Exxon Valdez Oil Spill by Will Reed

My project was on the Exxon Valdez oil spill of 1989 that occured in the Prince William Sound. I tried to find a variety of people to interview on the issue to get as differing perspectives as possible. However, considering the number of people the spill affected, I really only got four views out of the millions of perspectives available.

Dave Tarshes is a lawyer who works at the same law firm as my dad (Davis Wright Tremaine - DWT) and my dad arranged for me to interview Dave. This interview focused on the legal aspects or the spill and the litigation with Exxon over its liability for the damage.

Chris Wooley was living in Barrow, Alaska at the time of the spill working as an anthropologist/archaeologist for the local government. He spent six weeks working on the shoreline cleanup assessment team as an archaeologist who was contracted by Exxon. He also wrote a paper explaining how, prior to the oil spill, Prince William Sound was not the pristine environment many people think it was.

Brian Hawkins is the Harbor Master in Homer, Alaska. He was also contracted to work on his boat to clean up the sound immediately after the spill. I contacted him through the fact that he is my mother’s judicial assistant’s son’s (Matt Clarke’s) boss.

Matt Clarke is the son of my mom’s judicial assistant and works as the Deputy Harbor Master in Homer, Alaska and also runs guide fishing trips on rivers. His interview is slightly confusing because it was done simultaneously with Brian Hawkins’ so there are times where Matt’s thoughts were based off of something Brian said (which, to be honest, was an extremely effective way to do this. The two of them were free to discuss everything and I got some great stuff.)
------------------------------------------------------------------------------------------
Dave Tarshes (interview done by phone and rewritten afterwards)

Who are you and how were you involved in the Exxon Valdez spill of 1989?
First let me give you a description of the litigation related to the spill.
After the spill, many lawsuits were filed. State governments, along with the federal government, sued Exxon for damage to the environment as did many private individuals who were harmed. There were 70 plus law firms involved in the case including DWT. Our clients included mostly commercial fisherman but also people who processed fish, native Alaskans, area businesses, tour guides, and the list goes on. Overall there were probably 30,000 individuals in total. They became the plaintiffs in our lawsuit.
The courts set up an administrative structure responsible for coordinating the lawsuit. They appointed two lead counsels: one was Dave Oesting and the other was Brian O’Neil, who was the lead trial counsel. Your father knows Dave Oesting who is a partner in the Anchorage office of DWT and the co-lead council. I was appointed head of the “law team”. This meant that everything that had a law angle to it like briefs, jury business and appeals, I was in charge of. I was given this role in 1990 and I would say that the Exxon case would end up taking up about 40% of my total legal work.
My dad has mentioned to me, and I have also read things about, the controversy over punitive damages relating to the spill. Can you tell me about that?
[Small chuckle] There was a trial in Alaska in 1994 where the jury awarded the plaintiffs, our clients, $5 billion dollars in punitive damages against Exxon. Then in 2001, I think, the 9th Circuit Court of Appeals said that amount was too high but they didn’t specify an amount they thought was reasonable. Instead the circuit court sent the case back to the Alaska federal court in 2003 where Judge Holland said the amount should be $4.5 billion. You should double check both of those years because I’m not exactly sure. After another appeal in 2007, the amount was again cut to $2.5 billion. The case was then appealed to the Supreme Court, which finally cut the amount to finally cut to $500 million.
So what was the reason for the drastic decrease?
Before I can answer that I need to give you the basics on how damages work. There are two types of damages awarded in a case like this one. There are compensatory damages, which you can tell is related to the word compensation. Compensatory damages are defined as what is paid back for injuries according to the value of the injury. The federal court ordered Exxon to pay our clients $507 million in compensatory damage. That award didn’t change. These funds were used to pay back fisherman who had lost a lot of income due to the spill. The second kind of damages awarded are punitive damages. These are more complicated. They go over and above compensatory damages. They are there to make the guilty party pay more than just the compensation to injury. Punitive damages serve two purposes. The first is to punish the guilty because what they did was wrong. The second purpose is to discourage others from making the same mistake in the future.
When deciding to award punitive damages one thing you look at is the conduct. This was emphasized in the Exxon case. A lot of people think the bad conduct was mostly on the part of Captain Hazelwood but this is not so. The worst conduct was that Exxon knew that Captain Hazelwood was an alcoholic and they knew he had relapsed, AND they knew that he was navigating through a sensitive area. They knew all of this and acted recklessly allowing Hazelwood to continue as the captain of the ship.
What do you think of the Supreme Court’s decisions?
To put it simply, I think the decision was wrong. We won two out of three issues but lost on the amount of damages. The reasoning behind the Supreme Court’s decision was partly that they believe in that “a case of this type”, I’m not exactly sure what was meant by that, the ratio of compensatory damages to punitive damages should be 1:1. Now in this case the cut of the punitive damages to bring them down to the amount of the compensatory was extreme, but it happens.
I think the decision was wrong because it didn’t fulfill the definition and the goal of punitive damages. The amount that Exxon ended up paying was not nearly enough to punish them. Exxon is a huge company and could afford to pay way more than what they ended up paying. I think they got off very easy. The other problem is that because Exxon got off easy, other oil companies, like BP for instance, are not deterred from making the same mistakes and they are not as careful as they should be. BP should have looked at the amount Exxon had to pay and said “We should be careful”. But instead the amount Exxon had to pay doesn’t scare BP in the least.
Also it was bad that the whole process took 20 years. This concerns me greatly that the legal system took this long to deal with this important issue. Maybe you’ve heard the old saying: “Justice delayed is justice denied.”
And why did it take so long?
There really is no simple answer to that question because there is no simple reason for the length of time it took. For one thing, the 9th Circuit Court of Appeals sent the case back and forth because they were indecisive. I guess another reason is that the decisions were being made by slow judges. But more than that, the Supreme Court struggled immensely with the punitive damages. It was a difficult issue. Finally, it’s no secret that Exxon’s legal strategy was very effective at slowing down the process.
---------------------------------------------------------------------------------------------
Chris Wooley

I need to let you know three things right off the bat.

1) I was initially very disturbed by the images of the spill, and, like a lot of Alaskans with a vested interest in the natural resources of our state (and the cultural resources – the archaeology) I was angry and scared about the effects of the spill. I was in Barrow at the time (an Eskimo community) as I mentioned in my previous note, and quite frankly, most if not all of us were outraged by the initial images of the spill. We didn’t know what to expect.

2) I was later repulsed by the greed shown by many of my fellow Alaskans who felt the spill was a chance to get money for nothing – much of it they expected to receive through class action lawsuits. Also, during the cleanup, many people tried to take advantage of the situation by over-charging, stealing equipment, etc. There was a “wild west” mentality in the summer of 1989.

Exxon paid billions for the cleanup and legitimate claims for actual damages. The subsequent legal issues related to “Punitive Damages” (punishment) decided on by the Supreme Court were issues that lawyers understand (precedent, percentages of Punitive versus actual damages, etc.)

What I saw was that big time east coast class action lawyers showed up promising folks LOTS of money to sign on to the lawsuits. Many people had their hopes sky high, but legal issues (way beyond the scope of my pea brain) prevented all the Punitive (punishment) money being paid out. I really don’t know the legal issues involved, but I do know Exxon was portrayed as stingy – however, their loyalty is to their shareholders, so it seems like there was an inherent “conflict” of perceptions there.

In subsequent spills, I have seen some of the same lawyers show up and try to get their clients free money for wildly speculative claims and for the hope of a similar ruling on punitive damages.

Of course, the press loves to beat up on Major Corporations (and I’m no Pollyanna - they are all about generating profits make no mistake about it) so this sound byte aspect of the story ends up being Big Bad Oil Companies = Bad; small independent fisherman = Good. My personal experience was that there are some very good people working for Exxon, and the same for BP. There are some amazing Alaska Native people and commercial fishermen, too. I know a lot of folks from both companies, from villages and from the fishing industry. The fact that there was a shipwreck (Exxon) or an engineering accident (BP) does not mean all these industry people are evil. It’s a shame the press tries to “tar them all with the same brush” so to speak.

3) Many people forget that, in Alaska, in 1989 we were facing a huge recession of our own. Oil prices had plummeted in the mid-1980s (85% of Alaska’s wealth depends on oil – like it or not) and people were really hurting. Ironically, in a lot of ways (the economists showed this), the job opportunities and billions spend on boat contracts, wages, etc during the cleanup helped the Alaskan economy revive. The economists wouldn’t say that the spill was a good thing, but it’s undeniable that there were significant positive economic benefits to the state at a time when a lot of people were really hurting.

Attached is a paper I wrote after my experience during EVOS that will give you a good idea about my “view” of the spill and its impact in The Big Picture. As an archaeologist, my “frame of reference” is generally hundreds/thousands of years. I looked at the spill and its impacts from that perspective. Some people called me unprofessional names when I published this, saying I was an “Exxon whore” (and worse). It was ironic because I felt that I kind of stuck my neck out to be honest and not over-state things either way. But emotions rule for some people. You’re seeing that now in the Gulf.

I’m sorry not to be able to take a lot more time to respond, but I put a lot of time and effort into this paper, as well as another one I wrote: “The Alutiiq Culture Before and After the Exxon Valdez Oil Spill.” I don’t have a pdf of the Alutiiq paper (from 1994, I think), I apologize. I also got grief about that one. There were lawyers (and expert anthropologists) who claimed the spill “destroyed the Alutiiq culture.” I detailed the actual impacts (yes, people were affected and the villagers closest to the spill were most directly affected and emotionally affected.) But culture is an adaptive mechanism and to claim the spill “destroyed” culture was, in my professional opinion, non-sense. Also, the spill affected different people differently within the native community. Again, I tried to step back, look at the big picture, and try to make an objective assessment of the impacts. I have noticed that since the spill there has been a proliferation of Alutiiq traditional dancers in many of the villages and that the spill may even have strengthened some aspects of local village culture.

The big “take-away” is that during the initial stages of the spill, there are huge emotional impacts and different people deal with that differently. Some groups of people have never gotten “over it” – and my observation was that some groups who were so emotionally and financially tied up in the endless litigation continued to stay angry and upset. I am not saying people shouldn’t take advantage of their rights under the legal system, but it seemed like the litigation victimized people long after the direct spill impacts ended.

You asked about the Supreme Court decision and how it may have affected BP’s “readiness.” I don’t think that’s the issue. The big parallel I see between the lack of “readiness” in Prince Wm Sound and the lack of “readiness” in the Gulf is the lack of effective regulatory oversight. In Alaska, the Alaska Department of Environmental Conservation (the regulatory group with oversight on the spill preparedness) had been GUTTED because of budget issues in the late 1980s. They weren’t effective in ensuring Industry was prepared. I think a similar process has played out in the Gulf. I haven’t read their response plans, but it sounds like the MMS was not being an effective regulator and ensuring effective preparedness.

I got to see hundreds of miles of remote shoreline in Kodiak and the Alaska Peninsula. Very little oil made it down there relative to the oil in Prince Wm Sound. Also, the press put out a “map” of the oiling in 1989 implying that all the beaches from Prince Wm Sound to the Alaska Peninsula were all oiled. Our shoreline assessments – where teams of specialists (and oil geologist, a biologist an archaeologist and a Coast Guard and Landowner representative) produced maps that showed heavy, moderate and light oil for 1989. The press (New York Times printed it) took that map and took the full extent of the area and put a big black outline over the whole area from the Copper River to the Alaska Peninsula and everyone in the country thought that the whole area was greased. I saw a similar map of the Gulf the other day. From what I’ve heard from the folks on the ground down there, that map is totally inaccurate, implying that the whole gulf is full of oil. It is a mess, and it’s unprecedented in the sense that it continues to spew oil.

I hope this has been helpful, and I will leave you with this final thought: things are never “black and white” like the press tries to portray them – there are lots of shades of grey when you really start looking into things. Use your own independent critical thinking skills to guide you.

Best wishes, Chris
------------------------------------------------------------------------------------------
Brian Hawkins (interview done by phone and rewritten afterwards)

Brian, I was told that you were in Valdez during the spill?
Yeah. That was in 1989. So I was a commercial fisherman in the area who fished in Prince William Sound out of Homer, Alaska. I had a 48 foot boat. Now I remember the spill because it happened before the big fishing season had opened. It was during the spring. It was on Good Friday. So I remember that it happened on Friday. On Saturday morning I got a call telling me about the spill and they asked if I could go to work with my boat to help with the cleanup. They asked me how much I charged and I just doubled my rate. They accepted it really quickly and to this day I feel like I went to cheap, you know?
So by Sunday I was working as support for the skimming ships. We would skim oil from the water and take it back to unload it at a mother ship. Now, I think I worked for about 100 days straight. All we did was pull skimmers through the water. We pulled these skimmers through what seemed like “rivers of oil”. I mean just tons of oil. It was like we were pulling the booms through brown chocolate mousse.
So it seems like you reacted to the spill fairly quickly. What do you think about the accusations that Exxon’s response was slow and ineffective?
Well anyone with any common sense can tell that the response was bad. What we learned was that people standing on the beaches shoveling oil for hours will never have any real positive effect.
Can you tell me about the damage the spill did to the area?
A really obvious effect was the wildlife that was affected. So on our skimmer was a conveyer. When we pulled up a haul of oil we had to check in the thick oil for anything. We had to poke lumps to make sure that there wasn’t a sea otter because we couldn’t put sea otters in the tank.
A lot of people said we should be cleaning these animals off but scientists said we should be euthanizing them. And I believe this to be true. There’s really nothing we could do for most of these animals. It was too expensive and hard to clean them and most of the time the cleaning didn’t work very well. I mean, it would have been better to just put a .22 shell through their head.
Compared to the number of animals affected, the number of people affected was actually pretty small. I was fishing for salmon in the ‘80s. The year of the spill, it was actually quite funny, Exxon informed us fisherman that if we wanted to settle a claim to get any money, we had to fish that year. It was like to prove to them that there weren’t any fish left in the water. So basically all us fisherman were stuck in the same area fishing for fish that had had their populations completely decimated. And since your settlement was based on your catch that year it turned into a competition, and with all us fishing in the same small are it was really competitive. I mean, no one really knew how to address compensation.
So the year before the spill I could sell the fish I brought in for somewhere from 70-90 cents per pound. The year of the spill was a complete waste of time to fish. After the spill I sold my catches for something like 12 cents per pound. The way it worked was that as soon as the spill happened, demand for seafood from the region plummeted because, well of course, no one wanted sea food from a “contaminated environment”. I mean, who wants that? And it’s the same deal with the stuff coming from the Gulf of Mexico and that area right now. The demand for food from their area is going to fall through the floor.
Then I guess over the last five years the industry has started to recover. But of course I got out of it a long time ago. I had a family of five who I was trying to feed with just my income and with no fish and no demand for the fish I was actually able to catch I just got tired of it and eventually just quit. After that I got a skippering job for some fairly big companies.
Do you see anything we learned from Valdez being put to work in the Gulf of Mexico right now?
Well obviously a lot of new knowledge and equipment is being used and in that way I see learning. But what wasn’t learned was that… well, it happened again. We LET it happen again. Yeah, in a slightly different way but still. With Exxon, we had never had a catastrophe in that way of that magnitude. But just because it hadn’t happened doesn’t mean we shouldn’t have planned for it. It’s the same in the Gulf. We are doing all this off shore drilling and oil stuff in the water and even though we’ve never had a problem like this before we still should have planned for it. There’s no excuse. It’s just us being arrogant. We need to make our government responsible for these things because they didn’t plan for it. But now they’ll plan for it. I think they should keep looking for new oil; we need the oil. I can guarantee this won’t happen again. Now that it’s happened once we’ll prepare for it and it won’t happen again. We all pay the price. My advice to fisherman down there [in the gulf] is to get a new job as quick as possible.
------------------------------------------------------------------------------------------
Matt Clarke (interview done by phone, retyped afterwards)

What are your opinions on the cleanup process? (His response to Brian’s thoughts on Exxon’s bad cleanup response)
Well now, Will, you have to understand that in 1989 I was only 18 in a economics history class so my personal memory of the spill isn’t vast.
What I feel we learned from the lack of speed and efficiency in cleanup was that spill response equipment needed to address a major spill. We had never had a spill the size of this one so we had no practice reacting to it. Exxon’s faults come from their lack of preparedness. There was no preparation for a spill of that magnitude because it had never happened before. The money was there but it had never been faced, so they weren’t ready.
You have to understand the vast geography of Alaska. Alaska is a long ways away from you up there so you may not fully get it. Where Brian and I are, in Homer, is over 100 miles away from Valdez. So when people, like Brian, were contacted to help out 100 miles away, you can bet the response was slow. Not only that but also the weather was difficult that time of year and it made it hard for a quick response.
Another thing that was a problem was that there just was a lack of man power and machine power. And this is, again, just because they did not know what they were dealing with because were unprepared. It’s a very difficult situation and people were doing lots of scrambling from the very beginning.
(In response to Brian discussing the drop in fish demand due to “contaminated waters”)
So Will, let me jump in here. It has to be made clear that we would never sell contaminated fish. It’s simply that as soon as the spill occurred, people around the world labeled our water’s, Alaskan waters, as contaminated. It wasn’t the fish we were selling that were the problem, they were still just as good as before. What ruined the market was that they came from contaminated waters.
Do you see anything we learned from Valdez being put to work in the Gulf of Mexico right now?
I feel like this was a good example of industry overpowering regulation. The development of the technology was there, there were just no safety measures in place for the recovery. The government looked kindly on oil companies and the process of oil shipping. But my gut feeling is grim. The oil companies have the best technology and employees of anyone out there for dealing with things like this. Only they can do it. This is not a job for the coast guard or anyone like that. We can’t deal with an oil spill. It’s really an industry specific issue.
One way to put how “we all pay the price” is that, when a big spill happens, the oil companies “privatize the profits and socialize the losses”.
I mean the Supreme Court really let Exxon off the hook. Although, if the Supreme Court had come down harder on Exxon, I do not believe that BP would have been any more careful. The problem in the Gulf area still would have happened. Now it would be a different story if the BP catastrophe had happened during the time the Supreme Court was milling over the Exxon case. They would have come down way harder and in a more effective way on Exxon.