Cleaning Up: The Story Behind the Biggest Legal Bonanza of Our Time, by David Lebedoff, New York: The Free Press, 321 pages, $25.00
On March 24, 1989, the Exxon Valdez ran aground, slamming into Alaska's Bligh Reef a few minutes after midnight. More than 11 million gallons of oil seeped into Prince William Sound, disrupting aquatic ecosystems and undercutting the livelihoods of thousands of men and women who make their living from the sea.
On September 16, 1994, an Alaska jury hit the Exxon Corp. with a bill for $5 billion. This award was not compensation for the damage the spill had done: The jury had already told Exxon to deliver $286.7 million to commercial and subsistence fishermen injured by the accident. Nor was it a cleanup bill: The company had been sinking money into that project for years, at great expense (and to little effect). Nor was it a statutory fine: This was a civil case, separate from efforts of environmental regulators (more on those later). The award was for punitive damages, above and beyond the costs Exxon had imposed on others; it was a punishment and nothing more. It was the largest such penalty in legal history.
Exxon has appealed the verdict, and the award may be reduced. Either way, some lawyers are going to become very, very rich. I mention this not to engage in the familiar game of shyster-bashing but to raise a point. Most people did not immediately think of their bank accounts when they heard that the Valdez had run aground. That, I suppose, is the difference between attorneys and the rest of us. While we were watching footage of oil-soaked waterfowl, a flock of lawyers was already looking for clients on whose behalf they could sue Exxon. Some were interested in justice; some weren't. All were interested in cashing in, as were the fishing operations, native tribes, and municipalities who hired them.
Today, that interest may seem self-evident, but, as David Lebedoff reminds us in his engrossing Cleaning Up, in 1989 it wasn't. The Exxon case seemed like a simple morality play. On one side, there was a soulless corporation, a company so irresponsible, so starved for profits, that it let a drunk pilot its rig. On the other side, there were helpless birds and cuddly otters. It was big business against the earth, selfishness against the commonweal, evil against good. Or so we were told. The greatest virtue of Cleaning Up is that it clears away those old clichés and shows the competing interest groups at play.
By extension, the book demystifies the whole idea of "environmentalism," of a purely moral movement divorced from self-interest, political influence, and other signs of a social context. In grade school, many of us learned about the Lorax, the selfless Dr. Seuss character who stood up to the developers and spoke for the trees. Not once did our teachers mention that the Lorax charged a fat retainer.
Of course, this does not mean that the plaintiffs were wrong. Libertarians have long argued that the environment should be regulated by the common law and pollution treated as a tort. We have also declared that the pursuit of self-interest can serve the common good. If greed compels lawyers to pursue an errant corporation, that may speak well for greed. (Lady Justice, meet Mr. Invisible Hand.) Certainly, it is hard to muster much sympathy for Exxon. It did behave irresponsibly, and it did injure a lot of people.
One can reach this conclusion even without blaming the company for the behavior of Valdez captain Joe Hazelwood, who wasn't necessarily an alcoholic and might not have been drunk when his ship ran aground. To be sure, he probably was pretty toasted, given that 11 hours after the grounding he had a blood alcohol level of .061--over the legal limit for operating a ship, and far lower than it must have been at the time of the accident. On the other hand, Hazelwood's blood samples were so severely mishandled en route from Alaska to the testing lab in Sacramento that the jury concluded he had not been proven drunk.
Exxon was guilty of cutting its crews to small sizes, perhaps making accidents like the Valdez spill more likely. It also connived to dodge the jury's verdict by coming to an earlier settlement with the Seattle Seven, a group of seafood processors affected by the spill. The Seven received $70 million in exchange for surrendering all claims and--here's the kicker--secretly agreeing to apply for a share of any future punitive damages and then quietly hand the money back to Exxon.
And so, one might conclude, the case--including the massive punitive award--went just as it should. Indeed, on one level, it even demonstrates the power of the common law approach: The jury forced Exxon to compensate the people it hurt and in the process gave it (and other companies) a strong incentive to be more careful.
Yet $5 billion still seems bizarrely high. One might plausibly argue that Exxon shouldn't have to pay punitive damages at all; this was an accident, after all, not a deliberate dump. But the jury found that Hazelwood acted recklessly--not just negligently--on the night of the spill, and reckless behavior is punishable by law.
The distinction is commonsensical: It's the difference between hitting a pedestrian because you were checking your blind spot and hitting him because you were driving on the left side of the road. In the Valdez case, Hazelwood set sail only three hours after drinking, a violation of Coast Guard regulations. Furthermore, he left the bridge at an inappropriate time, leaving the vessel in an underqualified sailor's hands. In the jury's view, this added up to recklessness.
Cleaning Up provides the reader with enough information to come to a different conclusion (Lebedoff himself is neutral on the matter). Consider these mitigating factors. The ship's sailing schedule was changed at the last minute, without the captain's knowledge. Hazelwood's final drink would have been legal had the Valdez left port at the hour originally scheduled; when he ordered his illicit vodka, he didn't know the timetable had changed. A mistake? Yes. Reckless? Since we've no evidence that Hazelwood himself believed he was impaired, I wouldn't say so.
Similarly, leaving the bridge was, in retrospect, a serious misjudgment. The Exxon manual requires a captain to be on the bridge "whenever conditions present a potential threat to the vessel such as passing in the vicinity of shoals, rocks or other hazards presenting any threat to safe navigation." But was leaving reckless? There is a difference between breaking company policy and breaking the law, and it wasn't as though Hazelwood was going below deck to quaff a fifth of whiskey. He had work to do, and if he soberly decided it was safe to leave the ship in his helmsman's hands, one can assume he had carefully considered just what he was doing.
Please note the word soberly. If Hazelwood was legally drunk, that would constitute recklessness. But the jury refused to make such a finding. It's possible, then, that the jury reached the right conclusion for the wrong reasons. Even then, it's hard to justify fining Exxon billions for what was, after all, one worker's mistake. (The company's policy of cutting crew sizes may have been questionable, but it was not reckless in the legal sense.)