HARD AGROUND - Wreck of the Exxon Valdez - March 24, 1989



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Daily News reporter

Anchorage Daily News
Date: 08/12/94
Day: Friday
Edition: Final
Section: Nation
Page: A1

ANCHORAGE- After deliberating for nearly five weeks, a federal jury awarded 10,000 commercial fishermen $286.8 million on Thursday for damage caused by the 1989 Exxon Valdez oil spill. The fishermen had asked for more than three times that amount. "It makes me sick to my stomach," said Richard McGahan, who has fished upper Cook Inlet for 40 years and sat through much of the trial. He fought back tears outside the courthouse after the verdict was read. "We are talking about thousands of fishermen whose livelihoods are completely different."

Jerry McCune, president of Cordova District Fishermen United, said he was stunned by the verdict.

"After five years of this, I can see all of this is going to amount to nothing," he said. "When you boil the numbers down, it looks like we are going to get hardly anything out of this. I have to give the jury credit for sticking with it this long, but I am still disappointed."

Exxon appeared relieved.

"Naturally we are pleased that it is not as high as what the plaintiffs were asking for," Exxon attorney Patrick Lynch said.

The bulk of the fishermen's $895 million claim $553.2 million was for depressed salmon prices in the years following the spill. The fishermen argued that the market's fear of tainted salmon drove prices down. Exxon countered that prices dropped for many reasons, including a world glut of farm salmon from foreign markets.

The jury agreed that the drop in salmon and herring prices in 1989 could be blamed on the spill and awarded fishermen a total of $129.7 million for that claim; the fishermen had asked for $144.5 million.

But the jury didn't agree that the continued depressed prices in 1990 and 1991 for both herring and salmon could be blamed on the spill.

The jury also rejected the fishermen's claim that they would lose $116 million in 1994 and 1995 based on the state's projections of reduced returns of salmon and herring.

The verdict form required jurors to decide losses based on geographic area. Herring and salmon fishermen in Prince William Sound were awarded about $58.8 million; in Cook Inlet, about $48.8 million; in Kodiak, about $45.1 million; and in Chignik, about $5 million. The fishermen also had sought $23.3 million to cover a decline in the value of fishing permits. The jury returned an award of $9.4 million.

It will be months before Exxon actually writes a check to cover the jury's verdict. Between now and then, the number will go through some gyrations. First, both sides have stipulated that Exxon will be able to subtract $130 million off the top. That is how much Exxon paid to some fishermen through a claims program set up in 1989. And, of course, there's the question of attorney fees and the possibility of appeals.

"But there will also be a question of add-ons," said Brian O'Neill, an attorney representing the fishermen. One will be interest calculated for 51|2 years at 7 to 8 percent, he said.

Attorneys still are working on the formula for how the money will be divided among fishermen.

"We are not yet ready to come to any conclusions on that," he said.

Jurors pored over stacks of state Department of Fish and Game records to reach the verdict, and the panel figured dollar amounts to the penny. But sometime during the five weeks of deliberations, one of the 12 jurors dropped out. Only 11 returned to the courtroom Thursday.

When asked what happened to the 12th juror, attorney Marty Casey, who represents Capt. Joe Hazelwood, said U.S. District Court Judge Russel Holland issued a gag order prohibiting attorneys and the juror from discussing it. The information on the juror may be in two sealed documents relating to courtroom hearings held last week.

When the trial started in May, both sides stipulated that 12 jurors would be seated with no alternates. If any had to drop out, a verdict could be returned with as few as six jurors, both sides agreed.

The jurors now will take a weeklong break before returning Aug. 22 to hear opening statements in Phase Three of the complex trial. They are scheduled to take a helicopter tour of Prince William Sound sometime during this phase.

In Phase One, jurors decided Exxon should be liable for punitive damages because it acted recklessly by allowing a captain with a history of alcohol problems pilot one of its massive tankers. The result was on March 24, 1989, when the vessel ran aground on Bligh Reef spilling 11 million gallons of oil in the pristine waters of Prince William Sound.

Phase Two was to determine the actual damages suffered by commercial fishermen and Natives, who lost their subsistence harvests. While the jury was deliberating the fishermen's claims, Exxon and the Natives settled out of court for $20 million. A separate, state court jury currently is listening to $100 million in claims filed by a dozen coastal communities and Native corporations. A verdict from that jury is expected later this month.

In Phase Three, the federal jury is expected to listen to about a week of testimony before deciding how much money Exxon and Hazelwood should be assessed in punitive damages. All the plaintiffs fishermen, Natives, property owners, coastal communities and business owners are part of the class-action suit for punitive damages. They are seeking $15 billion.

Following Thursday's verdict, attorney O'Neill said, "We intend to come in and put on proof of Exxon's wealth and see if we can kick some butt."

Exxon attorney Lynch said he will ask the jury to award zero punitive damages.

"We believe that Exxon's response to the spill was really a unique show of corporate responsibility from Day One," he said. "It made an unlimited commitment to clean up."

Lynch said there's no need to punish Exxon further.

Story Index:
Main | The Legal Battles
Overall: story 303 of 380 Previous Next
The Legal Battles story 52 of 87 Previous Next

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