Despite profits, oil giant holds billions awarded to victims
In 11 days, it will be 17 years.
Long enough for children to have been born, grown and graduate from high school,
for boats to have been scrapped or replaced, for marriages, divorces and career
changes, and for a fair number of fishermen to die in one of the many ways life
and their chosen occupation offer.
The odd thing is that the day itself -- March 24, 1989 -- has become less momentous
to many fishermen than the slow grind of the years that followed.
On that date, the Exxon Valdez ran aground on Bligh Reef in Prince William
Sound and dumped 11 million gallons of crude oil. Five years later, an Anchorage
jury awarded the fishermen and affected communities $5 billion in punitive damages.
Calculated on one year of the oil giant's profits, the class-action award has
yet to be paid as ExxonMobil fights it in federal court.
Now, with Exxon reaping even more -- $36 billion last year, a world record
for a single company -- and another spill anniversary looming without a payment,
the 32,000 fishermen, food processors and Alaska natives who remain plaintiffs
in the case are seething.
"You really try to forget about it most of the time," said Stewart
Deal, 52, a Seattle salmon fisherman. "I've learned to put it out of my
mind. But when we saw it (reports of Exxon profits), it makes you angry."
Deal once fished out of Cordova on the edge of Prince William Sound. He said
the spill put the lucrative fishery "in a nose dive."
Buck Meloy agreed. The 65-year-old gillnetter from Bellingham was fishing his
F/V Aileen in those waters when the Valdez wrecked. Shortly afterward, the fishery
The federal government ruled the oil cleanup completed in 1992. Since then, Meloy
has watched his side both win and lose as the case moved up and back down the
Now at the 9th U.S. Circuit Court of Appeals and pending another decision on
the legality of such a massive punitive award, the seemingly endless legal wrangling
has left Meloy feeling as if he'll never see another dime.
So he adjusted, mostly. He lost thousands in income but continued fishing.
Attorneys have estimated that hundreds of Seattle fishermen could receive millions
of dollars if the award stands. Deal and Meloy say they're owed hundreds of
thousands of dollars. Individual claims vary from a few thousand to a few million.
"You don't think about it every day -- you can't," Meloy said.
But then came the news of the record profits.
"It makes you mad all over again, but I can't say I was that surprised,"
he said. "Look at the prices of gas and the price of crude. This has been
a heyday for the oil companies."
ExxonMobil, Royal Dutch Shell and other oil companies came under public and
congressional criticism for padding their bottom lines after Hurricane Katrina.
The oil companies defended the profits, saying that from a percentage standpoint,
the margins weren't out of line with other successful corporations.
Although that provided little comfort to Alaska fishermen and the Seattle-based
fleet, Exxon representatives said the issues aren't related -- and more important,
the Valdez-affected fishermen don't deserve any more money.
"We have compensated in actual damages," ExxonMobil spokesman Mark
Boudreaux said. "This is about punitive damages. We don't believe punitive
damages are warranted."
According to Boudreaux, court records and published reports, Exxon paid $2.3
billion for a cleanup that included 1,300 miles of coastline and an additional
$300 million in actual damage claims -- money specifically linked to immediate
lost income and property damage.
Meloy, for example, said he received $10,000 for his losses after the spill.
But the record $5 billion award -- later reduced to $4.5 billion -- came after
a federal judge ruled that the oil company had been negligent in its operations
before the spill, considered the worst environmental disaster in U.S. history.
The award has remained tied up in court, with Exxon contending it has paid
everything it owes. Some fishermen and affected Alaskan communities agreed,
"The $4.5 billion punitive damages ordered by Judge H. Russell Holland
is not a debt that is owed. Rather, they represent a windfall well in excess
of the amount the jury found necessary to compensate the plaintiffs for their
losses," Boudreaux said.
Exxon attorneys have said the case history shows that at most, the company
should pay a maximum of an additional $25 million -- less than 1 percent of
the current award.
After oral arguments in January, a decision on the most recent appeal is expected
in four to six months. The case could end up before the U.S. Supreme Court.
The plaintiffs, those who received any money at all, say the money owed doesn't
come close to what was lost. Prince William Sound's herring fishery has never
fully recovered, former herring seiner Victor Smith said.
"They thought the system would repair itself in six years, and it hasn't,"
said Smith, who now operates out of Friday Harbor transporting freight. He no
Part of the reason for the prolonged herring crash, Smith said, is that oil
settled in the seabed where the fish lay eggs. So even where populations of
mature herring survived, much of the next generation didn't.
Fishery scientists estimate that less than 10 percent of the oil was actually
cleaned up or recovered.
Smith said most fishermen lost far more than what was paid to them, and some
have died while waiting for their share of the award. Smith estimates that he
lost more than $1 million in income in ensuing years.
Does he expect to see any of that back?
Smith believes it's up to the federal judges' ability to withstand the oil
company's legal onslaught and political pressure.
"If (the judges) can overcome cubic dollars," he said. "There
seems to be a feeling that corporation rights have trumped the rights of the
BY THE NUMBERS
$300 million: Paid by Exxon in actual damage claims
$2.3 billion: Spent by Exxon in cleanup
$4.5 billion: Punitive damages against Exxon
$25 million: What Exxon claims it owes in punitive damages
$36 billion: ExxonMobil 2005 profit
32,000: Remaining plaintiffs
11 million: Gallons of crude spilled
1,300: Miles of coastline fouled
2,800: Number of sea otters killed by spill*
*Estimate by Exxon Valdez Oil Spill Trustee Council
P-I reporter Mike Lewis can be reached
at 206-448-8140 or email@example.com.