TRC Operating Co. v. Chevron USA, Inc.
102 Cal.App.5th 1040
Cal. Ct. App.2024Background
- TRC and Chevron operate adjacent well fields in the Midway‑Sunset oil field and both use cyclic steaming; a persistent "surface expression" near Chevron Well 20 began in 1999 and worsened through 2011.
- In summer 2011 eruptions and a fatal sinkhole near Well 20 prompted DOGGR to issue successive emergency orders banning steaming within expanding radii around the surface expression; steaming largely ceased (by TRC) from 2011 to 2015.
- TRC sued Chevron for negligence, nuisance, trespass, and strict liability, alleging Chevron’s improper abandonment/maintenance of wells (e.g., Well 20, H235, 202) caused the surface expression and the unsafe conditions that forced TRC to stop steaming and suffer economic loss. Chevron counterclaimed blaming TRC and argued DOGGR’s orders were a superseding cause.
- A 2021 jury found for TRC and awarded about $73 million (plus prejudgment interest totaling judgment ≈ $120M). The trial court denied Chevron’s JNOV but granted Chevron a new trial based on juror misconduct (Juror No. 10’s nondisclosure of a decades‑old out‑of‑state sexoffense matter and past civil suit).
- The Court of Appeal ruled (1) Juror No. 10 was not statutorily ineligible under Code Civ. Proc. §203 because that provision references only registration required under Penal Code §290 (California convictions), (2) Juror No. 10’s nondisclosures were misconduct but did not show actual bias or probable prejudice to Chevron, and (3) the DOGGR shutdown orders were not a superseding cause as a matter of law and substantial evidence supported the jury’s verdict and damages award.
Issues
| Issue | TRC (Plaintiff) Argument | Chevron (Defendant) Argument | Held |
|---|---|---|---|
| Whether juror nondisclosure required a new trial | Juror’s omissions were not prejudicial and he was not ineligible under §203 | Juror was statutorily ineligible (required to register) and his concealment plus conduct prejudiced Chevron | Reversed grant of new trial: juror not ineligible under §203; nondisclosure misconduct but no substantial likelihood of bias or prejudice (de novo review) |
| Scope/meaning of Code Civ. Proc. §203 disqualification for sex‑offender registrants | §203’s plain text disqualifies only those "required to register … pursuant to Section 290" (California §290), not all registrants under the broader Act | §203 should be read to include registrants under the Sex Offender Registration Act (Pen. Code §§290–290.024), including out‑of‑state registrants under §290.005 | Held for TRC: §203 refers only to registration under Penal Code §290 (California registrations); Legislature’s specific phrasing and administrative practicality support narrow reading |
| Whether DOGGR orders were superseding cause relieving Chevron of liability | TRC: harms resulted from unsafe conditions caused by Chevron; DOGGR orders did not supersede because TRC would not have steamed regardless | Chevron: DOGGR’s considered regulator orders were independent, discretionary actions that superseded Chevron’s conduct as a matter of law | Held for TRC: DOGGR orders were not an unforeseeable/superseding cause as a matter of law; jury reasonably found Chevron’s negligence a substantial factor and TRC stopped steaming for safety, not solely because of DOGGR orders |
| Sufficiency and apportionment of damages; jury findings on prejudgment interest | TRC: substantial evidence (expert proof of lost profits) supported full damages award; apportionment burden was Chevron’s to prove | Chevron: damages excessive/unsegregated; jury should have apportioned or been instructed to segregate items solely caused by DOGGR; prejudgment interest required additional jury findings | Held for TRC: substantial evidence supports verdict and damages; Chevron bore burden to segregate; Chevron forfeited objections to verdict form on prejudgment interest |
Key Cases Cited
- Bandana Trading Co. v. Quality Infusion Care, Inc., 164 Cal.App.4th 1440 (Cal. Ct. App.) (presumption of prejudice from juror misconduct; prejudice test)
- Soule v. General Motors Corp., 8 Cal.4th 548 (Cal. 1994) (standard for reversal based on instructional error and harmlessness)
- Hasson v. Ford Motor Co., 32 Cal.3d 388 (Cal. 1982) (presumption of prejudice from juror misconduct applies in civil cases)
- Haraguchi v. Superior Court, 43 Cal.4th 706 (Cal. 2008) (abuse of discretion review varies by underlying legal/factual determinations)
- In re Boyette, 56 Cal.4th 866 (Cal. 2013) (test for whether juror misconduct presumptively prejudicial and when presumption is rebutted)
- In re Hitchings, 6 Cal.4th 97 (Cal. 1993) (juror concealment on voir dire undermines jury selection and can justify a new trial)
- Manta Management Corp. v. City of San Bernardino, 43 Cal.4th 400 (Cal. 2008) (governmental application to a court can break causal chain; limitation where judicial independence intervenes)
- Brewer v. Teano, 40 Cal.App.4th 1024 (Cal. Ct. App.) (foreseeability / superseding cause analysis for intervening prosecution)
- Mercer v. Perez, 68 Cal.2d 104 (Cal. 1968) (statutory time limits on new‑trial motions are jurisdictional; appellate courts may have to decide issues de novo rather than remand)