Verdicts, settlements mop up Exxon Valdez litigation.

Phase two of the complex three-part trial of the Exxon Valdez oil spill five years ago concluded recently in Alaska, leaving only the question of punitive damages unresolved. (In re The Exxon Valdez, No. A89-0095CV(HRH) (D.Alaska trial pending).)

Phase one ended on June 13, when a jury of nine women and three men decided that the spill had been caused by the reckless behavior of Exxon executives and Joseph Hazelwood, captain of the oil tanker. (Natalie Phillips, Exxon Found Reckless in Alaska Spill, Wash. Post, June 14, 1994, at A3.) The grounding of the tanker on a reef in Prince William Sound dumped 11 million gallons of crude oil into Alaskan coastal waters. It was the nation's largest oil tanker spill.

Phase two dealt with the amount of damages to be paid to Native Alaskans and commercial fishermen. About 4,000 Eskimos, Indians, and Aleuts who live in 18 villages along the coast sought damages for natural resources that could not be harvested because they were polluted by the spill. The commercial fishermen sought nearly $1 billion for damage to their livelihood caused by the immediate fish kill, pollution of spawning grounds, and genetic weakening of fish strains poisoned by the oil.

Exxon settled with the Native Alaskans, agreeing to pay $20 million for damage to fish, seals, and other subsistence foods. According to some legal experts, the settlement helps solidify an evolving legal theory: that a dollar value can be placed on damaged natural resources--not just on property damage or lost income. (Keith Schneider, Exxon Will Pay $20 Million to Alaskans, N.Y. Times, July 31, 1994, at B2.)

The jury awarded the commercial fishermen $287 million, only about one-third of what they had been asking. (Natalie Phillips, $286.8 Million Awarded in Exxon Valdez Spill, Wash. Post, Aug. 12, 1994, at A24.) The award will be reduced by about $130 million that Exxon has already paid to fishermen for emergency support.

The final phase of the trial--to determine if Exxon must pay up to $15 billion in punitive damages--began on August 22 before the same jury. Arguments for punitive damages were expected to focus on Exxon's failure to respond to repeated warnings about Hazelwood's drinking problem. Exxon was expected to argue that the shock of the oil spill itself was sufficient to make the company improve its behavior.

Whatever the outcome of the final phase, damages won by plaintiffs are already the second highest ever in an environmental accident, surpassed only by the 1984 chemical poisoning in Bhopal, India. (Keith Schneider, With 2 Valdez Trials Down, Big One Is Coming Up, N.Y. Times, Aug. 14, 1994, at 34.)

The plaintiffs' trial team is led by Brian O'Neill of Minneapolis. Exxon's trial team is led by James Neal of Nashville and Patrick Lynch of Los Angeles. Federal district court judge Russell Holland is presiding.

The litigation has been highly complex. A confederation of 15 law firms representing plaintiffs have invested roughly $20 million in direct expenses and twice as much in unpaid time preparing motions, gathering evidence, and interviewing witnesses.

A fourth trial phase--to be conducted with a separate jury during the fall--will serve as a catchall for any plaintiffs who were not covered by the other trial phases. At TRIAL press time, another trial against Exxon was proceeding in state court in Anchorage. Plaintiffs there--about 100 coastal municipalities and businesses--were seeking $100 million in compensation.