Running aground in a sea of complex litigation: a case comment on the Exxon Valdez litigation.

• Author: Jenkins, Robert E.

I.

INTRODUCTION

Oil spills leave more than an environmental mess in their wake. They usually leave a mess of litigants and court dockets jammed with lawsuits filed by private and public parties, making claims for damages based upon a myriad of theories of liability.(1)

On March 23, 1989, the supertanker Exxon Valdez slowly left Valdez, Alaska carrying 53 million gallons of crude oil. Its next planned stop was Long Beach, California.(2) The ship traveled at a speed of no more than six knots during the first leg of its journey because there were small islands, reefs and, most likely, ice ahead. Captain Joseph Hazelwood stood on the bridge of the ship with the third mate Gregory Cousins. As the ship began making its way toward Prince William Sound, Hazelwood left to go to his office to do paperwork after telling Cousins to call if he needed anything.(3) Exxon's manual dictated that the captain had to be on the bridge "whenever conditions present a potential threat to the vessel such as passing in the vicinity of shoals, rocks or other hazards presenting any threat to safe navigation."(4)

A short time later, Hazelwood received a call that there was ice ahead and that they would need to maneuver around it. Hazelwood returned to the bridge, studied the ice reports, and ordered the helmsman to change course. Hazelwood then gave instructions to Cousins regarding the next turn the Exxon Valdez would need to make. Hazelwood left the bridge again and returned to his office down below.(5) While Hazelwood did paperwork, Cousins went into the chart room to look at the map, leaving the helmsman alone on the bridge. Suddenly, the lookout sounded an alarm and cried that the flashing red buoy marking Bligh Reef could be seen off the starboard when it was supposed to be on the port side. Cousins quickly ordered a turn. However, the huge ship could not turn fast enough. Cousins called Hazelwood in his office and told the captain, "We're in serious trouble."(6)

Just after midnight, the Exxon Valdez ran aground on Bligh Reef tearing open the hull of the ship. Bligh Reef was a well-known navigational hazard in Prince William Sound and clearly marked on the ship's navigating charts. The damage caused the ship to gush oil into the Sound at a rate of 200,000 gallons a minute. At the time, Prince William Sound was regarded as "one of the most pristine and diverse ecological systems in the world."(7)

Chief Warrant Officer Mark Delozier of the Coast Guard was called out to the Exxon Valdez. When he arrived, he spoke to Hazelwood. While talking to Hazelwood, Delozier could smell the odor of alcohol. He ordered Hazelwood and some of the crewmembers to be tested for alcohol. It would later be discovered that Hazelwood spent much of the previous afternoon in a bar. Due to numerous delays, however, Hazelwood's blood sample was taken nearly eleven hours after the grounding. Although the authenticity of the samples was later challenged in trial, the test revealed that Hazelwood's blood alcohol level was .061 eleven hours after the accident. Federal law prohibits a crewmember from operating a vessel if his blood alcohol level is over .04.(8) Exxon fired Captain Hazelwood immediately.(9)

Eleven million gallons of oil from the damaged hull poured out and eventually spread over 2,592 miles of coastline.(10) It has been called the worst environmental disaster in United States history.(11) The oil spill caused the death of more wildlife than any other single human catastrophe. More than 250,000 seabirds, 3,500 otters and hundreds of bald eagles were killed.(12) Additionally, the spill had an extensive impact on almost all levels of life in Alaska. Nearly 60,000 Alaskans claimed the oil spill impacted their lives.(13) No one knows what the long-term effects of the oil spill will be. What is certain is that this spill sparked the beginning of one of America's "largest and most complex litigation in history" that would involve thousands of people, hundreds of lawyers and years of court battles.(14)

Following the spill, thousands of plaintiffs filed hundreds of claims seeking compensation for their losses and punitive damages against Exxon. The plaintiffs included individuals, area businesses, environmental groups, and local, state and the federal governments. The plaintiffs filed individual claims and class actions in both state and federal court.

Now, nearly eleven years after the spill and six years after the trial, the plaintiffs have yet to receive even a portion of the $5 billion punitive damages they were awarded by the jury. The case reached the first level appeals in May 1999, and none of the plaintiffs' attorneys expect to see a cent of the award in the foreseeable future. Many of those who have followed the case closely have asked themselves: has justice been served?

The purpose of this comment is to describe the history of the Exxon Valdez litigation and analyze whether the courts and corresponding laws are equipped to effectively handle mass environmental litigation. Due to the extended duration and complexity of the Exxon Valdez litigation and the limited space of this comment, a thorough analysis of every aspect of this case would prove impossible. As a result, this comment focuses almost exclusively on the litigation between the numerous plaintiffs who suffered injuries as a result of the spill and the defendant Exxon.(15) Although this paper focuses on Exxon, it is important to note that plaintiffs filed suit against other defendants who played a role in the tragedy.(16) Despite these other suits, the plaintiffs' primarily focused their efforts on Exxon.

The analysis in Part II discusses the strategies chosen by the plaintiffs for pursuing their cases against Exxon, their goals, and the strengths and weaknesses of their choices. Part III consists of two parts: Section A discusses the substantive and procedural tools used by Exxon to minimize the number of plaintiffs proceeding with claims and their ultimate results; Section B analyzes Exxon's use of settlements, particularly with the governments of Alaska and the United States to limit its liability to private parties. Part IV describes Exxon's numerous post-trial motions and appeals as well as allegations by plaintiffs that Exxon is using delay tactics to avoid payment.

Finally, the conclusion to this paper contains a general analysis of how the court system performed in handling this complex environmental litigation. Bearing in mind that the court had to deal with numerous and diverse claims with limited resources, the conclusion discusses areas where the court performed well, areas where the court made less than ideal decisions, and areas where the judicial system in general could improve in order to better handle mass environmental litigation.

II.

THE PLAINTIFFS GATHER: MAY WE BE HEARD?

The litigants ... are as varied as the species of wildlife in Prince William Sound.(17)

The more than eleven million gallons of oil that poured into the Prince William Sound and eventually spread over thousands of miles of Alaskan coastline severely altered the ecological balance in the area. The effects of the oil devastated the natural resources, which in turn had an extensive impact on almost all levels of life in Alaska. Tens of thousands of Alaskans as well as thousands from outside Alaska claimed the oil spill damaged their livelihood and their lives.(18) The makings of mass environmental litigation had begun.

The Exxon Valdez litigation began with more than 52,000 plaintiffs and 84 law firms filing more than 200 suits in both state and federal court in the first year alone. While the army of plaintiffs were allies against a common enemy, they also had competing interests. Specifically, the plaintiffs were in disagreement on whether to proceed as individual claimants or to implement representative litigation through class certification. Those in favor of representative litigation believed it was the most effective way to combat a deep-pocket defendant like Exxon on behalf of plaintiffs who would otherwise lack the resources to pursue their claims. The plaintiffs favoring individualism through the pursuit of their own claims argued that representative litigation would be inefficient, take longer, and would deny them their constitutional right to the counsel of their choice.(19)

Exxon, for its part, argued that "certification would unnecessarily complicate the case, lead to logistical and paperwork problems, and allow for frivolous claims."(20) Exxon wanted to continue their ongoing claims-settlement program which had already paid a total of $235 million to about 10,500 claimants.(21)

1. The Plaintiffs Gather, But Who Represents Whom?

   The Exxon Valdez plaintiffs who preferred a representative litigation approach proposed several classes for certification. For example, on June 21, 1989, the Alaska Sport Fishing Association (ASFA) filed a claim in state court for the loss of use of Prince William Sound by members of the class of sports fishermen.(22) The class represented approximately 130,000 recreational fishermen. Shortly thereafter, on July 14, 1989, ASFA joined in an amended consolidated class action complaint with other certified class actions.(23) Several environmental groups also filed class actions in state court against Exxon for damage to the natural resources.(24) The environmental groups' claims were consolidated with the sport fishermen's class action and together they filed a motion for certification of a Conservation Trust Plaintiffs (CTPs) class for mandatory injunctive relief to create a conservation fund. The consolidated group also sought in the alternative, damages for lost use of the damaged area and creation of a fund from any undistributed damages that may remain. The certification of the CTPs was eventually granted.(25)

   In July 1989, a group designated as the Alaska Natives Class which included all Alaska natives, native villages and government organizations...