Scarlett Law Group
California Environmental Disaster Lawyers

On March 23, 1989, the supertanker EXXON VALDEZ pulled out of Valdez, Alaska, loaded with more than 56,000,000 gallons of crude oil. Captain Joseph Hazelwood, the Master of the vessel, had spent the day drinking with crewmembers. He had consumed at least eight Vodka doubles and his blood alcohol level stood at .241 - more than six times the permissible level under Coast Guard Regulations. Third Mate Gregory Cousins was on duty beyond the limits specified by federal fatigue laws. Hazelwood, Cousins and the rest of the crew faced a night voyage through ice in Prince William Sound. Hazelwood's intoxication was evident from the alcohol on his breath, his slurred speech (captured on audiotape) and, most of all, his actions as the ship navigated the Sound.

While passing through fishing grounds, Hazelwood took the EXXON VALDEZ outside established shipping lanes to avoid ice. He put the vessel on automatic pilot, accelerating at Bligh Reef. Hazelwood then left the bridge in violation of Federal Pilotage Regulations. As he went below, Hazelwood gave vague instructions to the inexperienced and fatigued Cousins. Within minutes, the supertanker struck Bligh Reef, spilling 11,000,000 gallons of oil, thereby causing "the largest oil spill and greatest environmental disaster in American historic".

In fact, Exxon's management of its shipping company made this catastrophe inevitable. Exxon knew that the result of a major oil spill in Prince William Sound would be disastrous. Exxon further knew that Hazelwood had a history of alcoholism and poor judgment, making his command of the EXXON VALDEZ a recipe for disaster. After Hazelwood went through an alcohol rehabilitation program in 1985, Exxon made no provision for post-treatment evaluation, after care or monitoring. Instead, it immediately reassigned Hazelwood to Command, fully understanding that a Master with an alcohol abuse problem was a potential for a disaster to the environment. Exxon's senior management received repeated reports of Hazelwood's open drinking between 1985 and 1989, but did nothing about it.

In 1989, Exxon's chairman admitted that putting Hazelwood in charge of a supertanker was a "gross error". At trial, an Exxon manager conceded that Exxon's policies, (with knowledge of the risks to the public of a catastrophe such as a supertanker accident), allowed a relapsed alcoholic to command a supertanker, and that Exxon's attitude towards alcohol left him with no ability to protect the safety of the public. The evidence also showed that Exxon regularly violated federal fatigue laws and that its loaded tankers regularly departed Valdez in dangerous nighttime ice conditions, simply to save money.

Rather than devise a plan to provide adequate compensation to those harmed by its grossly negligent conduct, Exxon resolved that it would not assist those harmed by its egregious conduct unless forced to do so by the victims in Court. Without the plaintiffs' lawyers bringing suit on behalf of those harmed, the victims were assured of receiving nothing from Exxon.

Following the grounding, lawsuits were filed in Alaska State and Federal Courts on behalf of more than 60,000 individuals, businesses, native corporations and local governments, seeking both compensatory and punitive damages. While the State Superior Court held that traditional negligence standards would determine which plaintiffs could recover their losses, the Federal District Court, following a 1927 case, Robbins Dry Dock & Repair Co. v. Flint, 275 U.S. 303 (1927), held that only commercial and subsistence fishermen and those suffering actual physical impact, or touching with the oil, could recover. Realizing that application of this federal law would likely result in the dismissal of some 40,000 economic damage claims, the Exxon defendants removed most of the State Court actions to Federal Court. Thereafter, they did receive dismissal of thousands of claims based on the federal law, which was more favorable to Exxon. (Due to a carefully worked, and Court approved Plan of Distribution, however, most of these claimants stand to recover damages, even though dismissed, as long as the judgments against Exxon are upheld.)
The Federal District Court carefully managed this litigation, however. It entered hundreds of Orders, and a discovery master entered hundreds more. The Trial Plan provided for four separate Phases of trial. The first three Phases were to be tried to a single jury of twelve (rather than the customary six), with a unanimous verdict required. Trial preceded as follows:

1. Phase I began on May 9, 1994, five years after the spill, and ended on June 6, 1994. A week later, on June 13, 1994, the jury returned a verdict that both Exxon and Hazelwood had been reckless.
2. Phase IIA went to trial on June 20, 1994, to determine the lost harvest, lost price and permit valuation claims in the Prince William Sound, Kodiak, Cook Inlet, and Chignik salmon and herring fisheries. After deliberating a month (from July 11, 1994 to August 11, 1994), the jury awarded hundreds of millions in compensatory damages on these claims.
3. In Phase III, tried between August 22, 1994 and August 29, 1994, the jury was asked to decide whether Exxon and/or Hazelwood should be assessed punitive damages and, if so, in what amount. The jury returned its verdict on September 16, 1994, awarding punitive damages against Exxon in the amount of $5,000,000,000, and against Hazelwood in the amount of $5,000.

The compensatory damage claims of all other plaintiffs, not earlier decided in Phase II of the trial, was to have been decided in Phase IV. Phase IV settled before trial, in mid-1996.

Exxon and Hazelwood filed over two dozen post-trial motions. These motions resulted in the District Court issuing approximately 250 pages of rulings. Due to this delay, final judgment was not entered until September 24, 1996. An Amended Judgment was ultimately issued on January 30, 1997.
As could have been expected, Exxon appealed the final judgment. The case proceeded to the Ninth Circuit Court of Appeal. Exxon vigorously argued against the award of any punitive damages whatsoever.

On behalf of plaintiffs, we cross- appealed on the trial court's dismissal, pursuant to Robbins Dry Dock, supra, of approximately 40,000 economic damage claims. Argument pursued before the Ninth Circuit Court of Appeals on both Exxon's appeal of punitive damages and plaintiffs' appeal of the Robbins Dry Dock dismissals.

On November 7, 2001, the Ninth Circuit Court of Appeals finally rendered its decision. In a lengthy decision, the Court found that punitive damages were appropriately awarded in the case itself. However, given two decisions of the United States Supreme Court, BMW and Cooper, (both of which were decided after the trial court jury determinations), the court remanded the case to Judge Holland, to again determine an appropriate amount of punitive damages. On the issue of plaintiffs' cross-appeal - or dismissal of approximately 40,000 economic damage claims - the Court of Appeal granted plaintiffs' cross-appeal.
 
On December 6, 2002, Judge Holland of the United States District Court for the District of Alaska issued in his opinion in response to the order of the Ninth Circuit Court of Appeals.  A copy of his decision can be read below.  Ultimately, Judge Holland reluctantly reduced the jury's punitive damage award from $5 billion to $4.5 billion.  Judge Holland went on to note that interest on the judgment itself would be somewhere in the range of approximately 2 $.5 billion.  Exxon appealed again.
 
On Friday, December 22, 2006, the Ninth Circuit Court of Appeals again issued decision, reducing the punitive damage award against Exxon from $4.5 billion to $2.5 billion.  Exxon immediately sought en banc rehearing before the Ninth Circuit Court of Appeals.  On May 23, 2007, rehearing was denied.  This left Exxon with the option of a writ to the United States Supreme Court, which it did.  (A copy of both the December 22, 2006, decision, and the May 23, 2007 decision may be read in full below.)
 
On October 29, 2007, the United States Supreme Court granted Exxon's Writ, and has agreed to decide the propriety of the revised judgment.  The case will likely be argued in Spring, 2008.  One justice, Samuel Alito, recused himself due to ownership of between $100,000 and $250,000 in Exxon stock.

The Exxon Valdez Oil Spill Litigation is illustrative of the role of plaintiff's counsel in assisting individuals and businesses harmed by the tortious conduct of another. ("Tortious conduct" is a civil wrong, other than breach of contract, for which the Court will provide a remedy in the form of an action for damages.)

Sadly, for most, it is not until a lawyer is truly needed that the worth of counsel becomes apparent. Indeed, it is the plaintiff's lawyer that carefully removes the Constitution from its glass case in Washington D.C., and puts its principles to work on behalf of those injured as a result of the carelessness of another.

As in the year of the oil spill, 1989, we are today bombarded with strong "anti-lawsuit" messages. As with the victims of the Exxon Valdez Oil Spill Litigation, this rhetoric could not be further from the truth.

Exxon has not compensated the thousands of victims suffering in the wake of its avoidable man-made disaster. Instead, the victims were forced to seek counsel, and ultimately initiate lawsuits (taking the Constitution from its glass case), thereby seeking a jury's determination and judgment ordering Exxon to compensate the victims in full. Short of being ordered to compensate the victims, Exxon would not.

Obviously, had Exxon rushed to the aid of the victims, individual and business, harmed by its egregious conduct, thousands of lawsuits would not have had to have been instituted against it. Like most corporate polluters, however, Exxon placed its priorities with denial and public damage control.

The multi-national corporate giant, Exxon, has instead vowed to fight every victim to the end. With its legion of paid, hourly lawyers, Exxon has defended each lawsuit every step of the way.

Plaintiff's counsel provides the only avenue for the victim to reach justice through our judicial system. The Contingency Fee Agreement is the "equalizer", a tool necessary to combat corporate polluters and their legions of lawyers. Indeed, for most, it would be impossible to pay counsel hundreds of dollars an hour for an eleven plus year period of time in order to be "brought whole" after sustaining damages as a result of a corporate polluter's conduct.

The Exxon Valdez Oil Spill Litigation is not unique in that most corporate polluters deny or otherwise vigorously defend their positions in order to escape responsibility. Plaintiff's counsel is often forced to spend thousands upon thousands of hours, and millions of dollars in costs in order the litigation is seen to conclusion, and justice is had.

On Friday, December 22, 2006 a federal appeals court cut punitive damages against ExxonMobil Corp. from $4.5 billion to $2.5 billion Friday for harm caused to tens of thousands of Alaskans by the 1989 Exxon Valdez oil spill, saying the company deserved credit for acting quickly to clean up the spill and compensate the victims.  A copy of this decision can be found below.  On May 23, 2007, the December 22, 2006, decision was amended to reflect the en banc hearing by the Ninth Circuit Court of Appeals.  A copy of this decision can likewise be found below.

 
For a full copy of this brief click here.

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