In re the Exxon Valdez, No. A89-0095-CV (HRH).
| Court | United States District Courts. 9th Circuit. District of Alaska |
| Writing for the Court | Holland |
| Citation | 296 F.Supp.2d 1071 |
| Decision Date | 28 January 2004 |
| Docket Number | No. A89-0095-CV (HRH). |
| Parties | In re the EXXON VALDEZ This Order Relates to All Cases |
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HOLLAND, District Judge.
On December 6, 2002, the court granted Exxon Mobil Corporation's (D-1) and Exxon Shipping Company's (D-2), hereinafter referred to as "Exxon", renewed motion for reduction or remittitur and reduced a jury verdict awarding plaintiffs $5 billion in punitive damages to $4 billion.1 The court concluded that application of the BMW guideposts supported the $5 billion award but, based on plaintiffs' alternative suggestion, reduced the award to $4 billion because the Ninth Circuit in earlier proceedings hereinafter described in detail had mandated that the award be reduced on remand. After final judgment was entered on the $4 billion award,2 both Exxon and plaintiffs timely appealed.3
On April 7, 2003, before any briefing on the appeals in this case, the Supreme Court decided State Farm Mutual Automobile Ins. Co. v. Campbell, 538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003).4 In State Farm, the United States Supreme Court revisited the due process issue as to punitive damages in the context of an insurance bad faith case. On August 18, 2003, the Ninth Circuit Court of Appeals vacated the $4 billion punitive damages judgment and remanded the case to this court to reconsider the punitive damages award in light of State Farm.5 Upon remand, this court called for supplemental briefing from the parties to aid in its reconsideration.6 Exxon submitted its supplemental briefing in the form of a second renewed motion for reduction or remittitur of punitive damages.7 This motion is opposed by plaintiffs.8 Oral argument on the second renewed motion for reduction or remittitur of punitive damages was heard on December 3, 2003.
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After considering the parties' briefing and hearing oral argument, the court has determined it most practical, for purposes of reevaluating the punitive damages award, to vacate Order No. 358 in its entirety.9 State Farm adds no new, free-standing factor to the constitutional analysis of punitive damages that the court might "tie onto" its previous order. It is the court's view that State Farm, while bringing the BMW guideposts into sharper focus, does not change the analysis.10 In fact, there are aspects of the due process evaluation of punitive damages awards which have not changed at all as a result of State Farm. As a consequence, although the court is vacating Order No. 358, where the court perceives no need or necessity of further exposition of the facts or its view of the law, the court will simply replicate what it has previously said in Order No. 358.
Terrible things have happened in Alaska on Good Friday. On Good Friday, March 27, 1964, the strongest earthquake ever recorded in North America literally relocated the seabed of most of Prince William Sound and the Kenai Peninsula. On Good Friday, March 24, 1989, the oil tanker Exxon Valdez was run aground on Bligh Reef in Prince William Sound, Alaska.
On March 24, 1989, Exxon's co-defendant, Joseph Hazelwood, was in command of the Exxon Valdez. He was assisted by a third mate and a helmsman. Captain Hazelwood was a skilled mariner, but he was an alcoholic. Worse yet, he was a relapsed alcoholic; and, before departing Valdez, Alaska, on March 23, 1989, he had, more probably than not, consumed sufficient alcohol to incapacitate a non-alcoholic. As the Exxon Valdez exited Valdez Arm, Captain Hazelwood assumed command of the vessel from a harbor pilot and made arrangements to divert the vessel from the normal shipping lanes in order to avoid considerable ice which had calved off Columbia Glacier. That diversion from the standard shipping lanes took the vessel directly toward Bligh Reef. The captain gave the third mate explicit, accurate orders which, if carried out by the third mate, would have returned the vessel to the shipping lanes without danger of grounding on Bligh Reef. The third mate, who had completed the requirements for a captain's license, was, more probably than not, overworked and excessively tired at the time in question. He neglected to commence a turn of the vessel at the point where, and the time when, he had been directed to do so. At that critical time, Captain Hazelwood had left the bridge to attend to paperwork. When the third mate realized that he had proceeded too far in the direction of Bligh Reef, he commenced a turn, but it was too late.
Like so many great tragedies, this one occurred when three or more unfortunate acts and/or omissions took place in close proximity to one another, and but for any one of them, the grounding would likely not have occurred. Joe Hazelwood was under the influence of alcohol. Instead of staying on the bridge to verify that his
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orders were carried out, he tended to paperwork below. The third mate, being overworked and tired, neglected to carry out the orders which he had been given. The grounding might still have been avoided but for several other converging circumstances: the captain had put the vessel on an automated system for increasing its speed prior to completing the maneuver around the ice in the shipping lane; and the third mate, upon realizing his oversight, did not turn the vessel as sharply as he might have.
It has never been established that there was any design, mechanical, or other fault in the Exxon Valdez. It responded to its human masters as intended and expected. Thus it is entirely clear why the Exxon Valdez grounded on Bligh Reef: the cause was pure and simple human frailty.
Defendant Exxon Shipping owned the Exxon Valdez. Exxon employed Captain Hazelwood, and kept him employed knowing that he had an alcohol problem. The captain had supposedly been rehabilitated, but Exxon knew better before March 24, 1989. Hazelwood had sought treatment for alcohol abuse in 1985 but had "fallen off the wagon" by the spring of 1986. Exxon knew that Hazelwood had relapsed and that he was drinking while on board ship. Exxon officials heard multiple reports of Hazelwood's relapse, and Hazelwood was being watched by other Exxon officers. Yet, Exxon continued to allow Hazelwood to command a supertanker carrying a hazardous cargo. Because Exxon did nothing despite its knowledge that Hazelwood was once again drinking, Captain Hazelwood was the person in charge of a vessel as long as three football fields and carrying 53 million gallons of crude oil. Exxon officials knew that it was dangerous to have a captain with an alcohol problem commanding a supertanker. Exxon officials also knew that oil and fisheries could not mix with one another. Exxon officials knew that carrying huge volumes of crude oil through Prince William Sound was a dangerous business, yet they knowingly permitted a relapsed alcoholic to direct the operation of the Exxon Valdez through Prince William Sound.
Captain Hazelwood came to the bridge immediately after the grounding. He timely reported to the United States Coast Guard:
Exxon Valdez [calling Valdez Traffic Control]. We should be on your radar there. We've fetched up hard aground north of Goose Island off Bligh Reef and evidently leaking some oil and we're gonna be here for a while....11
Despite the fact that he was aware of oil boiling up through the seawater on both sides of the vessel, Captain Hazelwood attempted to extract the vessel from the reef.12 Had he succeeded in backing the vessel off the reef or driving it across the reef, the Exxon Valdez would probably have foundered, risking the loss of the entire cargo and the lives of those aboard. However, the vessel was really hard aground. It could wiggle but not be moved off Bligh Reef.
The best available estimate of the crude oil lost from the Exxon Valdez into Prince William Sound is about 11 million gallons.13
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In the days following the grounding, about 42 million gallons of crude oil were lightered off the Exxon Valdez by other tankers. This process was very dangerous. The lightering process was necessarily taking place in a pool of crude oil. A spark from static electricity or other mechanical or electrical sources might have set fire to the crude oil.
The crude oil lost from the Exxon Valdez spread far and wide around Prince William Sound, mostly in a westerly direction. Counter-currents which pass through the sound in a westerly direction (the primary North Pacific currents flow from west to east) took the crude oil past numerous islands, spreading to the coast of the Kenai Peninsula, Cook Inlet, and Kodiak Island. As the oil spread, it disrupted the lives and livelihoods of those in its path, including the 32,677 punitive damages class members. Commercial fisheries throughout this area were totally disrupted, with entire fisheries being closed for the 1989 season. As a result, commercial fishermen not only suffered economic losses but also the emotional distress that comes from having one's means of making a living destroyed. A high percentage of commercial fishermen suffered from severe depression, post-traumatic stress disorder, generalized anxiety disorder, or a combination of all three.14 Subsistence fishing by residents of Prince William Sound and Lower Cook Inlet villages was also disrupted. The disruption to subsistence fishing deeply affected Native Alaskans, for whom subsistence fishing is not merely a way to feed their families but an important part of their culture. Research indicated that Native Alaskans also experienced great emotional distress following the spill.15 Shore-based businesses dependent upon the fishing industry were also disrupted as were the resources of cities such as Cordova.
In keeping with its legal obligations, Exxon undertook a massive...
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Simon v. San Paolo US Holding Co., Inc., S121933.
...F.3d 634, 639-640 (potential harm from tortious interference with contract may be considered); In re the Exxon Valdez (D.Alaska 2004) 296 F.Supp.2d 1071, 1103 (had ship captain succeeded in backing oil tanker off reef, additional oil could have spilled, causing "immense and incalculable" ad......
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U.S. v. Bp Products North America Inc., Criminal No. H-07-434.
...would be employed for restoration of the environment than by a larger fine which would not be so employed." In re the Exxon Valdez, 296 F.Supp.2d 1071, 1079 n. 111 (D.Alaska 2004), vacated and remanded on other grounds, In re Exxon Valdez, 472 F.3d 600 (9th Cir.2006). Besides the $100 milli......
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Exxon Shipping Co. v. Baker, 07–219.
...for reconsideration in light of Supreme Court due process cases that the District Court had not previously had a chance to consider. 296 F.Supp.2d 1071, 1110 (D.Alaska 2004). And each time it concluded “that a $5 billion award was justified by the facts of this case,” based in large part on......
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In re Exxon Valdez, 04-35182.
...Id. "The plaintiffs' claims for punitive damages expressly excluded consideration of harm to the environment." In re the Exxon Valdez, 296 F.Supp.2d 1071, 1090 (D.Alaska 2004). The resolution of punitive damages has been delayed because the course of this litigation has paralleled the cours......
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Simon v. San Paolo US Holding Co., Inc., No. S121933.
...F.3d 634, 639-640 (potential harm from tortious interference with contract may be considered); In re the Exxon Valdez (D.Alaska 2004) 296 F.Supp.2d 1071, 1103 (had ship captain succeeded in backing oil tanker off reef, additional oil could have spilled, causing "immense and incalculabl......
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Exxon Shipping Co. v. Baker, No. 07–219.
...for reconsideration in light of Supreme Court due process cases that the District Court had not previously had a chance to consider. 296 F.Supp.2d 1071, 1110 (D.Alaska 2004). And each time it concluded “that a $5 billion award was justified by the facts of this case,” based in large part on......
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U.S. v. Bp Products North America Inc., Criminal No. H-07-434.
...be employed for restoration of the environment than by a larger fine which would not be so employed." In re the Exxon Valdez, 296 F.Supp.2d 1071, 1079 n. 111 (D.Alaska 2004), vacated and remanded on other grounds, In re Exxon Valdez, 472 F.3d 600 (9th Cir.2006). Besides the $100 millio......
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In re Exxon Valdez, No. 04-35182.
...plaintiffs' claims for punitive damages expressly excluded consideration of harm to the environment." In re the Exxon Valdez, 296 F.Supp.2d 1071, 1090 (D.Alaska 2004). The resolution of punitive damages has been delayed because the course of this litigation has paralleled the course fo......
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Run Aground Again: The Exxon Valdez's Collision With the Supreme Court's Punitive Damages Jurisprudence
...Cir. Aug. 18, 2003). For a discussion of Campbell , see notes 59-69 and accompanying text. 94. Id. at 425. 95. In re Exxon Valdez, 296 F. Supp. 2d 1071, 110 (D. Alaska 2004). 96. Id. at 1106. he court found Exxon caused plaintifs actual harm in the amount of $513,147,740, which, when consid......