Oil Spill Verdict May Be Beachhead for Future Cases

When jurors requested a calculator, the lawyers knew something was afoot.

But the state’s attorneys remained tense. They had, after all, chosen to risk a jury trial on the kind of question that normally gets thrashed out in pretrial settlements: What is the public really owed for losing its use of 15 miles of famed Southern California beaches for five weeks during the massive 1990 American Trader oil spill?

By going to trial, the state drew a line in the sand. Its attorneys trusted that an Orange County jury would weather brain-numbing economic testimony and a spirited courtroom challenge from the tanker’s owner to conclude that the public deserved millions of dollars in damages.

In the end, the risk paid off. Jurors last Monday found that Attransco, owner of the American Trader tanker, should pay the public $18.1 million in damages and fines, two-thirds of it for lost recreational use of beaches and harbors. They even put a price tag on a day at the beach--$13.19.

The verdict may mark the first time nationally that a jury has awarded damages for lost beach days.

The fact that these 12 men and women would put such value on their beaches delighted the state’s chief lawyers, Deputy Atty. Gen. Sylvia Cano Hale and co-counsel Michael Leslie.

“Think if we didn’t have those beaches, if all those beaches were closed,” said Hale, recalling how during jury selection, people described how they loved walking or roller-blading along the beach, or simply enjoying the quiet there.

The verdict, applauded by several government and environmental attorneys across the country, could prove one of the biggest legacies of the American Trader spill, the worst in 20 years in Southern California.

In time, the verdict money could pay for numerous beach improvements, from new restrooms in Huntington Beach to new lighting at the Newport Beach boardwalk to better walking trails at the Bolsa Chica wetlands. Those, coupled with wildlife restoration plans, will be the most tangible legacies of the spill.

But the verdict itself could be a legacy, said six lawyers from Alaska to Washington, D.C., who could not recollect another case where a jury awarded damages for lost recreational use, when the public was unable to use beaches or harbors.

“This is probably the first time someone has tried and taken to judgment beach closures,” said Robert Klotz, a senior attorney with the environmental enforcement section of the U.S. Department of Justice. “This really is an important case.”

The fact that a jury awarded damages for lost recreational use could give government attorneys more clout in future settlement talks in other oil spill cases, some lawyers said.

“This eliminates an area of uncertainty in previous settlements of spills,” said Leslie, a partner at Hedges & Caldwell in Los Angeles.

David E.R. Woolley, attorney for Attransco, is troubled by the verdict, and not just the multimillion-dollar award. He criticized the notion of awarding damages using what he terms “a broad hypothetical theory,” such as estimating how many people did not use the beach because of the spill and then putting a value on their beach enjoyment.

“The law likes to deal with specific people, specific injuries,” he said. Attransco has not decided yet whether to appeal, he said.

The spill ranks as Orange County’s worst environmental crisis in memory. It began Feb. 7, 1990, when the American Trader ran over its own anchor while attempting to moor 1.3 miles off Huntington Beach.

The Alaskan crude it carried spewed into the ocean, polluting 15 miles of coastline and killing at least 1,000 birds. Televised news reports nationwide showed blackened sand, dead fish and oil-soaked rescue workers toiling on some of America’s fabled surfing beaches.

The American Trader oil spill has already spurred stiffer laws for how oil spills are treated.

Following the mammoth 1989 Exxon Valdez spill in Alaska, it helped speed passage of a state oil-spill act and creation of the state’s office of oil spill prevention and response. In Washington, the spate of oil spills led to passage of the 1990 Oil Pollution Act, which required the phase-in of doubled-hulled tankers in U.S. waters, increased spillers’ liability and tightened sanctions.

In California, the number of marine oil spills dropped by 50% from 1992 to 1996, which officials credit in part to the state and federal acts.

But the spill also created a long and tangled civil suit, filed in January 1991 by the state, Orange County, Newport Beach and Huntington Beach, against several companies connected with the spill.

The suit dragged through the courts for nearly seven years, yielding 100,000 documents and creating a labyrinth of motions and counter-motions.

Settlements of $3.89 million with BP America and $3 million with a petroleum industry fund were announced in 1995. Another $4.15-million settlement with Golden West Refining Co., the offshore terminal operator, was reached a year later.

California’s policy is to settle as speedily as possible in oil-spill cases so money can swiftly be channeled into restoring wildlife, officials said.

But when Attransco did not settle, the state chose to go to trial on the issue of lost beach days and water-code penalties.

“It was a pretty good-sized risk, because this had never been tried in California. A jury had never been asked to set a value on a beach day,” said Pierre du Vair, resource economist with the oil spill office.

In the verdict’s wake, officials suddenly face the task of deciding how to spend the money. Years-old lists are being pulled from file drawers. A coalition of local, county and state governments has identified about $25 million in possible beach-related projects.

But while state and local officials admit that some hard choices lay ahead, they remain jubilant over their victory.

For Hale and Leslie in particular, the grueling work now seems worthwhile.

“Everybody hopes there’s never another oil spill, anywhere. But history has shown every single year, including this year, there are oil spills,” Leslie said.

A legacy of this case, he said, could be to help governments resolve oil spill cases earlier and spend less money doing so.

“No one wants to take the money to litigate something for seven years,” he said.