Nuverra Environmental Solutions (NYSE:NES), (“Nuverra” or the “Company”), a leading provider of full-cycle environmental solutions to energy and industrial end-markets, responded to the District Court of Dimmitt County, Texas jury verdict against its operating subsidiary Heckmann Water Resources (CVR), Inc. in a wrongful death case involving a vehicle accident.
The jury awarded $181 million in compensatory damages and $100 million in punitive damages. The accident occurred in May 2012 and involved a Heckmann Water Resources (CVR), Inc. truck and one other vehicle. No citations were issued against the subsidiary or its employees.
"We are disappointed by the actions of this Texas state court jury but remain confident in the judicial system at both the trial court and appellate court levels," said Mark Johnsrud, Chief Executive Officer. "While we are highly sympathetic to the deceased and his family for his unfortunate passing, we believe based on input from our legal advisors and consultants, both trial and appellate, that this recent award exceeds well-established judicial norms and precedent by a staggering margin. The verdict is subject to post-trial motions and has not yet been entered as a judgment. After conferring with our legal advisors, we believe we have meritorious grounds to seek reconsideration of the verdict and to appeal. We intend to file motions to reduce or overturn the award and otherwise to file for reconsideration of the case," Mr. Johnsrud added.
Based on the pre-award analysis of the case, Heckmann Water Resources (CVR), Inc.’s exposure in this matter was not expected to exceed its available insurance limits of $16 million. Although it continues to review the matter, the Company does not anticipate establishing an accounting reserve for the matter at this time.The Dimmitt County jury verdict is against and limited to the Heckmann Water Resources (CVR), Inc. subsidiary, and any potential liability is limited to this subsidiary. Heckmann Water Resources (CVR), Inc. assets generated approximately 11% of the Company’s adjusted EBITDA for the nine months ended Sept. 30, 2013 and include fleet, real property and disposal wells in the Eagle Ford, Barnett, Permian, Mississippian Lime, Haynesville and Marcellus/Utica shale basins, excluding the Haynesville pipelines and the Marcellus treatment plant.