Pennzoil Wins $10.53 Billion in Texaco Suit

A state district court jury ruled today that Texaco Inc. deliberately interfered in a binding merger agreement between Pennzoil Co. and Getty Oil Co. and awarded Pennzoil $10.53 billion in damages.

Jurors heard more than four months of testimony and deliberated about nine hours over three days before reaching their unanimous verdict.

They decided that Texaco, which acquired Getty last year, must pay $7.53 billion in actual damages and $3 billion in punitive damages.

The jury had been assigned the task of deciding whether Texaco used unethical tactics to break up a Pennzoil-Getty merger or merely acted as a “white knight” to save Getty from an unwelcome suitor.

“The outcome of this trial is going to set the standards for the morality of business in America for years and years to come,” Pennzoil attorney Joe Jamail said before the verdict was reached.

Pennzoil had sought $7.5 billion in actual damages and $7.5 billion in punitive damages.

The award appeared to be the largest in history. The previous record award was in 1980, when a jury awarded MCI $600 million, which was tripled under antitrust law, for a total of $1.8 billion in a suit against AT&T.; An appeals court threw out the judgment and ordered a new trial.

Visiting Judge Solomon Casseb set a Dec. 5 hearing to decide whether to enter a final judgment approving the settlement.

Texaco Vice Chairman James Kinnear said the judgment, if approved, will be appealed.

The trial centered on Texaco’s $10.1-billion purchase of Getty, the second-largest merger in U.S. corporate history. Pennzoil contended that Texaco forced Getty to break an earlier merger agreement by offering a higher price for its stock.