Refinery Defendants Owed No Duty of Care to Plaintiff Under 1954 Agreement with Iranian National Oil Company

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CALIFORNIA – The plaintiff’s decedent, Farid Malek, died from mesothelioma after working almost 30 years at the Abadan oil refinery in Iran. Mary Malek, Farid’s surviving spouse, filed suit on his behalf. The matter is one of a number of coordinated asbestos-related actions in the Superior Court of Los Angeles County. The Maleks immigrated to the United States in 1981 and settled in California. Defendants Chevron USA, Inc. and Texaco, Inc. (Chevron/Texaco) and ConocoPhillips Company (CPC) filed for summary judgment, which the trial court granted. The plaintiffs/appellants appealed the decision.

The court engaged in a lengthy discussion of the Iranian oil industry after Iran nationalized its oil assets in 1951, eliminating British government majority ownership, and the 1954 agreement between the National Iranian Oil Company and eight international oil companies, including, as successors in interest, Chevron/Texaco and CPC. Ultimately, the appeals court held that “every possible theory of liability proposed by appellants originates with the 1954 agreement. By its express terms, the 1954 agreement did not identify respondents as operating or being in control of the Abadan refinery. As a matter of law, respondents were not in a joint venture with the owners or operators of Abadan and did not act as agents of the owners or operators. Accordingly, general negligence and premises liability theories were foreclosed.”

The court additionally stated that Malek, as an “incidental beneficiary of the 1954 agreement,” lacked standing to enforce any of the contract’s terms, including respondents’ guaranties of them.

The appellate court affirmed the trial court’s order granting summary judgment for the defendants.