Eyak Native Village v. Exxon Corp., 93-35274

• Decision Date: 27 May 1994
• Docket Number: No. 93-35274,93-35274
• Citation: 25 F.3d 773
• Parties: EYAK NATIVE VILLAGE, et al., Plaintiffs-Appellants, v. EXXON CORPORATION, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 773

25 F.3d 773

EYAK NATIVE VILLAGE, et al., Plaintiffs-Appellants, v. EXXON CORPORATION, et al., Defendants-Appellees.

No. 93-35274.

United States Court of Appeals Ninth Circuit.

Argued and Submitted July 13, 1993.

Decided May 27, 1994.

James van R. Springer, Dickstein, Shapiro & Morin, Washington, DC, Lloyd Benton Miller, Sonosky, Chambers, Sachse & Miller, Anchorage, AK, and Jerome M. Congress, Milberg, Weiss, Bershad, Specthrie & Lerach, New York City, for plaintiffs-appellants.

John F. Daum, O'Melveny & Myers, Los Angeles, CA, Ronald L. Olson, Munger, Tolles & Olson, Los Angeles, CA, Charles P. Flynn, Burr, Pease & Kurtz, Anchorage, AK, and Douglas J. Serdahely, Bogle & Gates, Anchorage, AK, for defendants-appellees.

Appeal from the United States District Court for the District of Alaska.

Before: CHOY, HUG, and LEAVY, Circuit Judges.

Opinion by Judge HUG.

HUG, Circuit Judge:

This case requires us to determine whether the district court's denial of motions to remand cases removed from an Alaska state court was error. This interlocutory appeal concerns the removal of over 160 separate cases brought in the Superior Court of the State of Alaska. Plaintiffs sued Exxon and Alyeska under Alaska law for the injuries caused by the Exxon Valdez oil spill. ¹ The cases proceeded in state court for several years before defendants Exxon and Alyeska removed the cases to district court on the basis that federal questions had arisen justifying removal. The issue on appeal is whether removal to federal court was appropriate.

The appeal is from five district court orders (Nos. 80, 83, 91, 92, 108) denying motions to remand to the Superior Court of the State of Alaska a number of different removed cases. We granted permission to appeal pursuant to 28 U.S.C. Sec. 1292(b), and we now affirm in part and reverse in part.

I. GENERAL BACKGROUND OF LITIGATION

Hundreds of cases were filed in both the Alaska Superior Court and the federal district court seeking relief from Exxon and Alyeska for various injuries caused by the March 1989 Exxon Valdez oil spill. Exxon was sued as the owner and operator of the tanker that went off course and ran aground (Exxon Shipping Co.) and as the owner of the more than 11 million gallons of oil that spilled (Exxon Corp.) for failure to perform its statutory and common law responsibilities in connection with the spillage and the clean up. The Alyeska defendants are pipeline companies that own and operate the Trans-Alaska Pipeline System and the terminal at which the Exxon Valdez had been loaded.

The plaintiffs sue on their own behalf and in some cases as representatives of plaintiff classes, including commercial fishermen whose fishing grounds were damaged by the oil, Alaska Natives who subsist on various fish and other resources, processors of fish harvested from the affected area, employees of processors, area businesses and land owners, and other injured persons. The federal court complaints seek relief under maritime law and the remedial provisions of the Trans-Alaska Pipeline Authorization Act, 43 U.S.C. Sec. 1653(c) ("TAPAA"). The complaints filed in state court seek relief under the Alaska Environmental Conservation Act, 46 Alaska Stat. Secs. 46.03.822, et seq., which establishes strict liability for oil spills, and also under Alaska's tort law.

The federal court cases were consolidated for pretrial purposes before District Judge H. Russel Holland and the state court cases were consolidated before Judge Brian Shortell of the Third Judicial District of the Alaska Superior Court. The state and federal courts cooperated in some stages of the proceedings. They selected the same lead and liaison counsel and a common executive committee for the plaintiffs, appointed a single discovery master, and jointly heard motions.

The State of Alaska and the United States Government also brought actions against the defendants on behalf of the public for injury to natural resources pursuant to the provisions of the Clean Water Act, 33 U.S.C. Sec. 1321(f), and other federal environmental legislation. On October 8, 1991, the state and federal governments' claims against Exxon Corp. and Exxon Shipping Co. were resolved by entry of an Agreement and Consent Decree in the district court. The Agreement and Consent Decree provided for Exxon Corporation and Exxon Shipping to pay the governments at least nine hundred million dollars ($900,000,000) to restore and rehabilitate the damaged natural resources in exchange for a release of all claims, including natural resources claims on behalf of the public. There is also a provision for an additional one hundred million dollars ($100,000,000) for unexpected damages under certain conditions.

Four environmental organizations sought to recover damages from Exxon to contribute to a conservation trust fund for the benefit of the general public to restore the environment and natural resources damaged by the oil spill. We have designated these plaintiffs as the "trust plaintiffs." On November 21, 1991, the Exxon defendants removed to federal court all cases related to the environmental organizations' cases. The Exxon removals are based on the ground that the claims of the trust plaintiffs raised a federal question because the trust plaintiffs continued to pursue their claims for natural resources damages after the federal consent decree was entered to cover the same natural resources damages. Exxon also removed other non-removable claims that had been joined with the claims of the trust plaintiffs. The district court's Order No. 80 denied the plaintiffs' motions to remand their cases to state court. Those plaintiffs timely appeal.

On February 13, 1992, Alyeska removed approximately 150 cases to federal court. Those plaintiffs had contended that Alyeska had violated state safety standards. Alyeska argued that this raised a federal question because it attacked a 1979 federal district court decree enjoining the state from enforcing certain provisions of the Alaska Tanker Law. The plaintiffs' motions to remand were denied in the district court's Orders Nos. 83, 91, 92, and 108. The plaintiffs timely appeal.

II.

ORDER NO. 80: THE EXXON REMOVALS

A. Background

The trust plaintiffs are composed of four environmental organizations--National Wildlife Federation ("NWF"), Wildlife Federation of Alaska ("WFA"), Natural Resources Defense Council ("NRDC"), involved in one action, and Alaska Sportfishing Association ("ASA")--and also four individuals, originally involved in a separate action.

NWF, WFA, and NRDC filed a complaint on August 17, 1989, in National Wildlife Federation v. Exxon, Superior Court No. 3AN-89-6957, stating 10 causes of action based on strict liability, negligence, and nuisance. The other plaintiffs stated similar liability claims in the Amended and Consolidated Class Action Complaint filed in Alaska Sportfishing Association v. Alyeska Pipeline Service Co., Superior Court No. 3AN-89-5188, on July 17, 1989.

On September 3, 1991, the trust plaintiffs moved to certify a conservation trust fund class to include "[a]ll persons whose use, enjoyment, aesthetic and environmental interests in the protection and enhancement of the ecosystem, wildlife and other natural resources of Prince William Sound and the Oil Impact Area" were injured by the oil spill. The class excluded the commercial and subsistence use and enjoyment interests of the classes already certified.

The relief sought by the trust plaintiffs in the certification of the trust fund class was creation of a conservation trust to restore the ecology of the oil impact area, to protect the area from further environmental harm, to restore wildlife populations on land and in the sea, to fund scientific studies and monitoring of the area, and to acquire resources equivalent to those lost in the spill. The trust plaintiffs claimed that the trust class was necessary because the State of Alaska could not adequately represent them due to its conflict of interest, and noted that Alaska law provides for individual actions where there is a potential conflict of interest between the Government and a class of private persons.

A little over a month after the trust plaintiffs filed for class certification, the Agreement and Consent Decree between the United States, Alaska, and the Exxon and Alyeska defendants was filed in federal court on October 8, 1991. The consent decree stated that the natural resources damages included relief recoverable by the governments "in their capacity as trustees of Natural Resources on behalf of the public" for injury to all natural resources resulting from the oil spill, "under any federal or state statute or maritime or common law relating to the environment."

The trust plaintiffs, however, proceeded with their action, and filed their reply brief in support of certification of a conservation trust class in state court on October 22, 1991. Anticipating the defense of res judicata, the trust plaintiffs argued that the consent judgment was not binding because the State was not fully representative of all interests. They asserted that they were entitled to sue as trustees for public users of the natural resources as a supplement to the damages secured by the State and the United States in the consent decree for two reasons.

First, the trust plaintiffs asserted that the State had a conflict of interest in negotiating the decree because of its own potential liability exposure. Second, they claimed that the settlement did not provide sufficient funds for environmental injuries, a fact that they claimed was indicated by the State's negotiating in secret and its failing to reveal the reports of economic studies on which it had purportedly relied. The trust plaintiffs' reply brief also stated, however, that they were not challenging the government settlement, but were seeking only supplementary and non-conflicting recovery through the proposed trust fund.

In notices of removal filed ...