SOME FEAR BILL WILL GUT SPILL VERDICT
STATE'S TOP LAWYER SAYS TORT REFORM PUTS $5 BILLION EXXON AWARD AT RISK

By NATALIE PHILLIPS
Daily News reporter

ANCHORAGE- Alaska's top lawyer thinks a bill passed by the Legislature and headed for the governor's desk could jeopardize the $5 billion verdict awarded the estimated 30,000 fishermen, Natives and others who claimed damages from the Exxon Valdez oil spill.

The tort reform bill, which puts a cap on punitive damage awards, includes a provision that would make the law retroactive to cover any case pending in court.

Attorney General Bruce Botelho said he thinks the retroactive provision is unconstitutional. However, if it survived a court challenge, it could affect the Exxon verdict, he said.

The author of the final version of the bill, Sen. Mike Miller, insists the bill would not affect the Exxon verdict. But, he said during a legislative hearing, even if a court ruled that it applied to the record Exxon verdict, the award still would be ''significant.'' The $5 billion verdict would be reduced to about $861 million, he said. And 75 percent of that -- or about $645 million -- would go to state coffers.

''I am not jeopardizing anything,'' Miller said. ''I don't believe it applies to Exxon.'' He added that he didn't know of any pending litigation that would be affected by the retroactive clause.

The revised bill's retroactive provision took many by surprise.

''It wasn't added in the 11th hour, it was added in the 11th hour and 59th minute,'' said Jeff Feldman, president of the Alaska Trial Lawyers Association. ''There was no hearing on that language.''

''It's a terrible bill,'' said Jerry Nolting, a Minneapolis attorney representing the plaintiffs in the case stemming from the 1989 Exxon Valdez oil spill. ''It is a very mean-spirited thing.''

An Exxon spokesman said the bill wouldn't apply to the Exxon verdict.

Gov. Tony Knowles has not decided whether he will sign or veto the bill, said Knowles spokesman Bob King.

The tort-reform bill, one of the most controversial and complicated issues tackled by the Legislature, would overhaul Alaska's civil-liability laws. Supporters say the measure will cut the number of frivolous lawsuits, reduce trial costs and help hold down liability insurance rates. The bill's critics argue it will hamper people's ability to file legitimate damage claims. The bill went through several modifications and then landed in Miller's Senate Rules Committe nine days before adjournment of the regular session.

When it emerged, it was completely rewritten, said Sen. Robin Taylor, R-Wrangell. ''I think everyone was in shock. That was just unheard of to have it completely rewritten,'' he said.

The rewritten version would cap punitive damages at three times the amount of compensatory damages or $300,000, whichever amount is greater. It also turns 75 percent of a punitive damage award to the state's general fund.

Miller's version also included the retroactive provision, which states the punitive damage cap would apply in any lawsuit where a ''judgment has not been entered.''

The Exxon verdict was returned by a federal court jury nearly two years ago, but Judge Russel Holland is still considering a handful of post-trial motions, so he has not entered a final judgment. The retroactive provision does not apply to cases that have progressed beyond final judgment and are under appeal.

''Does this do anything to the verdict?'' Feldman asked rhetorically. ''No one really knows. There is a fuzziness.''

One of the Legislature's attorneys, Michael Ford, thinks the language could affect the verdict. Ford wrote that it is likely, but ''the answer is not entirely clear.''

Exxon Corp. and Miller disagree.

In fact, Miller, R-North Pole, said he specifically asked that question before including the retroactive provision. He said he got a legal opinion.

''I don't remember who wrote it,'' Miller said. It was a private attorney, he recalled. He couldn't remember the name of the attorney or the law firm and said he would have his staff track it down.

His aide, Mary Gore, searched Miller's Juneau office late Friday, but couldn't find the letter. However, she found another letter in Miller's file .

In the letter, dated about a month before the retroactive provision was added to Miller's rewrite of the bill, Anchorage lawyer Brewster Jamieson said a punitive damage cap would not affect the Exxon verdict because the case was tried under federal and maritime law. He wrote that he was writing on his own behalf.

Exxon spokesman Ed Burwell cited the same reasons as Jamieson to explain why the bill would not affect the verdict.

Plaintiffs' attorney Nolting said that won't stop Exxon attorneys from trying to make the punitive damage cap apply. For example, if Exxon won a new trial on appeal, the case could end up in state court.

''It's a long shot, but they could make a motion that it should apply or they could try to wrangle this back to state court,'' Nolting said.

Lawyer Feldman said, ''Ultimately, Exxon will argue during its appeal that $5 billion was too much. And one of the things they will point to is this thing and say that the people of the state of Alaska have spoken and said what they think is reasonable.''

So why was the retroactive language added to the bill?

''As I have told you, I don't like punitive damage,'' Miller said. ''I am not a big fan of punitive damages.

''If you feel so strongly that someone should be punished, then you should go after them with criminal charges,'' he said. ''If it is not against the law, I don't know why you are punishing them.''

Miller said opponents of the revised bill are ''trying to raise a lot of red herrings'' by saying it it could affect the Exxon case. ''I think it is a much better bill,'' he said.

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