1990 Oil Spill Suit Still Stuck in Court

After 416,000 gallons of Alaskan crude fouled the Orange County coast in early 1990, hundreds of businesses, commercial fisherman and property owners went to court and sued for more than $14 million in damages.

Douglas Edlund, a Corona del Mar real estate investor, asked for $6,500 in lost income from his oceanfront rental on 66th Street in Newport Beach. Mark Hendriks, a dory fisherman from Costa Mesa, sought roughly $30,000 in earnings he figures he lost.

The State Fish Co. cannery in San Pedro wanted $400,000, and the Waterfront Hilton in Huntington Beach demanded $2.7 million to cover damages from a mass cancellation of reservations before the resort’s grand opening.

They have yet to collect a penny.

Almost 12 years since one of the worst oil spills in state history, the case remains tied up in U.S. District Court in Los Angeles, where 250 plaintiffs are fighting to recover losses they allegedly suffered when the American Trader gashed its hull off Huntington Beach on Feb. 7, 1990.

The plaintiffs expected the case to be long over by now, even though “we weren’t running around with rose-colored glasses,” said Robert Ashley, who has operated sportfishing businesses in local waters for almost 40 years. “There seems to be no rhyme or reason for this.”

Attorneys for the plaintiffs blame the American Trader’s defense team for turning the lawsuit into a protracted paper war. The same motions have been filed repeatedly, they say, and there have been five unsuccessful attempts by the defense to dismiss the case.

Court records show that the tanker company has fought to prevent other defendants from settling the case, and an entire year was consumed by a defense appeal that turned out to be groundless. Even the judge, Robert J. Kelleher, said the matter should have been resolved years ago.

Lawyers for the American Trader attribute the delay to the complexity of the case and a snarl of litigation, including actions by state and federal authorities to recover their own damages from the spill.

Those lawsuits were concluded in 1999, resulting in $30 million in settlements for local, state and federal government--$16 million of it paid by the owner of the American Trader, Attransco Inc.

“We have a litigious society and that includes defendants and plaintiffs,” said John Reilly, Attransco’s lead attorney since 1998. “There have been many parties, many claims, and many different forums. Look at how long the Exxon Valdez case has taken.”

In 1989, more than 11 million gallons of crude oil spilled into Alaskan waters after the Exxon Valdez ran aground in Prince William Sound. Last month, a federal appeals court struck down a $5-billion judgment for punitive damages against Exxon Mobil.

Whatever the reason, the final American Trader case has taken so long that some of the original plaintiffs have died, including Giuseppe Cracchiolo, a commercial fisherman from San Pedro, and Timothy Meek, a 33-year-old dory man who disappeared while fishing off Newport Beach in 1998.

To some of those still standing, the oil spill was a life-changing event. It undermined jobs, caused financial hardship and pushed marriages to the breaking point, plaintiffs said.

A few left Orange County to restart their lives, only to return years later to find the lawsuit they gave up on still had a pulse. One of them was Dale Sleight, 53, of Garden Grove, a former lobster and crab fisherman who says he lost more than 50 traps during the spill.

“People who were doing well started to struggle,” Sleight said. “My world fell apart. I lost my wife, my business and my career.”

Sleight fished in Alaska for a few years, then tried farming in Washington. When that didn’t work, he returned to Orange County, where he is now a construction supervisor. He wanted to fish again, but he says he could not get a new license or afford lobster traps.

“It still really hurts,” said Sleight, who is seeking $50,000 in damages. “Some of my friends at the dory fleet have passed away. Some of them were married. They will never recover what they lost and neither will I. Fishing meant more to me than life itself.”

The afternoon of Feb. 7, 1990, Sleight was in Dana Point tending traps as the American Trader maneuvered into an offshore terminal owned by Golden West Refining Co. of Santa Fe Springs. Aboard was more than 24 million gallons of Alaskan crude belonging to BP America Inc.

U.S. Coast Guard officials later concluded that the 811-foot vessel struck its own anchor, punching two holes in the hull. It was the maritime equivalent of shooting yourself in the foot.

The oil came ashore along 15 miles of Orange County coastline, from Sunset Beach to Crystal Cove. The worst of the spill hit Huntington Beach, Newport Beach and Bolsa Chica State Beach, closing the shore for four to five weeks.

Offshore, the spreading slick threatened marine life and disrupted Huntington Flats, a bountiful spot for commercial and sport fishing. Harbor entrances were sealed off, preventing tour boats, Catalina-bound ferries and fishing boats from going to sea.

Class-Action Suit Filed Immediately After Spill

The pending class-action lawsuit was filed Feb. 14, 1990, seven days after the spill. Named as defendants were Attransco, BP America, Golden West Refining Co. and the Trans-Alaska Pipeline Liability Fund, a nonprofit corporate entity designed to compensate victims of spills involving Alaskan oil.

The fund settled its part of the case for slightly more than $1 million, but the money has not been distributed to the plaintiffs yet. Another $1-million settlement involving BP has been proposed.

The main legal fight with Attransco and Golden West continues, and hearings could resume early next year. Reilly says he would like to settle the case on behalf of all remaining defendants, but the plaintiffs assert that their repeated offers are so low they are meaningless.

“Luckily, we are a large business with adequate resources and good records,” said Shawn Millbern, a senior vice president with Robert Mayer Corp., which owns the 296-room Waterfront Hilton Beach Resort. “Some of the claimants are now gone.”

As news of the oil spill spread across the nation, Hilton officials said individuals and companies that had booked the hotel well in advance of its July 1990 opening began canceling their reservations.

The disaster and the negative publicity could not have happened at a worse time because the oceanfront hotel had just launched a marketing campaign that emphasized the new resort’s “liquid assets” and “8 1/2-mile lap pool”--playful references to the nearby ocean.

“We became a laughingstock,” Millbern said.

Owners of smaller coastal lodgings reported similar problems. In Laguna Beach, guests at the 27-room Seacliff Motel either canceled reservations or cut short their stays, said Norman Nitta, whose mother, Yeriko, owned the motel for almost 35 years before it was sold in 1999.

The Nitta family, which is seeking more than $53,000 in damages, has been with the case from the start. They contend the oil spill, along with the Northridge earthquake, the Laguna Beach fire, El Nino weather conditions and other natural disasters, steadily eroded the profitability of their business.

“We thought we would be in this thing five years maximum,” said Nitta, 54, of West Los Angeles. “What are they trying to do? Wear us out? Frustrate our lawyers? Wait until everyone dies?”

The largest group seeking compensation is from the local seafood industry--at least 89 commercial operations and 106 deckhands. They say the spill forced them to go to less productive fishing grounds for weeks. Meanwhile, canneries in San Pedro, such as Star-Kist and State Fish, said they had to accept smaller catches and pay higher prices.

Dory Fishermen Were Severely Affected

Among the hardest hit was a group of dory fishermen whose rustic quarters are at the foot of the Newport Beach Pier. Following a custom that has survived for more than 100 years, the anglers launch their tiny flat-bottomed craft from shore in the early morning and fish the local waters. At least 10 of them have filed claims.

During the spill and for some time afterward, the lawsuit alleges, customers visiting the dory fleet’s open-air seafood market refused to buy the daily catch, fearing it was contaminated. The chance to make $800 a week or more vanished.

“You couldn’t sell anything,” said Hendriks, 41, who finally stopped fishing last year. “We made very little money for quite a while. The problems from the spill persisted for roughly a year, but the fishing has never been like it was.”

Hendriks, who has a wife and two children, says his current financial difficulties, some of which have their roots in the oil spill, could have been avoided had the lawsuit been resolved sooner. To help pay his bills, he sold his fishing license for $20,000 to his brother-in-law.

“It’s hard to see the world from any other place,” Hendriks said as he walked along a row of idle dories in Newport Beach this month. “The people around here don’t want the money, they just want good lives.”

If nothing is done to speed up the case, attorneys for Hendriks and the others say the lawsuit will become a maritime “Bleak House”--a reference to Charles Dickens’ classic tale about an English probate case that remained in court for generations.

“Delay has been the defense approach from Day 1,” said Howard Sacks, a San Pedro attorney who began representing commercial fishermen during the initial weeks of the spill. “The case has become outrageous. This is not the Exxon Valdez.”

In court papers filed in November, the plaintiffs alleged that attorneys for the tanker company have used virtually every tactic available to stall the case and create costly diversions.

Attransco has “filed motion after motion, often repeating the same arguments that were presented and rejected on prior occasions,” attorney Gretchen Nelson stated in court records. “It sought dismissal on one exotic theory after another, usually to have its theories resoundingly rejected by the court.”

‘Just Another Delaying Tactic’

In one action, defense attorneys unsuccessfully appealed a decision by Judge Kelleher to approve a settlement involving the Trans-Alaska Pipeline Liability Fund. The 9th Circuit Court ruled that because the defense had unconditionally agreed to the settlement earlier, it could not challenge that settlement on appeal.

“Attransco has been very difficult to deal with all along,” Nelson said. “The settlement challenge was just another delaying tactic.”

David Woolley, a Long Beach attorney who represented Attransco for much of the case, declined to comment on the plaintiffs’ criticisms. He referred all comment to Reilly, a New York attorney who replaced him in 1998.

Reilly said the arguments among the lawyers are not productive. Rather than attack each other, he contends that both sides should focus on what the damages are and determine a fair settlement.

“There are indications that some of the claims are not justified, some are overstated, and some have no sufficient link to the spill,” Reilly said. “We are contesting most of them on their dollar value.”

If the case does not settle soon, defense attorneys say, they might try to dismiss the hotels and other land-based businesses from the case. Should that fail, there might be a trial--something Reilly described as a remote possibility at this time.

“They have made us an offer, if you can call it that,” Nelson said. “It’s unacceptable and nothing different than they have offered in the past. If they want to go to trial, then there will be a trial.”