The Taking of Getty Oil

by Coll, Steve;

  “I took the bar exam in May of 1952. I was still not even done with school—I needed another semester and a half. But if you were a veteran, you could take the bar with sixty hours of classes or so. I took it on a dare. We were sitting around there drinking. I was kind of hoorah-in’. This was like on a Thursday. So some of my buddies said, ‘Okay, loudmouth, why don’t you go take the fucking bar exam if you’re so smart.’ So we bet a hundred dollars—me against four buddies—that I could take the sumbitch and pass it. And the hundred dollars would be used to buy beer for each other.

  “I hadn’t studied. I hadn’t done any of the application shit. Nothing. I rushed to Houston on Saturday morning to see if I could apply. The chairman of admissions just kind of laughed at me because I was so fucked up. But they said it was okay.

  “I studied over the weekend. A couple of professors were really nice. The word got around that this fucking nut was going to do this. And I sailed into that sumbitch, and I made a 76 on the bar exam. Seventy-five is passing. So I’m a lawyer. I didn’t know anything about taxation. But when you’re loose, you can play.

  “I was offered a job at the big downtown firm of Fulbright & Jaworski. I was the only guy they hired that year. I was there about a month. They introduced me to some of the senior men, very conservative bunch of shit. You can’t sign your name to anything. So I walked out and called the man who hired me and said, ‘We both made a big mistake. I been to war and law school and all kinds of shit and I ain’t doin’ this.’ So I opened a small office with two other guys: Fred Jamail, a cousin, and Myron Love. Most of my classmates wrote me off. It wasn’t socially acceptable to do what I did. But I had a couple of friends at Baker & Botts and Vinson & Elkins, and they’d come over and we’d go eat hot dogs. I admired them for doing that.

  “I knew all along that I wanted to be a trial lawyer. After this first firm, which I was at only for a couple of months, I worked as a prosecutor for about a year and then I joined another small trial firm.

  “The first case I tried after I got out on my own that got a great deal of notoriety was a case called Glover v. City of Houston. This man was driving one night and he hit a tree over here behind Rice University, off Main Street. The city claimed that what he hit was a ‘tree island esplanade.’ I claimed it was a goddamn nuisance. This man hit a curb, jumped the curb, went nineteen feet, knocked a keep-right sign down—he’s in the grass now—went another twenty-two feet, hit the tree. Later, he died. I represented his widow. He had alcohol in his blood—enough, they claimed, to make him intoxicated. I subpoenaed the mayor of Houston and put him on the stand. I asked the mayor about why he put the tree there. I got a lot of notoriety. The jury went out and gave us everything I sued for, which was a lot of money in those days. Well, it just blew everybody’s mind. There was coverage everywhere. Nobody thought you could sue a city, first off, and then there was the business about him hitting a tree. And the press was very kind to me. The thing went all over the country.

  “And I heard from my old torts professor, who had moved on to teach torts at the University of Pennsylvania. When I failed his class my first year of law school, this professor had told me that I ought to quit, that I shouldn’t stay in law school. He said at the time, ‘You’re not ever going to make a lawyer.’ Well, now he wrote me a letter that said, ‘I have just read with interest about the Glover case. I told you that you would never make a lawyer and I meant it.’

  “Later on, I tried so many colorful cases. I was blessed. My first love is damage suits. My father didn’t like this shit I was doing, you know, suing businesses, being a ‘sore-back lawyer.’ He was oriented the other way. So was my mother.

  “I like to help people, though. Listen, I could hire out tomorrow to the business world. They come in here every day. Every day. Banks. Every bank in town has tried to get me. But why do that? I’m not into that. I’m more into one-on-one. And I don’t need any more money. I think people are by and large getting the shaft. And what they need is good lawyers like me.”

  Hugh Liedtke understood this much in the winter of 1984: if Joe Jamail could be persuaded to try the case of Pennzoil v. Texaco before a Houston jury, if he could be convinced that Pennzoil had “gotten the shaft” during its attempt to take control of Getty Oil, then John McKinley and his battery of Wall Street lawyers and advisors would face a kind of reckoning unknown in the equity courts of Delaware or in the elegantly appointed suites of Manhattan’s finest hotels, where the deal for Getty Oil had been made and lost. They would have to explain themselves to Joe Jamail.

  Liedtke’s relationship with Jamail was strictly social. Their children attended the same private school in Houston. They had met at a birthday party in the early 1970s. Drinking, fishing, traveling, playing dominos—they found that they enjoyed each other’s company immensely, and so did their wives, both tolerant, expressive, gregarious women. To Baine Kerr, Pennzoil’s president and the former corporate partner at mammoth Baker & Botts, Liedtke’s relationship with Jamail seemed “a good change for Hugh. It was a chance to get around somebody who is totally outside the corporate mold. Hugh relaxed with him, got away from the big wheels of business, which after a time get pretty damn boring.” So it was in the context of friendship, not the oil business, that Liedtke urged Jamail to take his case. He told his friend that he felt sorely hurt, angry, betrayed, and appalled at what had happened to him in New York. He said that he wanted to bring Texaco to account.

  In March, the two of them went fishing at Liedtke’s sprawling Arkansas ranch. They were out on a boat together when the Pennzoil chairman reiterated that he wanted Jamail to be his lead trial lawyer. The suit had already been moved to Houston. Jamail would not have to leave town but for a few dispositions.

  “You still fumin’ about that?” Jamail asked. “I am tired of hearin’ about this. Goddamn it, quit it.”

  “Joe, it’s just a fact that they’re wrong. And more than that, it’s not honorable. They violated my contract.”

  “Do you still want to do this?” Jamail asked, seriously.

  “Yeah.”

  “I’ll do it. Let’s go get a drink.”

  “I guess we’ve got a done deal now, don’t we?” Liedtke asked.

  “We do,” Joe Jamail replied.

  26

  The Loner

  By the summer of 1984, the excited publicity surrounding the takeover of Getty Oil Company had faded away. Pennzoil’s various attempts to block Texaco’s merger with Getty had failed. In White Plains, the triumphant team of Texaco executives led by John McKinley was busy with complex, ambitious programs designed to integrate Getty Oil’s operations into its own. Getty’s nonoil operations were sold off (ERC, the insurance company, fetched $1.075 billion) and Getty Oil’s old Los Angeles headquarters operation was dissolved into Texaco’s Western regional division. More than one thousand “redundant” Getty Oil managers and employees lost their jobs. In July, Getty’s top executives, now known among their disgruntled subordinates as the “divine nine” because of the lucrative golden parachutes they had secured, formally retired. Sid Petersen retreated to his corner Tudor home near the big movie studios in Burbank. The oldest among the deposed Getty Oil regime were still in their fifties, but of the divine nine, only young Steadman Garber eventually accepted a full-time job with another corporation. Petersen dabbled with some oil investments and concentrated on his work with the Los Angeles Philharmonic.

  Gordon Getty, led by his soaringly ambitious wife, became increasingly visible in the monied artistic and literary societies of New York and San Francisco. His family fortune was still tied up by the beneficiaries’ lawsuit instigated by Sid Petersen and filed against him in November 1983. The judge in the case ordered that the cash proceeds from the stock sale to Texaco be temporarily invested in short-term U.S. government bonds until a settlement of the family lawsuit was reached. Whatever its disposition would be, Gordon’s fortune would be considerably enriched. And protected by Texaco’s indemnity, Gordon Getty was no
t terribly concerned about the lawsuits filed in Delaware and Houston by Pennzoil.

  Indeed, the case of Pennzoil v. Texaco had sunk by mid-1984 into the great sea of routine business litigation, far from the public’s view. The Wall Street bankers and lawyers so prominently involved in the deal were now off chasing new and bigger mergers; the Texaco-Getty merger, the largest in American history when it occurred, was soon supplanted in rank by a deal between Gulf and Chevron, a merger instigated by a Boone Pickens takeover raid. Even among the principal participants in the Pennzoil lawsuit, there did not seem to be much interest or excitement. John McKinley and Texaco’s other top executives said later that Baker & Botts’ successful jurisdictional maneuver, leading to the shift from Delaware to Houston, focused their attention on the suit and caused them to initiate a search for a Houston-based law firm to handle the matter. But there was so much else to do in White Plains during those frantic first months following the merger, and besides, all of Texaco’s lawyers—including the respected Wall Street advisors such as Marty Lipton who had been involved in the deal—assured McKinley that Pennzoil’s case was a sure loser on the merits.

  Slowly, then, the once public resentments and conflicts between executives and shareholders at Getty Oil, Texaco, and Pennzoil, were absorbed and pursued in proxy fashion by the companies’ Houston-based lawyers. It might be expected that once the attorneys took over, the mood of anger and confrontation extant at the time of the takeover would be diffused, replaced by cool, lawyerly analysis and negotiation. Such an expectation, however, could not account for the peculiar personality of Pennzoil lead counsel Joe Jamail, and perhaps more importantly, it could not account for the tangled personal history of Richard Miller, the man chosen by Texaco to try its case in Houston.

  John Jeffers and Irv Terrell, the Baker & Botts partners assigned to Pennzoil’s case from its inception, had wondered all along whether they could work successfully with a trial attorney such as Joe Jamail, whose career and personality contrasted sharply with the upright traditionalism of their large downtown firm. Jeffers and Terrell were second-generation Houston professionals, affluent, well-schooled, well-trained, driven by their careers. Jeffers’ father had been an attorney at the downtown firm of Vinson & Elkins, where he enjoyed a long and successful practice. A squat, polite, emotionally restrained man with distinctive furry eyebrows resembling those of the late Soviet premiere Leonid Brezhnev, the younger Jeffers attended private high school, Yale University as an undergraduate and then law school at the University of Texas. He joined Baker & Botts upon graduation and trained as a trial lawyer specializing in complex corporate disputes. He was, it was said admiringly, a solid corporate lawyer—thorough, cautious, cerebral. His partner Terrell, at thirty-eight just a few years his junior, shared Jeffers’ upbringing and professional orientation, if not his personality. A tall, expressive, high-strung man with a talent for calculated belligerence, Terrell had built an impressive career at Baker & Botts by concentrating on defense-oriented trial work. His early training had come from representing insurance companies on the defense side of local personal injury cases, where he did battle with Joe Jamail’s colorful brethren in the plaintiff’s bar. Later, he graduated to complex commercial disputes. At the time of his involvement in the Pennzoil lawsuit, Terrell had never before handled a plaintiff’s case; in twelve years of practice, he had only worked on the defense side of civil lawsuits.

  Despite some initial apprehension, Jeffers and Terrell were early and pleasantly surprised by the ease with which they formed a working partnership with Joe Jamail, that great and wild antagonist of the downtown law firms. Neither of them had ever tried a case against Jamail, but Jeffers’ father had known Jamail during the latter’s incipient period as a Houston muckraker, and Jamail recalled the elder Jeffers fondly. From that basis, he lavished trust and independence on his younger partners—he would need their corporate expertise in a trial as complex as Pennzoil v. Texaco, and besides, Jamail was not about to travel across the country taking depositions and reviewing documents during the months-long discovery phase of the case. For their part, Jeffers and Terrell knew that Jamail was the most successful jury lawyer in Texas, if not in the country, and when they found that his legendary ego was tempered by humor and a willingness to divide the workload into equal thirds among them, their doubts about Jamail quickly dissolved.

  Apparently pleased with their own partnership, the interest of all three Pennzoil attorneys turned to their opponent, veteran Houston trial lawyer Richard Miller, a man whose life and career were intimately entangled with their own.

  Richard Miller and his small, elite Houston trial firm of Miller, Keeton, Bristow & Brown were retained by Texaco early in 1984 after a search conducted by the company’s Houston legal department. There was no question that local counsel was required for the case; it would be the height of foolishness to try a local Texas jury suit with lawyers imported from New York. In the past, much of Texaco’s commercial litigation in Houston had been handled by Baker & Botts, which of course was unavailable for the Pennzoil case. Texaco interviewed attorneys at the other two major downtown firms, but settled in the end on Miller, who came very highly recommended. Beyond his obviously impressive legal career, Miller was a man well suited to the authoritarian imperatives at Texaco headquarters. Like Texaco chairman John McKinley, Miller was distinctive for his “manly” attributes.

  His mother died when he was born, and for that and other reasons, Dick Miller regarded his father as the most influential person in his life. A commercial feed manufacturer who ran a small plant in Tulsa, Oklahoma, Miller’s father was a severe man who taught his son that “the most important thing is to be able to count on yourself,” as Miller put it later. Thus, Miller was encouraged as a boy to involve himself in individual rather than team sports, to develop in himself the spirit of the “individual warrior.” It was a lesson that Miller embraced, one he later tried to impress upon his own son. An eleventh-grader in the midst of World War II, Miller quit high school to enlist in the Marines, where he served for three years. When he returned home, he attended the University of Tulsa for two years before transferring to Harvard College in the fall of 1948. He took undergraduate courses for a year and then, his intellectual gifts obvious to his professors, he “talked” his way into Harvard Law School, from which he graduated in 1952. That fall, he came to Houston and accepted a position with Baker & Botts, where he stayed for more than thirty years.

  Miller had known all along that he wanted to be a trial lawyer, and he devoted himself to his profession with an uncommon singleness of purpose. Trial work attracted him because it was the aspect of a legal career that was romanticized in the popular imagination. It was the field where a man could count on himself, where he could do battle to a verdict with another attorney, mano a mano, on a field of intellectual combat. “What you finally learn,” Dick Miller said, “is that really good trial lawyers don’t do the work for the client. They do it for themselves.” At least, that was Miller’s motivation, and his drive to excel and win was obvious to everyone who came in contact with him. His partners called him “a type triple-A plus,” because to them he seemed so tightly wound, a loner propelled by some mysterious force to achieve the nearly impossible standards he set for himself and others. The Baker & Botts partners who worked with Miller remarked uniformly that no one could be as good a lawyer as Miller thought he should be—not even Miller himself could meet his own exacting standards.

  He was an erect, trim, imposing, punctiliously dressed man with a severe, pocked face, thinning hair, and icy blue eyes. He lived by the credo that personal image and first impressions were key not only to professional success but to authority over others; he advised his younger partners to spruce up their appearances. His white shirts were monogrammed and crisply starched, his suits were perfectly tailored, and his shoes were polished to a Marine Corps shine. There was about Dick Miller the air of a man in full control of every detail, every nuance—a power born of the rel
entless drive for mastery. He was, in a phrase Miller regarded as the ultimate compliment, a “tough hombre.”

  His thirty-year career at Baker & Botts was luminous, if also marked over time by an estrangement from his colleagues at the firm. Beginning with small personal-injury cases and graduating to complex business litigation, he tried more than three hundred civil lawsuits to verdict, working nearly always on the defense side. He rose to become head of the litigation department, the heart and soul of the firm, and was a key member of its management committee. His success derived not from his relationships with his partners or his clients, who tended to regard him as a distant, alienated figure, but from his unceasing devotion to his work, to winning. “The difference between winning and losing is mental attitude,” Miller said. “Given equal ability, the guys who win are the guys who refuse to lose. That’s true in everything that I know anything about. When you go to trial on a case, it’s just you against him. You look across the counsel table and you know how tough the guy is in his head. And that’s what counts.” the most important emotion in any lawsuit, Miller believed, was fear—the fear of the lawyers, the fear of the witnesses, the fear of the clients. To win was to conquer one’s own fears and exploit the fears of others, particularly those of the opposing attorneys. Unlike many trial lawyers, Dick Miller was never afraid to take his cases to trial. He did not worry that he might later be embarrassed by losing a verdict larger than an earlier settlement offer. He said himself that the best lawyers could win any case. And Dick Miller clearly believed that he was one of the best lawyers. The evidence of his own career supported that belief—he was a winner.