RICHMOND -- The city sued Chevron on Friday for damages stemming from last summer's fire at the energy giant's local refinery.
The suit, which drew a sharp response from Chevron, comes after months of negotiations between city officials and company executives and their attorneys ended in an impasse.
"We did have talks," Mayor Gayle McLaughlin said at a City Hall news conference. "We couldn't come up with an agreement. That is why we have taken this next step."
McLaughlin shared the lectern with attorney Frank Pitre, a partner 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.
Pitre said his firm's 39-page suit, filed in Contra Costa County Superior Court, seeks compensation for four areas of damages. Pitre said the city incurred economic losses providing emergency response to the fire and monitoring air quality; suffered environmental harm; has been hampered by the stigma from decades of releases and accidents; and that Chevron's negligence interferes with residents' rights to "comfort and enjoyment" of their community.
"This is a company that has sacrificed safety to profits," Pitre said.
Chevron, which for months has sounded conciliatory notes to criticism leveled by city officials and federal, state and regional investigators probing the fire's causes, slammed the city for filing suit.
"The city's meritless lawsuit is a waste of its own resources and yet another example of its failed leadership," Chevron spokeswoman Melissa Ritchie said in a prepared statement. "The baseless allegations against Chevron USA are plainly intended to divert attention away from a dysfunctional City Council."
Ritchie added that Chevron will "vigorously" defend itself but will " ... remain dedicated to those in the Richmond community who truly wish to improve the quality of life in Richmond and West Contra Costa County."
Councilman Tom Butt said this is the first time the city has sued Chevron since he began his tenure on the City Council since 1999, and he believes it's the first suit ever by the city against the energy giant.
The Aug. 6 fire knocked out the No. 4 crude unit for months and sent more than 15,000 residents to area hospitals complaining of 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.
Pitre told reporters he will hire economists and other experts to attempt to quantify total losses.
"These amounts of money are within the discretion of a jury," Pitre said. "I am not going to speculate on numbers at this point."
The lawsuit follows news earlier this week that Chevron has agreed to pay the Bay Area Air Quality Management District $190,000 to settle air quality violations at its Richmond refinery before the fire.
The civil settlement covers 19 violations at the refinery reported between 2010 and August 2012.
Pitre noted that Chevron has reported profits of more than $26 billion in the past two years. On Friday, the company reported $5.37 billion in profits for its second quarter, 26 percent below last year's levels because of weaker oil prices and refinery maintenance work.
Chevron doesn't divulge exactly how much the fire affected production. The unit was offline for six months.
The fire also resulted in a drop in the refinery's property value, resulting in a tax break for the company.
Pitre and McLaughlin took exception to Chevron's criticism of the city's leadership in its statement, which circulated minutes before the news conference.
"Chevron won't let the city of Richmond or their council members into the boardroom," Pitre said. "This is a question of corporate culture and the decisions made by Chevron for more than two decades behind closed doors."