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Checks may close book on '89 oil spill

Victims of Alaska's Exxon Valdez disaster begin receiving punitive damages. Most say it's too little.

December 06, 2008|Kim Murphy | Murphy is a Times staff writer.

CORDOVA, ALASKA — A little less than 20 years ago, Mike Webber was king of his own watery world. He was 28 years old, with three herring fishing boats. He leased another long-line boat for halibut, and gill-netted the fat salmon that made Prince William Sound one of the most legendary fisheries in the world.

Then came the 1989 Exxon Valdez oil spill. Overnight, it was all gone: Fish prices plummeted. People started selling their fishing permits to pay their mortgages, and then lost their houses anyway. Salmon rebounded, but the $12-million-a-year herring fishery all but disappeared.

On Friday, Webber and more than 200 other residents of this rain-soaked fishing town began getting the first round of punitive damage payments from ExxonMobil, closing the book on one of the nation's most epic battles over environmental destruction and corporate responsibility.

Over the next year, more than 32,000 plaintiffs from around the globe who once made their living fishing in and around Prince William Sound will collect their shares of the $507.5 million ExxonMobil was ordered to pay. The corporation spent nearly two decades appealing an initial $5-billion court order.

"My heart's not into receiving this money because, in reality, we're getting nothing," Webber said. "Even if we got the full $5 billion, we still wouldn't come close to what we would have made in 20 years of fishing." Webber said he will get about $180,000, compared with the $2.5 million he might have received under the initial judgment.

"One good thing is that this case is coming to an end. . . . It's been an open sore," Webber said. "But are we going to be able to heal from it? I don't know."

At a time when national attention is focused on opening new sources of oil and gas from Alaska's substantial reserves, the Exxon Valdez disaster -- which occurred when North Slope oil production was in its adolescence -- stands as the most devastating oil spill in the nation's history.

Commanded by an alcoholic captain who had returned to his cabin as the tanker threaded its way through treacherous icebergs and reefs, the Exxon Valdez went off course and spilled 11 million gallons of crude oil into a pristine wonderland of orcas, sea otters, bald eagles and glacial peaks.

Two decades later, oil -- an estimated 55 tons of it -- still oozes a foot or so below the surface of many beaches. Shellfish in the western sound have never come back, nor have the otters that depended on them.

But in June, the U.S. Supreme Court struck down the $5 billion in punitive damages intended as a deterrent against future acts of corporate negligence. The justices ruled that punitive damages in maritime cases should not exceed the amount of actual damages inflicted, which had been calculated at $287 million.

The ruling was a victory for corporations that claimed they had been victimized for years by excessive punitive damages.

Exxon pointed out that it had already spent more than $3.4 billion in cleanup, compensation and fines.

But the fishermen here -- along with boat owners, seafood processors and other businesses ruptured by the spill -- argued that the original compensatory damages were calculated well before the long-term environmental damage to Prince William Sound became apparent.

"The day after the Supreme Court ruling in June, the attorneys came here to talk to us. And one of them projected the pictures of the Supreme Court justices on the wall, and he turned around and he said to us, 'You lost this case the day George Bush got elected,' " said Linden O'Toole, who fished for salmon with her husband before the spill and now works in real estate -- a business that these days is only slightly better than fishing.

O'Toole and her husband had borrowed and saved $300,000 to buy their once-prized salmon seiner's permit on the eve of the spill. They finally sold it in 1994 for $47,000.

"The biggest reason why we need punitive damages," O'Toole said, "is if there really is no significant consequence to [corporations], no matter how egregious their behavior, then why should they change?

"If we had 5-cent speeding tickets, would people slow down? It's like they got a hall pass to run amok."

The first claims being paid this week cover 13 of the roughly 50 categories of claimants, mainly salmon fishermen with no complications in their claims and no liens by creditors filed against them. In the end, the average award will be about $15,000.

"We're a bunch of hungry dogs out here getting a very small bone, where at one point we thought we were going to get a nice, big steak," said Frank Mullen, 58, a salmon fisherman from Homer.

"For a company that made $40 billion last year, $500 million is what? Two days, three days' profit?" said Cordova's mayor, Timothy Joyce, a fisheries biologist for the U.S. Forest Service.

The money is so little, and so late in coming, that some have suggested holding out for a new lawsuit, based on newer scientific evidence demonstrating far greater long-term harm to the environment.

"I've talked to a small subset of people who say, 'What if I don't sign my check? It's a slap in the face, this amount of money. What if we refuse it, and keep our case open?' " said Riki Ott, an oil pollution scientist and fisherman who has spent years advocating for the Exxon Valdez victims and has written two books on the spill.

"These are questions I hope to get framed in a way to present to lawyers, and get some answers."

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kim.murphy@latimes.com

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