DENVER—A whistle-blower lawsuit that accused Kerr-McGee Oil & Gas Corp. of underpaying royalties for federal offshore oil leases is getting another life.
A three-judge panel of the 10th U.S. Circuit Court of Appeals on Wednesday reversed a judge’s decision to throw out a jury verdict that Kerr-McGee knowingly underpaid royalties by about $7.5 million.
The ruling came in a lawsuit filed by Bobby Maxwell, a former auditor for the U.S. Minerals Management Service.
A jury last year found that Kerr-McGee sold oil produced from the Gulf of Mexico at below-market prices to Houston-based Texon Corp. from 1999 to 2002. In exchange, Maxwell’s lawsuit said, Texon provided marketing services to Kerr-McGee and paid more for other crude oil.
However a federal judge later ruled that the lawsuit had to be dismissed because Maxwell didn’t qualify as a whistle-blower under the Federal Claims Act. The judge said Maxwell’s lawsuit relied on publicly disclosed information.
The appeals court said the information was transferred between a federal employee and state government auditor who was under a duty of confidentiality, and that the transfer did not qualify as a public disclosure.
The appeals court sent the case back to district court for further action.
