$18.1-Million Verdict in O.C. Oil Spill

SANTA ANA — Setting a price on the public’s right to enjoy the beaches, an Orange County jury Monday levied $18.1 million in damages and penalties against the owner of an oil tanker that ran over its own anchor nearly eight years ago, causing Southern California’s worst oil spill in 20 years.

In a case that is a first for California, the jury found that Attransco, which owned the American Trader oil tanker, owes beach-goers and boaters $12.8 million in damages for the five weeks that the coast from Huntington Beach to Newport Beach was closed for cleanup.

The jury also found that Attransco should pay $5.3 million on behalf of the Regional Water Control Board for damages to small marine life along the 15 miles of beach and coastline coated by the spilled oil.

Michael Leslie, lead attorney for the plaintiffs, described the verdict as “a real victory.”

“This means that somebody who spills oil and closes beaches will have to stand to account,” he said. “These are real damages. You can put a dollar value on them, and it’s substantial enough to give [oil shippers] reason to be extremely careful when shipping up and down the coast.”

All the money will go into two government-run trust funds to care for beaches and waterways, he said.

The lawsuit was filed in 1991 by California, Orange County and the cities of Newport Beach and Huntington Beach.

David E.R. Woolley, the attorney for Attransco, owner of the American Trader, said the amount of the verdict surprised him.

“I don’t think the evidence was as strong as the jury thought it was,” he said.

He said the company likely will appeal the size of the award.

Attorneys said the verdict was precedent-setting on two fronts. It is the first time a jury has found merit in the legal argument that the public suffers legal damages when oil spills close beaches.

And the fine marks the first time that a California jury has put a dollar figure on the loss of microorganisms--such as plankton--that anchor the marine food chain, said Sylvia Cano Hale, a state deputy attorney general.

“One of the large aspects of this case is that in general, industry is often quick to point out the cost of complying with environmental regulation, but the cost involved in environmental damage is often more difficult to quantify,” said David Beckman, a lawyer who heads the Natural Resources Defense Council’s Los Angeles coastal water quality program.

“Here, the jury listened to all the highly technical expert testimony and clearly concluded that there had been significant damages to their recreational opportunities, and to the marine and coastal biology as well.”

Beckman and Hale, who was assigned to the case the day of the spill, cited the legal significance of the verdict in assessing damages to microorganisms that don’t receive the public attention generated by oil-soaked birds and dead fish. Yet such microorganisms are key food for larger wildlife, they argued.

The state Supreme Court in a separate, earlier case set the stage for Monday’s fine by ruling that, in part because of the difficulty of determining damage to microorganisms, liability can be based on the number of gallons of oil spilled, Hale said.

“This is the first time we have a jury decision setting a per-gallon figure to address damages to these unquantifiable resources,” she said.

Beckman said the verdict could become a benchmark for public officials.

“I hope that other municipal governments that have oil spills will not only seek to recover the immediate costs of cleanup but will recognize that environmental damage robs communities--not only of direct costs but of the use of resources.”

Jurors said they found Attransco negligent because its employees failed to take sufficient steps to learn the water depth at the mooring and terminal a mile off Huntington Beach.

Testimony in the trial revealed that the ship’s captain, acting on advice from a mooring pilot, thought he was steering the ship into 56 feet of water. It was actually 50 feet deep, too shallow for the ship to navigate safely.

The ship ran over its port anchor, puncturing the hull and one storage tank. The spill was exacerbated because crew members had left the valves open between three connected tanks, allowing 416,598 gallons to leak out.

“We didn’t feel that they did anything that was overt, but we did think they were negligent,” said juror Robert Henson of Santa Ana.

Another juror, Douglas James of Santa Ana, said of the crew: “Maybe they should have been nit-picky. They didn’t get the right depth. There was information they could have obtained before they went in.”

Juror Wendy Rocha of Mission Viejo said she was persuaded by the state’s argument “that you can put a value on loss, and they had literature to back it up.”

Woolley said he expects an appeal to focus on several technical legal points, including that the damages are based on estimates, which he said is not allowed under the law. The state, he said, failed to prove that anyone suffered actual damages.

In a separate appeal already before the federal 9th District Court of Appeals, Woolley said, Attransco is arguing that it has satisfied its responsibility for damages from the spill under federal law and that the Orange County trial should not have taken place.

If Monday’s verdict stands, it will be up to Orange County Superior Court Judge William F. McDonald to determine how much of the $18.1 million Attransco must pay.

Woolley said Attransco maintains that some of the loss-of-use damages have already been covered in earlier settlements with other defendants.

BP America--the U.S. subsidiary of British Petroleum--and the Trans-Alaska Pipeline Liability Fund, which owned the oil, have already paid $9.1 million for programs to restore and protect wildlife habitats, establish a fish hatchery program in Carlsbad, and reimburse public agencies for some of their cleanup costs. That was in addition to $12 million that BP America paid just after the spill for cleanup costs and to compensate private parties who suffered losses.

In a second settlement, platform owner Golden West Refining Co. paid $4.5 million to the state, Orange County and the cities of Huntington Beach and Newport Beach.

Leslie, though, said whatever overlap there might be would be minimal.

James H. Ackerman, the attorney representing Huntington Beach, said the city is pleased with the verdict, particularly in light of Attransco’s legal defense.

“Some of [Woolley’s] arguments were excellent,” Ackerman said. “Of course we were worried.”

The trial centered on key issues such as how many people would have used the beaches had they been open, and how much a day at the beach is worth. Jurors rejected defense estimates as too low but also trimmed the state’s estimate of 618,000 affected beach-goers, saying they had wanted to be conservative in the face of admitted errors by the state’s expert, UC Berkeley professor Michael Hanemann.

But the amount of damages was well within the range sought by the state.

Jurors also set the value of a day at the beach at $13.19, based on a 1988 study of Florida beaches that was introduced during the trial.

The lawsuit cost the state and other plaintiffs about $3.6 million. Hale said the state plans now to try to win legal fees and court costs against Attransco.