Two judges overseeing the massive litigation arising from the 1989 Exxon Valdez oil spill approved a $98 million settlement Thursday between Alyeska Pipeline Service Co. and thousands of fishermen, Natives and others harmed by the spill. Sharing the bench in a federal courtroom, U.S. District Court Judge H. Russel Holland and state Superior Court Judge Brian Shortell accepted the settlement and an elaborate payment plan to compensate more than 20,000 parties.
"We are jointly satisfied this settlement is fair, reasonable and adequate," Holland said. Shortell nodded in agreement.
But their action doesn't mean the checks are in the mail. Exxon has asked Holland to block the settlement because the oil giant and its shipping subsidiary fear that terms of the agreement could hurt them. Holland is expected to rule on Exxon's arguments within a few weeks.
Among other things, a condition of the deal would bar Exxon from later suing Alyeska over its role in the spill. Alyeska has the right to walk away from the settlement unless the court accepts that provision.
"If Exxon loses billions of dollars at trial, we don't want them coming after us for billions of dollars," said Allen Katz, a Los Angeles lawyer representing the pipeline company.
Nevertheless, Katz said he was happy the judges found the terms of the deal fair. Attorneys for the individuals, businesses and corporations suing over the spill also said they were pleased the judges accepted the settlement and a plan for distributing the money.
"We're 60 percent home," said Dave Oesting, an Anchorage lawyer who represents commercial fishermen and who helped negotiate the deal. "There's so much ground work in place now."
Between 20,000 and 25,000 parties are expected to receive a piece of the settlement, said Lloyd Miller, who represents Native villagers and coordinates the litigation for all the plaintiffs.
Roughly 70,000 claim forms were mailed to limited-entry permit holders, cannery workers, business owners, land owners, and everyone in the oiled villages of Prince William Sound. Miller said more than 20,000 forms have been returned and they are still trickling in his office received about 100 on Thursday.
After expenses, $87 million would be divided among the plaintiffs. The largest slice, $44.8 million, or 51.5 percent, would go to commercial fishermen. That sum is further broken down by gear group and region. Payments would range anywhere from a few dollars for an upper Yukon River salmon fisherman to more than $30,000 for a Chignik seiner.
A sum of $11.7 million would be paid to village and regional corporations in the spill region, and Native villagers are expected to receive $2,000 to $4,000 each, according to Miller.
The attorneys originally predicted that payments from the settlement would be mailed out by the end of the year. But with the delay caused by Exxon's lawsuit, they said they are not optimistic.
Holland must rule on three issues posed by Exxon.
One is the question of whether Exxon can seek damages from Alyeska if the oil company loses at trial.
Another is the question of whether payments from the Alyeska settlement should reduce payments made to certain parties by the Trans-Alaska Pipeline Liability Fund. Exxon argues they should because Exxon is required to reimburse the fund for any oil spill payments.
Finally, Exxon wants Holland to rule that any legal disputes between Exxon and Alyeska should be settled by an arbitrator, not by the federal court.
Lawyers on both sides said they expect Holland to rule promptly on those matters, partly because the court is working against a tight deadline.
The trial against Exxon is now scheduled to begin May 2 in federal court, where all the cases currently reside. If Exxon wins its arguments and Alyeska pulls out of the settlement, all the parties will have to begin preparing for a trial that includes Alyeska as a defendant.