Exxon's claims proved untrue. Nineteen years after the incident, an estimated 85 tons of oil residue remain in area beaches and sea bottom. The aroma resulting from kicking rocks on local beaches eerily resembles that emanating from south Texas oil refineries. Recent studies predict this oil will remain, be readily detectable and harm wildlife for decades to come.
Worse, two years after the settlement herring, which had been scooped up by the millions by local fishermen, disappeared. Recent studies indicate the herring population may never regenerate. This was an economic disaster for the local population of Chugach Natives, who earned their livings in the fishing industry. Soon after the spill, the fishing fleet decreased by half. Three of the five canneries in Valdez filed bankruptcy. A former mayor, upset by the destruction, committed suicide.
Today, the fishing boats are permanently harbored or have been sold or repossessed. The herring processing plants and canneries have been closed and may never reopen.
The natives asked Exxon for compensation sufficient to buy boats and rebuild their villages. Exxon produced more studies to "prove" there was no link between the spill and destruction of the local fish population. The Natives were offered pennies on the dollar for their claims, take it or leave it and wait twenty years for payment of any court-ordered settlement. To survivors. Exxon warned:
"Exxon is immortal. Natives die."
Commercial fishers, seafood processors, cannery workers, landowners and business owners filed suit. In 1994 in Baker vs. Exxon, a jury in Anchorage awarded 32,677 plaintiffs $287 million in actual damages and $5 billion in punitive damages.
Most of the Chugash Natives didn't take part in this award. Years earlier, many took Exxon's threats seriously and settled, for $22.6 million.
Exxon appealed. And funded research by economists that "proved" that juries aren't competent to rule in punitive damage cases like the one at bar and are incapable of making fair awards.
The Ninth Circuit Court of Appeals ordered the District Court judge to reduce the amount of punitive damages. In December 2002 the trial judge announced a reduction to $4 billion, which he concluded was justified by the facts of the case.
Exxon again appealed. The Circuit Court ordered the District Court to consider the amount of punitive damages in light of a recent ruling by the Supreme Court. The judge complied and increased the punitive damages to $4.5 billion, plus interest.
Exxon again appealed. In December 2006 the Circuit Court reduced punitive damages to $2.5 billion, in conformance with holdings of the Supreme Court in Due Process cases.
Exxon appealed to the Supreme Court, which ruled on June 25 that punitive damages must be limited to the amount previously paid for economic losses, or $507.5 million. Equivalent to $15,531 per person for malicious, permanent destruction of plaintiff's economic livelihoods and their traditional way of life.
Payment will be distributed to plaintiffs or their estates. Over six thousand of the original plaintiffs have died, including over one-third of the Native seal hunters and fishermen. Their families will receive 10 percent of what would have been their share had they survived nineteen years of lives ruined by Exxon.
The Supreme Court held that Exxon's actions were "worse than negligent but less than malicious". This holding requires a detailed look at Exxon's actions.
The publicly stated cause of this accident was widely accepted. Captain Joseph Hazelwood admitted he was drunk at the time of the accident and was asleep (or passed out) in his cabin. Hazelwood admitted to "having some alcoholic drinks" earlier. Before the ship left port, Captain Hazelwood was seen drinking at least five double martinis in a local bar - enough that a non-alcoholic would have passed out. Experts testified that at the time of the accident, Hazelwood's blood-alcohol level must have been about 0.241 - slightly over three times what is required for a legal finding of intoxication.
This was not Hazelwood's first unfortunate experience with alcohol. Hazelwood was a drunk, and had been for years. Four years earlier, Hazelwood admitted to drinking while on his ship and to returning to his ship while drunk. Over a three-year period, Hazelwood drank with employees on 33 occasions that were documented. The actual number is thought to be higher.
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