JUDGE SAYS EXXON, SUBSIDIARY LIABLE FOR DAMAGES

By DON HUNTER
Daily News reporter

ANCHORAGE- Exxon Corp. and its shipping subsidiary are liable under Alaska's pollution laws for the actual damages caused by the Exxon Valdez shipwreck, Superior Court Judge Brian Shortell ruled Wednesday.

An attorney representing plaintiffs in the massive oil spill litigation said Shortell's decision simplifies the case because it means the court won't hear arguments about whether Exxon Corp. is responsible for the damages suffered as a result of the spill.

"I think it's very definitely a victory for the plaintiffs in that . . . we're not going to be fooling around with any of the attendant issues and various theories for why the defendant Exxon wouldn't be accountable for their acts," attorney Dave Oesting said.

"They are accountable for their acts as a matter of law."

Oesting and Douglas Serdahely, who represents Exxon, said Shortell's ruling leaves to be decided the amount of actual damages suffered by each of the thousands of claimants who have sued in state court, and the point at which the company's liability for spill-related economic losses ends.

Serdahely said each of the thousands of claimants will also have to show that the spill and not some intervening action of another party caused the damages they suffered.

Oesting said Shortell's two-page ruling apparently does away with the need to argue a lot of subtle questions about whether the state's pollution laws are enforceable.

"Despite its brevity, when fully digested, what it really means is that our strict liability statute means exactly what it says," Oesting said, "and that there need be no further discussion in Superior Court with regard to the spill perpetrators' responsibility to pay actual compensatory damages caused by the spill."

The judge's ruling only affects compensatory, or actual, damages people and companies suffered as a result of the spill. It does not address punitive damages that the plaintiffs argue the companies should be ordered to pay over and above actual property or income loss as punishment for their conduct.

At the same time, Shortell denied a motion by another defendant, Alyeska Pipeline Service Co., to dismiss complaints filed by those who sued for " "purely economic damages where there has been no physical injury to a . . . person or property." Shortell said neither prior court decisions nor federal maritime law requires such a limitation on claims at this early stage of the lawsuit.

Plaintiffs in the case include the state of Alaska, a Native corporation, seafood companies and fishermen.

In the ruling, Shortell said:

* Exxon and Exxon Shipping are "persons" who can be held liable for pollution damage under Alaska law.

* The Alaska statute's definition of "compensatory damages" will apply. The definition includes injuries to people, real or personal property, loss of income, loss of the means of producing income and loss of an economic benefit. An economic benefit, under state laws, includes subsistence uses of fish and game.

* There is no factual dispute that Exxon Shipping and Exxon Corp. "are persons owning or having control over the crude oil released into Alaskan waters by the Exxon Valdez oil spill on March 24, 1989," and that crude oil is a hazardous substance under state pollution laws.

* Exxon and Exxon Shipping are "strictly liable, without regard for fault," for all actual damages caused by the spill.

* Because of the circumstances of the spill, the companies cannot rely on liability defenses specified in the pollution laws. Such defenses would have included arguing the spill was "solely" the result of negligence on the part of the state or federal government, an act of God or an act of war.

According to the attorneys and commonly used legal definitions, the spill would be the "proximate cause" of damage if the damage is part of a "natural and continuous sequence" of events that began with the spill.

For example, if a commercial fisherman suffered business losses because oil from the spill fouled his gear and prevented him from taking part in a fishery, the spill would likely be found to be the proximate cause of his loss of income and the companies would be liable for paying him for lost income.

However, if the fisherman's gear was untouched but he was unable to fish because state officials suspended a fishery out of fear, but no actual proof, that fish were oil-tainted, the spill might not be a "proximate cause" of his business loss.

Oil spill lawsuits have been filed in both state and federal court. In a tentative ruling earlier this month, U.S. District Court Judge Russel Holland said he plans to require federal plaintiffs to exhaust a $100 million pipeline liability fund limit set up by Congress before proceeding with the federal lawsuits.

Holland said he would make a final decision after hearing arguments from the plaintiffs and defendants in the federal cases.

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