many of the questions as we could. There were many issues that arose during that time related to, when can I have my house gutted, torn down, I need permission to get it torn down. Those are all additional

things that were discussed and handled; and, as a result of that, people had the opportunity to have a clear understanding of what was happening. As of January 2nd, we show that there were 4,200 proof of claim forms that have been received by the claims office. And as we appear here in this courtroom today, the As in every instance in this So

claims office is functioning.

case, there's always something going on in multiple venues.

as we speak, people, I'm sure, are still filling out the proof of claim forms and they have until January 31st to complete the proof of claims process. Your Honor, at this time we would like to go ahead and present and introduce our evidence in support of the fairness, and I would ask Mr. Meunier to assist in this process. MR. MEUNIER: for the PSC. May it please the Court, Jerry Meunier

Your Honor, we have previously furnished you with

a bench book and that bench book includes an index of the record and the exhibits which we offer into evidence today in support of our request for approval of the class settlement. Tab 2 in your binder, Judge, would be the

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affidavits of various experts.

These are both plaintiff and

defendant experts who have all come together within their various fields of expertise to voice support for the settlement and, specifically, for that aspect of the settlement which falls within their expertise. Those experts are Todd Hilsee, Dr. John Kilpatrick, Dr. Marco Kaltofen, Dr. Paul Templet, John Perry, Mike Perrullo, Jim Wallwork, Dr. Glenn Millner, and Dr. Wade Ragas. Those affidavits are now offered into evidence

jointly by the parties as Joint Exhibit 1A through I, each letter corresponding to the experts I've mentioned. THE COURT: Is that 1 or 2? I'm sorry, 2, Your Honor. They would

MR. MEUNIER:

be 2A through I, yes, sir. THE COURT: I'll admit them into evidence. Tab 3 in the binder contains the There are five

MR. MEUNIER:

affidavits of class representatives.

representatives, Robin Clark, Fernand Marsolan, Phyllis Michon, Cherie Perez, and James Shoemaker. These are all designated as

class representatives in this Court's decision to certify a class. Each has submitted an affidavit expressing their familiarity with the settlement, with the litigation, with their responsibilities as class representatives. And those

affidavits in support of the settlement are offered as Joint

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Exhibit 3A through E. THE COURT: Let those be admitted. Tab 4 in the binder, Judge, would be

MR. MEUNIER:

the affidavits of class counsel. And we have done our best to furnish in the record today all of the affidavits from all class counsel who, because of scheduling, et cetera, were able to do so. And you

will see each class counsel identified in the index and by affidavit. They are Madro Bandaries, Daniel Becnel, Robert Becnel, William Bradley, Walter Dumas, Val Exnicious, Michael Hingle, Hugh Lambert, Gerald Meunier, Ronnie Penton, Carroll Rogers, Michael Stag and Sidney Torres. And then there is a Joint Exhibit, Your Honor, from Robert Becnel and Jerald Andry, which specifies information for the Court on the claims process, which is, as Mr. Torres said, an ongoing process. And that affidavit

furnishes additional information on the claims process. The other affidavits all express the views of class counsel, that they have examined the settlement, they are familiar with the litigation and their responsibilities as court-appointed class counsel, and they find and support the settlement as being fair and adequate and in the best interest of class members. And we would offer as Joint Exhibit 4A through N

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the affidavits referred to. THE COURT: Let those be admitted. What that then follows in the bench This

MR. MEUNIER:

book, Judge, at Tab 5 is a stipulation of facts. stipulation -THE COURT: MR. TORRES: received this morning. MR. MEUNIER: Your Honor. R. THE COURT: Let those be admitted. O, P, Q and R of 4.

Jerry, those were the additional ones

Oh, we have some received this morning, We would offer Exhibit 4O, P, Q, and

I apologize.

MR. MEUNIER:

Tab 5, Judge, is the stipulation of

facts that has been confected by counsel for the parties. What we've attempted to do with this stipulation is direct it to facts pertinent to be put in the record by agreement -- put into evidence by agreement that are relevant to and supportive of the request to approve the settlement as fair. I would mention that some of the facts also pertain and are relevant to the pending motion of the PSC for the assessment and award of class counsel fees and expenses. THE COURT: Let that be admitted. That's Tab 5.

MR. MEUNIER:

Judge, Tab 6 are findings of fact, We don't

conclusions of law, and Tab 7, proposed judgments.

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purport to give exhibit numbers to those.

We would simply

offer them into the record for the Court to consider in making its required findings of facts and conclusions of law in support of the approval of the settlement. And the proposed judgments, there are three of those, Your Honor. They're self-explanatory. One is a The other

judgment just approving the class-wide settlement.

is a proposed judgment that would do that, as well as provide for the payment of common benefit fees and expenses. And the

third judgment would pertain to individual objections. THE COURT: That's 6, 7, 8 and 9. We'll make that a part of the record. 8 is a docket sheet of plaintiff That

counsel, and 9 is a docket sheet of all case activity. will be a part of the record. MR. MEUNIER: Thank you, Your Honor.

The final tabs

are 8 and 9, those are the docket sheet, and listing all plaintiff counsel of record would be Tab 8, and the docket sheet listing all case activity would be Tab 9. Your Honor, we felt that those documents were important to put in the record to show the scope of the activity and the involvement of plaintiffs counsel. And so we

would like to attach -- or rather assign joint exhibit numbers to both of those docket sheets; and consistent with the index in the bench book, those will be Joint Exhibit 8, the docket sheet listing plaintiffs counsel of record; and Joint Exhibit

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9, the docket sheet listing all case activity. THE COURT: That will be a part of the record. I

won't introduce it into evidence, but it will be a part of the record. MR. MEUNIER: Your Honor, going back to, if the Court I did mention the

will allow me, to class counsel affidavits.

affidavits of Richard Arsenault and Joseph Bruno, which are included. We also would ask the Court to allow us to supplement the record by, say, of close business tomorrow with some additional class counsel affidavits that are in the process of being -THE COURT: That's fine. I'll do that.

MR. MEUNIER:

And, Judge, we'll be putting stickers

on these various originals and giving them to your staff. Thank you, Judge. THE COURT: MR. MILLER: THE COURT: Anything more from the participants? That's it, Judge. We'll take a ten-minute break at this

time and then come back and then I'll hear from Judge Klees and then I'll hear from any objectors. THE DEPUTY CLERK: All rise.

(WHEREUPON, the Court took a recess.) THE DEPUTY CLERK: THE COURT: All rise. Now I'll hear from

Be seated, please.

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Judge Klees. MR. MEUNIER: Your Honor, excuse me. Jerry Meunier.

Before Judge Klees addresses the Court, I neglected to mention that one of the matters that we'd like to place in the record of this hearing is the record of the class certification hearing before Your Honor January 12th and 13th of 2006, and we respectfully incorporate and adopt the record of the transcript of that hearing. THE COURT: That will be made a part of the record. As I mentioned, I appointed

Let me hear from Judge Klees.

Judge Klees as a special master in this matter to assist the court in discussing the objections, as well as other areas. I appreciate all of the work that he's been doing in this matter. I know you worked very hard on it and I'll hear from Judge Klees

you have the Court's appreciation. at this time. JUDGE KLEES:

Your Honor, first, I would like to

thank you very much for allowing me to participate in this process. As a resident of St. Bernard Parish, I have been

affected; and it has always bothered me that I had very little input into the process and you included me and I truly appreciate what you did. We were able to meet with 21 persons whom we had objections from. We met on January 2nd and 3rd of this year.

I was able to have Mr. Sal Gutierrez, Mickey Landry and

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Jay Andry for the PSC present, as well as Mr. Sidney Torres, Mr. A.J. Krouse and Daniel Dysart from Murphy Oil Corporation. So I found it was a very good thing for the people to have both sides of the fence there, as well as the Murphy Oil representative, and we were able to work out solutions for a lot of people. We talked to 21 people. The first was Arthur

and Sondra Arseneaux, and their objection has been withdrawn. We talked to Terrence Meyer, and his objection was withdrawn. Bernie and Linda Deschamp, their objection has been withdrawn. Mr. Gregory Faia, who is present in court today, presented an objection because he showed me that he was the registered land owner of property in the area. Unfortunately,

the previous land owner had made a settlement with Murphy and there is some confusion there. My recommendation to you is that he be allowed to remain as a member of the class and present his claim. But

I'm sure you're going to hear from the other representatives and they'll make their spiel to you in a moment. Mr. Wayne Duchmann was also present and his objection could not be resolved. He was invited to appear here Mr. James

today and make his presentation to the Court.

Philpot also was present and his objection has been withdrawn. Peter and Betsy Harrison, their objection has been withdrawn. Kevin Karcher, objection has been withdrawn.

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Blaise and Sandra Sauro, represented by Mr. Van Robichaux and Bruce Kingsdorf, their objection was withdrawn with reservations. And John and Joyce Thonn were also represented

by Mr. Robichaux and Bruce Kingsdorf and their objection was withdrawn with reservations. Daniel Bourgeois with his objection was withdrawn. Raymond and Darlene Albert, represented by Ronald and

Lance Licciardi, their objection was withdrawn.

Rosemary Caruso with their daughter, Cheryl, their objection was withdrawn. Jules Dixon and Jacob Borrouso represented by Mr. Mumprey and Clayton Conner, their objection was withdrawn because they wanted to opt out and join the other class of people, and my recommendation would be that they be allowed to opt out at this time. Glenn and Cindy Gabb, represented by Mr. Lance Licciardi, their objection was withdrawn. objection was withdrawn. Cathy Bowers,

Michael Ginart, Alice Ginart, and Daniel and

Julie Ginart, their objection was withdrawn.

Nathalie -- I don't have their last name on my report -THE COURT: Does anyone have that? -- Frederick. They were determined not

JUDGE KLEES:

to be a member of the class. was withdrawn.

Cheryl Migliore, the objection

Ryan Casey, who had previously sold out to And

Murphy, was determined not to be a member of the class.

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Sherri and William Follette, their objection was withdrawn. I just want to say that it was a pleasure to deal with all of the persons who were there. their story to tell. They all had

I think it was very important that they

were able to tell their stories and vent and let the persons who they thought were responsible to know how they felt. But, as you can see, at the end of the day, all objections were withdrawn except for the two people that I mentioned. That's my report. I have it here. I'll be happy

to submit it to the Court to include in the record. THE COURT: Submit it in writing. And with regard to

the people whose objection has been withdrawn, I will allow that and approve their withdrawal in accordance with the federal rules. With regard to the opt-outs, they need not have

my approval, they can officially opt out, and they have done so and will not be a part of the settlement. With regard to the two individuals who have not -- who are still objecting, I will hear from them at this time. Is it Mr. Faia, or how does he pronounce his name? JUDGE KLEES: THE COURT: Faia, F-A-I-A.

Mr. Faia, would you come forward, sir,

and explain to the Court your position? MR. FAIA: Good morning, Judge. Please state your name for the

THE DEPUTY CLERK: record.

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MR. FAIA:

My name is Gregory, initial G, Faia,

And, Judge, I apologize.

As of yesterday

afternoon, I was not of the belief that I had to be here today because we had a meeting with the special master and I believed that we had an agreement. And at the time when I left, I was unaware that I was going to have appear today. THE COURT: So if --

Well, Mr. Faia, as I understand from the

special master's report, you owned a piece of property and it was placed in someone else's name and you had a counter-letter, I assume or not? MR. FAIA: counter-letter. Well, no, sir. It wasn't a

What actually happened was there was an

individual -- and this is all spelled out in the complaint that I submitted. There was an individual who worked for me who --

a husband and wife, and they had some difficult financial problems because of medical issues. And their home on Volpe Drive was in foreclosure for being in arrears for two years. She approached me about it This was in 2003.

was going to sale in approximately two days.

I put the money up in order to get the house out of foreclosure for her so that she could continue to live there. At that time we did an act of sale and assumption to one of my companies, CGF Holding.

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THE COURT: MR. FAIA: THE COURT: MR. FAIA:

From her or to -From her to my company, CGF Holding. All right. At that time I paid approximately $15,000 And it was with

to the foreclosing lender to get her current.

the idea that she was going to buy the property back in -within six months when her husband received his disability settlement because he was a disabled Vietnam vet. That transfer, which was done before a notary and was all done as it's indicated on its face, was to be recorded by her. Obviously, she was an internal secretary. She also lived in

She handled all the recording in my office. St. Bernard.

So when we had recordings in St. Bernard, she was

the one who took it down there and got it recorded. It is my understanding that that initial sale and assumption was not recorded until I recorded it in January of '06. THE COURT: MR. FAIA: I see. Okay. But the sale itself, the transfer Murphy, at some point prior

of ownership, took place in 2003.

to the litigation or once the litigation began, she ran to them and got them to settle with her unbeknownst to me, obviously, and they paid her some money. I'm not aware of how much or what was done in that regard. Subsequent to that, I went to the claims office

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to file my claim; and when I did, they accepted the claim. They said there was -- you know, at that point we were informed that other people -- that she had actually made a claim and was paid. Pardon me. She had not made a claim. She was settled

with prior to the lawsuit itself is my understanding of it. At that point they said, we understand that that took place and that's an awful shame; but, of course, we're accepting your claim, there's no problem, everything's fine. left. Some time passed. I'm not exactly sure of the exact I

dates right now. And then I got a call saying, well, can you give us an affidavit stating of what the facts were and how it went down. I said, absolutely. So I did that affidavit and it's And it wasn't until -- I

attached to my objection as well. didn't hear back from them.

It wasn't until I received the

notice of denial, which came on the exact date of whatever the date to opt out of the class was. Then -- forgive me if I go off on the dates, but I filed the objection because, in my review of it and in my looking at the definition of what the -- in other words, under the legal notice of the class settlement, it clarifies that all persons and/or entities who have sustained injuries, loss or damages as a result of the 2000 spill -- and I'll jump ahead -and who which on October 29th were residents or owned properties in the following area.

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Well, I always felt I was in that class.

I

didn't know at any point in time that there was an issue that's different. I understand now that they've made some different But there's no doubt that I

argument regarding public record.

was the owner of that property and I'm the one who sustained the injury. And for that reason, and in addition, in the way that they've handled my claim, I felt that on numerous occasions I was told one thing and then something else took place. And I'm sure it's a theme, not only for me, but for

other people who have been involved in this. So that was the reason for my objection, and I think it's set forth in my -THE COURT: MR. KROUSE: Right, it is. Good morning. Anything from Murphy? Yes, Your Honor. A.J.

Krouse on behalf of Murphy Oil USA, Inc.

And with all due

respect to the special master and Mr. Faia, we opposed the special master's recommendation on this issue. I don't believe the facts are in dispute here. In April of 2003 this transaction took place and the property at issue was 2428 Volpe Drive. Murphy paid to a Georgia

Valenzo on December 5, 2005 and settled the claim on this property. As Mr. Faia admits, the property transaction was not

recorded until after that on January 13th, 2006. And it's black letter law in Louisiana that we

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have a right to rely upon the public records; and the public records indicated that on that date, the date of the settlement, Ms. Valenzo was, according to the public records, the owner of that property. So on that basis, we would

respectfully disagree with the special master's ruling. If the Court would like to have this briefed within seven to ten days, we can do that. By all the means, we

do not want to hold up anything with the fairness hearing, but we believe that we need to state our opposition here. THE COURT: I think it's fair. Yeah, I understand the issue. Mr. Faia,

There's no question in my mind in looking The issue is

at the material that the wrong person was paid.

who's responsible for the wrong person being paid. There there's some interplay with the public records doctrine in Louisiana, which is somewhat peculiar to Louisiana, but it's a part of the civil law tradition that provides that third-parties to a transaction can rely on public records. Now, there's certain requirements before that public record doctrine is in play. I understand you're a well

recognized real estate attorney, so you probably know this better than anybody in this courtroom. But I think it would be

fair to give both of you an opportunity just to focus me on whether or not the public records doctrine has any play in this case.

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I'd be interested in your views on it.

I will

mark, for the record, an objection and I won't rule on the objection. I will give you an opportunity to explore and focus

me on that issue, give me your views on whether or not it applies, and if so whether or not they have proved access to it. And you do it within seven days and I'll give the defendant three days to respond so that I'll have the whole thing before me within ten days. MR. KROUSE: THE COURT: appreciate it. MR. FAIA: THE COURT: Thank you, Judge. Okay. We have another objector. Anybody Thank you, Your Honor. Thank you very much for being here. I

other than Mr. Duchmann? Mr. Duchmann? Okay.

Any other objectors other than

Mr. Duchmann, come forward, please.

Mr. Duchmann, I ask that you tell me specifically your objection, introduce anything into the record, but I'm not going to be watching any movies in open court. I'll do so in chambers, but I'm not going to be

watching any movies. MR. DUCHMANN: THE COURT: I appreciate that, Your Honor. I'll

I'll Make it a part of the record.

accept it as part of the record. Also, first, tell us your name and your standing

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in being here.

What do you represent? I'm a property owner on Jacob Drive.

MR. DUCHMANN: THE COURT:

Your name is what, sir? Wayne Duchmann. And you say you're a property

MR. DUCHMANN: THE COURT: owner.

Okay.

Does the record show that you're a property owner? MR. DUCHMANN: My mom just passed away two months ago But prior to that, we opened

and we didn't open up succession.

up succession from my dad and get the opportunity that my mom could opt out and take this money for health care that was needed at that time. Since then my mom's passed on since the last time I appeared before you, Your Honor. THE COURT: When your dad's succession was opened,

were you put in possession of his share of the property? MR. DUCHMANN: I waived my share to my mom for the

simple right she needed this money to continue her health care. THE COURT: And your mother died recently? Sir, she died two months ago.

MR. DUCHMANN: THE COURT:

What's the address? It's 2224 Jacob Drive. It is inside

MR. DUCHMANN: the buyout area. THE COURT: of your objection? MR. DUCHMANN:

And you're objecting and what's the basis

First off, I will call it to the

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Court's attention, and I would request that Mr. Kerry Miller stand up and come forward. THE COURT: Why is that, sir? Well, as you well know, I fired Sidney

MR. DUCHMANN:

Torres, but it was under false pretense-s. THE COURT: Mr. Duchmann -MR. DUCHMANN: objection, Your Honor. THE COURT: Fine. But you're here, and I respect But you'll Well, it lays a foundation on my Let me just say something to you,

that, and you have a right to speak as an objector.

notice that this is a court of law and people handle themselves with dignity in a court of law and they do not cast aspersions or say anything of ill will against the other person. MR. DUCHMANN: THE COURT: No, sir. I --

This is from the governor of the state of I expect that.

Louisiana to private citizens. MR. DUCHMANN: objection itself. THE COURT:

Your Honor, this has relevance on

All right.

So you're not represented?

You're representing yourself and you're objecting -MR. DUCHMANN: THE COURT: Unfortunately, I am, yes, sir.

And the basis of your objection is you

feel you're not being paid enough money? MR. DUCHMANN: The fairness of this situation is that

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the people across the street received three times more money being in the fairness of this settlement and these people walk and they have a normal life and they also live in a house right now. My mama didn't have that opportunity. She's

paid only one-third of what they would get -- what they have received. And is that fair? THE COURT: That's your objection? No, my objection goes on to -- well, I

MR. DUCHMANN:

filed a memorandum in support of my objection. THE COURT: record. MR. DUCHMANN: And also that, and this video will And I will make that a part of the

show, 16 years ago that Murphy Oil failed to comply with state, federal and local regulations. As of three weeks ago, they also failed to let the fire foreman inside the refinery. going into the refinery. They stopped him from And that just

They locked the gate.

shows you that they have no intention to ever, ever comply with any laws and regulations set forth by this court or the state. And if Kerry Miller would stand up and come forward, I'd like to address the Court because I did file a notice in judge chambers, and it wasn't in reference to the attorneys we fired, it was in reference to Mr. Kerry Miller and his conduct, disobeying a court order.

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THE COURT: Mr. Duchmann.

Okay.

I'm not going to do that, I do

I'll take your material on the record.

mark, for the record, that you object to the -MR. DUCHMANN: THE COURT: I strongly object, Your Honor.

And as you say, you strongly object.

I'll take that into consideration and I'll rule on that in due course. Anything other than the video and the documents that you -MR. DUCHMANN: Well, I did have some witnesses, but

since President Junior Rodriguez's attorney for St. Bernard Council called me and told me that Mr. Rodriguez would be in a meeting with the Army Corps of Engineers. And I told him that He was

it was most important that he would come here today. served. THE COURT:

Well, for the record, you served him, and

you served him in the 11th hour when he's going into a meeting. I officially quashed the subpoena, so he need not be here. MR. DUCHMANN: Well, then what you're saying is that

I don't have no witnesses to call now? THE COURT: You have no witnesses to call. So my next course is the Fifth Circuit

MR. DUCHMANN: Court of Appeals. THE COURT:

Well, we'll see -Your Honor, I'd rather not have to do

MR. DUCHMANN:

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this.

I'd rather not be here today.

I'm only here today

because of 3,009 Americans lost their life defending the Constitution, which I'm here today to uphold this Constitution. I think it is my duty as an American to be here for those who cannot be here. THE COURT: Okay. I appreciate your being here. I will file an appeal and take

MR. DUCHMANN: it from there. THE COURT:

Okay.

All right.

Thank you very much.

MR. DUCHMANN: to see the video and -THE COURT:

Your Honor, you did say you would like

No, I've put the video into evidence.

I'll accept the video as evidence and I'll make it a part of your objection; and also the documents that you have filed, I'll make that a part of the record. MR. DUCHMANN: Can you also make part of the record

that Mr. Kerry Miller did meet with me when you had a court order to stop him from meeting with residents in the buyout area? THE COURT: What are you -It was under a court order that he

MR. DUCHMANN: disobeyed. THE COURT:

Okay.

All right.

Thank you very much.

MR. DUCHMANN: THE COURT:

So that doesn't mean nothing to you?

Anything else from anybody?

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MR. MILLER:

Yes, Your Honor, briefly.

Murphy would

like to respond to the objection of Mr. Duchmann. Your Honor, it is black letter law that in order to make an objection you must be a class member. THE COURT: You may have a seat Mr. Duchmann. Sit

right at the -- make sure we get that document. to give us the video? MR. DUCHMANN: record, Your Honor. THE COURT:

Are you going

Yeah, I have a copy entered into the

I'll give you an opportunity to

supplement the record. MR. MILLER: Your Honor, Kerry Miller on behalf of It

Murphy in response to what we just heard from Mr. Duchmann. is black letter law, Your Honor, in order to make a proper

objection to a class settlement that the objector need to be a class member as well. That's the law of the Federal Rules of Civil Procedure in the Fifth Circuit and the U.S. Supreme Court, I think in the Epstein case. That was what was contained in the

class action settlement agreement in the section on objections. It was very specific that in order to make an objection, you had to qualify as a class member. That was also what was

contained in the notice that Your Honor approved that went out. I quote, Your Honor, the legal notice that Mr. Duchmann apparently received read as follows, and this was

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a legal notice of class-wide settlement: Number one, it requires objectors to be class members. quote: And, number two, it requires that in the objection,

Proof of residency and/or property ownership in the

class area as of August 29th, 2005, be provided, closed quotes. Your Honor, you will note that Mr. Duchman's objection contained no such proof of ownership or residency in the class area as of August 29th, 2005. MR. DUCHMANN: MR. MILLER: THE COURT: speaking now. Objection, Your Honor.

In fact, Your Honor -I'll give you just a moment. He's

Nobody objected when you were speaking. Thank you, Your Honor. In fact, Your

MR. MILLER:

Honor, you will note that Mr. Duchman's objection on the certificate lists his address as 3209, Number 2, Cleary Avenue, Metairie, Louisiana 70002, which is obviously outside of St. Bernard Parish. It's in Jefferson Parish.

Additionally, Your Honor, I would like to file into the record. THE COURT: speak. I'm talking to the Marshal now. Nobody

Marshal, I don't want anybody to be speaking and

interrupting this person. MR. MILLER: Additionally, Your Honor, we would like

to file into the record an affidavit we think adequately demonstrates that Mr. Duchmann had no ownership interest at all

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in the property that he referenced located on Jacob Drive. What we've conducted, Your Honor, is a search of the records over in St. Bernard Parish which indicates that property was owned on Jacob Drive by Mr. Duchman's parents; that Mr. Duchman's father's succession was opened; that Mr. Duchmann renounced his rights to that succession; and that no succession has been opened on behalf of his mother's estate, Your Honor. Given that, it is the law of Louisiana that Mr. Duchmann does not have standing to present a claim on behalf of his mother or her estate, Your Honor. THE COURT: MR. MILLER: Okay. Thank you.

That is detailed in our memo; and we

would like to file into the court record, Your Honor, we'll mark as the next exhibit an affidavit containing evidence that Mr. Duchmann has no ownership interest in the property. THE COURT: I'll make it a part of the record.

Mr. Duchmann, you can respond to that. MR. MEUNIER: For the record, the PSC joins in the

objection to lack of standing by this gentleman. MR. MILLER: Your Honor, this is a joint exhibit and

we'll mark it as Exhibit Number 10 to today's hearing. THE COURT: That's fine. Mr. Duchmann, you have an

opportunity to respond. MR. DUCHMANN: Your Honor, as you well know, I

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appeared before the special master, which is present today in this court. Also my brother was there who has power of He also at the time, you can

attorney to speak for my mother.

ask the special master, said that Wayne speaks for my family. That is the person that has the executive of my mama's estate at that time. The special master is right there.

And if you think that I'm here, for some reason, trying to mislead the court, and I'm not. I'm here to protect the

individual rights of all Americans. THE COURT: Mr. Duchmann. MR. DUCHMANN: So the statement that he's made should Okay. Fine. Thank you very much,

be stricken from the record. THE COURT: other objectors? objectors -MR. MEUNIER: Your Honor, just to complete the record Okay. Thank you, sir. All right. Any

Any other objectors?

Seeing no other

with respect to objections, we were in receipt of certain letters from potential objectors and I would now, respectfully, move for the dismissal of these objections for the failure to appear today. Letters of objection were received from Howell Robertson, III, Daniel Bourgeois and Carrie Bourgeois, Daniel Paul Bourgeois, Melissa and Edwin Macost, Donna LaBouf, Kathleen O'Brien Bauers and Kim LaPara. And for the failure to

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appear, we respectfully move for the dismissal of those objections. THE COURT: I did set certain rules regarding

objectors and also I received a report from the special master regarding objectors. I made those a part of the record and I

will rule on them in due course. This concludes the settlement hearing. Let me

say that it's apparent to the Court after listening to all of the information and reviewing all of the records as I have done, that the settlement negotiations in this case were conducted on an arm's length basis. There's no evidence of fraud or collusion on the parties. matter. Extensive discovery was, obviously, taken in this Counsel worked literally around the clock to achieve Both

settlement within one year of the lawsuit being filed.

sides worked diligently and carefully assessed the risks and potential rewards of trial versus settlement. Notice was adequately given. I participated in

the design of the notice and made sure that it was given throughout the area, the larger area. class members has been overwhelming. The response among the With the exception of two

objections, it's been overwhelmingly in favor of the settlement. It's my inclination to, obviously, conclude that the settlement is fair, reasonable and adequate. However, I do

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believe that it would be appropriate to give formal reasons for the approval of the settlement. I want to discuss it in detail

and give the Court, and counsel, the benefit of my thinking on this matter in rendering my opinion. I hope to have my opinion out very shortly. I've already taken the common benefit fund issue under submission. I will be ruling on that expeditiously also. This

concludes the settlement fairness hearing and I thank the parties, as well as counsel, for their participation. The court will stand in recess. THE DEPUTY CLERK: All rise.

(WHEREUPON, the Court was adjourned.) CERTIFICATE I, Jodi Simcox, RMR, Official Court Reporter for the United States District Court, Eastern District of Louisiana, do hereby certify that the foregoing is a true and correct transcript, to the best of my ability and understanding, from the record of the proceedings in the above-entitled and numbered matter.

/s/Jodi Simcox, RMR Jodi Simcox, RMR Official Court Reporter

JODI SIMCOX, RMR - OFFICIAL COURT REPORTER UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA

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