County Group’s Suit Blames Hike in Gasoline Prices on Exxon Spill

A group of county residents sought Monday to hold Exxon Corp. financially responsible for a recent increase in gasoline prices that they allege was caused by the firm’s oil spill in Alaska.

The demand came in a lawsuit filed in U.S. District Court in Santa Ana, seeking unspecified damages from Exxon. The eight local residents named as plaintiffs hope to turn their case into a class-action suit that could in theory include millions of California motorists.

The worst oil spill in North American history occurred March 24 when an Exxon tanker hit a reef near the port of Valdez, spilling 10 million gallons of oil. The captain of the tanker has been charged with operating a ship while under the influence of alcohol.

Although the lawsuit may carry a symbolic message of anger and frustration, even the Newport Beach lawyer who filed the action acknowledged that it faces rough sailing in the courts.

At least four other class-action lawsuits have already been filed in state and federal courts in Alaska on behalf of commercial fishermen, tour operators and others who allege that their livelihoods are threatened.

But Monday’s suit in Santa Ana is the first known action to seek such a broad recourse--demanding compensation for any consumers who can show financial harm from the loss of the spilled oil and the industry havoc it created.

“It’s certainly novel,” Michelle A. Reinglass, head of the Orange County Bar Assn.’s business litigation unit, said about the suit. “The idea of a class-action suit for a group that broad seems a bit farfetched, but it might be reasonable in that people who buy gas all have something in common.”

Beyond getting the lawsuit certified as a class action, tougher still may be proving in court that the spill was the direct cause of a price surge with increases of up to 27 cents a gallon.

Experts have disagreed over the cause of the increase, with some officials within the industry suggesting that public panic--more than market economics--has created the inflation.

But Newport Beach attorney Peter Seidenberg, representing the gas buyers named in the suit, asserted that Exxon’s negligence in failing to secure its oil properly or take prompt cleanup action produced “a real shortage” of oil and created the price increase.

Southern California consumers have been particularly hard hit by the situation because 40% of the Southland’s oil supply comes from Alaska, Seidenberg said.

He called the lawsuit “an opportunity here to make some noise and perhaps be compensated and to show that we’re mad and we’re not going to take this anymore.”

Exxon officials could not be reached for comment. The Alyeska Pipeline Service Co., also named as a defendant, declined comment.

NO RELIEF IN SIGHT Alaskan oil’s flow to California is increasing, but gasoline prices keep rising. Page 1, Part I.