Alaska Sport Fishing Association v. Exxon Corporation highlights the need to take a hard look at the doctrine of parens patriae when applied in natural resource damage litigation.

• Author: Kerin, Scott
• Position: Case Note

1. INTRODUCTION

   Under the doctrine of parens patriae, the government represents all of its citizens when it is a party in a suit involving a matter of sovereign interest. In this capacity, the government acts as a trustee of the public. Increasingly, parens patriae actions are brought in cases involving natural resource disasters resulting from oil spills and hazardous waste releases.(1) With natural resource damage suits referred to as the new frontier of environmental litigation,(2) the use of parens patriae actions promises to become more prominent. Thus, the implications of government actions and their impact on private causes of action must be examined.

   In the recent case of Alaska Sport Fishing Ass'n v. Exxon Corp.,(3) the Ninth Circuit used the doctrine of parens patriae to affirm the dismissal of the Alaska Sport Fishing Association's (ASFA) class action complaint against Exxon.(4) The sport fishers sought damages that they argued the government could not recover for the lost use of natural resources resulting from the 1989 Exxon Valdez off spill.(5) The district court held that the doctrine of res judicata barred the Alaska Sport Fishing Ass'n suit, because a consent decree between the United States government, the State of Alaska, and Exxon - in a suit commenced after the Alaska Sport Fishing Ass'n class action - settled all public claims including lost use of natural resources.(6) On appeal, the Ninth Circuit affirmed the district court and held the United States government and the State of Alaska, acting as public trustees under section 311(f) of the Clean Water Act (CWA)(7) and section 107(f)(1) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA),(8) had authority to recover for all lost use damages caused by the oil spill.(9) The result: a denial of any direct relief for ASFA's claim.

   The Ninth Circuit employed the doctrine of res judicata and dismissed ASFA's class action, thereby extending the government enormous parens patriae authority to subsume private claims.(10) The court's use of res judicata to usurp private claims is disturbing, given that the doctrine normally bars a claim only when three elements exist: 1) there is a final judgment on the merits in the prior suit, 2) the prior and present suits have identical claims, and 3) the prior suit involved the same parties or their privies.(11) The a final consent decree is a judgment on the merits,(12) the holding in Alaska Sport Fishing Ass'n raises legitimate concerns regarding the last two res judicata elements: identity of issues and privity of the parties. In Alaska Sport Fishing Ass'n, the issues underlying the plaintiffs' claims regarding lost use were not identical to the issues underlying the claims of the governments of the United States and the State of Alaska.(13) In addition, there are serious concerns regarding the existence of privity between the governments and ASFA, such that ASFA's interests were adequately represented.(14)

   However, by affirming the lower court and allowing a subsequent case to extinguish the earlier filed class action, the Ninth Circuit painted the government's authority in broad strokes that arguably dismissed legitimate claims as merely a "hypertechnical reading" of the underlying regulations.(15) The Ninth Circuit's expansive reading of the governments, authority to represent the public in parens patriae actions enables a court to find privity in cases when it might not clearly exist. In so doing, the Ninth Circuit sent a clear message to potential plaintiffs and defendants. Potential plaintiffs in natural disaster cases must have evidence of specific harm to a concrete interest, preferably a commercial or property injury, apart from what the general public might suffer. Additionally, claims based on state law might not be worth pursuing due to a risk that subsequent state action will extinguish the suit. For potential defendants facing a large number of lawsuits as a result of a natural resource accident, the best option may be entering into a settlement agreement with the government to extinguish private or public claims.

   The outcome in Alaska Sport Fishing Ass'n demonstrates the need for both legislatures and courts to rethink the expansive applications of the parens patriae doctrine and its relationship to res judicata's concept of privity. Although the court dismissed ASFA's claim as a purely public cause of action settled by the government consent decree, a closer look reveals a private claim.(16) Ironically, ASFA's claim Was not substantially different from a class action suit brought on behalf of commercial fishers that resulted in a judgment against Exxon for more than five billion dollars in punitive damages.(17) The resulting question is to what extent it is desirable to have the government, instead of the individuals, represent arguably private interests.

   This Chapter analyzes the Ninth Circuit's decision and its potential impact on the conduct of natural resource accident litigation. Part II outlines the Exxon Valdez oil spill and subsequent litigation. Part III discusses the arguments raised in the Alaska Sport Fishing Ass'n litigation as well as the holdings of the district court and Ninth Circuit. Part IV critically examines both the ability of the governments to recover all lost use damages as well as the court's decision and reasoning, as well as the issue of privity between the governments and ASFA, the concept of parens patriae, and how the courts have over-extended the doctrine. Finally, the Chapter concludes that a new view of the parens patriae doctrine is necessary.

2. THE Exxon Valdez Oil and Subsequent Litigation

   1. The Exxon Valdez Oil Spill

      On March 24, 1989, eleven million gallons of crude oil spilled into Alaska's Prince William Sound when the Exxon Valdez, an oil tanker the length of three football fields, hit a reef just after midnight.(18) The Exxon Valdez spill, the largest oil spill in United States history,(19) contaminated more than 1,275 miles of Alaskan shoreline.(20)

      At the time, reports of the oil spill called it an "unprecedented ecological disaster" for the region.(21) Part of the tremendous impact caused by the spill stemmed from both its location in a remote and pristine region abundant with fish and wildlife,(22) and its timing, the beginning of fish spawning and bird migration seasons.(23) The adverse effects of the oil spill were overwhelming. It caused the contamination of between 2,500 and 6,000 square miles of ocean and the deaths of countless animals,(24) including 3,500 to 5,500 sea otters(25) and hundreds of thousands of birds.(26) At least eleven species of birds experienced a significant population decline.(27) Despite this unrivaled damage and views to the contrary,(28) Exxon maintains that Prince William Sound verges on fun recovery.(29)

      More than five years after the spill, Exxon's total bill for the Valdez off spill rings in at almost $9 billion.(30) This includes more than $2 billion that Exxon spent on direct cleanup.(31) Exxon employed more than twelve hundred workers for two years to remedy the area.(32) While the beach cleanup nears completion, court battles over the spill promise to continue for many years.

   2. Overview of Exxon Valdez Litigation

      In the aftermath of the Exxon Valdez oil spill, thousands of plaintiffs(33) - commercial fishers,(34) local governments,(35) Native Americans,(36) and others(37) - filed suits against Exxon Corporation, Exxon Shipping Company, and the Exxon Pipeline Company (collectively known as Exxon), Alyeska Pipeline Service Company,(38) and the State of Alaska for injury to property, businesses, and other interests allegedly caused by the spill. In addition, numerous claimants sought relief for such private losses pursuant to the special process established by the Trans-Alaska Pipeline Authorization Act (TAPAA),(39) while others resorted to the claims facility established by Exxon for persons and businesses with provable private losses.(40) ASFA sought a different form of relief, suing Exxon on behalf of a class of recreational fishers who actively used the area affected by the oil spill (a total of 130,000 recreational users), and seeking to recover the value of their lost use of natural resources that occurred during the course of the cleanup.(41) ASFA based its claim upon a variety of causes including negligence, nuisance, and violation of an Alaska state statute imposing strict liability for the release of hazardous substances.(42)

      Following the filing of the Alaska Sport Fishing Ass'n suit, the governments of the United States and the State of Alaska sued Exxon for natural resource damages as a trustee of the public.(43) Alaska also sued in its capacity as parens patriae.(44) These two suits eventually led to a government settlement and consent decree that the district court and the Ninth Circuit later held barred ASFA's suit on grounds of res judicata.(45)

   3. Government Consent Decree

      In March 1991, the United States and the State of Alaska filed suit against Exxon in their capacities as "trustees of the public" under section 311 of the Clean Water Act (CWA)(46) and section 107(f)(1) of the Comprehensive Environmental Response, Compensation, and liability Act (CERCLA).(47) Both the United States and Alaska state governments sought damages for restoration of the environment and compensation for lost public uses of natural resources.(48) On March 13, 1991, the governments and Exxon entered into a settlement agreement and proposed consent decree.(49) No one sought to intervene.(50) However, numerous comments filed by public and private litigants (including ASFA) urged the district court to reject the decree.(51) Both the Alaska House of Representatives and the district court rejected this first settlement.(52) Exxon, Alaska, and the United States then slightly modified their settlement agreement and proposed consent decree, filing on September 25...