Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Almost every number connected with the Exxon Valdez has been huge. The tanker spilled more than 11 million gallons of oil in an Alaska bay in 1989. The resulting civil litigation led to a $5 billion jury verdict and more than 7,700 docket entries in Anchorage federal court. In late January the case produced another eye-popping figure: a $1.3 billion fee for the plaintiffs legal team. The fee seems to be the largest ever approved by a court. (The face value of some tobacco plaintiffs fees appears larger, but they’ll be paid over decades, reducing their value. Plus, those awards were handed down by an arbitration panel, not a court.) In making the Valdez award, federal district court judge H. Russel Holland granted the plaintiffs’ request for a 22.4 percent contingency fee. Holland wrote, “Exxon [Mobil Corporation] put up an unflagging, spare-no-expense defense that might have been overwhelming but for the skill and resources of class counsel.” The judge also added more than $350 million in interest (calculated as of April 2003) since the jury’s 1994 verdict. The Valdez team is led by two firms not typically known for plaintiffs work: Minneapolis-based Faegre & Benson and Davis Wright Tremaine of Seattle. Whether these lawyers ever collect their fee is another matter. Judge Holland has been tussling with the U.S. Court of Appeals for the Ninth Circuit over the case for a few years. In 2002 the appeals court ruled that a $5 billion punitive award was too much and ordered Holland to reduce it. The judge shaved it to $4 billion. When the Ninth Circuit vacated that award, Holland reacted this past January by increasing the punitives to $4.5 billion. He issued his fee ruling the next day, basing his calculation on the assumption that his latest punitive award wouldn’t get reduced. Lead trial counsel Brian O’Neill of Faegre & Benson believes the punitive award and the fee will survive, despite the Ninth Circuit’s hostility. “I think it has a 99 percent chance of standing,” O’Neill says. He claims he hasn’t calculated Faegre’s share of the award. “I just don’t want to know,” O’Neill says, explaining that the exercise wouldn’t be “mentally healthy.” He adds, “The goal before worrying about all these things is to get checks to clients. That’s what drives the whole thing.” O’Neill represents more than 32,000 fishermen, business owners, and others harmed by the spill. The fee, whatever it turns out to be, will be split among more than 60 firms, including plaintiffs-side mainstays like Milberg Weiss Bershad Hynes & Lerach and Lieff, Cabraser, Heimann & Bernstein. Over 15 years, at least 2,348 plaintiffs lawyers and paralegals clocked more than 1.2 million hours on the case, according to the fee application. The most hours were logged by Faegre & Benson, Davis Wright, and Keller Rohrbach of Seattle. Out-of-pocket costs topped $30 million. The fee request alone filled 200 binders. In court papers, Exxon called the plaintiffs’ fee request unreasonable and faulted the plaintiffs for not turning over sufficiently detailed time records. The company maintained that while a 22.4 percent contingency fee might be approved in run-of-the-mill cases, it should not be used for such a mammoth recovery. Holland dismissed the company’s arguments as “red herrings.” And O’Neill maintains that the plaintiffs, even with their army of lawyers, still were vastly outspent by Exxon. The company’s lead counsel, O’Melveny & Myers, referred all questions to the client, which limited its comment to a prepared statement. It said it would again appeal Holland’s punitive damages award, and called the oil spill “a tragic accident that the company deeply regrets.” O’Neill, 56, has spent most of the last 15 years on the Valdez case. Sounding wearied from the protracted battle with the energy giant, he notes that the case has also exacted a heavy toll on his colleagues. Of the 15 Faegre lawyers who started on this case with him, only one is in the same marriage or relationship. O’Neill says, “It’s created a huge amount of personal turmoil.”

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.