Alaskans Express Mixed Emotions on Exxon Verdict

Small commercial fishermen in this quiet port, among those pounded the hardest by the devastating Exxon Valdez oil spill, aren’t throwing any parties to celebrate the $5-billion verdict delivered by a federal jury Friday against Exxon.

Though most felt a weary triumph, and surprise, at the size of the punitive damages award, no one expects that much money to ever get here. Of more immediate concern was the job of unloading gear from their boats as they ended their halibut and silver salmon seasons.

“I felt better that the jury judged Exxon’s story and said, ‘Yeah, you should pay, you were responsible,’ ” said Chris Nerison as he gazed over the 1,000 boats in Cordova harbor during the drizzly Sunday afternoon.

But not even the relatively optimistic Nerison, who fishes for salmon and herring, is not counting on anything close to $5 billion winding up in plaintiffs’ pockets. And other fishermen doubt they will get anything.

“I don’t think so,” said Thea Thomas, over a cup of coffee at The Reluctant Fisherman Inn. She fishes commercially for salmon and herring. At least, that is, she fished for herring until the fish failed to show up last year, cutting her income by one-third.

“Any upbeat mood is because we’ve had a pretty good year for the first time since the spill,” she said, “not the judgment.”

Thomas noted that the grinding pressure of poor fishing in various species, squeamishness over the quality of Alaskan fish--particularly in Japan--and other problems had plagued the fishing community year after year since the Exxon Valdez ran aground in 1989, producing the biggest oil spill in North American history.

Families broke up, people committed suicide, parents couldn’t send their kids to college, and the town’s schools and library cut back personnel and hours as fishermen had trouble paying boat mortgages while the litigation ground on.

“The banks let them go for a few years,” Thomas said. “Many lost their boats just in the last two years. It took a while for people to go broke.”

“We’ve taken a series of economic hits,” said Margy K. Johnson, an innkeeper and the mayor of Cordova. “One knocks you to your knees; a series renders you down and out.”

The punitive damage award--or whatever survives Exxon’s planned legal challenges--will be apportioned among all plaintiffs winning claims for actual damages from the spill. Those include about 10,000 fishermen and at least 4,000 others--from native villagers who lost subsistence harvests to such coastal businesses as fish hatcheries and processors.

Brian O’Neill, the Minneapolis lawyer who led the plaintiffs’ legal team, estimated that fishermen will receive anywhere from $25,000 to $250,000 each in punitive damages, with the payouts hinging on their former production. An estimated $1 billion will be divided up by the 82 law firms representing plaintiffs in the case.

The $5-billion verdict capping the third part of Exxon’s trial is second in size in the U.S. courts only to the $10.5-billion award Pennzoil won in 1985 from Texaco Corp. for its interference in a corporate acquisition. Moreover, the Exxon decision dwarfs what had been the biggest civil award in an environmental case--the $470 million that Union Carbide paid because of the tragic chemical leak in Bhopal, India, in 1984 that killed 4,000 people.

O’Neill agreed with the skeptics in Cordova that the plaintiffs are unlikely to receive punitive damages anytime soon, but he expressed confidence the award will eventually arrive. “I guess we’ll slug it out for another year or so before we get the appeals out of the way,” he said.

“I feel relieved that I’m not going to go down in history as the world’s biggest loser,” added O’Neill, who has worked on the case since 1989. Given the vast environmental disaster in this case, he asked rhetorically, “How could you lose to Exxon?”

In the first phase of the trial, which concluded in June, Exxon and Exxon Valdez Capt. Joseph Hazelwood were found to have been recklessly negligent in connection with the spill.

Next, in the second phase of the trial, jurors awarded commercial fishermen $287 million for actual damage to their livelihood. Exxon agreed to pay $20 million as well to 3,500 native Alaskans as compensation for the food they normally would have caught in Alaskan waters.

The company’s biggest expense so far, however, has been its $3.5 billion in cleanup costs.

Still to come in the Exxon case are smaller trials, including what U.S. District Judge Russel Holland is terming the “fourth phase.” The next segment of the case, which will be played out before a new jury, will include halibut fishermen, shrimp fishermen, lodge owners, helicopter leasing firms and others citing lost income after the spill.

Over in Valdez, the petroleum town where the Exxon Valdez took on its fateful cargo, most workers and contractors on this end of the Trans-Alaskan Pipeline were glad to see Prince William Sound’s hard-pressed commercial fishermen win the judgment on Friday.

Over the clamor of a local rock band Saturday night in The Pipeline Club--where according to court testimony Hazelwood went drinking hours before his tanker left port--oil workers expressed sympathy for the fishermen.

“The oil field reaction is that they go along with the fishermen, that Exxon deserves everything they get. They’re people too,” said one contractor for Alyeska, the oil-company consortium that operates the pipeline and loading terminal.

The contractor, who asked not to be identified, said that one factor playing on the oil workers’ sympathies is the comparatively low earnings of the fishermen. As a rule of thumb, a fishing industry worker who doesn’t own a boat makes $30,000 a year, whereas an oil pipeline or terminal worker makes $70,000 to $80,000 or more.

“We’re all happy they got something; they haven’t had anything, for years,” said June Morgan, who was tending bar at the Club Bar, a fishermen’s hangout near the Valdez harbor.

Over coffee Sunday morning, Stan Stephens, who has run tour boats to the glaciers and islands around the sound for the past 30 years, added: “Most people realize what’s happened to the fishing industry.”

An Anchorage newspaper announced the verdict in a spare, bold headline: “$5,000,000,000.” But one of many Valdez skeptics added to a copy lying in the Westmark Valdez lobby: “And they’ll never get one red cent.”

Whatever the ultimate outcome of the court battle, the five-year saga of the Exxon Valdez spill has had long-term implications for the U.S. oil industry.

After the disaster, Congress passed the Oil Pollution Act of 1990, a wide-ranging attempt to tighten oil-tanker standards for ships plying U.S. waters. The law required standby pollution cleanup boats and imposed tougher ship construction standards, along with other changes.

But many in the oil industry have criticized a provision that could saddle shippers with unlimited liability for oil spills caused by negligence or employee misconduct. As Friday’s verdict suggests, the liabilities could be enormous for shippers and their insurers. Critics contend that U.S. energy companies, which overall have much better ships and crews than many foreign tanker fleets, will simply turn the shipping business over to foreign companies.

Another part of the spill’s legacy was to close off the last big oil exploration area of promise in the country, the Arctic National Wildlife Refuge, near Prudhoe Bay.

“It’s reduced the opportunity for the industry to find major oil in the United States,” said Eugene L. Nowak, director of the energy group for Dean Witter Reynolds in New York. He said that is one of the factors “why more and more oil companies have had to invest overseas.”

Parrish reported from Alaska and Silverstein from Los Angeles.