Five Exxon Valdez oil-spill lawsuits are back in state court after a federal judge this week rejected a bid by Exxon Corp. to create an unlikely new spill plaintiff. U.S. District Judge Russel Holland on Wednesday ordered the civil cases cut away from a consolidated lawsuit now in federal court.
The suits were originally filed in state court, but the law allows Exxon to automatically move them to federal court. Plaintiff lawyers, who think they have an edge in state court, appealed the moves.
Lloyd Miller, a lawyer for plaintiffs, said Thursday that Holland's order was significant because Exxon had succeeded in moving every other case to federal court, where the oil giant believes it stands a better chance of winning.
Exxon officials in Houston, Texas, had no comment on the ruling Thursday, while Doug Serdahely, an Anchorage lawyer representing the firm, didn't return a phone call.
Parties to the remanded cases include the municipalities of Cordova, Seward, Seldovia, Kodiak and Kodiak Island Borough; Chugach Alaska Corp., a Native regional corporation, and a number of Native village corporations; and about three dozen commercial fishermen.
They are among thousands of governments, businesses, Native groups and others seeking billions of dollars in compensation from Exxon, owner of the tanker that in March 1989 dumped 11 million gallons of North Slope crude into Prince William Sound after running aground on a charted reef.
Holland's ruling was his third on the Native corporation suits and his second on the municipal suits.
In each instance, Exxon tried to move the litigation to Holland's court and each time he bounced the cases back to the state.
This time around, the plaintiffs argued Exxon's latest attempt, filed in September, was improper because it wasn't approved by Alyeska Pipeline Service Co., an original defendant in the lawsuits. Under law, all defendants must approve a move request.
Alyeska, which operates the trans-Alaska pipeline and the Valdez tanker terminal, is owned by seven oil companies: British Petroleum, Arco, Exxon, Mobil, Unocal Phillips and Amerada Hess.
Last summer, Alyeska settled its Exxon Valdez exposure by agreeing to pay spill plaintiffs $98 million.
Exxon argued that because Alyeska settled, it was no longer a defendant and its approval no longer necessary.
The company said Alyeska should actually be considered a plaintiff because of a provision of its settlement that prohibits Exxon from trying to make Alyeska pay part of any future spill-related judgments. Exxon owns a 20 percent share of Alyeska.
But Holland ruled that Alyeska was still officially a defendant when Exxon filed the petition to move the five cases. And just because the consortium and plaintiffs agreed on one issue in the spill case, the judge said, that doesn't make them partners.
"The court simply cannot ignore the reality of the general adversity of positions which have existed between the plaintiffs and Alyeska throughout this litigation," Holland wrote.
The five cases are the only ones currently in state court, but that could change. The 9th Circuit Court of Appeals in San Francisco is yet to rule on a plaintiff request last summer to return the bulk of the consolidated lawsuit back to state jurisdiction.
Plaintiffs have resisted Exxon's efforts to transfer all spill litigation to Holland's court, saying they fear many of their claims would be dismissed under federal law.
They say Alaska law allows damages for more types of harm and has lower standards of proof.
In addition, they believe the presiding judge could be significant.
Before the litigation was consolidated before Holland, state Superior Court Judge Brian Shortell had issued a number of rulings favoring plaintiffs. Since the consolidation, Holland has decided several issues in favor of the defendants.