Whatever It Takes
The Exxon civil case began in 1990, when hundreds of fishers and natives filed lawsuits against the company. That same year, Exxon attorneys filed motions to dismiss the charges in the federal government's five-count criminal indictment resulting from the spill. Perhaps the most memorable brief from this first round was the one in which Exxon claimed that crude oil was not a pollutant under the federal Clean Water Act, which it had violated. "The crude oil on board the Exxon Valdez was not a waste," Exxon Shipping attorney Edward Bruce said. "It was a commodity."
In October of 1991, the State of Alaska, the US Justice Department and Exxon brokered a deal that would allow Exxon to plead guilty to four misdemeanor environmental crimes, put $100 million on the table for criminal penalties and pay $900 million in civil damages. By this time, Exxon had already spent nearly $2 billion in its cleanup efforts. However, environmentalists condemned the deal, complaining that the Justice Department had backpedaled from its earlier censures of Exxon; the criminal case had been initiated by then US Attorney General Dick Thornburgh, who indicted Exxon and promised that the federal government was "throwing the environmental book" at the company. Thornburgh initially promised to seek more than six times the amount he settled for from Exxon. On April 24, 1991, Federal Judge Russel Holland rejected the deal. "These fines send the wrong message, and suggest that spills are a cost of business that can be absorbed," he said.
In May of 1994, the Exxon trial began in the federal courthouse in Anchorage. The case was conducted in three exhausting phases. Phases one and two dealt with questions of recklessness (a finding of recklessness against Exxon was necessary for recovering punitive damages) and actual damages caused by the spill. Phase three determined whether punitive damages would be awarded, and if so, how much. Exxon's lawyers pointed to the cleanup of the sound's beaches, which pumped huge amounts of money into the local economy. Did the jury want to punish a corporation that accepted responsibility for its mistakes? Would that not set a dangerous precedent?
"Accept responsibility?" O'Neill asked in his closing arguments. "They didn't have any choice but to accept responsibility. It's on a reef, the state authorities are coming out; what are you going to do, paint the smokestack and put Sea River on it? Exxon has no place to hide."
On September 16, 1994, a federal jury ordered Exxon to pay $5.2 billion in punitive damages to Alaska natives, property owners and commercial fishermen on the sound. Immediately, Exxon filed more than two dozen post-trial motions, which would take more than a year to resolve. In the meantime, the pollution of a world-class salmon fishery had affected the market, diminishing demand for the sound's catch at a crucial time, when there was already a glut of pink salmon. Salmon farms in Chile and Norway had begun taking up a larger share of the market, squeezing fishers of Prince William Sound out of the game. As O'Neill tells it, "These guys just lost shelf space permanently."
In 1998, four years after the initial verdict, the fully briefed Exxon appeals finally went to the Ninth Circuit Court--and sat there. The next year, 1999, 60 Minutes broadcast a segment on the ten-year anniversary of the spill; it focused, in part, on the Ninth's inaction. The day after the segment aired, the court scheduled arguments. But the briefed case sat in the Court of Appeals through 2000. Then, in November 2001, the Ninth Circuit overturned the $5.2 billion award against Exxon, calling it excessive, and sent it back to Judge Holland's district court so it could set a lower amount.