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Chenega Corporation v. Exxon (11/22/99) sp-5211
Chenega Corporation v. Exxon (11/22/99) sp-5211
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
CHENEGA CORPORATION, )
PORT GRAHAM CORPORATION, )
and ENGLISH BAY CORPORATION, ) Supreme Court Nos. S-7252/7512
)
Appellants and ) Superior Court No.
Cross-Appellees, ) 3AN-89-2533 CI (Consolidated)
)
v. )
)
EXXON CORPORATION and EXXON ) O P I N I O N
SHIPPING CORPORATION, )
) [No. 5211 - November 22, 1999]
Appellees and )
Cross-Appellants. )
______________________________)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
Brian C. Shortell, Judge.
Appearances: Samuel J. Fortier, Fortier &
Mikko, P.C., Anchorage, and Kenneth F. McCallion, Goodkind Labaton
Rudoff & Sucharow LLP, New York, New York, for Appellants and
Cross-Appellees. Douglas J. Serdahely, Bogle & Gates, P.L.L.C.,
Anchorage, John F. Clough III and Eric Twelker, Clough &
Associates, P.C., Juneau, Charles P. Diamond and M. Randall
Oppenheimer, O'Melveny & Myers, Los Angeles, California, for
Appellees and Cross-Appellants.
Before: Bryner, Justice, Rabinowitz, Senior
Justice, pro tem, Hunt, Greene, and Zervos, Justices, pro tem.
[Matthews, Chief Justice, Compton, Eastaugh, and Fabe, Justices,
not participating.]
BRYNER, Justice.
A jury awarded several Alaska Native corporations almost
$6,000,000 for harm caused by the EXXON VALDEZ oil spill. Exxon
and the corporations appeal, raising numerous issues. We affirm in
all respects but one: The superior court determined that the Oil
Pollution Act of 1990 did not assign to the corporations certain
federal claims for spill-related harm to federal lands that the
corporations had selected under the Alaska Native Claims Settlement
Act but that the federal government had not yet conveyed to them.
Because we conclude that the Oil Pollution Act did assign these
federal claims to the corporations, we hold that the superior court
erred in precluding their consideration by the jury.
I. FACTS AND PROCEEDINGS
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); [Fn. 1]
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, [Fn. 2] one section of the act,
section 8301, [Fn. 3] 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. [Fn. 4]
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. [Fn. 5]
The superior court decided to offset TAPL's and Alyeska's
pretrial payments against the jury awards. Because the offsets
exceeded the jury verdict, the court entered final judgments
ordering that the Corporations "take nothing"from Exxon. Exxon
moved for a judgment notwithstanding the verdict, but the court
denied this motion.
The Corporations appeal, and Exxon cross-appeals.
II. DISCUSSION
A. Instructional Errors
1. Standard of review
The legal sufficiency of jury instructions is a question
of law to which this court applies its independent judgment. [Fn.
6] A legally erroneous instruction warrants reversal only when it
prejudices a party [Fn. 7] -- that is, when "substantial rights of
the parties were affected or the error had substantial influence."
[Fn. 8]
When evidence supports a plaintiff's theory of the case,
the court must ordinarily give an instruction "consonant with the
theory."[Fn. 9] Furthermore, if it appears from questions
submitted by the jury to the court that the jury is confused on a
legal issue and "the resolution is not apparent from an earlier
instruction, the trial judge has a responsibility to give the jury
the required guidance by a lucid statement of the relevant legal
criteria."[Fn. 10] But so long as the jury instructions given are
adequate, the trial court has broad discretion to decide upon the
need for additional instructions responding to jury questions,
summarizing potentially helpful statutory provisions, or describing
the plaintiffs' theory of the case. [Fn. 11] Its decision in such
cases is subject to review only for abuse of discretion. [Fn. 12]
2. The court did not abuse its discretion in
instructing on the Corporations' theory of land damages.
The Corporations argue that the superior court erred in
instructing the jury that it could award land-use damages only for
loss of "actual use"of corporate lands. Citing the Restatement of
Torts, they claim that they should not have been required to prove
any actual lost monetary use of the damaged lands. [Fn. 13] They
also claim that the court erred in restricting the jury's
consideration of fair market value and in failing to instruct on
their specific theory of damages. Before addressing these claims,
we will briefly describe the procedural background from which they
arise.
a. Background
The Corporations sought damages for the reduced market
value and loss of use of their oiled and adjacent lands. They
asserted several theories of liability, including trespass, private
nuisance, and violation of Alaska's strict-liability statute
prohibiting release of hazardous substances. [Fn. 14] The
Corporations presented expert testimony at trial in support of
these damages theories. To establish the value of the
Corporations' lost use, the Corporations' experts relied on the
concept of impaired rental value. They began by positing that the
"highest and best use"of the lands was preservation as natural
land or archeological sites. After determining the market value
based on sales of comparable property, the experts converted this
value into a projected annual income stream representing estimated
rental value. They then multiplied this income stream by the
projected number of years of impairment and discounted to present
value.
This process yielded the unimpaired value of the affected
lands. The experts then calculated the impaired rental value of
the lands by multiplying the unimpaired value by an impairment
factor derived from the ratio of soiled to unsoiled acreage.
Finally, by subtracting impaired from unimpaired values, they
arrived at an estimated value of lost-use damages. Exxon's experts
acknowledged that the "income stream"method of valuation is
commonly used by appraisers in valuing coastal Alaska properties.
Near the end of trial, in a hearing on jury instructions,
the Corporations acknowledged that essentially all of the land
damages they sought were temporary. They agreed to submit their
land-damages claims to the jury as temporary lost-use claims rather
than as claims for permanent reduction in market value. This
approach was consistent with the methodology adopted by the
Corporations' experts, who relied on fair market value as a
starting point for calculating annual rental value of corporate
lands but did not use reduction in fair market value as a valuation
component.
Despite their agreement to limit their claims for land
damages to temporary lost use, the Corporations requested
permission to refer in closing argument to testimony describing the
lost market value of spill-affected lands belonging to other
owners. They maintained that the reduced market value of nearby
properties tended to support their claims of lost use as to their
corporate lands. Exxon objected, contending that reduced market
value was no longer a valid measure of the Corporations' alleged
land damages. But the superior court granted the Corporations'
request, ruling that each party could argue its own interpretation
of the evidence.
After closing arguments, the trial court instructed the
jury that the Corporations' "first item of claimed loss is damages
to real property."[Fn. 15] As to this item, the court stated,
"The measure of harm to land, in the circumstances of this case, is
the 'fair rental value' attributable to any use of the property
that could have been made but for the Oil Spill." After defining
the concept of "fair rental value"as "the amount of rent that the
plaintiff would receive from a fully informed renter . . . in an
open rental market,"the court, in Jury Instruction No. 27,
cautioned against using other measures of damage, such as impaired
marketability or reduction in market value:
Plaintiffs are not asserting any of the
following as a basis for any of their claims and, therefore, you
may not award damages for:
1. Any alleged harm to plaintiffs'
ability or right to sell or lease any of their property, as a
result of the Oil Spill;
2. Any alleged reduction in the market
value of any of their properties as a result of the Oil Spill.
Neither harm to plaintiffs' ability or
right to sell or lease, nor reduction in the market value of any of
their properties is a lost use for which you may award damages.
On the second day of deliberations, the jury expressed
confusion concerning the Corporations' land-damages claim. First,
the jury asked for the transcribed testimony of Dr. Wilbur Mundy,
an expert for the Corporations who had described their theory of
damages and had estimated the lost fair rental value to their
damaged lands. Shortly thereafter, apparently referring to
Instruction No. 27, the jury sent the court another note, this time
asking:
If "harm to [the Corporations'] ability or
right to sell or lease"is not a lost use (for which we may award
damages), there is then some unclarity as to what is lost use.
What are [the Corporations] asserting?
Just before retiring that evening, the jury voiced similar concerns
in three further questions:
Is damage to []Market Value of real property[]
actual damage to real property[?]
Can we award damages for mere loss of market
value ([f]or whatever cause) or only when actual use is lost, as a
result of the Spill?
Is that what Inst[.] No. 27 mean[s]?
Upon learning of these questions, the Corporations
proposed supplemental instructions that would inform the jury of
numerous claimed uses, indicating in part that "[i]t is not
necessary to have previously engaged in each of the uses in order
to recover for their loss,"and stating that although "[r]ental
value is how the law requires you to calculate the value of [the
Corporations'] lost uses, [h]arm to [their] ability or right to
sell or lease their lands is evidence of the damage to the lands
because of lost use."[Fn. 16]
Exxon opposed these supplemental instructions and
submitted three proposed supplemental instructions of its own --
one responding to each of the jury's three questions. For the most
part, Exxon's proposed supplemental instructions simply restated
information contained in the court's original instructions. After
hearing extensive argument on the issue, the trial court determined
that the Corporations' proposed supplemental instructions did not
adequately explain the "component nature"of fair market value in
regard to loss of use damages in Dr. Mundy's testimony.
Accordingly, the court approved Exxon's proposed instructions but
gave the Corporations one more opportunity to add language stating
the relevance of fair market value under their theory of damages.
The Corporations then proposed that the following
sentence be added to Exxon's supplemental instructions: " Lost
market value may be considered by you as evidence of lost or
impaired use and as a factor in calculating lost rental value."
Exxon objected that this language would only confuse the jury
because the Corporations' experts had not used reduction of market
value to calculate lost rental value.
The court agreed with Exxon, rejected the Corporations'
proposed supplemental language, and elected to give Exxon's
proposed supplemental instructions without revisions. These
instructions, which the court designated as Supplemental
Instructions Nos. 5, 6, and 7, reminded the jury that "fair rental
value"was the appropriate measure of damages for lost use of
corporate lands; they again cautioned against using reduced market
value as a measure of lost use; and they defined "lost use"to
include any "legal and practical"use the Corporations "could have
made of [their] property in the absence of the oil spill."[Fn. 17]
After receiving the supplemental instructions, the jury
awarded more than $3.6 million to the Corporations, cumulatively,
for land damages.
b. The trial court did not abuse its discretion
in instructing the jury on property damages.
The Corporations contend that the supplemental jury
instructions erroneously required loss of "actual use"for recovery
of land damages. We disagree. As should be clear from the above
background discussion, neither the original nor the supplemental
instructions limited the Corporations' lost-use claims to "actual"
lost uses.
Among the original instructions, Jury Instruction No. 23
expressly provided that "[t]he measure of damages for harm to land
. . . is the 'fair rental value' attributable to any use of the
property that could have been made but for the Oil Spill."[Fn. 18]
Supplemental Instruction No. 5 echoed the original instruction,
stating that, although damages based on reduction in market value
were not allowed, "[y]ou may award damages measured by the fair
rental value attributable to any use of the property that could
have been made but for the oil spill."[Fn. 19] And Supplemental
Instruction No. 6 defined "lost use"to include any use that the
Corporations "could have made of [their] property in the absence of
the oil spill." Simply put, these instructions did not require
that lost uses be actual uses.
The Corporations nonetheless claim that these
supplemental instructions were erroneous because they "took the
'market value' component from the jury's consideration, thus
leaving the jury with no alternative but to believe that they could
only award damages for lost 'actual use' by the Village
Corporations." But as we have just observed, the supplemental
instructions did not state or imply that lost-use damages could
only be awarded for actual uses; instead, they encompassed any
potential use of land that might have been permissible. And while
they also specified that the appropriate measure of damages was the
fair rental value of the lost use, rather than any reduction in the
lands' market value, they did not preclude considering market value
as a component in the Corporations' calculation of fair rental
value.
The Corporations' argument blurs the distinction between
"market value,"on the one hand, and "loss of market value,"
"reduction in . . . market value,"and "damage to market value,"on
the other. Supplemental Instructions Nos. 5 and 7 informed the
jury that the Corporations were not making a claim for "damage to
market value"and that the jury should not make an award for "mere
loss of market value"or "damage to market value."[Fn. 20] The
concept of reduced, damaged, or lost market value played no role at
all in the Corporations' calculation of rental value: original
market value was the starting point for determining fair rental
value; and impaired rental value was based on fair rental value and
an impairment ratio, which was unrelated to the lands' reduced
market value. Hence, removing reduced market value from the
picture as a basis for awarding damages did nothing to preclude
consideration of original market value as a component in
calculating lost rental value.
The jury's three questions did indicate confusion as to
the nature of the Corporations' lost-use claims and the manner in
which the value of lost use should be measured. But the court
directly answered each of the jury's questions with a concise,
straightforward supplemental instruction that accurately restated
and amplified the original jury instructions. [Fn. 21] Because
these instructions fully addressed and resolved the apparent
confusion, we find no abuse of discretion in the trial court's
refusal to give different ones.
The Corporations also claim, however, that they were
entitled to a supplemental instruction explaining their specific
theory of damages because of the jury's confusion on the issue.
But the supplemental instructions that the Corporations proposed on
their theory were imprecise, overly broad, and one-sided. [Fn. 22]
For this reason, the superior court properly rejected these
proposed instructions. Moreover, the Corporations had ample
opportunity to discuss their theory in detail during closing
arguments. Further elaboration would have shed little additional
light on the topic; and by fixing the jury's attention narrowly and
exclusively on the Corporations' version of damages, while ignoring
Exxon's, the court might have encroached on the jury's fact-finding
function.
Although we recognize that a plaintiff is generally
entitled to an instruction "consonant with the theory of [the] case
if such enjoys evidentiary support,"[Fn. 23] the trial court has
broad discretion to determine what instructions should be given on
the facts of the particular case at hand. Here, we hold that the
court did not abuse its discretion in declining to submit the
Corporations' additional proposed instruction on their theory of
damages. We further hold that the superior court's supplemental
instructions were not erroneous.
3. The trial court did not abuse its discretion in
refusing to instruct the jury that oil is a hazardous substance.
The Corporations also argue that the trial court erred in
refusing to instruct that oil is a hazardous substance, contending
that the instruction was needed to cure the prejudicial effect of
testimony given by Exxon's appraiser, John D. Dorchester, Jr. But
a trial court need only instruct on matters of law necessary to
enable the jury to reach a verdict. [Fn. 24] Given that Exxon,
before trial, had conceded liability under AS 46.03.822 for
unpermitted release of a hazardous substance, the statute's
inclusion of oil as a "hazardous substance"for purposes of
imposing strict liability was not as a matter of law necessary to
the jury's verdict. [Fn. 25] Nor did Dorchester's testimony create
a necessity.
To impeach an unfavorable damage report that Dorchester
had prepared before trial and had relied on as a basis for his
trial testimony, the Corporations asked Dorchester on cross-
examination to admit that when he wrote his report he did not know
that oil was "hazardous waste"under Alaska law. Although oil is
a hazardous substance for purposes of AS 46.03.822(a)(2), [Fn. 26]
two other Alaska statutes dealing with hazardous substances exclude
oil from the definition of "hazardous substance."[Fn. 27]
Dorchester accurately responded that "two out of three"times
Alaska law did not identify oil as a hazardous substance. Though
acknowledging that the strict-liability law under which Exxon was
liable, AS 46.03.822-.826, does identify oil as a hazardous
substance, Dorchester indicated that in valuing the lost use of the
Corporations' properties he had been more concerned with the
market's perception of the hazards and toxicity of oil than with
"arcane law."
In response to this testimony, the Corporations requested
a jury instruction establishing that the oil spilled by the EXXON
VALDEZ was a hazardous substance as a matter of law and that Exxon
was strictly liable for the damages caused by the oil spill. The
trial court rejected this request, reasoning that there was no need
to mention "hazardous substance"because liability under the
strict-liability statute was uncontested. Instead, the court
simply instructed the jury that Exxon was strictly liable for
damages caused by the oil spill.
Dorchester did not speak to Exxon's liability; he
testified about damages. Moreover, he accurately characterized
Alaska law and expressly acknowledged that the law under which
Exxon conceded liability defines oil as a hazardous substance.
Finally, in emphasizing that his primary concern was the market's
perception of the oil spill's impact, and not "arcane law,"he
essentially asserted that none of the existing legal definitions of
hazardous substances had any bearing on his opinions. Under these
circumstances, we hold that the lower court did not abuse its
discretion in refusing to instruct that oil is a "hazardous
substance."
4. The jury instructions on the Oil Pollution Act of
1990 were erroneous.
The Corporations claim that the trial court erred by
failing to instruct the jury that OPA 90 [Fn. 28] gave the
Corporations the right to claim lost-use damages as to certain
federal lands. Exxon responds that the superior court's
instructions "were consistent with applicable law and with the
measure of damages instructions stipulated to by the Native
Corporations."
a. Background
The Corporations held patents for most of the oil-
affected lands as to which they claimed damages, but their claims
also encompassed some lands owned by the federal government. ANCSA
had authorized the Corporations to select certain federal lands for
ownership. [Fn. 29] The selection process is quite cumbersome:
about 90,000 acres of land selected by the Corporations remained in
federal hands at the time of trial. The Corporations sought
compensation from Exxon for injuries to these selected but not yet
conveyed lands, contending that their claims were authorized under
section 8301 of OPA 90, which provides:
Solely for the purpose of bringing claims
that arise from the discharge of oil, the Congress confirms that
all right, title, and interest of the United States in and to the
lands validly selected pursuant to the Alaska Native Claims
Settlement Act (43 U.S.C. 1601 et seq.) by Alaska Native
corporations are deemed to have vested in the respective
corporations as of March 23, 1989. This section shall take effect
with respect to each Alaska Native corporation only upon its
irrevocable election to accept an interim conveyance of such land
and notice of such election has been formally transmitted to the
Secretary of the Interior.[ [Fn. 30]]
Based on this provision, the Corporations proposed jury
instructions stating that they held equitable title to the selected
but not yet conveyed federal lands and were entitled to recover
damages for all lost uses of these lands resulting from the spill.
Exxon countered that OPA 90 gave the Corporations no
right to claim compensation for the federal government's lost uses
of these lands, but only gave them standing to claim damages for
their own lost uses. Thus, according to Exxon, to recover lost-use
damages as to any of the selected but unconveyed lands, the
Corporations had to prove, first, that the federal government had
given them authority to use the lands and, second, that the oil
spill had interfered with the authorized use. Because the
Corporations had conceded that they lacked any more authority to
use the selected land before its actual conveyance than the general
public would have, Exxon insisted that they had suffered no
compensable lost use.
The court agreed with Exxon that damages could be awarded
to the Corporations only for those selected lands they could use.
Accordingly, it instructed the jury that "[f]or lands that were
selected but not conveyed, plaintiffs may bring a claim for damages
in this action, but they must establish that they could have used
such lands and that they lost some of those uses." The court went
on to explain in another jury instruction that the law "allows the
Native corporations to bring claims for selected but not conveyed
lands, but it does not mean that the corporations or their
shareholders could use such lands at the time of the spill or
afterward except with the consent or approval of the federal
government."
The court apparently based these instructions on the
portion of OPA 90's section 8301 stating that title to the selected
but not conveyed ANCSA lands was "deemed to have vested"in the
Corporations "[s]olely for the purpose of bringing claims that
arise from the discharge of oil . . . ." In interpreting this
language, the court relied on the September 1991 consent decree,
which recognized that the Corporations retained "private claims
. . . for all private harms resulting from injuries caused by the
Oil Spill, to lands . . . deemed to have vested in the respective
Alaska Native Corporation in accordance with the provisions of
Sec[tion] 8301 of the Oil Pollution Act of 1990."[Fn. 31]
b. The jury instructions dealing with the
selected but unconveyed lands incorrectly interpreted OPA 90 and
improperly required the Corporations to establish their own loss of
a federally permitted use.
(i) OPA 90 did not merely grant standing to
the Corporations to litigate damages to selected but not yet
conveyed lands.
The Corporations argue that the trial court erroneously
interpreted OPA 90 as merely conferring standing. They insist that
OPA 90 properly should be interpreted as an assignment of a portion
of the federal government's proprietary rights in lands irrevocably
selected but not yet conveyed to the Corporations. [Fn. 32] Under
this assignment, the Corporations contend that they may recover for
the federal government's spill-related lost uses of these selected
but unconveyed lands.
Exxon responds that the opening phrase of OPA 90
section 8301's first sentence -- "[s]olely for the purpose of
bringing claims that arise from the discharge of oil"[Fn. 33] --
simply confers standing. We disagree. If Congress had merely
intended to confer standing, it could have done so more clearly and
directly with the kind of language it employs in many other
statutes, where Congress provides that parties "may bring a civil
action,""may sue,"or "may commence a civil suit"under certain
conditions. [Fn. 34] Instead, Congress chose in OPA 90 to
"confirm[] that all right, title, and interest of the United States
. . . are deemed to have vested"in the Corporations. [Fn. 35]
Although this language undeniably applies "[s]olely for the purpose
of bringing claims that arise from the discharge of oil,"[Fn. 36]
it is not the language of standing. That Congress did not use one
of its usual formulas for conferring standing suggests that it had
some other purpose; the language it chose is more consistent with
the conveyance of an interest in land or an assignment of a right
beyond mere standing. [Fn. 37]
In the superior court, Exxon relied heavily on Cape Fox
Corporation v. United States [Fn. 38] for the proposition that
section 8301 of OPA 90 merely conferred standing. That case held
in part that ANCSA corporations lack standing to assert claims
against the United States for takings of lands selected but not yet
conveyed. [Fn. 39] Exxon argued that section 8301 was merely
intended to overrule Cape Fox. But a careful reading of Cape Fox
reveals otherwise.
In Cape Fox, the Cape Fox Village Corporation challenged
the Forest Service's management of certain selected but not yet
conveyed lands. [Fn. 40] Among the claims Cape Fox asserted was a
takings claim. [Fn. 41] The United States Court of Claims held
that the village corporation could not raise a takings claim
because its interest in the subject lands was "contingent"and
"speculative"in that "[m]ost of the lands selected by the regional
and village corporations never will be conveyed,"and "any interest
that vests on conveyance . . . is required to be subject to all
valid existing rights, including contracts and leases."[Fn. 42]
Thus, implicitly, the court held that an injury in fact is a
prerequisite for a valid claim. [Fn. 43]
Given the underlying rationale of Cape Fox, it seems
unlikely that Congress would have attempted to circumvent the
case's holding by enacting a mere standing provision. Under the
reasoning in Cape Fox, if the Corporations were merely given
nominal standing to pursue lost-use damages as to the unconveyed
federal lands, they would still lack any actual interest in the
lands that would enable them to prove an injury in fact. In other
words, had Congress conferred mere standing, without an
accompanying interest, it would not have altered the reality that
the Corporations' interest in the selected but unconveyed lands was
too speculative to sustain a finding of actionable injury.
As evidenced by the statutes we noted above, [Fn. 44]
Congress does frequently confer standing without conferring a
substantive interest. But those statutes are distinguishable from
OPA 90; each confers standing to parties who have already sustained
injuries in fact. [Fn. 45] In contrast, if section 8301 were
construed as a mere standing statute, it would purport to vest the
Corporations with a right to sue for injuries not actually
sustained. This grant of standing would be ineffectual under the
rationale espoused in Cape Fox. Hence, if Congress intended
section 8301 to allow the Corporations to recover damages despite
Cape Fox, it would not have attained its purpose by enacting a
standing provision.
Moreover, if Congress intended section 8301 only to
overrule Cape Fox with respect to standing, its action would be
constitutionally suspect under the reasoning of Lujan v. Defenders
of Wildlife. [Fn. 46] In Lujan, the United States Supreme Court
considered whether Congress could create a purely procedural injury
-- one not based on an injury in fact -- that would support
standing. [Fn. 47] Defenders of Wildlife had alleged that the
citizen-suit provisions of the Endangered Species Act created such
a procedural right. [Fn. 48] That provision authorized anyone to
sue to force a violating governmental body to comply with the
Endangered Species Act. According to Defenders of Wildlife, the
provision created a procedural right to governmental compliance;
failure to comply was a "procedural injury"that would support
standing. [Fn. 49]
The Supreme Court rejected this argument. [Fn. 50] It
reasoned that a concrete injury in fact was essential under Article
III's case or controversy limits on standing. [Fn. 51] Congress
cannot ignore Article III's limits, the Court held, by creating
"procedural injuries"that are "abstract,""self contained,"and
otherwise independent of any injury in fact. [Fn. 52] According to
the Court, Congress can create legally cognizable rights out of de
facto injuries; but it cannot create de jure injuries in the
absence of de facto injuries. [Fn. 53]
If the Corporations lack a legally cognizable interest in
selected but not yet conveyed lands under Cape Fox, and thus lack
a concrete injury in fact, and if section 8301 of OPA 90 does not
vest them with substantive rights with respect to these lands, the
statute would create the sort of impermissible "abstract"
procedural injury that Lujan condemned.
Validly enacted statutes come to this court with a
presumption of constitutionality. [Fn. 54] Where it is reasonable
to do so, we will construe a statute to avoid constitutional
problems. [Fn. 55] Because it would be unreasonable for Congress
to adopt a statute that is without effect, we reject Exxon's
proposed reading of section 8301, and we decline to hold that the
provision merely confers standing.
(ii) OPA 90 authorized the Corporations to
assert the federal government's private claims for lost use of the
selected but unconveyed lands.
Exxon nevertheless suggests that if OPA 90 does more than
confer standing, it should be read only to authorize the
Corporations to pursue claims for permanent, not temporary,
injuries to the selected but not conveyed federal lands. Under
this theory, the statute creates a kind of legal fiction. It would
require the courts to treat the selected lands as having been
conveyed to the Corporations but, at the same time, would provide
that the federal government would retain stewardship over the land
and all right to use the land pending the actual conveyance. This
would mean that the Corporations could not claim damages for the
loss of temporary use because they had no actual right to use these
lands pending the conveyance. That the Corporations abandoned
their efforts to recover any permanent damages as to these lands at
trial does not, according to Exxon, suggest a flaw in its proposed
interpretation of section 8301; rather, it merely reflects a
failure of proof grounded on the fact that the spill ended up
causing no permanent damages to the selected lands.
But Exxon's alternative theory assumes that the
Corporations' permanent interests in the selected but not yet
conveyed federal lands are somehow less speculative than their
temporary interests. Unless we assume that recovery for permanent
injury of the selected lands would be permissible because, despite
their present unconveyed status, their eventual conveyance can be
predicted with enough certainty to support a finding of eventual
injury in fact to the Corporations, Exxon's alternative theory
would necessarily suffer from the same flaw as its theory that
section 8301 is merely a standing provision. To accept the theory,
we would have to conclude that Congress meant to confer upon the
Corporations the right to sue for an "abstract"injury, in the
absence of any injury in fact.
In our view, Exxon's assumption of greater certainty
does not withstand scrutiny. Under ANCSA, Alaska Native
corporations were allowed to purposefully "over-select"lands for
conveyance to assure that they would eventually receive their full
entitlement. In making their original selections, ANCSA
corporations collectively overselected about 122,600,000 acres.
[Fn. 56] As Exxon acknowledged below, most of these lands would
never be conveyed. [Fn. 57]
Although OPA 90, as implemented by the BLM, greatly
reduces the uncertainty regarding future conveyances by requiring
that Native corporations prune overselections to five percent when
making "irrevocable"[Fn. 58] selections, there is no way to know
exactly which selected lands ultimately will be conveyed to the
Corporations. Thus, as to any given parcel of selected but
unconveyed federal land, it would be as difficult for the
Corporations to prove with certainty "their own"permanent injury
in fact as it would be for them to prove "their own"non-permanent
injury based on future lost uses.
Moreover, Exxon's proposal to read section 8301 of OPA 90
as confirming the eventual conveyance of the selected federal lands
and allowing the Corporations to recover permanent damages to these
lands conflicts with the literal meaning of the statute. Section
8301 expressly uses selection, not conveyance, as the fulcrum for
recovery, vesting the Corporations with "all right, title, and
interest"in lands "validly selected."[Fn. 59] The wording of the
statute does not restrict itself to those lands that will
ultimately be conveyed. And the Corporations did in fact seek
damages for injury to lands that they selected, including thousands
of acres in excess of their ANCSA entitlement.
These excess lands, we believe, hold the key to
understanding the intended effect of OPA 90. Because section 8301
conveys rights to the overselected lands that will never be held by
the Corporations as well as to the selected lands that will, it
seems fair to infer that in enacting the provision, Congress
intended to convey an actionable right, rather than a fictitious
future interest in the selected federal land.
The Corporations propose an interpretation of section
8301 consonant with this inference. They maintain that, with
respect to all of the selected but unconveyed lands, OPA 90 simply
assigns all of the federal government's oil-spill claims to the
Native corporations.
It is well established that a cause of action or claim
for damages with respect to trespass or subsequent injury may be
assigned without transfer of title to the underlying property. [Fn.
60] Section 8301 can plausibly be read as such an assignment:
Congress used the language of conveyance -- "right, title, and
interest"-- but by using the words "[s]olely for the purpose of
bringing claims that arise from the discharge of oil,"[Fn. 61]
limited the conveyed interest to a cause of action, rather than to
any land right. This reading is textually straightforward and
would give effect to Congress's intent that Alaska Native
corporations be able to bring claims.
Before OPA 90 was enacted, the interests of ANCSA
corporations in the subject lands was too speculative to serve as
a basis for proof of injury or to otherwise support standing. [Fn.
62] Congress sought to eliminate the uncertainty by adopting
section 8301. Read in the manner that the Corporations propose,
the statute would avoid the uncertainty by allowing ANCSA
corporations to pursue all spill-related proprietary claims that
the federal government could have pursued in its own right with
respect to the selected but unconveyed lands, regardless of whether
those lands ever will be conveyed.
(iii) The Lujan Decree does not foreclose
the Corporations' land-use claims.
While the Corporations' proposed interpretation of
section 8301 has much to recommend it, we must consider whether it
conflicts with the "Lujan Decree"-- the consent decree signed by
the Native Corporations and the United States in September 1991 in
Native Village of Chenega Bay et al. v. State of Alaska and United
States. [Fn. 63] The Lujan Decree provides, in relevant part:
[Native corporations shall have the right] to
the exclusion of the Governments, to pursue private claims, other
than claims for Natural Resource Damages, for all private harms
resulting from injuries caused by the Oil Spill, to lands either,
(a) legally owned by it; or (b) deemed to have vested in the
respective Alaska Native Corporation in accordance with the
provisions of [OPA 90].[ [Fn. 64]]
The superior court accepted Exxon's "standing"theory of
section 8301 in part because of the "private claims"language
included in the Lujan Decree. The court agreed with Exxon that the
"private claims"mentioned in the decree must have referred to the
"private"harms suffered by the Corporations themselves and did not
include harms to the federal government's "public"land.
But when we consider the "private claims"language in the
context of the litigation that led up to the Lujan Decree, another
meaning emerges. The Lujan Decree was the culmination of efforts
by various ANCSA corporations that sought to preserve their rights
to claim oil-spill damages by intervening in the federal court
settlement between Exxon and the governments of the United States
and Alaska. The state and federal governments were settling claims
with Exxon for "natural resource damages"recoverable by the
governments under various federal laws, including 33 U.S.C. sec.
1321(f)(5), a provision of the Clean Water Act (CWA).
This CWA provision authorized the federal and state
governments to recover "on behalf of the public as trustees"for
the cost of restoration, rehabilitation, and replacement of damaged
or destroyed natural resources. [Fn. 65] Although the CWA did not
authorize Native corporations or villages to sue in the same
"public"capacity, [Fn. 66] affected villages managed to intervene
as private parties in the federal action in part by asserting a
claim for damages under a different federal statute. [Fn. 67] And
various affected ANCSA corporations intervened seeking damages
under ANCSA itself. [Fn. 68] Hence, the Lujan Decree's reference
to "private claims"merely recognizes that the federal and state
governments had sued as public trustees asserting "public"claims
and that their settlement with Exxon did not encompass the non-CWA
claims that the intervening villages and corporations sought to
assert as private parties.
So construed, the Lujan Decree does no more than preserve
the status quo with respect to the Corporations' private claims:
its "private claims"language maintains neutrality as to who might
pursue the kind of proprietary, or "private,"federal claims
assigned to the Corporations under section 8301. [Fn. 69]
Because the consent decree's "private claims"language
does not militate against interpreting section 8301 as more than a
statute conferring standing, we adopt the Corporations' proposed
reading of the provision. We thus conclude that it was error to
treat the statute as a "standing"provision in the jury
instructions.
c. The OPA 90 jury instructions were prejudicial.
An erroneous statement of law in a jury instruction
warrants reversal if it prejudices a party, [Fn. 70] substantially
influencing the outcome of the case. [Fn. 71]
In the present case, two jury instructions reflected the
incorrect view that section 8301 gave the Corporations standing to
sue only for "their own"lost-use damages on the selected but
unconveyed federal lands. Jury Instruction No. 25 stated:
For lands that were selected but not conveyed,
plaintiffs may bring a claim for damages in this action, but they
must establish that they could have used such lands and that they
lost some of those uses.
Jury Instruction 26 built on this view of the Corporations' claims,
stating that the "Native corporations do not have a right to use
lands that have been selected but not conveyed without the consent
or approval of the federal government"and narrowly describing
their rights under section 8301 as follows:
In 1990, after the Oil Spill, the Alaska
Native Claims Settlement Act was amended to provide that Native
corporations could elect to accept interim conveyance of selected
but not yet conveyed lands by filing a notice called an irrevocable
election. The law provides that, upon filing a notice of
irrevocable election, "all right, title and interest in and to the
lands"are deemed to have vested in the respective Native
corporations as of March 23, 1989. This requirement has been met
as I have previously advised you. This law allows the Native
corporations to bring claims for selected but not conveyed lands,
but it does not mean that the corporations or their shareholders
could use such lands at the time of the spill or afterward except
with the consent or approval of the federal government.
In determining what damages, if any, were
suffered by the plaintiff Native corporations for selected but not
conveyed lands, you must consider: (1) whether the Native
corporations were permitted to use the selected but not conveyed
lands for which they are asserting claims; and (2) whether the
corporations suffered any loss or interruption of uses for such
lands.
The jury received these instructions against an
evidentiary backdrop of testimony from several corporate and former
corporate officers who conceded that the federal government had not
permitted any specific uses of the selected public lands and that
until the lands were actually conveyed the Corporations could
engage only in those recreational uses permitted the general
public. By precluding any award to the Corporations based on the
government's proprietary uses and by allowing an award only for the
Corporations' own loss of federally permitted uses, the jury
instructions virtually foreclosed any damage award for the selected
but unconveyed lands.
Had the Corporations been allowed to claim damages for
the federal government's lost proprietary uses, as contemplated by
section 8301, the result may well have been different. For the
Corporations presented relevant evidence at trial tending to prove
that the spill had interfered with the federal government's
preservation and other proprietary uses on the selected lands. And
since the jury found that similar evidence with respect to the
Corporations' own lands warranted awarding substantial lost-use
damages, we conclude that the section 8301 instructional error was
prejudicial.
5. Archeology instruction: the superior court did not
err in refusing to instruct the jury regarding the Corporations'
alleged property interest in archeological resources found on
state land.
The Corporations' expert archeologist, Dr. Lora Johnson,
testified that various archeological sites for which the
Corporations claimed damages lie both above and below the mean high
tide line. On cross-examination, Dr. Johnson granted that the
Corporations did not own any of the land below the mean high tide
line and thus that any artifacts found there belong to the state.
Following Exxon's cross-examination, the Corporations requested
that the court take judicial notice of AS 41.35.020, [Fn. 72] which
they contended grants them the "possession and use"of artifacts
located on state lands. They asked the court to instruct the jury
accordingly, but the court refused. The Corporations now argue
that the court erred in failing to give their requested jury
instruction and that this error precluded the jury from awarding
damages for injury to their statutorily protected property rights.
However, we conclude that no prejudicial error occurred.
The Corporations' theory of damage under AS 41.35.020 has
been somewhat fluid. The record reveals two potential bases for
the Corporations' claim that they were entitled to recover for
damages to archeological resources below the mean high tide line.
First is the theory that damage to the intertidal area damaged the
Corporations' upland sites by impairing the historical context
necessary to ensure a full understanding of the portions of the
archeological sites located above the mean high tide line. Second
is the theory that AS 41.35.020 gives the Corporations a property
right in artifacts below the mean high tide line:
[W]ithin the bundle of rights the Native
corporations have, there is in addition to these common law . . .
rights, some statutory basis for an interest in archaeological
sites and artifacts below mean high tide. Now it may well be that
Natives would have to approach the state and get a license, but
it's our view that they do have a property interest which is
cognizable under the law and the court could take notice of that.
Exxon counters that AS 41.35.020 does not give the
Corporations an enforceable property right to archeological
resources on state-owned lands. It maintains that an award of
damages to the Corporations for archeological harm below the mean
high tide line would require it to pay twice for the same injury,
because it has already settled with the State of Alaska the state's
claims for damages to archeological resources on state lands. We
find Exxon's arguments persuasive for several reasons.
First, we reject the Corporations' claim to a statutorily
created property right. Alaska Statute 41.35.020 expressly
reserves to the state "title to all historic, prehistoric, and
archeological resources situated on land owned or controlled by the
state, including tideland and submerged land"and specifically
"reserves to itself the exclusive right of field archeology."[Fn.
73] The statute recognizes the "cultural rights and
responsibilities"[Fn. 74] of aboriginal persons to possess and use
certain artifacts for study and display, but only in certain
limited circumstances where the state's rights are protected. [Fn.
75] Thus, while AS 41.35.020 recognizes limited cultural rights,
the provision does not create a property right supporting a claim
for damage to artifacts not in the Corporations' actual possession
and control.
Second, we conclude that, even if AS 41.35.020 allocates
certain rights to the Corporations, Exxon's settlement with the
state precludes the Corporations from recovering for damages
sustained below the mean high tide line. If the Corporations were
allowed to recover under the statute for damages to archeological
resources located below the mean high tide line, then Exxon would
be unfairly forced to pay twice for the same injury, having already
paid the state for those damages. [Fn. 76]
Third, the superior court offered the Corporations an
opportunity to cure any potential misunderstanding as to Dr.
Johnson's testimony. After Dr. Johnson conceded on cross-
examination that the artifacts below the mean high tide line
belonged to the state, the Corporations objected to the implication
that they had no interest in those artifacts, requesting that Dr.
Johnson be allowed to testify further as to her understanding of
their interest. The court granted this request, and Dr. Johnson
testified again the following day. But the Corporations failed to
ask her any further questions concerning the Corporations' interest
in artifacts below the mean high tide line. Having failed to avail
themselves of the opportunity to cure any error that might have
occurred during Dr. Johnson's cross-examination, the Corporations
may not now claim that they were denied an opportunity to present
their theory of statutory rights to the archeological resources
below the mean high tide line.
For all of these reasons, we conclude that the trial
court did not err in refusing to instruct the jury on AS 41.35.020.
B. The Superior Court Did Not Err in Allowing a Set-Off
Against the Corporations' Jury Award for the TAPL Fund.
The jury awarded the Corporations damages of almost
$6,000,000. Before the verdicts were entered, the Trans-Alaska
Pipeline Liability Fund (the Fund) made settlement payments of
approximately $23,000,000 to the Corporations for losses they
sustained from the EXXON VALDEZ oil spill. The superior court set
off the Fund settlement payment amounts against the jury award and,
accordingly, entered judgments that the Corporations would take
nothing from the verdict. The Corporations argue that the court
erred in reducing the jury awards by the amount of the Fund
settlement payments.
In general, a court will not reduce a tortfeasor's
liability to a victim when the victim receives compensation from a
collateral source. [Fn. 77] On the other hand, payments made to
the victim from non-collateral sources -- such as the tortfeasor's
insurance company or a joint tortfeasor -- reduce the tortfeasor's
liability. [Fn. 78]
In adopting the collateral source rule in Ridgeway v.
North Star Terminal & Stevedoring Co., this court explained that
a tort-feasor is not entitled to have his
liability reduced merely because plaintiff was fortunate enough to
have received compensation for his injuries or expenses from a
collateral source . . . .[ [Fn. 79]]
A collateral source is "a source [that] is entirely independent of
and collateral to a wrongdoer who is legally responsible for the
injuries."[Fn. 80] Thus, while a victim's own insurance or a
charity may be a collateral source, [Fn. 81] a tortfeasor's
insurance is not, since it is actually paid for by the tortfeasor.
[Fn. 82]
The collateral source rule thus embodies an attempt to
reconcile two competing principles of tort law: [Fn. 83] (1) that
an injured party should recover no more than the amount needed to
make the party whole [Fn. 84] and (2) that the tortfeasor should be
held accountable for all damages resulting from the tort. [Fn. 85]
An injured party who is compensated by both a collateral source and
the tortfeasor for the same injury obtains a double recovery; but
a tortfeasor who is credited for compensation paid to the victim
from a collateral source escapes accountability. The common-law
collateral source rule resolves this conflict in favor of the
injured party: it allows the victim a double recovery if the
alternative would be to allow the tortfeasor to escape liability.
[Fn. 86] Alaska Statute 09.17.070 modifies this common-
law rule by shifting the balance from the victim toward the
tortfeasor. The statute allows the court to reduce an injured
party's jury award to reflect unsubrogated collateral source
payments in some circumstances. [Fn. 87] By doing so, AS 09.17.070
limits the circumstances in which a victim can receive double
recovery, while enhancing the chances that a tortfeasor may not be
held fully accountable.
The Corporations contend that AS 09.17.070 did not permit
the superior court to subtract the Fund settlement payments from
the jury awards, because the Fund settlement was a "collateral
source payment"and was subrogated. Exxon responds that the Fund
is not a collateral source and that, therefore, neither the
collateral source rule nor AS 09.17.070 bars reduction. We agree
with Exxon. [Fn. 88]
The Fund was created by 43 U.S.C. sec. 1653(c) and is
underwritten by a fee of five cents per barrel assessed on all oil
shipped through the Trans-Alaska Pipeline. [Fn. 89] The owners of
the oil pay the fee. [Fn. 90] In the event of a spill, the Fund,
the owner of the spilling vessel, and the vessel's operator are
strictly liable for the resulting damages in varying amounts: the
owner and operator are jointly and severally liable for the first
$14,000,000 in damages, and the Fund is liable for the balance, up
to a $100,000,000 limit. [Fn. 91] In In re Glacier Bay, the Ninth
Circuit clarified how 43 U.S.C. sec. 1653 operates:
[The Act establishing the Fund] is a
comprehensive liability scheme . . . . [The Act's] strict liability
provision ensures that . . . oil spill victims receive prompt
compensation without resort to prolonged litigation.
. . . [The Act includes a] subrogation
section, allowing, for example, the Fund to seek reimbursement of
its strict liability contribution from the owner in the event that
owner negligence caused the spill. . . .
. . . After an oil spill, innocent
victims receive prompt compensation. Then, the parties involved
with the transportation of the spilled oil and the Fund litigate
fault. Ultimately, the costs of the spill are borne by the
responsible party.[ [Fn. 92]]
Following the EXXON VALDEZ spill, the Fund paid the
Corporations approximately $23,000,000 in settlement of their
claims. Pursuant to the settlement agreement, the Corporations
released the Fund from further liability and assigned to it all
rights that they had against any other party for damages arising
out of the spill to the extent of the Fund's initial payment. The
Fund in turn sued Exxon, asserting its statutory subrogation rights
under 43 U.S.C. sec. 1653(c)(3) and its right as assignee of the
Corporations' claims.
The Corporations maintain that, unlike a tortfeasor's
insurer, the Fund has no duty to defend, hold harmless, or
indemnify Exxon. Thus they suggest that the Fund is independent of
Exxon. Furthermore, they point out that the Fund was established
by Congress "for the benefit of oil spill victims, not oil
companies." Accordingly, the Corporations liken the Fund to
"victims' insurance"and argue that it should be considered a
collateral source. Because the Fund has reimbursement rights
against Exxon, the Corporations maintain that the Fund is a
subrogated collateral source and that its payments to the
Corporations therefore do not qualify for a set off under the
collateral source rule.
But the Corporations are mistaken in reasoning that the
Fund's commitment to the goal of aiding oil-spill victims renders
it "entirely independent of"[Fn. 93] Exxon or justifies likening
it to an insurance policy owned by Exxon's victims. Exxon and the
Fund are co-obligors: by law, they were both strictly liable for
the spill; Exxon was liable for the first $14,000,000 in damages,
and the Fund was liable for $86,000,000 in additional damages. [Fn.
94] Moreover, the Fund's entitlement to reimbursement from Exxon
did not arise from a subrogation agreement with the Corporations.
Instead, it arose under federal law as a result of the federally
created relationship between the Fund and Exxon. [Fn. 95] This,
then, is not a situation in which denying a set off is necessary to
prevent the wrongdoer from escaping accountability.
To the contrary, if we were to consider the Fund a
subrogated collateral source, we would not only enable the
Corporations to receive a double recovery, but also leave Exxon
exposed to double payment -- once to the Corporations in damages
and again to the Fund in reimbursement of its settlement payments
to the Corporations for the same damages. The collateral source
rule certainly does not dictate such a result.
Accordingly, we hold that the trial court properly
subtracted the Corporations' $23,000,000 Fund settlement from their
$6,000,000 jury verdict. [Fn. 96]
C. Exxon's Cross-Appeal
1. The superior court did not err in denying Exxon's
motions for directed verdict and for judgment notwithstanding the
verdicts on the Corporations' claims for damages to their lands.
On cross-appeal, Exxon argues that the trial court erred
in denying its motions for directed verdict and judgment not
withstanding the verdicts on the Corporations' land-damages claims
because the Corporations failed to present evidence that any
economic use of their property was lost and because they failed to
establish any reasonable measure for determining lost-use damages.
a. Preservation is a compensable lost use.
The parties generally agree that the proper measure of
damages for injuries to corporate lands is the value of the
Corporations' lost use; their disagreement on damages focuses on
what constitutes a lost use and how its value must be measured.
The Corporations claim that they used their lands for their
"pristine value"and "natural bounty"and that the spill impaired
this use. Viewing the Corporations' preservation of the lands in
wilderness status as a non-use, Exxon rejoins that their use is not
compensable.
Exxon cites numerous cases to support its contention that
the Corporations may only recover for lost uses of their lands that
are pecuniary in nature. But, at most, these cases stand for the
proposition that a landowner may not recover lost-use damages for
uses that are speculative. [Fn. 97] For example, Exxon relies on
City of Los Angeles v. Ricards. [Fn. 98] But Ricards did not hold
that a use must be pecuniary before it can be compensated. In
Ricards, the city temporarily impaired access to property that a
landowner held solely for "speculation and investment
appreciation."[Fn. 99] In reversing an award of damages for the
impairment, the California Supreme Court simply held that the
landowner had failed to show any potential use that the city's
actions might have impaired. [Fn. 100] In contrast, here the
Corporations presented evidence that they held their property for
preservation, that this use of the land had value, and that Exxon's
intrusion on the land temporarily impaired this value.
We are not convinced that lost-use damages should be
limited to commercial uses. Black's Law Dictionary defines "use
value"as "[t]he value established by the usefulness of an object
and not its value for sale or exchange."[Fn. 101] Nothing in this
definition restricts use value to those values derived from
economic uses. To the contrary, the definition's explicit
rejection of "sale or exchange"value implicitly acknowledges that
property may have cognizable uses that are not commercial. [Fn.
102]
The Corporations assert that by preserving large tracts
of their lands they enable their shareholders to practice and
maintain their cultures and their tradition of subsistence hunting
and fishing. As Congress recognized in enacting the Alaska
National Interest Lands Conservation Act (ANILCA), "the
continuation of the opportunity for subsistence uses . . . by
Alaska Natives on Native lands is essential to Native physical,
economic, traditional, and cultural existence . . . ."[Fn. 103]
By impairing the lands' preservation use, Exxon injured the
Corporations' right and duty to hold the lands in their natural
state for the benefit of shareholders.
Moreover, in an era marked by worldwide population
explosion, an emerging global economy, and industrial development
reaching into virtually every corner of the earth, it hardly seems
unrealistic to recognize the value of preserving wilderness as a
valid use in itself, quite apart from any incidental benefit
conservation might have in promoting subsistence living and
cultural survival. For example, in United States v. 117,763.00
Acres of Land in Imperial County, California, a federal court
recognized that [t]he fact that there is no proof of a market for
a particular kind of property does not permit [the defendant] to
take useful property for nothing . . . ."[Fn. 104] We, too,
conclude that lost-use damages may be awarded for the tortious
impairment of non-economic uses such as preservation. [Fn. 105]
b. Reasonable basis for measuring lost
preservation-use damages
This conclusion leads us to inquire whether the evidence
in this case sufficed to prove lost preservation-use damages.
"[O]n review of motions for directed verdict or for judgment
notwithstanding the verdict, [our role] is not to weigh conflicting
evidence or judge the credibility of witnesses, but is rather to
determine whether the evidence, when viewed in the light most
favorable to the nonmoving party, is such that reasonable [jurors]
could not differ in their judgment."[Fn. 106]
As we mentioned in describing Exxon's damages argument,
the Corporations' experts calculated their lost-use estimates by
comparing hypothetical income streams for the Corporations' lands,
impaired and unimpaired. They derived the income streams by taking
as a fair rental value a percentage of the lands' fair market
value. Exxon challenges the Corporations' application of this
methodology, contending that owners of vacant and unused land are
entitled only to what a renter might actually pay to use the land
in a real-world market and "not some hypothetical, pipedream rental
rate."[Fn. 107] Exxon argues that the Corporations' methodology
"bore no relation to what an actual renter would have paid to lease
the property." Thus, according to Exxon, the Corporations failed
to provide the jury with a reasonable, market-based estimate of
fair rent.
But Exxon overlooks the point that the Corporations are
not seeking damages for lost use of unused lands. They are seeking
damages because the oil spill impaired their ability to preserve
the land as it was.
In 117,763.00 Acres, one of the cases Exxon cites to
support its claim of insufficient lost-use evidence, the court
rejected the defendant's valuation method, which was based on a
percentage of the purported market value of the land. [Fn. 108]
But, in doing so, the court recognized that "where property . . .
has a substantial use value but is not commonly traded,"owners may
prove lost-use damages by nonstandard methods. [Fn. 109]
Specifically, the court observed that in such cases compensation
for lost use may be calculated based on a percentage of the land's
market value. [Fn. 110] The court ruled the percentage-of-market-
value method inappropriate in the case before it only because it
found that the desert land for which damages were being sought
"ha[d] no proved use except as a gunnery range"and that that was
not a "substantial use."[Fn. 111]
In our view 117,763.00 Acres supports the proposition
that when wilderness lands are shown to have substantial use value
in their natural state, impairment of that use is compensable, and
the value of the lost use may be proved by expert testimony
expressing damages as a percentage of the land's market value. We
thus conclude that the Corporations' calculation of lost rental
value based on a percentage of the underlying market value of the
property was an appropriate method for determining damages. [Fn.
112] This method "provide[d] the jury with a 'reasonable basis'
for computing the award."[Fn. 113] The evidence in the record,
when viewed in the light most favorable to the Corporations, "is
such that reasonable persons could differ in their judgment as to"
the fact, and amount, of damages. [Fn. 114]
The Corporations' experts described preservation as a
desirable, valuable use of corporate lands; they testified that
preservation required intact ecological systems with biological
diversity. Other witnesses testified that the oil persisted on the
land for a period of time, as did cleanup crews. The Corporations
also presented expert testimony that these invasions impaired the
value of the lands and their use. Dr. Hayden Green, the
Corporations' expert who calculated the impaired value for the
first three years following the spill, specifically depicted how
these intrusions affected the preservation use of the land. [Fn.
115]
Indeed, Exxon's own expert, Dorchester, relied on similar
methodology to calculate lost-use value for some of the affected
parcels; this evidence in itself might suffice to permit a
reasonable person to conclude that the spill had caused compensable
lost-use damages. [Fn. 116]
Viewing the evidence in the light most favorable to the
non-moving party, [Fn. 117] we conclude that the trial court
correctly left this issue to the jury. We therefore affirm the
trial court's denial of Exxon's motions for directed verdict and
judgment notwithstanding the verdicts regarding land damages.
2. The superior court did not err in denying Exxon's
motion for a directed verdict or for judgment notwithstanding the
verdicts on the Corporations' archeological resources claims.
a. Background
In its cross-appeal, Exxon asserts that the trial court
erred in refusing to grant its motion for a directed verdict or for
a judgment notwithstanding the verdicts on the Corporations'
archeological resources claims. Exxon asserts that the
Corporations presented no evidence of actual physical harm to their
archeological sites from the oil spill. Exxon also argues that the
Corporations' lost-confidentiality theory of damages is legally
untenable.
The Corporations respond that they did present evidence
of actual physical damage as a result of the spill and cleanup.
They further argue that they presented evidence of foreseeable
future harm to their archeological sites as a result of the loss of
the sites' confidentiality.
In support of their archeological damages claims, the
Corporations presented the testimony of two archeologists, Dr. Lora
Johnson and Dr. Jack Lobdell. They described two basic types of
damage to the sites: (1) loss of confidentiality and (2) "impacts."
According to Dr. Johnson, the Corporations traditionally leave
archeologically significant sites alone. Dr. Johnson stated that
the Corporations' philosophy was that "you don't want to collect
things, you don't want to change things, you want to basically keep
it intact as much as possible." According to Drs. Johnson and
Lobdell, the Corporations kept the location of these sites
confidential out of fear that the sites would be changed -- either
by people visiting and inadvertently changing the sites or by
vandals and looters deliberately damaging the sites. These experts
also testified that the confidentiality of the sites was lost when
Exxon moved oil workers into the area to clean up the spill. They
feared that the workers, having learned the locations of various
sites, would return to damage or loot them.
The other element of the Corporations' archeological
damages claims flowed from "impacts"to the sites. According to
the Corporations' experts, anything that moved an artifact was
potentially problematic because the artifact's "archeological
context"is important in reconstructing the history of a site.
These kinds of impacts included: cleanup workers walking over
intertidal and uplands sites; artifacts being washed into the water
with hoses during the cleanup effort; destruction of sites by
vandalism; and inadvertent pickup and disposal of artifacts by
workers' use of "tar mats"or "Sorbent cloths." In addition, the
experts viewed the mere presence of oil as harmful -- in part
because oil contamination of a wooden artifact might preclude or
complicate accurate dating.
Dr. Johnson believed that nothing could be done to
restore the sites to their pre-spill condition. She thus concluded
that in order to mitigate the damage to the sites and remedy the
loss of confidentiality, the archeological context of the affected
sites should be fully explored and documented. Specifically, she
proposed surveying and excavating the sites, collecting and
curating artifacts, and publishing scholarly papers to document
this work; she also proposed monitoring the sites on an interim
basis to ensure site integrity until the project was completed.
The estimated total cost of the plan was $29.5 million, with
completion estimated to take approximately twenty-three years.
In response to the Corporations' expert archeological
testimony, Exxon attempted to establish that the location of the
sites was not confidential and, consequently, that there was no
lost confidentiality. According to Exxon, a number of the sites
were frequent stops for campers, fishermen, and tourists. In
addition, Exxon maintains that many of the less traveled sites had
been identified in archeological texts readily available to the
public.
b. The Corporations presented sufficient evidence
of actual physical damage to archeologically significant sites on
their lands to support the jury's verdict.
Exxon maintains that the only proof the Corporations
adduced of actual physical damage to their archeological resources
was evidence indicating that a line of graffiti had been added to
a wall of the Old Chenega Village Schoolhouse. Exxon also
maintains that the Corporations were unable to connect this line of
graffiti to the spill or to the cleanup, as the schoolhouse was a
"favorite camping site"even before the spill and was not a site
that was kept confidential. Moreover, Exxon claims, there was no
evidence that this additional line of graffiti damaged the site,
because the schoolhouse was already extensively defaced.
Exxon dismisses the remainder of the Corporations'
evidence of physical damage as mere conjecture. Specifically, it
maintains that the Corporations' experts speculated that shore-side
deposits of artifacts "probably"reside in the vicinity of known
archeological sites. The experts presumed, according to Exxon,
that since the intertidal areas near these known upland sites were
oiled, any related shore-side deposits also must have been oiled.
According to Exxon, the experts further speculated that "oiling was
tantamount to damage." Exxon claims that there were only three
archeological resources -- all owned by Chenega -- that might have
been oiled. Exxon insists that none was actually damaged by the
oil. Exxon further insists that in addition to failing to
demonstrate any damages to their sites, the Corporations failed to
offer any evidence of a measure of damages appropriate for the
alleged archeological harm.
But these tend to construe the record in Exxon's favor
and minimize evidence of injuries that the Corporations claim to
have suffered. For purposes of reviewing the denial of a directed
verdict or judgment notwithstanding the verdict, we must view the
evidence in the light most favorable to the Corporations. [Fn. 118]
The Corporations claimed that their sites were damaged by cleanup
workers walking across them and by cleanup activities that may have
moved, picked up, or washed away artifacts. Although the
Corporations' evidence on these points could certainly have been
clearer, there was at least some evidence of damage to specific
sites and artifacts, from which reasonable jurors could have
inferred that other similar damage occurred. Altogether, because
our review of the record persuades us that the Corporations
presented substantial evidence indicating that at least some sites
and some artifacts were actually physically injured, we conclude
that Exxon has failed to demonstrate that the evidence at trial was
insufficient as a matter of law to support an award for physical
damage.
c. The Corporations' claim for loss-of-
confidentiality damages is also legally sufficient.
Exxon next challenges as deficient the Corporations'
loss-of-confidentiality theory of damages, which Exxon describes as
the "real basis"for the Corporations' archeological damages claim.
Exxon advances several arguments to support its position. It
argues that it owed the Corporations no duty of confidentiality
because disclosing the location of the sites was necessary to
ensure that cleanup workers did not inadvertently damage them. But
Exxon incorrectly defines the duty at issue: the duty to transport
its oil safely. While the loss of confidentiality resulting from
cleanup efforts may indeed have been inevitable once the spill
occurred, Exxon was strictly liable for all foreseeable
consequences of the spill -- avoidable or inevitable. [Fn. 119]
Next, Exxon argues that the location of the sites was not
confidential. It points out that a number of the sites were listed
in various publications. But the Corporations' experts testified
that there is a qualitative difference between listing sites in
obscure publications and physically exposing the sites to cleanup
workers. This evidence of incremental loss created a factual
dispute for the jury.
Exxon further contends that if the loss of
confidentiality of the Corporations' sites results in any future
harm, that harm would come in the form of theft or vandalism.
Exxon insists that such criminal acts would be superseding causes
that would preclude the spill from being considered a proximate
cause of the future injury. Thus, Exxon reasons, the Corporations
have necessarily failed to meet their burden of proving that the
spill is a proximate cause of their future injuries.
But Exxon's theory of superseding causation misperceives
the Corporations' alleged injury. The alleged injury is not the
future vandalism itself, but the loss of confidentiality in the
Corporations' archeological sites and the fear of vandalism that
this loss engenders. The Corporations presented substantial expert
testimony indicating that their fear of future harm is reasonable
and that the most reasonable response to this fear is to take
immediate action to salvage what they can of their sites. Under
this theory, the Corporations' injury is complete without a single
incident of vandalism occurring.
In any event, even assuming that Exxon is correct in
characterizing the Corporations' damages as harm resulting from
future acts of vandalism rather than the Corporations' reasonable
fear of future vandalism, the oft-cited maxim that criminal acts
are superseding causes is merely a rule of thumb. While a criminal
act will ordinarily break the chain of causation, this general rule
does not excuse the factfinder from examining the foreseeability of
the intervening act. In Williford v. L.J. Carr Investments, Inc.,
we discussed the theory of superseding causes:
Superseding cause is a variant of the doctrine
of proximate cause. This court has explained that the doctrine of
superseding cause will relieve a negligent actor of liability only
in exceptional cases. We have explained that an action of a third
person which intervenes to injure the plaintiff will shield a
negligent defendant only where[,] after the event and looking back
from the harm to the actor's negligent conduct, it appears to the
court highly extraordinary that it should have brought about the
harm. Thus, an act will not constitute a superseding cause where,
though unforeseeable by the original negligent actor, it does not
appear in retrospect to have been highly extraordinary.[ [Fn. 120]]
Applying this test, we believe that reasonable jurors might be
justified in concluding that Exxon's spill would be a proximate
cause of the future vandalism that the Corporations fear.
Exxon finally contends that the Corporations offered
nothing more than speculation and conjecture in support of the
theory that their sites would suffer from future vandalism as a
result of the oil spill. Exxon argues that speculation and
conjecture are not a sufficient basis for an award of damages.
Specifically, Exxon points out that during the five years between
the spill and the trial, none of the Corporations' sites had been
vandalized. Positing that "[t]he state of facts as they exist at
the time of trial is the basis for any prospective damages claim,"
Exxon insists that there was insufficient evidence of future harm
to present this question to the jury.
But we conclude that the Corporations presented adequate
evidence to support their loss-of-confidentiality claim. In City
of Fairbanks v. Nesbett, we discussed the nature of proof required
to establish future damages:
The law does not permit a recovery of damages
which is merely speculative or conjectural. . . . As a general
rule, it refuses to allow a plaintiff damages relating to the
future consequences of a tortious injury unless the proofs
establish with reasonable probability the nature and extent of
those consequences. . . . There must be some reasonable basis upon
which a jury may estimate with a fair degree of certainty the
probable loss which plaintiff will sustain in order to enable it to
make an intelligent determination of the extent of this loss. . . .
The burden is upon the plaintiff to furnish such proof. If he fails
in this respect, the jury cannot supply the omission by speculation
or conjecture. . . . The fact that there is some uncertainty as to
plaintiff's damage or the fact that the damage is very difficult to
measure will not preclude a jury from determining its value.[ [Fn.
121]]
The Corporations presented expert testimony that "there
is a high likelihood that [oil-spill workers] will be coming back
to different sites." The testimony indicated that the
archeologists' concerns were based on the fact that oil-spill
workers were taken out to the sites and were given information
regarding how to identify sites. The archeologists' concerns were
also based on incidents of vandalism that occurred during the
cleanup. While the Corporations' theory is not based on hard
scientific evidence, neither is it based on rank speculation or
conjecture. The expert testimony of Drs. Johnson and Lobdell
provides a reasonable basis for the Corporations' loss-of-
confidentiality claims. Whether the Corporations' fears of
vandalism were reasonable is a factual issue that was properly left
to the jury.
III. CONCLUSION
Because we conclude that the superior court's OPA 90
instructions erroneously precluded the jury from awarding the
Corporations damages for the selected but not yet conveyed federal
lands, we REVERSE with respect to the Corporations' OPA 90 claims,
but we AFFIRM in all other respects. We therefore REMAND this case
for a retrial limited to the OPA 90 issues.
FOOTNOTES
Footnote 1:
See 43 U.S.C. sec.sec. 1601-29f (1986 & Supp. 1998).
Footnote 2:
See generally S. Rep. No. 101-94, 101-99 (1989),
reprinted in 1990 U.S.C.C.A.N. 723-49, 750-78.
Footnote 3:
Section 8301 of OPA 90 is codified as 43 U.S.C. sec. 1642
(Supp.
1998).
Footnote 4:
The consent decree, which the parties have referred to as the
"Lujan Decree,"was entered in Native Village of Chenega Bay et al.
v. State of Alaska and United States, No. A91-454 Civ. (D. Alaska
Sept. 24, 1991). The decree recognized, in relevant part, that the
Corporations had retained
[t]he right to the exclusion of the [federal
and state governments] to pursue private claims . . . for all
private harms resulting from injuries caused by the Oil Spill, to
lands either, (a) legally owned by it; or (b) deemed to have vested
in the respective Alaska Native Corporation[s] in accordance with
the provisions of Sec[tion] 8301 of the Oil Pollution Act of 1990.
Such claims include those for lost or diminished land values, for
preservation, protection and restoration of archaeological or
cultural resources and archaeological sites found on lands
described in this paragraph, for private harms resulting from
injuries to natural resources found on lands described in this
paragraph, for impairment of riparian or littoral rights, if any,
and any other claims that are available to [the Corporations] as
private landowners.
Footnote 5:
The jury apportioned the damages as follows:
Land Damages Archeological Damages
Chenega $3,186,934.41 $665,120.62
English Bay 225,821.55 797,598.89
Port Graham 284,810.38 755,456.02
Totals: $3,697,566.34 $2,218,175.53
Aggregate Total: $5,915,741.87
Footnote 6:
See City of Kenai v. Burnett, 860 P.2d 1233, 1241 n.17 (Alaska
1993).
Footnote 7:
See Beck v. State, Dep't of Transp. & Pub. Facilities,
837 P.2d 105, 114 (Alaska 1992); see also Sever v. Alaska Pulp
Corp., 931 P.2d 354, 361 n.11 (Alaska 1996).
Footnote 8:
See Vincent by Staton v. Fairbanks Mem'l Hosp., 862 P.2d
847, 853 n.11 (Alaska 1993); see also Alaska R. Civ. P. 61
(requiring that the reviewing court disregard defects in lower-
court proceedings which do not affect the "substantial rights of
the parties").
Footnote 9:
Clary Ins. Agency v. Doyle, 620 P.2d 194, 201 (Alaska
1980) (quoting Putenson v. Clay Adams, Inc., 91 Cal. Rptr. 319, 334
(Cal. App. 1970)).
Footnote 10:
Des Jardins v. State, 551 P.2d 181, 189-90 (Alaska 1976)
(quoting Bollenbach v. United States, 326 U.S. 607, 612-13 (1946)
(internal quotations omitted)).
Footnote 11:
See Shane v. Rhines, 672 P.2d 895, 901 (Alaska 1983) (no
abuse of discretion in refusing to instruct on statutes not
applicable to controversy); Clary, 620 P.2d at 201 (no abuse in
instructing on two similar theories of negligence, despite possible
jury confusion, where theory supported by evidence); Des Jardins,
551 P.2d at 189-90 (no abuse where judge refused to answer jury's
questions, though answer would have been "desirable,"where earlier
instruction was "sufficiently clear on th[e] issues").
Footnote 12:
See Shane, 672 P.2d at 901.
Footnote 13:
See Restatement (Second) of Torts sec. 931 at 551 (1977).
Footnote 14:
See AS 46.03.822.
Footnote 15:
Jury Instruction No. 21 stated, in relevant part: "The items
of loss claimed by the plaintiffs are the following: (1) The first
item of claimed loss is damages to real property; (2) The second
item of claimed loss is for damage to archeological resources."
Footnote 16:
In a similar vein, the Corporations submitted another proposed
supplemental instruction stating, in relevant part:
1. Plaintiffs are claiming that the
spill interfered with the use and enjoyment of their land in a
number of respects. . . .
. . . .
3. If you find that the oil spill
impaired such uses, damages should be computed by determining the
"fair rental value"of the property for the period of impaired or
lost use. . . .
4. The owner is entitled to the fair
rental value of the land during the period of impairment even if he
never may have actually used or would not have actually used the
land during the period of impairment.
5. If you find that there was a
reduction in the market value of the plaintiffs' lands as a result
of the spill and cleanup activities, even though plaintiffs do not
base their claim for lost use on reduction in market value, you may
consider the reduction as a factor in deciding whether there were
or were not lost uses of the land, and, if so, the magnitude of the
lost uses.
Footnote 17:
For the full text of these supplemental instructions, seeinfra note 21.
Footnote 18:
(Emphasis added.) Likewise, while Jury Instructions Nos. 25
and 26 -- which dealt more narrowly with lands selected by the
Corporations under ANCSA but not yet conveyed -- required the
Corporations to prove that they "could have used"or "were
permitted to use the selected but not conveyed lands for which they
[were] asserting claims,"these instructions did not require proof
that the claimed uses were actual uses.
Also notable is Jury Instruction No. 4, which dealt
generally with Exxon's strict liability for damages legally caused
by the oil spill and informed the jury that "your job will be to
determine what, if any actual damages were caused to the plaintiffs
by the discharge of oil from the Exxon Valdez." (First emphasis
added.) The Corporations do not argue that this instruction's
generalized reference to "actual damages"could reasonably be
interpreted as requiring them to prove actual lost use to establish
real property damages. In our view, such an interpretation would
be unreasonable. Accordingly, we find that this instruction does
not amount to plain error.
Footnote 19:
(Emphasis added.)
Footnote 20:
See infra note 21.
Footnote 21:
The three jury questions and their corresponding supplemental
instructions are as follows:
Question 1
(Sent at 9:55 a.m., 9/15/94)
If harm to plaintiff's ability or right
to sell or lease is not a lost use (for which we may award
damages), there is then some unclarity as to what is lost use.
What are the [plaintiffs] asserting?
SUPPLEMENTAL INSTRUCTION NO. 6
This will respond to your note of 9:55 AM
yesterday, September 15, 1994. A "use"of real property, for
purposes of these instructions, means some purpose to which the
property can be put that is legal and practical under all the
circumstances. A lost use, for purposes of these instructions,
means a "use"which a plaintiff has shown by a preponderance of the
evidence it could have made of the property in the absence of the
oil spill.
Plaintiffs are claiming that the oil
spill interfered with their use of their property in a number of
ways, as set forth in the evidence in the case.
You are the sole judges of whether the
evidence supports plaintiffs' assertions. You must determine from
the evidence (1) whether plaintiffs could in fact have made use of
their property in the manner they claim; (2) if so, whether such
use was prevented or interfered with by the oil spill; and (3) what
fair rental value someone would have paid for the use [of] the
property that was prevented or interfered with.
Question 2
(Sent at 4:30 p.m., 9/15/94)
Is damage to []Market Value of real
property, actual damage to real property[?]
SUPPLEMENTAL INSTRUCTION NO. 7
In response to your question whether
"damage to market value of real property [is] actual damage to real
property,"such damage can be actual damage to real property, but
such damage is not being claimed here. Plaintiffs in this case are
asserting claims for loss of use, measured by lost rental value as
defined in Instruction No. 24.
Question 3
(Sent at 4:30 p.m., 9/15/94)
Can we award damages for mere loss of
market value ([f]or whatever cause) or only when actual use is
lost, as a result of the Spill?
Is that what Inst[.] No. 27 mean[s]?
SUPPLEMENTAL INSTRUCTION NO. 5
This is in response to your question
whether you can "award damages for mere loss of market value (for
whatever cause) or only when actual use is lost, as a result of
spill." As set forth in Instruction No. 27, you may not award
damages for any alleged reduction in the market value of any of
plaintiffs' properties as a result of the oil spill. You may award
damages measured by the fair rental value attributable to any use
of the property that could have been made but for the oil spill.
Footnote 22:
For example, the following proposed instruction described the
Corporations' claims in sweeping terms that would have provided
little specific guidance but might have been read as strongly
favoring recovery:
This is a joint response to your
questions from both 0955 and 1630 on September 15, 1994. I have
consulted with counsel prior to responding to your questions. The
first and second paragraphs that I will read to you are set forth
as a description of plaintiffs' claims in this case. I remind you
that it is your job, and yours alone, to evaluate the evidence and
to decide whether the evidence supports Plaintiffs' claims.
Paragraphs three, four and five contain supplemental instructions
on the law.
1. Plaintiffs are claiming that the
spill interfered with the use and enjoyment of their land in a
number of respects. Plaintiffs claim that the oil spill and
cleanup and remaining oil disrupted their property rights by
interfering with their right to quiet enjoyment, to use their lands
free from fear, increased risk and uncertainty, their right of
exclusive possession of their lands; interference with the
ecosystem affecting the productivity of the lands (including
subsistence resources) and natural beauty of the land; interference
with littoral rights of the plaintiffs, including rights of free
access, use and enjoyment of the sea; and other lost uses as
described in the testimony of witnesses.
2. Kodiak Island Borough claims that
its citizens and the general public have the opportunity to use its
land for recreational purposes, such as sport fishing, hiking,
hunting, kayaking, camping, picnicking, and enjoying the outdoor
environment, and for subsistence purposes, such as fishing,
hunting, clamming and other gathering activities.
3. If you find that the oil spill
impaired such uses, damages should be computed by determining the
"fair rental value"of the property for the period of impaired or
lost use. See Instruction[s] No[s]. 22 and 24.
4. The owner is entitled to the fair
rental value of the land during the period of impairment even if he
never may have actually used or would not have actually used the
land during the period of the impairment.
5. If you find that there was a
reduction in the market value of the plaintiffs' lands as a result
of the spill and cleanup activities, even though plaintiffs do not
base their claim for lost use on reduction in market value, you may
consider the reduction as a factor in deciding whether there were
or were not lost uses of the land, and, if so, the magnitude of the
lost uses.
Footnote 23:
Clary Ins. Agency v. Doyle, 620 P.2d 194, 201 (Alaska
1980).
Footnote 24:
See Alaska R. Civ. P. 51(b).
Footnote 25:
AS 46.03.822(a)(2) provides:
(a) Notwithstanding any other provision or
rule of law . . . the following persons are strictly liable,
jointly and severally, for damages, for the costs of response,
containment, removal, or remedial action incurred by the state, a
municipality, or a village, and for the additional costs of a
function or service, including administrative expenses for the
incremental costs of providing the function or service, that are
incurred by the state, a municipality, or a village, and the costs
of projects or activities that are delayed or lost because of the
efforts of the state, the municipality, or the village, resulting
from an unpermitted release of a hazardous substance or, with
respect to response costs, the substantial threat of an unpermitted
release of a hazardous substance:
(2) the owner and the operator of a
vessel or facility, from which there is a release, or a threatened
release that causes the incurrence of response costs, of a
hazardous substance . . . .
Under AS 46.03.826(5)(B) "hazardous substance,"as used
in AS 46.03.822(a)(2), is defined to include "oil." The statute
further defines "oil"as "a derivative of a liquid hydrocarbon and
includes crude oil, lubricating oil, sludge, oil refuse or another
petroleum-related product or by-product." AS 46.03.826(7).
Footnote 26:
See AS 46.03.826(5)(B) & (7).
Footnote 27:
See AS 46.08.900(6); AS 46.09.900(4).
Footnote 28:
See 43 U.S.C. sec. 1642 (Supp. 1998).
Footnote 29:
43 U.S.C. sec. 1611 (1986).
Footnote 30:
43 U.S.C. sec. 1642 (Supp. 1998) (see supra note 3).
Footnote 31:
See supra note 4.
Footnote 32:
See Camfield v. United States, 167 U.S. 518, 524 (1897)
(explaining that the United States government has, with respect to
its own lands, rights of an "ordinary proprietor"); Black's Law
Dictionary 1219 (6th ed. 1990) (defining "proprietary rights"as
"[t]hose rights which an owner of property has by virtue of his
ownership. A right customarily associated with ownership, title,
and possession . . .").
Footnote 33:
43 U.S.C. sec. 1642 (Supp. 1998) (full text quoted suprap. 24).
Footnote 34:
See, e.g., 7 U.S.C. sec. 2305(c) (1988) (Agricultural Fair
Practices Act) ("[a]ny person injured in his business or property
by reason of any violation of [section 2303] may sue therefor in
the appropriate district court . . . without respect to the amount
in controversy"); 15 U.S.C. sec. 72 (1997) (Federal Trade
Commission
antidumping statute) ("[a]ny person injured in his business or
property [by violation of this section] may sue therefor in the
district court"); 15 U.S.C. sec. 298(b) (1997) (Jewelers' Liability
Act) ("[a]ny competitor, customer, or competitor of a customer of
any person in violation [of various sections under this statute]
shall be entitled to injunctive relief . . . and may sue therefor
in any district court"); 15 U.S.C. sec. 797(b)(5) (1997) (Energy
Supply and Environmental Coordination Act) ("[a]ny person suffering
legal wrong [because this section was violated] may bring a civil
action for appropriate relief"); 16 U.S.C. sec. 1540(g) (1985)
(Endangered Species Act) ("any person may commence a civil suit on
his own behalf"); 30 U.S.C. sec. 1270 (1986) (Surface Mining
Control
and Reclamation Act) ("any person having an interest which is or
may be adversely affected may commence a civil action on his own
behalf"); 33 U.S.C. sec. 1365(a) (1986) (Clean Water Act) ("any
citizen may commence a civil action on his own behalf"); 42 U.S.C.
sec. 9124(a) (1995) (Ocean Thermal Energy Conversion Act) ("any
person
having a valid legal interest which is or may be adversely affected
may commence a civil action for equitable relief on his own
behalf"). But see generally Bennett v. Spear, 520 U.S. 154, 162
(1997) (recognizing that although Congress may not change the
constitutional limit on standing -- which requires "injury in fact"
that is "fairly traceable"to the actions of the defendant and that
may be redressed by the remedy sought -- it may modify or abrogate
judicially created prudential limits).
Footnote 35:
43 U.S.C. sec. 1642 (Supp. 1998) (emphasis added).
Footnote 36:
Id.
Footnote 37:
For example, Congress used similar language in another
section of ANCSA when it clearly did intend to convey an interest
in land. It confirmed "all right, title, and interest of the
United States in and to"previously tentatively approved lands
selected by the State of Alaska under the Statehood Act. 43 U.S.C.
sec. 1635(c) (1986).
Footnote 38:
4 Cl. Ct. 223 (1983).
Footnote 39:
See id. at 236.
Footnote 40:
See id. at 235-36.
Footnote 41:
See id. at 236.
Footnote 42:
Id.; accord Seldovia Native Ass'n, Inc. v. United States,
35 Fed. Cl. 761, 774 (1996), reconsidered in part, 36 Fed. Cl. 593,
599 (1996) (holding cited for unchanged).
Footnote 43:
See Cape Fox, 4 Cl. Ct. at 236.
Footnote 44:
See supra note 34.
Footnote 45:
See id.
Footnote 46:
504 U.S. 555 (1992).
Footnote 47:
See id. at 571-78.
Footnote 48:
See id. at 571-72.
Footnote 49:
Id.
Footnote 50:
See id. at 571-78.
Footnote 51:
See id. at 573-78.
Footnote 52:
Id. at 573.
Footnote 53:
See id. at 578.
Footnote 54:
See Bonjour v. Bonjour, 592 P.2d 1233, 1237 (Alaska
1979).
Footnote 55:
See id.; Larson v. State, 564 P.2d 365, 372 (Alaska 1977);
Hoffman v. State, 404 P.2d 644, 646 (Alaska 1965); Reutter v.
State, 886 P.2d 1298, 1306 (Alaska App. 1994).
Footnote 56:
See Cape Fox Corporation v. United States, 4 Cl. Ct. 223, 234
(1983).
Footnote 57:
Id. at 236.
Footnote 58:
43 U.S.C. sec. 1642 (Supp. 1998).
Footnote 59:
Id. (emphasis added).
Footnote 60:
See United Verde Copper Co. v. Jordan, 14 F.2d 299, 301
(9th Cir. 1926); Andersen v. Edwards, 625 P.2d 282, 290 (Alaska
1981).
Footnote 61:
43 U.S.C. sec. 1642 (Supp. 1998).
Footnote 62:
See Cape Fox, 4 Cl. Ct. at 236, and discussion supra pp.
28-29.
Footnote 63:
No. A91-454 Civ. (D. Alaska Sept. 24, 1991).
Footnote 64:
See supra note 4.
Footnote 65:
33 U.S.C. sec. 1321(f)(5) (1982).
Footnote 66:
The CWA does not recognize Native corporations or
villages as public trustees. See id.
Footnote 67:
The villages asserted their claim under the federal
Comprehensive Environmental Response, Compensation, and Liability
Act (CERCLA), 42 U.S.C. sec. 9601 et seq. See Darrin Quam, Right
to
Subsist: The Alaska Natives' Campaign to Recover Damages Caused by
the Exxon Valdez Spill, 5 Geo. Int'l Envtl. L. Rev. 177, 182-83
(1992).
Footnote 68:
See Quam, supra note 67, at 182-83.
Footnote 69:
OPA 90 was enacted on August 18, 1990, and retroactively
assigned rights as of March 23, 1989. The Lujan Decree was entered
into on September 24, 1991.
Footnote 70:
See Sever v. Alaska Pulp Corp., 931 P.2d 354, 361 n.11
(Alaska 1996).
Footnote 71:
See Martinez v. Bullock, 535 P.2d 1200, 1206 (Alaska 1975);
Hazen v. Municipality of Anchorage, 718 P.2d 456, 462 (Alaska
1986).
Footnote 72:
AS 41.35.020 is a provision of the Alaska Historic
Preservation Act. See AS 41.35.010-.240.
Footnote 73:
AS 41.35.020(a); see AS 41.35.020(b).
Footnote 74:
AS 41.35.020(a).
Footnote 75:
See AS 41.35.020(b) (limiting aboriginal possession to
those situations where the artifacts are safely preserved).
Footnote 76:
See In re Air Crash Disaster Near Cerritos, California,
on August 31, 1986, 982 F.2d 1271, 1277 (9th Cir. 1992) (holding
that defendant should not be made to pay twice for same injury).
Footnote 77:
See Alyeska Pipeline Serv. Co. v. H.C. Price Co., 694 P.2d
782, 787 (Alaska 1985); King v. Jordan, 601 P.2d 273, 278 (Alaska
1979); Wright v. Vickaryous, 598 P.2d 490, 501-02 (Alaska 1979);
see also Restatement (Second) of Torts sec. 920A(2) & cmt. b
(1977).
Footnote 78:
See Restatement (Second) of Torts sec. 920A(2) & cmt. b
(1977).
Footnote 79:
378 P.2d 647, 650 (Alaska 1963).
Footnote 80:
Alyeska Pipeline Serv. Co., 694 P.2d at 788 (quoting
James P. Moceri & John L. Messina, The Collateral Source Rule in
Personal Injury Litigation, 7 Gonz. L. Rev. 310 (Spring 1972)
(internal quotations omitted)).
Footnote 81:
See King, 601 P.2d at 278.
Footnote 82:
See Wright, 598 P.2d at 502; Restatement (Second) of
Torts sec. 920A(2) & cmt. b (1977).
Footnote 83:
See King, 601 P.2d at 278.
Footnote 84:
See Maynard v. State Farm Mut. Auto. Ins. Co., 902 P.2d
1328, 1333-34 (Alaska 1995); Luth v. Rogers & Babler Const. Co.,
507 P.2d 761, 766 (Alaska 1973).
Footnote 85:
See King, 601 P.2d at 278.
Footnote 86:
See id.
Footnote 87:
Specifically, AS 09.17.070 provides:
(a) After the fact finder has rendered
an award to a claimant, and after the court has awarded costs and
attorney fees, a defendant may introduce evidence of amounts
received or to be received by the claimant as compensation for the
same injury from collateral sources that do not have a right of
subrogation by law or contract.
(b) If the defendant elects to introduce
evidence under (a) of this section, the claimant may introduce
evidence of
(1) the amount that the actual attorney
fees incurred by the claimant in obtaining the award exceed the
amount of attorney fees awarded to the claimant by the court; and
(2) the amount that the claimant has
paid or contributed to secure the right to an insurance benefit
introduced by the defendant as evidence.
(c) If the total amount of collateral
benefits introduced as evidence under (a) of this section exceeds
the total amount that the claimant introduced as evidence under (b)
of this section, the court shall deduct from the total award the
amount by which the value of the nonsubrogated sum awarded under
(a) of this section exceeds the amount of payments under (b) of
this section.
(d) Notwithstanding (a) of this section,
the defendant may not introduce evidence of
(1) benefits that under federal law
cannot be reduced or offset;
(2) a deceased's life insurance policy;
or
(3) gratuitous benefits provided to the
claimant.
(e) This section does not apply to a
medical malpractice action filed under AS 09.55.
Footnote 88:
Whether the superior court properly set off the Fund
settlement payment against the jury award is a question of law.
See Luth, 507 P.2d at 767 (holding that judge rather than jury
should determine the amount of set-off). "We review questions of
law de novo, adopting the rule of law that is most persuasive in
light of precedent, reason, and policy." Bauman v. Day, 892 P.2d
817, 824 (Alaska 1995) (citing Langdon v. Champion, 745 P.2d 1371,
1372 n.2 (Alaska 1987)). In briefing this case, the parties have
assumed that the statutory version of the collateral source rule,
set out in AS 09.17.070, applies to this case. But under either
version of the collateral source rule, payments previously received
from a non-collateral source could properly be deducted from a jury
award. Accordingly, our conclusion that the Fund is not a
collateral source makes it unnecessary to question the parties'
assumption that the statutory form of the rule governs this case.
But cf. AS 09.17.040(a) (suggesting that the statutory version of
the collateral source rule set out in AS 09.17.070 may apply only
in cases of personal injury).
Footnote 89:
See 43 U.S.C. sec. 1653(c)(1) & (5) (1986 & Supp. 1998).
Footnote 90:
See 43 U.S.C. sec. 1653(c)(5) (1986 & Supp. 1998).
Footnote 91:
See 43 U.S.C. sec. 1653(c)(1) & (3) (1986 & Supp. 1998).
Footnote 92:
In re Glacier Bay, 944 F.2d 577, 582 (9th Cir. 1991).
Footnote 93:
Alyeska Pipeline Serv. Co. v. H.C. Price Co., 694 P.2d
782, 787 (Alaska 1985).
Footnote 94:
See 43 U.S.C. sec. 1653(c)(1) & (3).
Footnote 95:
See 43 U.S.C. sec. 1653; In re Glacier Bay, 944 F.2d at
582
(explaining that under 43 U.S.C. sec. 1653, ultimately the costs of
a
spill must be borne by the responsible party and not by the Fund).
Footnote 96:
The Corporations separately challenge the propriety of the
superior court's decision to set off their verdict against another
settlement, which they received from Alyeska. Because our
conclusion that the court properly set off the $23,000,000 Fund
settlement results in the Corporations receiving no recovery from
Exxon, we need not consider the issue of set off for the Alyeska
settlement payments.
Footnote 97:
See Wernberg v. Matanuska Elec. Ass'n, 494 P.2d 790, 791
(Alaska 1972) (noting that the trial court rejected as
"speculative"landowner's claimed lost-use damages based on his
allegedly intended use of land as an airstrip, where the landowner
had taken no steps to develop that use); Ruiz v. Varan, 797 P.2d
267, 271 (N.M. 1990) (affirming trial court's refusal to award
damages for loss of use of development property where partnership
held property for no specific use and presented no evidence of
actual lost uses); Eisen v. Westchester, 415 N.Y.S.2d 888, 888-89
(N.Y. App. Div. 1979) (holding that the "measure of damages in a
trespass action is the diminution in the rental or usable value of
the premises caused by the trespass, taking the property as is and
as zoned"); Rumsey v. New York & New England R.R. Co., 30 N.E. 654,
654-55 (N.Y. 1892) (instructing that the proper measure of damages
is the diminished rental or useable value of the property as it was
at the time of injury and, thus, not as a brickyard, given that the
property had not been used as a brickyard for six years); Tallman
v. Metropolitan Elevated Ry. Co., 23 N.E. 1134, 1134 (N.Y. 1890)
(holding that the "plaintiff's recovery must be confined to the
diminished rental or usable value of the lots as they were"); Clark
v. Peninsula R.R. Co., 22 A. 989, 991 (Pa. 1891) (holding that the
estimate of damages sustained in the use of land must be based on
"the purposes to which for the time the land was used, or for which
it would have been used"and, therefore, that the landowner could
not recover for use of land as a mill site where there was as yet
no mill). Cf. United States v. Michoud Indus. Facilities, 322 F.2d
698, 703 (5th Cir. 1963) (instructing in a condemnation proceeding
that "just compensation is the fair market value of the property at
the time of the taking"in light of "the highest and most
profitable use for which the property is adaptable and needed, or
is likely to be needed in the near future").
Footnote 98:
515 P.2d 585 (Cal. 1973).
Footnote 99:
Id. at 586 (internal quotations omitted).
Footnote 100:
See id. at 586-89.
Footnote 101:
Black's Law Dictionary 1392 (5th ed. 1979).
Footnote 102:
Cf. United States v. 117,763.00 Acres of Land in Imperial
County, California, 410 F. Supp. 628, 631 (S.D. Cal. 1976), aff'd
sub nom. United States v. Shewfelt Inv. Co., 570 F.2d 290 (9th Cir.
1977) (rejecting owner's valuation of condemned land where owner's
sole use of the land was for speculation).
Footnote 103:
16 U.S.C. sec. 3111(1).
Footnote 104:
117,763.00 Acres, 410 F. Supp. at 631.
Footnote 105:
Exxon briefly advances a maritime preemption argument,
contending that "to the extent Alaska law would permit loss of use
damages in the absence of evidence of a viable use appellants would
have made of their property, federal maritime law does not." But
Exxon's preemption argument incorrectly assumes that preservation
is not a "viable use." The cases Exxon cites to support this
argument simply hold, as Ricards did, that a plaintiff must
establish loss of a viable use in order to recover lost-use
damages. See, e.g., Dow Chemical Co. v. M/V ROBERTA TABOR, 815
F.2d 1037, 1042 (5th Cir. 1987); J/O Ebony K/S v. DREDGE
STUYVESANT, 804 F. Supp. 898, 900-02 (S.D. Tex. 1992). We do not
read these cases to hold or suggest that preservation of wilderness
lands cannot, in appropriate circumstances, be deemed a "viable
use."
Footnote 106:
Hahn v. Russ, 611 P.2d 66, 67 (Alaska 1980) (quoting City of
Whittier v. Whittier Fuel & Marine Corp., 577 P.2d 216, 220 (Alaska
1978)).
Footnote 107:
For this proposition, Exxon cites 117,763.00 Acres, 410 F.
Supp. 628, and United States v. Michoud Indus. Facilities, 322 F.2d
698 (5th Cir. 1963).
Footnote 108:
See 117,763.00 Acres, 410 F. Supp. at 631.
Footnote 109:
Id.
Footnote 110:
See id.; accord In re Condemnation of Lands for Military Camp,
250 F. 314, 315 (E.D. Ark. 1918) (holding that owners of condemned
property that "is wild . . . and not subject to cultivation"could
recover damages measured by the "prevailing rate of interest on
[the property's] fair value").
Footnote 111:
117,763.00 Acres, 410 F. Supp. at 631.
Footnote 112:
Exxon also relies on Michoud to support its claim of
insufficient evidence. But Michoud is in accord with, and
therefore does not change, our analysis. See 322 F.2d at 707-08.
Footnote 113:
Conam Alaska v. Bell Lavalin, Inc., 842 P.2d 148, 154 (Alaska
1992) (quoting Whittier v. Whittier Fuel & Marine Corp., 577 P.2d
216, 222-24 (Alaska 1978)).
Footnote 114:
See Hahn v. Russ, 611 P.2d 66, 67 (Alaska 1980).
Footnote 115:
Dr. Green testified, in relevant part:
A: There was actual physical oil out there.
There is a disruption to the ecological system, which we were able
to determine. By that -- and we're talking about environmental
land that is important ecological environment, if you would, and
that environment was disrupted because there was [sic] thousands of
animals and birds and things that were dying and affected and, in
some cases, the food chain is affected.
. . . .
Q: Did you arrive at an opinion as to the
harm to the property if any?
A: . . . It's my opinion that in the early
stages of . . . the [oil] spill, . . . a portion of the property
rights that [Native Corporations] typically enjoyed were suspended.
. . .
I've seen photographs of beach workers
with oil up to their shoulders working on those beaches. You had
boats brought -- many boats brought into the area. You had
helicopters flying all over the place. You had barges with huge
hoses spraying down the beaches. It's difficult to think that you
would have what we would call quiet enjoyment of your -- of the use
of your land during that period of time.
Footnote 116:
After specifying that his research revealed extensive oiling
of a particular parcel, Dorchester, referring to a chart, explained
as follows his calculation of the value of the damage:
A: Down here what we have is our calculation
of the impairment for this property. Behind the sheet up here is
information about our acreage values, the numbers of acres,
consideration of the total parcel and then the shoreline-related
area, and ultimately here, we concluded that these shoreline[-
]related areas had a market value of $650,000 for shoreline-related
area.
. . . .
A: . . . Then what we did . . . to calculate
our impairment, we started with the value of the shoreline-related
area . . . .
In the first year, our analysis was
that the shoreline-related area was effectively 100 percent
impaired. . . .
The calculation that we did, then,
was to multiply six percent times $650,000, and this indicated that
a just and reasonable compensation for the impairment of that land
for the first year of the oil spill would have been $39,000.
. . . .
A: Six percent is the market rate that we
used as a license rental rate for purposes of estimating just
compensation.
Footnote 117:
See Hahn, 611 P.2d at 67.
Footnote 118:
See id.
Footnote 119:
See AS 46.03.822.
Footnote 120:
783 P.2d 235, 237 (Alaska 1989) (citations omitted)
(internal quotations omitted).
Footnote 121:
432 P.2d 607, 616 (Alaska 1967) (quoting Henne v. Balick,
146 A.2d 394, 396 (Del. 1958)).
