Exxon Corp. asked a federal appeals court Tuesday to strike a potentially crippling blow to thousands of private damage claims over the 1989 Exxon Valdez oil spill. At issue is whether the consolidated lawsuit, claiming harm to fishing, land, businesses, local governments and Alaska Native interests, belongs in Alaska state court or federal court. Plaintiffs' lawyers say they fear most of the claims would be dismissed in federal court.
The spill of nearly 11 million gallons into Prince William Sound from the Exxon Valdez in March 1989 already has resulted in a settlement of nearly $1 billion from Exxon to the state and federal governments for environmental damage.
The private suit seeks additional billions for economic losses and punitive damages.
Exxon stands accused in the suit of unsafely storing and transporting the oil. The suit was filed in state court but transferred to federal court at the request of Exxon and Alyeska Pipeline Service Co., and kept there by U.S. District Judge H. Russel Holland.
John Daum, a lawyer for Exxon, told the 9th U.S. Circuit Court of Appeals that the case involved federal issues and should be kept in federal court.
Transfer from state court "made good sense from every practical standpoint," Daum told a three-judge panel. "The litigation is of national importance" and will be determined by federal maritime law, he said.
James Springer, a lawyer for the plaintiffs, argued that the suit was filed under Alaska safety and negligence laws and should be returned to state court. The panel of Judges Procter Hug, Herbert Choy and Edward Leavy has no deadline for ruling on the case.
Though the federal and state courts would be allowed to use each other's laws, the choice of courts could be decisive.
Before the case was transferred, Anchorage Superior Court Judge Brian Shortell issued a number of rulings in favor of the plaintiffs, and since the transfer, Holland has decided several issues in favor of the defendants.
Plaintiffs' lawyers say Alaska law allows damages for more types of harm and has lower standards of proof than federal law.
In arguing that the case belonged in federal court, Daum said the suit amounted to an "artfully disguised attack" on two past federal rulings: one overturning an Alaska law requiring double-hulling and other safety measures for oil tankers, the other a court approval of the government settlement with Exxon.
A federal court has ruled that "the state had no power to impose requirements that go beyond federal law" for tankers, the same issue raised in the current suit, Daum said.
Springer acknowledged that the suit challenged Exxon's failure to take measures that the former state law had required, including double-hulling and tug escorts. But he said those and other asserted safety violations were challenged under general negligence laws, unrelated to the former state law or federal standards.
Leavy, the most active questioner on the court panel, observed that a federal court has decided Alaska cannot require double-hulling by law, but "you're saying that it's free to impose that requirement judicially."
Springer agreed, but contended Exxon's use of federal law as a defense to the suit did not convert it to a federal case.