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Shell refuses to comment on Oklahoma oil royalties fraud

“As you surmise, we will not be commenting.  As always, you cannot take our silence to mean that we agree with any of your conclusions.”: Richard Wiseman, Chief Ethics & Compliance Officer, Royal Dutch Shell Plc 29 April 2010

NANCY FULLER HEBBLE AND OTHERS vs SHELL OIL CO.

On 13 April 2010, Shell filed an “APPELLANTS’ MOTION TO SUSPEND EFFECTIVENESS OF MANDATE“. It relates to the 18 December, 2009 decision by the Oklahoma Court of Civil Appeals affirming a judgment on a jury verdict in the Hebble v Shell royalties fraud case.

The jury awarded the Plaintiffs/Appellees $750,708 in principal, $12,455,208 in pre-judgment interest, and $53,625,000 in punitive damages.

The mandate is the instrument used by the Oklahoma Supreme Court to signal that they are finished with the case.  Shell asked the Oklahoma Supreme Court to suspend the effectiveness of the mandate so that the plaintiffs would not collect on the judgment pending a ruling by the United States Supreme Court.

Shell states they are appealing constitutional issues.  The only US Constitutional issue is whether the award of punitive damages violates Shell’s 14th Amendment due process rights.

The US Supreme Court will not review the judgment for fraud and breach of fiduciary duty, as Shell has exhausted their appeals on those issues.

The behavior of relevant Shell Oil Co. executives and lawyers could hardly have been more unethical. It is not just the misdeeds of those responsible for the fraud and deceit perpetrated against ordinary American families, but also the incredible decision to defend the misdeeds in long drawn out litigation through the courts, adding to the impact on the families in terms of stress and uncertainty. These are families, which the jury found, had been deliberately deceived and cheated by Shell.

The conclusion reached by the Appeal Court judges is damning:

“In the present case, the reprehensibility of Shell’s conduct is heightened by its intentional deceit of the interest owners whose oil proceeds it held for their benefit…”

Since such conduct is in blatant breach of Shell core business principles, pledging honesty, integrity and transparency in all of Shell’s dealings, it seems proper to ask what action is being taken by Shell against (1) those responsible for perpetrating the fraud and deceit and (2) those who authorised and implemented the litigation trying to defend the indefensible?

As can be seen from recent high level email correspondence with Shell printed below in its entirety, Shell has not been prepared to comment.

EMAIL TO RICHARD WISEMAN 27 APRIL 2010

From: Alfred Donovan <[email protected]>
Date: 27 April 2010 23:59:25 BST
To: [email protected]
Cc: [email protected]
Subject: NANCY FULLER HEBBLE AND OTHERS vs SHELL OIL CO.

Dear Mr Wiseman

When you contacted me on 26 February, you were kind enough to enquire about my health. I know from the Shell internal documents supplied to us in response to a Data Protection Act application that Shell maintains a touching interest in my antiquity.

Consequently, I know you will be delighted that I have now reached the grand age of 93 thanks to the NHS and in particular, my local GP, Dr Tirunelveli L Ashok Kumar and his wonderful staff at the Highwoods Surgery.

I have printed below, the draft of an article we plan to publish which is a follow-up on the recent posting: “Oklahoma Appeals Court Rules Shell Guilty of Royalties Fraud“.

Please feel free to point out any error in what we state as fact. In particular, I draw your attention to the paragraph which says: “The US Supreme Court will not review the judgment for fraud and breach  of fiduciary duty, as Shell has exhausted their appeals on those issues.”

Please also feel free to supply any comment for publication on an unedited basis.

There is no panic for a reply, but please be kind enough to say if you do not intend to comment, in which case there would be no point in delaying publication.

Best Regards

Alfred Donovan

DRAFT ARTICLE

Headline: Shell appeal to U.S. Supreme Court on issues arising from oil royalties fraud verdict

NANCY FULLER HEBBLE AND OTHERS vs SHELL OIL CO.

On 13 April 2010, Shell filed an “APPELLANTS’ MOTION TO SUSPEND EFFECTIVENESS OF MANDATE” relating to the 18 December, 2009 decision by the Oklahoma Court of Civil Appeals affirming a judgment on a jury verdict in the Hebble v Shell royalties fraud case.

The jury awarded the Plaintiffs/Appellees $750,708 in principal, $12,455,208 in pre-judgment interest, and $53,625,000 in punitive damages.

The mandate is the instrument used by the Oklahoma Supreme Court to signal that they are finished with the case.  Shell asked the Oklahoma Supreme Court to suspend the effectiveness of the mandate so that the plaintiffs would not collect on the judgment pending the ruling by the United States Supreme Court.

Shell states they are appealing constitutional issues.  The only US Constitutional issue is whether the award of punitive damages violates Shell’s 14th Amendment due process rights.

The US Supreme Court will not review the judgment for fraud and breach of fiduciary duty, as Shell has exhausted their appeals on those issues.

DRAFT ENDS

FOLLOW-UP  EMAIL TO RICHARD WISEMAN: 29 APRIL 2010

From: Alfred Donovan <[email protected]>
Date: 29 April 2010 11:18:21 BST
To: richard.wis[email protected]
Cc: [email protected]
Subject: NANCY FULLER HEBBLE AND OTHERS vs SHELL OIL CO.

Dear Mr Wiseman

Perhaps you are checking the facts with U.S. colleagues before responding to my email of 27 April?

The implications arising from the Appeal Courts decision must be of immense concern to you as Chief Ethics & Compliance Officer of Royal Dutch Shell?

The behavior of relevant Shell Oil Co. executives and lawyers could hardly have been more unethical. It is not just the misdeeds of those responsible for the fraud and deceit perpetrated against ordinary American families, but also the incredible decision to defend the misdeeds in long drawn out litigation through the courts, adding to the impact on the families in terms of stress and uncertainty.

The conclusion reached by the Appeal Court judges is damning:

“In the present case, the reprehensibility of Shell’s conduct is heightened by its intentional deceit of the interest owners whose oil proceeds it held for their benefit…”

Since such conduct is in blatant breach of Shell core business principles, pledging honesty, integrity and transparency in all of Shell’s dealings, what action is being taken against (1) those responsible for perpetrating the fraud and deceit and (2) those who authorised and implemented the litigation trying to defend the indefensible?

If I hear nothing from you by 3pm UK time tomorrow, I will assume Shell has decided it best under the circumstances, not to comment on the debacle.

I will also assume that Shell does not challenge our statement of fact that the US Supreme Court will not review the judgment for fraud and breach of fiduciary duty, as Shell has exhausted the appeals process on these issues.

Best Regards
Alfred Donovan

REPLY FROM RICHARD WISEMAN 29 APRIL 2010

From: [email protected]
Date: 29 April 2010 11:21:39 BST
To: [email protected]
Cc: [email protected]
Subject: RE: NANCY FULLER HEBBLE AND OTHERS vs SHELL OIL CO.

Dear Mr Donovan

As you surmise, we will not be commenting.  As always, you cannot take our silence to mean that we agree with any of your conclusions.

Best Wishes
Richard Wiseman

Chief Ethics and Compliance Officer
Royal Dutch Shell plc
Shell Centre, London SE1 7NA

Registered in England and Wales number 4366849
Registered Office:  Shell Centre, London, SE1
Headquarters: Carel van Bylandtlaan 30, 2596 HR
The Hague, The Netherlands

Email: [email protected]
Internet: http://www.shell.com

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