EXXON WINS COURT REVIEW OF CLAIM AGAINST BANK

EXXON WINS COURT REVIEW OF CLAIM AGAINST BANK

The Supreme Court will give Exxon Co. U.S.A. one more chance to argue that Banque de Paris et des Pays-Bas should make good on a letter of credit that expired.

In another action Monday, the justices refused to hear arguments by the National Cottonseed Products Association that there is no rational reason for the Occupational Safety and Health Administration to require monitoring of workers for cotton dust exposure.The Exxon case involves a $19.53 million letter of credit issued by the bank to Houston Oil & Refining Inc.

The letter of credit was used to back up an arrangement in which Exxon delivered 558,000 barrels of crude oil to Houston Oil in July 1981 in exchange for an equal amount of crude oil to be delivered to Exxon from September through December 1981.

The bank, known as Paribas, required a signed statement certifying that Houston Oil refused to make good on its contract before paying, but the letter of credit expired on Oct. 31, 1981.

Houston Oil did not fulfill its contract. Exxon did not learn that the company intended to default until November. But the bank refused to pay, saying that the letter of credit expired at the end of October.

Paribas removed the case from state to federal court, where it lost on the district court level but won its case at the Fifth U.S. Circuit Court of Appeals.

After the decision, a Texas appellate court decided the same issue in another case in favor of the creditor, not the bank. Because Texas law should prevail in this situation, Exxon asked the federal appellate court to reconsider, but it refused.

Now the Supreme Court will determine whether Exxon gets its money based on whether the federal court was obligated to reopen its case once a state court considered the issue and came to the opposite conclusion in an unpublished opinion.

The cotton dust case is part of several cases going back to 1979 in which non-textile industries challenged the Labor Department's decision to include these industries in cotton dust standards that halved permissible exposure levels and required medical monitoring of workers.

The lower level of the 1978 ruling never went into effect for these industries and in 1985 the secretary of labor removed all exposure limit requirements but demanded medical surveillance.

The current case, National Cottonseed Products Association vs. Ann McLaughlin, secretary of labor, challenges the need for medical surveillance as well.

The U.S. Court of Appeals for the District of Columbia Circuit backed up the secretary. It ruled that she does have the power to require medical monitoring, both to develop evidence that exposure limits might be necessary and to protect sensitive workers who might otherwise suffer permanent lung damage.

That was the decision that the Supreme Court declined to review.

In other business Monday, the justices also refused review to a dispute between Florida Power & Light Co., Miami, and Westinghouse Electric Corp., Pittsburgh.

The issue was the contract under which Westinghouse supplied fuel to the Turkey Point Nuclear Power Plants in 1966.

Westinghouse agreed to truck spent nuclear fuel away from the plant

because at that time the federal government was reprocessing such fuel.

But since 1975 there has been no legal way of removing spent fuel from the site and no federal reprocessing.

Now Congress expects to create a repository to bury spent fuel after the year 2000. Utilities will have to pay the cost of building this repository, and the Florida utility is estimated to have an $82 million share.

Florida Power & Light wants Westinghouse to bear this cost.

The Fourth U.S. Circuit Court of Appeals resolved a decade of legal disputes by ruling in favor of Westinghouse. It said that disposal other than by reprocessing was never contemplated in 1966 and was not covered by the contract.