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


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Daily News reporter

Anchorage Daily News
Date: 12/28/89
Day: Thursday
Edition: Final
Section: Nation
Page: A1

ANCHORAGE- Alyeska Pipeline Service Co., Exxon Corp. and other oil company defendants in more than 150 lawsuits resulting from the Exxon Valdez oil spill are asking that all evidence gathered before trial be kept secret from the public.

In papers filed in Anchorage Superior Court, the oil companies propose a sweeping order that would bar all the parties from disclosing virtually anything learned during the discovery phase of the litigation, among the biggest and most complex environmental actions ever. The order would shield all legal motions, corporate records and sworn statements of company officials from public view.

Attorneys suing Exxon say the lawsuits may not go to trial for a decade, and a majority probably will be settled out of court. A secrecy order could thus prevent the public from learning exactly what caused the disastrous March 24 wreck of the Exxon Valdez, or why efforts to contain and clean up 11 million gallons of crude oil from Prince William Sound failed.

Even the state of Alaska would be forbidden to disclose what it had learned from the defendants about the spill, impairing the ability of lawmakers and environmental officials to do a better job of regulating the industry, officials said.

National Wildlife Federation President Jay Hair called the proposed order a "blatant and outrageous attempt to hide the facts from the American people. These oil companies are terrified that the public could learn the complete details about what they have done."

The oil companies say they want to prevent competitors from learning their commercial secrets, and they argue that state and federal rules of evidence don't create a general right of access to information, a contention disputed by public interest attorneys.

In its brief, Exxon asked the court to rule that all evidence obtained through discovery shall "not be used for any business, competitive, personal, publicity or other purpose." Disobeying the secrecy order would bring a charge of contempt of court.

In support of its request, Exxon introduced a sworn statement from John Q. Anderson, a management consultant for the company, who maintained that "disclosure of large quantities of internal business records will likely result in the disclosure of valuable trade secrets."

Anderson asserted that trade secrets can be derived from the sheer accumulation of documents even when the individual documents do not contain any secrets.

He said that competitors could piece together millions of bits of information, creating a mosaic of Exxon operations that as a whole would betray trade secrets.

Exxon attorneys and spokesmen did not return phone messages Wednesday to discuss their request.

Alyeska spokesman George Jurkowich said the blanket order is being sought to safeguard proprietary information that could harm corporate interests if made public.

"It's a broad request to protect information gained in a very wideranging discovery process," he said.

"What that means is, if there is information out there about Alyeska, you can come and ask Alyeska about it, and we'll make a judgment about whether to release it."

Alyeska is owned by a consortium of seven oil companies that pump about 2 million barrels of oil a day to the Valdez terminal and into tankers. During years of environmental regulation and press scrutiny, the company has zealously shielded its innermost operations from view.

But the entire Alaska oil industry came under a fierce scrutiny when the Exxon Valdez struck Bligh Reef. Attorneys from all over the country began packing their bags. More than 150 lawsuits have been filed in state and U.S District Court.

All of the state court cases have been consolidated for pretrial motions and discovery, which is the evidencegathering stage of a lawsuit. Judge Brian Shortell is scheduled to rule on the secrecy order and other aspects of the massive discovery process next month.

A parallel process is under way in federal court, which has jurisdiction over actions governed exclusively by federal law, such as the Sierra Club suit to compel further cleanup under the Clean Water Act.

Attorney Dave Oesting, appointed last week as one of two lead cocounsels for the consolidated plaintiffs, said there are so many different kinds of interests represented in the lawsuits that nobody can agree about secrecy. "We've fought this out," he said.

The plaintiffs range from the state of Alaska, which wants to prove Exxon and Alyeska were negligent in preparing for and responding to the spill, to fishermen who lost a season, tourism companies claiming that the bad publicity hurt business and a coalition of environmental groups suing to restore Prince William Sound and prevent future environmental damage. Some lawsuits were brought by individuals, some by classes of people. They rely on a welter of state and federal laws that are often in disagreement.

Despite this diversity, none of the plaintiffs has agreed to Exxon's ground rules.

"The idea that this will all be done behind closed doors is unacceptable," Oesting said.

The state of Alaska has not yet drawn up a list of evidence and witnesses it will subpoena. Because the state is claiming Alyeska and Exxon were negligent in preparing for and dealing with the spill, it likely must produce company records showing the companies knew or should have known that their spill planning was inadequate.

And those are the kinds of internal management and financial records the oil companies are most loathe to see in the newspaper.

Assistant Attorney General Craig Tillery said the state opposes Exxon's blanket request for secrecy but has no desire to pile up boxes of confidential records.

"A fishing expedition is the last thing we want," he said. "They could bury us, and I'm sure we could do the same to them."

The state wants Exxon and Alyeska to prove confidentiality on a documentbydocument basis. Under Exxon's plan, "you can wind up with hundreds of thousands of documents and no way to challenge the designation," he said.

Should Exxon obtain a blanket order, the state also has a "fallback argument" that "some kind of exception be made for the legislature and administration so they have access to make policy regarding future spills."

"Basically, we just think this case is a uniquely public case and affects a broad section of the public, virtually the entire state of Alaska. And the public does have a broad right to know what is going on," he said.

The state is not only a plaintiff, but a defendant. Claiming the state hindered its efforts to use chemical dispersants in the crucial first days of the spill, Exxon countersued. The company argues the state should be forced to pay much of the damages and cleanup costs.

Attorney Mike Dundy, representing seafood processors suing to recover for the lost harvest, said he also is asking the court to protect commercial information, but selectively.

"My view is that the industry is so competitive, if you have financial statements, contracts with fishermen . . . with brokers and buyers, all that stuff, I think that is sensitive financial information," he said.

Rival processors could gain an edge by studying such information, he said. But even the processors do not favor a secrecy order as broad as Exxon seeks.

"Exxon takes the view that everything should be confidential. I think that is horsepucky . . . as far as liability is concerned."

At the other end of the legal spectrum is Arthur H. Bryant, executive director of Trial Lawyers for Public Justice, who is pressing for a full airing of the evidence. He said the American people deserve to know how the accident happened, how to prevent another spill and how well the courts deal with environmental catastrophe.

The oil companies' trade secrets are protected by state and federal rules of evidence. But courts have ruled in several major publicinterest cases, such as the Agent Orange classaction suits, and various claims against cigarette manufacturers, that the public has a right to know.

"Exxon's basic proposal is to put all this information in a black box," he said.

Macon Cowles, lead attorney for environmental groups in the case, said secrecy would place enormous pressures on Exxon to pay off lawsuits to prevent the release in court of damaging information.

"Exxon can say, "OK, boys, let's settle, only if you will give us back the documents.' If you've been damaged in your business as a fisherman, processor . . . it's hard to say no."

Cowles said he has not heard a satisfactory explanation from Exxon about the disappearance of computer tapes of memoranda among top executives during the time of the spill. So he's not willing to let Exxon decide what is secret, and what is public.

Story Index:
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