Exxon Asks BOE to Dismiss County's Petition
If the deal is reopened, Exxon want a refund for its original $12 million settlement payment
by Rob Shaul

Exxon Corporation has filed a forceful response with the State of Wyoming Board of Equalization (BOE) to Sublette County's petition for an independent investigation of the tax valuation method used at Exxon's LaBarge Operations.

Last August the Wyoming Supreme Court, in a unanimous decision, ruled that Sublette County has the right to take its complaint to the state BOE under "Section 14" of the law.

In their response to the county's petition, Exxon Attorneys Patrick Day and Brent Kunz argue that "Section 14" should be limited to allegations of fraud, negligence or malfeasance by the tax authorities, none of which have been made by the county. Second, they argue that the county's specific valuation allegations lack merit. Third, the attorney's write that reopening the 1989 tax valuation agreement will also reopen the issue of taxation of federal helium, and put into question Exxon's original $12 million settlement that went along with the agreement, and require the Department and Exxon to derive a new valuation method where no adequate alternative exists.

Throughout the brief, Exxon's attorneys point out that the 1989 agreement is perfectly legal and, further, was approved by the Department of Revenue, Board of Equalization, the Governor's Office, Attorney General and Sublette County. Write the lawyers, "Unless the Board is prepared to conclude that the conduct of the prior Board in 1989 was illegal and improper, and unless this Board is prepared to conclude that the Governor's Office and Attorney General were negligent, and unless this Board is prepared to conclude that Sublette County was itself acting improperly when it agreed to the deal it now challenges, this Petition should be dismissed."

The attorneys further argue that if the BOE reopens the 1989 agreement, Exxon will challenge the $10 million in taxes it has paid on helium since the agreement, and it will also ask to be refunded its $12 million settlement payment that was part of the 1989 agreement. The brief states that Exxon agreed to pay the $12 million settlement and give up its right to challenge the taxation of federal helium as long as the 1989 agreement was used to determine the LaBarge Operations' tax valuation. If the BOE reopens the agreement, Exxon threatens to go after the helium taxes it has paid and the original settlement payment. Concerning the settlement payment, the lawyers write, "The County's argument is rather like a plaintiff who settles a case for a $12 million payment by the defendant and then later demands to revoke the release given for the payment while simultaneously keeping the money."

Finally, Exxon suggests that if the BOE does reopen the 1989 agreement, and another valuation method is developed, it's likely Exxon's taxes will decrease. Setting aside the 1989 agreement "offers the County and the state no assurance of higher taxes," conclude Exxon's lawyers, "It promises only years of additional litigation."

The county commissioners must now submit a response to the Exxon brief. Sometime after receiving the county's response, the BOE will set a hearing date to hear arguments in the dispute.

Please go to pinedaleonline.com to read Exxon's entire brief.

Exxon's Brief to the Board of Equalization