Chenega Corporation v. Exxon Corporation

Environmental Pollution - Oil Spill - Strict Liablity - In the early morning hours of March 24, 1989, the EXXON
VALDEZ, owned by the Exxon Shipping Corporation, ran aground near
Bligh Reef in Prince William Sound, spilling approximately ten
million gallons of crude oil owned by the Exxon Corporation.
Currents and winds pushed the spilled oil in a southwesterly
direction onto the shores of lands owned by several Alaska Native
corporations, including Chenega Corporation, Port Graham
Corporation, and English Bay Corporation (the Corporations). Each
of the Corporations is an Alaska Native corporation organized
under the Alaska Native Claims Settlement Act (ANCSA);
collectively, they own more than 250,000 acres of wilderness land
along western Prince William Sound.

Within a month of the oil spill, the Corporations filed
suit in Alaska superior court against the Exxon Shipping
Corporation and Exxon Corporation (collectively, Exxon) and the
Alyeska Pipeline Service Company (Alyeska). The Corporations
alleged that the oil spill affected their lands and damaged
coastal archeological sites containing irreplaceable historical
evidence of Native people who had used and occupied these lands
for thousands of years. They sought compensation on various
theories of liability for damage to their real property and
archeological sites and artifacts. In September 1990 the trial
court entered an order holding Exxon strictly liable for damages
proximately caused by the oil spill.

Also in 1990, Congress responded to the oil spill by
enacting the Oil Pollution Act of 1990 (OPA 90). Although OPA 90
focuses on preventing oil spills and creates a fund to enable
faster response to oil spills, one section of the act,
section 8301, vests Alaska Native corporations with "right,
title and interest" to pursue claims arising from the EXXON VALDEZ
oil spill that related to federal lands selected by the
corporations but not yet conveyed to them under ANCSA.

In 1991, upon learning that the United States and State
of Alaska were about to settle spill-related claims with Exxon in
federal court, the Corporations intervened in the federal action,
seeking injunctive relief to protect their own state-court claims
from being impaired. In September 1991 the federal and state
governments responded by entering into a consent decree
recognizing that the Corporations retained "private claims . . .
for all private harms" caused by the oil spill to OPA 90 section
8301 lands.

Before trial the Corporations obtained compensation for
spill damage from two alternative sources: In 1991 the
Corporations filed claims for damages with the Trans-Alaska
Pipeline Liability Fund (TAPL Fund or Fund); the Fund paid them
$23,266,884 in settlement of their claims. In 1993 Exxon's
codefendant Alyeska entered into a settlement, paying the
Corporations $5,689,079 in exchange for a release of liability.

Thereafter, the superior court dismissed the
Corporations' state punitive damages claims in deference to a
federal court order creating a federal mandatory punitive damages
class. The court then held a jury trial on the remaining claims.
During trial and at the close of the evidence Exxon moved for a
directed verdict. The court denied the motions.

The jury returned a verdict totaling $5,915,741.87 for the
Corporations.

Unknown

Unknown

Affirmed on all issues at appeal except reversed and remanded on the issue of OPA 90 claims. See: ___ P.2d ___ (Alaska 11-22-1999. Note: The above date reflects the appellate court decision date, not the original trial date. Reported by kkm.