An appeals court on Wednesday reversed a judge’s dismissal of a $7.6 million jury verdict against the Kerr-McGee Corp. in a case brought by a whistle-blower from the Minerals Management Service in Lakewood.
The ruling came on the same day that federal investigators alleged that some MMS employees improperly accepted gifts and engaged in sexual relationships with oil-and-gas industry representatives. The investigation was prompted in part by revelations made in a handful of lawsuits, including the Kerr-McGee case.
In the court case, former MMS auditor Bobby Maxwell claimed that Kerr- McGee underpaid the agency of the Interior Department on royalties for federal offshore oil leases.
Maxwell had alerted his MMS superiors to the alleged underpayments, but the office did not pursue the matter. Maxwell sued under the False Claims Act, allowing him to recover one-third of any proceeds.
A federal jury in Denver determined in January 2007 that Kerr-McGee was liable for $7.5 million. But U.S. District Judge Phillip Figa later dismissed the suit, saying the court did not have jurisdiction in the matter. Figa died in January.
On Wednesday, the U.S. Appeals Court for the 10th Circuit in Denver reversed Figa’s dismissal and sent the case back to federal court.
Maxwell, now a college professor in Hawaii, said Wednesday he was thankful.
“We had a company that was stealing money from the government, from the American people, and walking away with it,” he said. “When my managers wouldn’t allow me to pursue it, it was just wrong. . . . We were being told to look the other way.”
Maxwell and the government are entitled to split treble damages and other fines, said Michael Porter, Maxwell’s attorney. The ultimate amount owed by Kerr-McGee, now part of Anadarko Petroleum Corp., could exceed $30 million, he said.
Anadarko spokesman John Christiansen said in a statement, “We respectfully disagree with the court’s conclusion and will continue to pursue our legal rights.”
Greg Griffin: 303-954-1241 or ggriffin@denverpost.com
