Continental Carbon files request with federal appeals court.

The Continental Carbon Co. filed a petition Wednesday asking the 11th Circuit U.S. Court of Appeals to rehear its decision in March that upheld a $17.5 million punitive damage award against the Phenix City carbon black plant and its parent company, China Synthetic Rubber Corp.

The company was hit in August 2004 with a U.S. District Court jury verdict in Opelika awarding more than $3 million in compensatory damages and attorneys’ fees, plus $17.5 million in punitive damages. The eight-person jury found that airborne pollutants from the carbon black plant near the Chattahoochee River had damaged a south Columbus home, a business, the Columbus Civic Center and other public facilities at South Commons.

Attorney Ron Jones, with the Beasley-Allen law firm in Montgomery, said the rehearing request was another “disappointment” in a case that already has lasted six years without those wronged receiving their due.

“It’s disappointing more so for our clients, the city of Columbus, Action Marine and Owen Ditchfield,” Jones said. “They’ve been at this since 2001. Now, it’s 2007, and they’ve still received no compensation. It’s really just sad.

“That they’re asking for this doesn’t surprise me. They’ve had a U.S. District Court judge tell them the punitives are OK… and three justices from the 11th Circuit have told them it’s the right thing,” he said. “Yet they just continue to string this out.”

Continental Carbon’s appeal of the verdicts was heard by a three-judge panel of the 11th Circuit in Atlanta. The panel’s opinion on March 22 affirmed all aspects of the District Court case, including the punitive damages award. It found the company had knowingly and repeatedly polluted the air and caused the damages found by the jury, and labeled the company’s actions and inactions “exceedingly reprehensible.”

The petition for rehearing seeks to have the case heard again, this time by the full bench of the appellate court.

The company’s request argues that the three-judge panel accepted the plaintiffs’ claims even though scientific tests by independent laboratories disputed the degree of damage. It also argues the disproportionately high amount of punitive damages, compared to the actual damages found, is excessive when compared to other cases involving more extreme conduct with more serious damages. The $17.5 million award is the largest the 11th Circuit has ever upheld, the petition states.

The company’s attorneys argue that the panel also erred by failing to rule that the punitive damage award should not have been allowed to exceed Alabama’s $250,000 cap on such damages. That decision is contrary to rulings the Circuit Court has made in cases with more egregious facts than those present in the carbon black case, which includes failure to “do more to prevent the escape of carbon black dust during the course of a socially valuable manufacturing process,” the petition states.

“Comparing Continentals conduct to that of defendants in other cases confirms that the result here is aberrational,” it states. ”… Courts have repeatedly reduced punitive awards to amounts far below $17.5 million even though the misconduct was much more egregious than here.”

The three-judge panel also erred by allowing the more than $1.2 million in attorneys’ fees to be included in the formula it used to allow the large punitive damage award to stand, the company’s attorneys argue.

Continental also cites as grounds for a rehearing the panel’s decision to establish a lower standard of evidence for scientific evidence than the previous court rulings established. That should require reversal, the attorneys wrote.

If a rehearing before the full panel of 11th Circuit judges is not granted, the attorneys ask for a new hearing before another three-judge panel.

The petition was filed by a group of attorneys representing Continental Carbon and China Synthetic Rubber Corp., including Clifford C. Brady of Brady, Radcliff & Brown of Mobile, Ala.; Evan M. Tager and Nickolai G. Levin of Mayer, Brown, Rowe & Maw of Washington; H. Thomas Wells Jr. and Peter S. Fruin of Maynard, Cooper & Gale of Birmingham; and J. Brett Busby of Mayer, Brown, Rowe & Maw of Houston.

Blake Lewis of Houston, a spokesperson for Continental Carbon, said the company still reserves the right, if necessary, to consider an appeal to the U.S. Supreme Court on the important issues raised in the rehearing request.

The Phenix City plant manufactures carbon black, a product used in making tires, rubber, plastics, inks and other products. The lawsuit, pursued as a class-action suit that was denied that status by the U.S. District Court, presented evidence that the carbon black that escaped from the plant landed on the Civic Center, boats of businessman John Tharpe’s Action Marine Inc., and homes and automobiles of Owen Ditchfield of Oakland Park.

The jury verdict awarded compensatory damages of $570,000 to the city of Columbus, $1.2 million to Action Marine, $100,000 to John Tharpe, and $45,000 to Owen Ditchfield.

None of those damage awards have been paid. Continental Carbon must pay interest on the unpaid awards from the date of the jury verdict.

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