Legislature(1999 - 2000)
03/22/2000 01:20 PM House RES
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* first hearing in first committee of referral
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+ teleconferenced
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SJR 18 - EXXON VALDEZ DAMAGE CLAIMS Number 1936 CO-CHAIR HUDSON announced that the next order of business would be CS for SENATE JOINT RESOLUTION NO. 18(RLS), requesting Exxon Corporation to pay claimants for court-ordered damages resulting from the Exxon Valdez oil spill. CO-CHAIR HUDSON called an at-ease at 2:50 p.m. and called the meeting back to order at 2:55 p.m. [The committee took up HCS CSSJR 18(O&G), version 1-LS0731\N.] SENATOR GEORGIANNA LINCOLN, Alaska State Legislature, sponsor of SJR 18, explained the legislation. [Due to a recording malfunction, some of this testimony was lost.] She told members: As you know, over 40,000 claimants await payment while Exxon [Mobile Corporation] has continued to file motions and other legal actions to delay payment. The latest appeal of the federal district court's denial of Exxon's second motion for a new trial was heard in the Ninth Circuit Court of Appeals in Seattle on May 3, 1999. This past week the Ninth Circuit ruled against Exxon Mobile [Corporation] on one of the three parts of their appeal. We're awaiting a decision on the other two parts of that appeal. The resolution [SJR] 18 urges - and I have to underscore that word - it urges Exxon Mobile Corporation to immediately pay the compensatory damages awarded in the court-ordered judgment of 50 million dollars. And as you will read in the letter that was sent on March 16, ... it was $20 million and now, with the interest, it's $50 million. While following the spill Exxon payed a limited group of fisherman and processors for some of the damages prior to the judgment in the pending federal suit, those payments were less than the compensatory damages ... later awarded in the federal court. The Exxon appeal at the Ninth Circuit is of both, as you know - the compensatory and punitive damages - with the 40,000 litigants who are entitled to payments from Exxon Mobile [Corporation] including the commercial fishermen, the fish processors, cannery workers, residents of communities who depended on the subsistence resource from the area, and many local governments from Prince William Sound, the Cook Inlet and Kodiak Island, the tourism and other business operations, as well as the many real property owners in the core spill area. ... To date, a very large group of others who were impacted have received absolutely no compensation from this devastating spill that occurred and, Mr. Chairman, I worked on that oil spill for months and am acutely familiar with the damages that did occur, and every day going out there to mop up the oil on the water and oil on the shoreline, and steaming those rocks, and then going back 11 years later - or near 11 years - and seeing still ... what I call the dead shoreline. I mean, it is just so sterile. ... I recognize the rights of individuals and corporations to use our judicial system. I know that that's what the judicial system is there for; however, there is the issue of corporate responsibility and doing what's right for Alaska and for our citizens. Those who have waited over six years for payment of any money from Exxon do not think that Exxon is doing its part to make Alaska whole again, like they promised after the spill. While the level of damages was paid to a very limited class of persons and businesses following the spill, a very large majority of those affected by the spill have not received any payment from Exxon. A letter, which I alluded to, is in your packet and explains how the judge in the original trial interpreted the maritime law to limit those entitled to compensatory damages to a rather limited class of those who are impacted by this bill. Again, I will say that this resolution urges - urges - Exxon to pay the level of compensatory claims ordered by the court, to pay that immediately, and if the remaining portions of Exxon's appeals are also denied by the Ninth Circuit, then to pay those punitive damages without further delay ... . Number 2418 PATIENCE FAULKNER testified via teleconference from Cordova. She indicated that she is an Alaska Native and lifetime Cordova resident. She stated: ... I feel the most important thing that has happened to the Cordova community and to the Native Village of Eyak has been that it's very expensive to continue to live here. Now, granted, this is our birthplace and we've been here many, many years. But when we're an economy that depends on money to survive, it's pretty hard to just go out there and sit in a tree and live. In the fishing industry, which we depend on in this area, one-third of the fishing vessels did not go salmon fishing. These are the seiners, of course, ... the larger vessels; they employ three to five people. They also each have families. For the last, I'd say, five or six years, ... only one-third of the vessels have gone fishing. We also have herring that was closed this year in October. It's been closed for so many years I don't even know what a herring looks like. Also impacted were the salmon fisheries. The salmon fisheries, especially the setnetters over on Western side, they haven't fished. They don't even get their gear ready to go, because they're told that their areas are not producing any salmon at all. ... The fishermen are impacted; that hits their crews and their families very hard. Then the cannery workers ... have no fish to process. Local businesses suffer because there are no funds to keep the community moving, and then the general community suffers. We have people that end up leaving town or taking what limited resources out of this community, which makes it more expensive for those who stay here. On the subsistence side, for me as an Alaska Native, our resources are dwindling, and then whatever we manage to get, they're tainted. We're not sure if they're good to eat. They have a lot strange things that happen to them. Maybe the herring that do come back will have an extra head or they won't spawn correctly, and the places that they spawn, for instance, like herring roe on kelp, it doesn't taste very good - too much something in the water. Exxon promised us in 1989 that they would make us whole. Well, we are ... going to be in such a financial hole and such a spiritual hole that we will never be able to dig out. We are dying off. I think Senator Lincoln expressed it in her papers. We're dying off, and many of our people are dying, and they are not going with a peace of mind. That has been the most important thing, is that twelve seasons we are into, in about two days. We have no relief. We'd like to have you tell Exxon, "Pay off." Please, make us a little bit better. Thank you. Number 2594 ROSS MULLINS testified via teleconference from Cordova. He indicated that he has lived in Cordova for about 39 years and has participated in the commercial fishery all of those years. He stated: I would like to applaud Senator Lincoln's sponsorship of this bill because, in my opinion, I think it could go a long way to help instill goodwill among those that have been injured by the oil spill and our political representatives. I think back to the early '70s when Cordova District Fisherman United brought a lawsuit against issuing the permit for a terminus in Valdez, our concern being that a massive spill might impact our environment and impinge our ability to earn a living. Well, those fears were realized in 1989. And, of course, had the pipeline gone through Canada - as we were urging, as were a few of the political pundits of the day - we might not be in the condition we're in today. But we were promised, of course, by federal and state representatives that we would be taken care of: this would be the safest terminus and most scrutinized operation in the history of the world .... I remember Ted Stevens saying when we were in his office in Washington, [D.C.], "Not one drop of oil is going to touch the waters of Prince William Sound." Well, gentlemen, you know where we are today, and you know what's happened. To change my approach here a little bit from the last testimony I gave before the [House Special Committee on] Oil & Gas ..., I'd like to read a few items from the transcript of the oral arguments that were presented in front of the Ninth Circuit Court of Appeals in Seattle, Washington, on May 3, 1999 - might give you a sense of how Exxon is attempting to utilize the state to escape its responsibility in paying the punitive and compensatory damages that they have incurred at the result of the jury. I will quote, this is Exxon's attorney, Dom (ph), speaking: "Long before this verdict society had already spoken, through its authorized representatives, the Attorney General of the United States and the Attorney General of Alaska, and had defined the proper punishment necessary to vindicate society's interest." They recommended, and the district court opposed, the largest fines of an environmental matter in history. Judge Kleinfeld, who is a member of the Ninth Circuit, hearing this case, spoke up, and he said: "Yes, I understand the language of that. It said compensatory and remedial. That quote, 'compensatory and remedial,' could you show me the page and the excerpt to show ... that it also intended to apply to punitive damages?" Exxon's Dom (ph): "The consent decree by its terms does not speak of punitive damages, but it required the State of Alaska to dismiss with prejudice its complaints, and that complaint had sought all the punitive damages to which the State of Alaska was entitled, parens patriae, ... as public trustee and on every other basis." Kleinfeld: "So, the consent decree doesn't take punitive damages, but the complaint did?" Dom (ph): "Correct." Exxon goes on at length to try to make the argument that by the state releasing it from punitive damages, by the payment of the $900 million, that that, in fact, relieved Exxon of any burden to pay punitive damages to any other plaintiffs, because the state acted in their behalf. Now, gentlemen, I ask you if that is, in fact, your intent? I think it's obvious the ploy Exxon is using here. They're trying to get out ... from under the responsibility to, as Don Cornett (ph) - who spoke here in 1989, three days after the spill said to a packed auditorium of concerned Cordova citizens - ... said, "Exxon will make you whole. If your nets don't fill up with fish, we'll take care of it." Well, we know how they've taken care of it. ... Patience was being charitable when she said one-third of the fleet is not fishing in the purse seine fishery. It is one-half the fleet. There's 272 permits issued, and prior to the spill in 1989, all 270 - plus or minus two or three - would be fishing every season. You can look at the historical record. Today, if you have 120 to 135 out there, that's about it, and those guys are barely able to make a living. I can't say that every factor is directly a result of Exxon's actions, but there have been scientific studies that have come forward, just within the last couple of years, that show there's long-term, low-level damages ongoing in Prince William Sound, and that (indisc.) parts per billion, the oil in the sediments, of having a direct impact on pink salmon and herring resources. These are studies done by the National [Oceanic and Atmospheric] Administration, not really subject to being construed as biased. So I think if the state could get behind this resolution that [Senator Lincoln] and others are sponsoring, it would go a long way to create a goodwill among the [population]. I mean, we are talking about 40,000 plaintiffs that are still waiting to be made whole from Exxon's promise and, you know, many of them are dying off. There's over 500 estates that are party to the litigation. All that this resolution urges is that you get behind it, and if the court of appeals comes down with a ruling that Exxon's argument is not supported in the law, then urge them to pay up rather than seek further appeals. I mean, Exxon is a master of delay. I heard several of their attorneys referred to as "Doctor Delay." I mean, it's the name of the game for those people. Every year they delay is another few billion they can sock away. I mean, I just feel this has gotten -- 11 years now since the event, six years since the litigation. It's time to bring an end to it. And if they lose at the court of appeals level - and they did lose the one issue on jury improprieties that caused an additional year delay - if the question of punitive damages is resolved in the plaintiff's benefit, I urge you gentlemen to have the State of Alaska at least stand behind its citizens and ask for Exxon to do the responsible thing and pay what they are obligated to pay by law. Thank you very much. TAPE 00-23, SIDE B Number 2925 CHRIS BERNS testified via teleconference from Kodiak. He indicated that he supports the resolution. He stressed that 40,000 Alaskan residents will benefit. Number 2871 LARRY MALLOY testified via teleconference from Kodiak. He stated that he is representing the Aquaculture Association in Kodiak and supports the resolution. BRUCE SCHACTLER testified via teleconference from Kodiak. He stated that he supports the resolution. He indicated that not only are there 40,000 residents who are actual claimants, but that could be multiplied by four or five because of all the communities that also are claimants. DAVID OESTING, Attorney at Law, Managing Partner, Davis Wright Tremaine, testified via teleconference. He indicated that he is the court-appointed lead counsel for all 40,000 claimants. He said that as an advocate and Alaskan citizen he strongly urges the passage of the resolution. He thanked Senator Lincoln for her stellar efforts because he believes that the message needs to be sent to Exxon. CO-CHAIR HUDSON closed public testimony on SJR 18. Number 2737 REPRESENTATIVE HARRIS made a motion to move HCS CSSJR 18(O&G) out of committee with individual recommendations and zero fiscal note. There being no objection, HCS CSSJR 18(O&G) moved from the House Resources Standing Committee.
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