RICHMOND -- The city has hired a high-powered Burlingame law firm and plans to sue Chevron for damages stemming from last summer's fire at the energy giant's 2,900-acre refinery here.

The contract with Burlingame-based Cotchett, Pitre & McCarthy, which represented victims of the 2010 San Bruno disaster caused by a Pacific Gas & Electric Co. gas line rupture, signals that settlement negotiations between the city and its largest taxpayer have broken down.

"This was the next step we had to take to make the city whole," said Councilman Tom Butt, who was on the team of local representatives who took part in three negotiation sessions with Chevron officials in recent months.

TV news crews, along with the curious, gather on a hillside in Point Richmond to photograph the fire in an oil unit at the Chevron refinery in Richmond on
TV news crews, along with the curious, gather on a hillside in Point Richmond to photograph the fire in an oil unit at the Chevron refinery in Richmond on Aug. 6, 2012. (D. Ross Cameron/Staff file)

"I was disappointed in the negotiations," Butt said, adding that he couldn't disclose details because all participants signed confidentiality agreements.

The Aug. 6 fire knocked out the No. 4 crude unit and sent more than 15,000 residents to area hospitals with respiratory discomfort and other symptoms. The fire occurred when a corroded pipe ruptured.

The state Division of Occupational Safety and Health (Cal/OSHA) found that the refinery was guilty of 11 "willful" violations and fined the corporation about $1 million, the highest fine in the agency's history. The U.S. Chemical Safety Board's investigation found that the pipe was recommended for replacement by Chevron inspectors as early as 2002.

Council members first broached the idea of hiring the firm in May but expressed hope that they might be able to reach a settlement with the energy giant without litigation.

Instead, both sides were too far apart, and a unanimous council voted in closed session Tuesday to turn loose its high-profile lawyers.

According to the contract, which both sides signed Thursday, Cotchett, Pitre & McCarthy will be paid between 6.25 percent and 13.5 percent of the net amount recovered from Chevron, with the higher percentages collected if the lawsuit lasts longer than six months or one year.

The city will pay all costs incurred by the firm on a monthly basis up to $500,000, with the firm picking up the tab thereafter and then deducting the amount from whatever damages it wins in court.

Chevron spokeswoman Melissa Ritchie issued a statement in response, saying the city's decision does not " ... change our commitment to the Richmond community."

"We have been working with the community to build a long-term partnership that will benefit local residents. We remain committed to the community's economic development and to improve the quality of life for all of Richmond."

Contact Robert Rogers at 510-262-2726 or rrogers@bayareanewsgroup.com. Follow him at Twitter.com/roberthrogers.