EXXON VALDEZ - OIL SPILL 15 YEARS ON
JULY 2012 - EXXON VALDEZ DISMANTLED FOR SCRAP
The Indian Supreme Court ruled that the ore carrier Oriental Nicety could be beached and dismantled for scrap in the Indian port of Alang, the world's largest scrap metal yard.
Alaskan Fishermen Are Still Waiting for a Settlement
On March 24, 1989, Captain Joseph Hazelwood stepped onto the oil tanker Exxon Valdez having consumed, according to him, three vodkas on the rocks at various waterfront bars in the port city of Valdez. O’Neill, however, filed affidavits from Valdez bartenders claiming the captain drank the equivalent of five doubles, or, in the words of the Court of Appeals, enough to make most people unconscious.
“Exxon knew Hazelwood had an alcohol problem,” O’Neill told the American College of Trial Lawyers in a 2002 speech outlining the legal odyssey of the Exxon case. “They knew he had been treated for it, and knew he was drinking again.” After the spill, the Boston Globe found a pretrial deposition from an unrelated harassment suit filed against Exxon some years earlier in which the plaintiff, a second mate, said that Hazelwood’s problem drinking was so well known in the company that there was even a tired joke about it. “It’s Captain Hazelwood and his chief mate, Jack Daniels, that run the ship.”
The oil spill eventually spread down 1,200 miles of coastline, the equivalent of the distance between Minneapolis and New York. The environmental damage was catastrophic. Cleanup crews watched in horror as otters scratched out their own eyes to rid them of oil. U.S. Department of Justice teams recovered the carcasses of more than 36,000 migratory birds and a thousand sea otters, and believe these numbers represent only a fraction of the actual death toll.
It is now 15 years later in Cordova, perhaps the hardest hit of all the fishing villages on the Sound. The chill from the Childs, Sheridan, Miles and Scott glaciers is felt here, sometimes even during the summer. The Chugach Mountains cast shadows on Main Street through the early evening and sometimes into the night, when the sun sets late. Cordova, a town of 2,600 on the southeastern rim of Prince William Sound, is accessible only by plane or boat, and that’s how folks here like it. During the autumn and winter months, Cordova is a depressed fishing port—depressed since the spill—filled with former high-liners mending nets in cannery warehouses and bartenders refilling beer glasses. O’Neill moves his half-eaten sandwich to the side and points to a light-gray ribbon on the tablecloth, which stretches from the port of Valdez to the Gulf of Alaska—the Sound’s shipping lanes.
“These lanes are a kind of two-lane highway,” O’Neill tells me. “If you’re outgoing, you don’t cross into the incoming lane, and vice-versa. Now, keep in mind that in order to navigate an oil tanker in the Sound, you need a special license. Hazelwood was the only one on board with that license.” Just out of the port, the Valdez encountered some growlers—or chunks of ice separated from a glacier—and Hazelwood changed the vessel’s course from 200 degrees to 180 degrees, steering the tanker outside of the shipping lane. It was a significant maneuver, one that would have attracted the attention of the Coast Guard, had the man on watch not left the monitors to grab a cup of coffee at the very moment of Hazelwood’s turn.
I watch O’Neill’s finger cross the gray ribbons and slowly approach a clearly charted reef, clear even on this tablecloth: Bligh Reef. After crossing the shipping lanes, Hazelwood put the tanker on autopilot and increased the speed. He instructed an exhausted, unqualified third mate named Gregory Cousins to turn the ship when it came abeam of Busby Island. The turn was two minutes away. Hazelwood did not wait two minutes to supervise the turn. He left the deck and returned to his cabin. Gregory Cousins had never piloted a vessel outside of the shipping lanes, but was a conscientious student. He retired to the map room to chart the turn, which was, now, just a minute away.
“Now, at this point the lighthouse at Bligh Reef was on the right of the vessel. Every captain, every sailor, probably every deckhand on an oil tanker knows it should never be on the right side of the tanker.” O’Neill looks up at me. “They were fucked.”
For a few months after the Exxon Valdez leaked 11 million gallons of oil into the once-pristine waters of Prince William Sound, the catastrophe was imprinted on the national consciousness. But, as time passed, it became nothing more than a few stubborn media images: an oiled otter, a tar-covered seagull, men in haz-mat suits wandering the beaches spraying boulders with boiling water. An out-of-work commercial fisherman was never among the emblems.
When Brian O’Neill walks the streets of Cordova, he wears rainbibs, a polar fleece, a fisherman’s rain slicker, and heavy-soled work boots, looking like just another unemployed commercial fisherman. But in Cordova, no one mistakes him for a seiner or a gillnetter; he’s their lawyer. And when he walks down First Avenue, a guy in a truck is apt to slow down and honk. O’Neill will amble up to the driver’s side window, lean in and dispense some legal advice.
O’Neill is a stocky man with tousled blond hair and a round, soft face. He seems, on first meeting, deeply shy; but he has an acute sense—and appreciation for—irony. It’s a tool he uses both in the courtroom and in the barroom. O’Neill receives both accolade and invective from people in Cordova—sometimes both from the same person. “They are very different and very wonderful,” he says of his clients, nearly all of them Sound fishers or Alaska Native Americans. “They’re good people, people who are comfortable moving off the grid.”
O’Neill pays a visit to one of those clients, Virgil Carroll. “Our records show that a thousand claimants that we know of have died while this has been going on,” O’Neill says to Carroll. “Three to four thousand that we guess have died.” "Three of ‘em in my family,” Carroll says. Like most of the commercial fishers in Cordova who bought their permits before the spill, Carroll spent hundreds of thousands of dollars on his. Now he’ll be lucky if he gets $60,000 for it.
“What if you get money from the settlement?” O’Neill asks. “Young guys can start fishing,” Carroll replies. “It could help my boys; but it won’t bring the fish back.” Carroll’s boat is docked in Cordova’s old harbor, with a new “for sale” sign on it.
Alaska 1,200 mile coastal slick killed 36,000 birds
A Civil Action
The Exxon civil case, like the spill itself, is unprecedented. It began in 1990, when hundreds of fishers and Native Americans whose subsistence lifestyle had forever been altered and, in some cases, destroyed by the spill, filed lawsuits against Exxon. That same year, attorneys for Exxon filed motions to dismiss the charges in the five-count criminal indictment resulting from the spill. In technical arguments, the company claimed it could not be held criminally liable for the actions of Captain Joseph Hazelwood, despite the fact that officials had been told previously that Hazelwood was an alcoholic who had a history of shipboard binges. But perhaps the most memorable brief from this first round was the one in which Exxon claimed that crude oil was not a pollutant under the federal Clean Water Act.
“The crude oil on board the Exxon Valdez was not a waste,” Exxon Shipping attorney Edward Bruce said in Anchorage Federal Court. “It was a commodity.”
The next year, discovery in the Valdez case began, and O’Neill and his firm, Minneapolis-based Faegre & Benson, consolidated the individual lawsuits. This was a massive undertaking; by the time it was over, the case file would contain 14 million documents, including more than a thousand depositions.
On September 16, 1994, more than five years after the spill, a federal jury in Anchorage awarded in excess of $5 billion in punitive damages against Exxon to Alaska natives, property owners and commercial fishers on Prince William Sound.
Immediately, Exxon filed more than two dozen post-trial motions. It would be more than a year before these were resolved. In 1995, post trial motion practice began in Anchorage’s federal district court, and in 1996, a final judgment was entered. Exxon appealed. It would be yet another full year before the appellate briefing was completed and brought before the Ninth Circuit Court.
In the meantime, the pollution of a world-class salmon fishery had affected the market, diminishing demand for the Sound’s catch at a crucial time when there was already a glut of pink salmon, and salmon farms in Chile and Norway were taking up a larger share of the market. As O’Neill tells it, “these guys just lost shelf space permanently.”
Although pink salmon and herring catches peaked in the two years immediately following the spill, the two fisheries have since collapsed. Commercial fishing markets are fickle, sensitive to natural and manmade events. For example, after the catastrophic 1964 earthquake in Alaska, Japan, Cordova’s largest market, panicked about losing access to Sound fish, and so began overpaying. The 1970s and 1980s were times of large loans and million-dollar boats. Then the so-called Japanese Miracle disappeared, and Sound fish began losing value.
Then, suddenly, there were 11 million gallons of North Slope crude in Prince William Sound. Cordova was once a town of high-liners, a term reserved for the most successful commercial fishers, who might have brought in a couple hundred thousand dollars a year, if not more. Today, most fishers in Cordova will tell you there isn’t a single fisher in town who could be considered a high-liner by pre-spill standards.
One of the grimmest aspects of the spill’s effect on Cordova has been the state of the once highly coveted commercial fishing permits. In Cordova, commercial fishing permits are like homes, an asset that accrues value. In 1988, there were fishers in the town whose permits were worth nearly $1 million. Today, permits have depreciated in value by a staggering 90 percent.
Like the town of Cordova, the local Masonic Lodge is a ghost of its former self—its stucco and cement crumbles around the corners, its meager lawn is brown and sparse. Inside, 18 chairs have been placed in a circle and the upright piano has been pushed against the south wall. Tonight’s meeting is a kind of test-run, the preliminary gathering of fishers and cannery workers for a sort of focus group for Brian O’Neill. He returns to the stricken fishing villages on Prince William Sound on a fairly regular basis to update his clients on the progress—or lack of progress—of their case and to answer their questions about possible payout figures. With each year that passes, fewer and fewer Cordova fishers are counting on the Exxon money.
Most of the people in the room tonight remember Don Cornett’s visit to Cordova in the days following the spill as clearly as they remember the birth of their children. Six days after the accident, Cornett, an Exxon spokesperson, addressed heartbroken fishers and cannery workers in the town’s high school auditorium.
“You have my word,” Cornett told them then. “We will do whatever it takes to keep you whole.” No one in this room has forgotten that promise and no one has failed to notice that things haven’t exactly worked out that way.
A man walks in late. He pours himself a cup of coffee and stands back near the kitchen, listening to his neighbors talk about how they now consider their wives’ health insurance plans dowries and how the new definition of a high-liner is a fisherman whose wife has a good job. He listens, then turns to O’Neill and says, “Where in the hell is my money? If any of us knew we’d be having this meeting 14 years later, we’d have liquidated and moved out. Maybe we should have.”
The man’s name is Phil Lian, and in 1988, he had a life and a career fishing and selling supplies to Cordova’s fleet. He was a high-liner, one of the most successful fishers and businesspeople in Cordova. His family took vacations. His kids were going to go to college, then take over the fishing business that had been in the family for 160 years. His business was growing at 80 percent a year, and it was grossing $2 million a year.
But then after the spill, with no herring fishery and poor returns and prices on the others, no boats were going out into the Sound. Lian might have been able to survive had the herring fishery been closed only a year, but it has now been closed for more than 10 years. Lian is afraid the massive debts he’s accrued are all he’ll be able to leave to his children after he’s gone.
“Our lives are on hold,” Lian says. “If we are going to have a retirement, it is now going to have to be from that settlement.” “We’re going to get the award,” O’Neill says. “In regards to your anger…” “I don’t like to call it anger,” Lian says sharply. “I like to call it frustration.”
“Well hell, I’m angry!” O’Neill shouts. “When I started this case, I was a 41 year old with a wonderful legal career ahead of me. I’ve been working on this drunk-driving case for 14 years.”
Later, Jack Babic is taking O’Neill on a ride around the Sound in the purse seiner he hasn’t used for herring fishing in the 10 years the season has been closed. Babic uses his boat now to fish for red salmon; but the salmon prices have plummeted, and so he watches the halibut fishers and their haul jealously.
Babic and his wife, Heidi, are two of O’Neill’s 32,000 clients. Jack made out well after the spill; Exxon hired local fishers to help with the cleanup, and the company paid handsomely. The Babics took the money and bought a boat they hoped to pass on to their children. Then the herring seasons were cancelled, and salmon prices dried up, and suddenly the Babics had to start thinking about how to manage their finances until the Exxon payments came through.
“Fishing used to support this community, and quite nicely, but not anymore,” Babic says. “I think of the last 14 years as lost opportunity.” O’Neill asks Babic if he’s angry. Babic looks out at the horizon, one hand draped over the steering wheel. “I just try to make the best of the situation I have,” he finally says. “I’m still angry, but how long can you be angry? We’re fishers; we have to adapt.”
O’Neill says, “Eighteen to 24 months, and the final and whole settlement will be distributed.” But it’s clear Babic doesn’t believe this forecast.
The Ninth Circuit Court of Appeals in San Francisco has been a source of great frustration for O’Neill, who considers it one of the most sluggish federal courts in the country. In 1993, the Valdez parties had appealed to the Ninth to settle the question of whether the case ought to be tried in federal or state court. More than a year passed with no word from the Ninth as to how the parties should proceed. Meanwhile, in Cordova, the herring season was canceled, and thousands of commercial fishers were suddenly facing another summer of devastating losses.
Finally, on May 3, 1994, the parties to the Valdez case decided to start trial in the federal courthouse in Anchorage without the requested Ninth Circuit guidance. The case was conducted in three exhausting phases. Phases one and two dealt with questions of recklessness (a finding of recklessness against Exxon was necessary for O’Neill to have any hope of recovering punitive damages) and actual damages caused by the spill. Phase Three determined if punitive damages would be awarded, and if so, how much.
In closing arguments in Phrase Three, O’Neill told the jury the world was watching them very carefully. “If the headline in the newspapers…is ‘Exxon Walks Away,’ ‘Exxon Gets Off,’ ‘Exxon Goes Scott-Free,’ what does that say to the rest of the oil industry?” Exxon’s lawyers pointed to the $2 billion cleanup of Sound beaches, which pumped huge amounts of money into the local economy. Wasn’t the two billion dollars the company spent for cleanup punishment enough?
Despite losing the case, Exxon would spend the next nine years continuing to mount a defense that would, they hoped, result in the Ninth vacating or overturning the punitive damage award. In 1998, the fully briefed Exxon appeals went to the Ninth. And sat there. The next year, 60 Minutes broadcast a segment on the 10-year anniversary of the spill; it focused, in part, on the inaction of the Ninth in the Exxon matter. The day after the segment aired, the Ninth scheduled argument. The appeals on the merits of the action were finally argued in May of 1999, 10 years after the spill.
The briefed and argued Exxon Valdez case then sat in the Court of Appeals through the rest of 1999 and all of 2000. By this time, nearly 3,000 of the almost 32,000 claimants in the case had died. The debt load in Cordova was, according to some people in town, about to exceed the award.
In November of 2002, in what was perhaps the nadir of Brian O’Neill and Cordova’s experience with the Ninth Circuit, the court vacated the punitive damage award of $5 billion, calling it excessive. It sent the case back to Judge Russel Holland for recalculation.
A Devastated Community
Steven Picou, a professor of sociology from the University of South Alabama, rivals O’Neill for the title of most popular out-of-towner in Cordova. He has spent the last 14 years studying the effect the Exxon spill has had on the towns of the Sound. Over time, his focus has slowly shifted from the effects of the environmental devastation on the fishers to the sociological and psychological damage the unmitigated legal battle has inflicted, in Cordova in particular.
“You have in the Sound small, face-to-face communities where a handshake is worth a lot more than a legal contract,” Picou told me. “I think the vast majority of people in Cordova believed the reps from Exxon. And probably those reps thought they were acting in an honest and forthright manner. But once the issue transformed from how-to-get-out-of-the-media-limelight to how-to-get-in-a-position-to-protect-our-profit-margin-and-stock-value, then it changed overnight. They zipped up their purse strings, got out of town, and said: you’ll find us in the courtroom.”
In a keynote address presented at the Earth Charter Summit in 2002, Picou outlined what he considered Exxon’s legal strategy for avoiding payment of the damages. “Hire the best attorneys money can buy, and aggressively attack plaintiffs in every manner possible,” he said, “while also delaying court proceedings by any legal means necessary for as long as possible, no matter how frivolous the challenge. Hire your own scientists to evaluate ecological damages and pervert the process of science by hiding behind any degree of uncertainty.” It wasn’t long before Picou was drawn into the litigation himself. In 1992, he received a civil subpoena from Exxon attorneys, demanding that he turn over his research documents—including documents that contained the names and addresses of interview subjects. After a protracted legal fight, Picou was able to protect the anonymity of his subjects.
The data Exxon was so eager to subpoena from Picou included damning statistics from Cordova: a third of fishers were clinically depressed; approximately 37 percent exhibited symptoms of Post Traumatic Stress Disorder; 20 percent had clinically significant symptoms of anxiety. Sixty percent of Cordova commercial fishers have had to take second jobs to make ends meet. Toxins, Picou was finding, had contaminated more than just the water; they had contaminated the town of Cordova.
After 15 years of bad press, it’s not surprising that Exxon’s chief spokesperson, Tom Cirigliano, doesn’t want to talk about Cordova anymore. Since 1989, Exxon has spent a total of $2.1 billion on attempts to clean up the Sound. It has paid out about $1 billion settling state and federal claims. (Most of the government’s settlement money was used to buy land in the Sound and on the Kenai peninsula from Native corporations.) The company also paid about $300 million to the 32,000 plus fishers in the Sound towns for losses suffered in 1989 when the entire fishing season had to be canceled. Divided equally (and the payments were not equal), that is roughly $9,500 a person. Fishers in Cordova could usually bring home $100,000 a season.
“I don’t want to waste any more time talking about it with you,” Cirigliano said when I called him at his Houston office. “When they say we’re dragging our feet, they’ve appealed a number of issues with regard to this and dragged their feet when it was to their advantage considerably. And as far as Brian O’Neill, we don’t want to give an opinion on him. He’s talking out of both sides of his mouth.” Cirigliano then directed me to a website ExxonMobil maintains, which is dedicated to its P.R. efforts regarding the spill. “That’s Mobil without the e,” he said dryly.
The collection of press releases and opinions found on Exxon’s website run the gamut from its statement that Prince William Sound is “healthy, robust, and thriving” to changes the company has made to prevent another Valdez (no more safety-sensitive jobs for people with substance abuse histories) to its opinion that ExxonMobil is “exercising a fundamental right to appeal these damages.”
Much of Exxon’s P.R. energies are directed towards refuting claims made by government scientists such as Jeff Short, who, in January 2002, reported that there was still Exxon oil—lots of it—in Prince William Sound. Short’s research found more than 200 times more oil than Exxon had claimed. On the hardest hit beaches, Short reported that the chances of finding oil there 12 years later were better than one in three.
The National Marine Fisheries Service Lab in Juneau found that weathered oil was affecting young salmon and herring. Among the results of one investigation were eggs that died before hatching, grossly deformed spines and jaws in those that managed to hatch and a considerable decrease in returns of salmon from the sea.
Exxon struck back with David Page, a professor of chemistry and biochemistry at Bowdoin College in Maine. Page disparaged Short’s study, calling it bad science. Although Tom Cirigliano encouraged E to contact Page regarding the state of the Sound, he did not respond to requests for an interview. “Prince William Sound today is as healthy as it would have been if the spill hadn’t happened,” Page wrote in the Alaska Daily News. If this claim sounds unusual, it helps to know that Page is on Exxon-Mobil’s payroll.
When Short wrote to Page and another Exxon scientist, Jerry Neff, in 1993 for data supporting presentations they’d made at an Exxon-sponsored symposium in Atlanta, both refused to divulge it, “citing,” Short told me, “client prerogatives.” Yet Exxon’s stated policy regarding this type of data-sharing couldn’t be more explicit: “ExxonMobil continues to believe that the public interest would be better served by sharing data from scientific studies, and we will continue to advocate this policy as we have in the past.”
On January 8, 2002, ExxonMobil filed a Freedom of Information Act request for all of Short’s study records. The company has publicly complained that it has been forced to file the FOIAs because many of the agencies performing research on the Sound won’t release their data without them.
“That complaint is specious,” Short told me. “An easy way to get this information is to just give us a phone call and ask for it. But Exxon has never done this.”
As a result of Page’s charges, the sponsor of Short’s research, the Exxon Valdez Oil Spill Trustee Council, commissioned a scientific review of Short’s methods by a National Marine Fisheries Service panel. The review called Short’s study “rigorous, well-designed and executed.”
Just Below the Surface
The water in Northwest Bay off Eleanor Island is dark and cool, and the beach is rocky. A floatplane from Cordova has a smooth saltwater landing strip to the beach, with stony, pine-covered cliffs rising up on either side. On the beach, Short walks towards the water with a garden spade in his hand, squats down and turns over a few barnacle-covered rocks. Short removes two spadefuls of sand and black, viscous oil slowly begins to fill the new pit. “It’s really an insidious poison,” Short says, shaking his head. “The fact that we can find this much oil 15 years later—and oil in this toxic condition—means it did a lot more damage than we think.”
In fact, the journal Science published a study in December 2003 that found residual oil harmed salmon eggs for at least four years following the spill, and that significant amounts of crude remains on the sea bed, where it poisons mussels and clams—and by extension the animals that feed on these creatures, including otters and ducks. And, like Short, the study’s researchers easily found pockets of oil on the beaches.
O’Neill focuses on the symbolic value of a payout rather than on the money itself, because he knows that despite the fact that it’s the largest punitive damage award in history, it may not be enough to help everyone out of the hole. The federal government will take 38 percent of the award as taxes (nearly $2 billion) and 22 percent will go to O’Neill and his team.
“To see the system work would be very important to this community,” O’Neill says. “To see this very powerful company not be able to get out of it…it would just be a euphoric feeling to see justice.” At the Cordova Masonic Lodge, O’Neill paces back and forth, his hands in his pockets, as fishers and Native Alaskans file in and take seats. “I think we’re down to the last 18 to 24 months,” O’Neill says. It’s obvious no one in the lodge believes him.
Exxon never came to O’Neill’s team with a settlement offer. But that’s okay with O’Neill. “If I was to come to you guys with $550 million,” O’Neill says at the meeting, “you’d say…”
“Bullshit,” someone offers.
In 1994, it would have been impossible for O’Neill to argue that Exxon oil would remain on Sound beaches 15 years after the spill. That was speculative, and the compensatory award covered only actual damages. But what happens in a situation in which a fishery is closed for 10 years? When some fishers have not set a net to the water since March 23, 1989?
“What happened up here was just wrong,” O’Neill says to me before he heads to Cordova’s tiny airport. “Most Americans have a very short memory, especially when it comes to things that are unpleasant. There’s a whole generation of people who don’t know this happened.”
Some people might say by filing motion after motion and drawing this legal battle out interminably, Exxon is simply using their right to take full advantage of the legal system.
“They do have the right to take hundreds of millions of dollars and grind these people into the ground,” O’Neill says. “But that doesn’t mean it’s morally right. The only guiding light Exxon has is profit. We’ve learned in the last few years that these companies are laws unto themselves.”
At the end of January of this year, Judge Russel Holland increased the punitive damage award against Exxon from $4.2 billion to $4.5 billion, plus the $2 billion in interest that has accrued on the award since 1994. O’Neill expects Exxon will appeal.
ASHLEY SHELBY is the winner of the William Faulkner Award for Short Fiction and the author of Red River Rising: The Anatomy of a Flood and the Survival of An American City (published by Borealis Books in April).
Valdez Oil Spill Trustee Council
for Alaskan Coastal Studies
Center for the Environment
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