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


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Daily News reporter

Anchorage Daily News
Date: 07/26/93
Day: Monday
Edition: Final
Section: Nation
Page: A1

ANCHORAGE- Elenore McMullen is an Alaska Native from Port Graham who subsists heavily on wild foods gathered from or near the sea. She hasn't been able to dig clams near her village since the Exxon Valdez oil spill. Pete Blake has fished commercially in Prince William Sound for 34 years, but hasn't had a normal season in four years.

Laura Brown had to increase the pay at her Cordova diner and liquor store to compete with the steep wages being paid to oil spill clean-up workers in 1989.

Each of these Alaskans is seeking compensation for their losses due to the Exxon Valdez disaster, and each one stands to gain from a recent $98 million settlement with Alyeska Pipeline Service Co., the company that operates the trans-Alaska pipeline.

McMullen, Blake and Brown are faces in a crowd of 65,000 people, businesses and other entities with potential claims against Exxon and Alyeska over the 11-million gallon spill. They belong to classes of people who experienced similar losses and sued as groups to simplify the oil spill litigation.

The agreement negotiated by the pipeline company and the plaintiffs' lawyers calls for the $98 million to be portioned out to the classes, to people who filed their own lawsuits, to Native corporations and to repay some of the expenses lawyers have incurred in four years of litigation.

In Cordova, news of the settlement was met with cautious relief and a little skepticism.

"My main feeling at the momentis it's a step in the right direction," said Blake, who holds herring seine, salmon seine and salmon drift permits. "I'll really be glad when this whole thing is out of my life."

But $98 million divided by 65,000 doesn't feel like a windfall.

"You start dividing that money up and I don't know what it means to me," Blake said.

"Lots of people are hurting in town. Fishing has been bad, the economy is bad," said Brown, who owns Laura's Liquors and the Airport Depot Diner. "I know it will help a lot of people. Maybe get them through the winter a little easier."

The payments are not meant to fully compensate anyone for their oil spill losses, said Lloyd Miller, a lawyer who represents Native villagers and coordinates the lawsuits. The Alyeska settlement is about 5 percent of the total estimated oil spill damages of more than $2 billion, he said.

"At long last a small part of your claim is being paid by a small participant in the Exxon Valdez disaster," is Miller's message to those who sued over the spill.

"A lot of people love to hate Alyeska," he said. "But nobody, including us, has ever suggested a perfectly operating cleanup would have removed all the oil."

Alyeska was created by seven major oil companies, including Exxon, to construct, operate and maintain the pipeline and the Valdez oil terminal. The company is responsible for establishing an emergency plan, having equipment and workers in place and responding to oil spills in Prince William Sound.

In new class action complaints filed in state and federal court last week as part of the settlement proposal, the groups allege that Alyeska lied to the public and the government about its ability to prevent oil spills.

"Alyeska and the Owners systematically reduced their oil spill response capabilities between 1977 and 1989. These reductions were designed to cut costs and were made with deliberate disregard for, or reckless indifference to, the interests of plaintiffs and class members," according to the complaints.

When the tanker Exxon Valdez ran aground on Bligh Reef just after midnight on March 24, 1989, Alyeska wasn't prepared to respond to a major spill. Despite calm weather for the first two days, the company failed to respond quickly enough or with enough equipment to make a difference, the complaints say. As a result, the oil spread out of Prince William Sound to the Kenai Peninsula, Kodiak and Cook Inlet, increasing the environmental harm.

Fishermen lost income, Natives lost their wild food supplies, cannery workers lost work, property was damaged and businesses were hurt, the complaints say.

None of these allegations against Alyeska will have to be proved, and under the settlement the pipeline company is not admitting wrongdoing. Both sides signed an agreement stating that Alyeska followed the 1987 Contingency Plan, which was approved by the state Department of Environmental Conservation and the federal government.

"Alyeska's position was everything they did was correct, and in any case, nothing they could have done would have made any difference," Miller said. "Our position was if they had responded correctly it would have made a difference."

The settlement is a long way from final approval. During the next two months, lawyers will attempt to contact all 65,000 people in their computer data base and publish notices in newspapers and trade journals. Everyone who can be contacted will receive a packet of claim forms which they must fill out and return by Sept. 28.

Everyone who falls into the five main classes fishermen, Natives, cannery workers, business owners and property owners is eligible for part of the settlement, whether or not they filed claims previously.

Commercial fishermen will be asked to state their gear type, vessel and permit details, and the area and species they fished in 1989, 1990 and 1991. They do not have to show how much they made or how much they estimate they lost due to the spill, and it makes no difference if they leased their boats to Exxon for the cleanup or received money through Exxon's claims program.

"This settlement is so small relative to the total damages, we've decided not to make fine distinctions," Miller said.

Fishermen who hired their own lawyers and filed individual lawsuits, known as direct action plaintiffs, will get the same amount as those who are part of the class action, according to Miller.

Natives are asked their name, age, Social Security number and village. They must merely show that they are Native Alaskan and lived in the spill area.

Business owners are asked their gross and net incomes for the years 1985 through 1991 and the amount of loss they attribute to the oil spill. Property owners are also asked to show how much they lost due to the spill.

There is also a form that allows people to "opt out" of the settlement if they want to sue Alyeska on their own.

The settlement must be approved by the state and federal court judges who oversee the oil spill litigation, and the deal could still be scuttled. Exxon, for one, has put the courts on notice that it doesn't like a provision that prevents the oil giant from suing or making any claims against Alyeska.

Miller said Alyeska could pull out of the deal if it still faced a court battle with Exxon, or any of the plaintiffs.

"They're trying to buy global peace. They don't want any leftover lawsuits they'll be defending for the next five years."

Story Index:
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