Kodiak Island Borough v. Exxon Corp.

991 P.2d 757, 30 Envtl. L. Rep. (Envtl. Law Inst.) 20184, 1999 Alas. LEXIS 156, 1999 WL 1051950
CourtAlaska Supreme Court
DecidedNovember 22, 1999
DocketS-7581
StatusPublished
Cited by57 cases

This text of 991 P.2d 757 (Kodiak Island Borough v. Exxon Corp.) is published on Counsel Stack Legal Research, covering Alaska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kodiak Island Borough v. Exxon Corp., 991 P.2d 757, 30 Envtl. L. Rep. (Envtl. Law Inst.) 20184, 1999 Alas. LEXIS 156, 1999 WL 1051950 (Ala. 1999).

Opinion

OPINION

BRYNER, Justice.

This case arises from the EXXON VALDEZ oil spill of March 1989. In response to the discharge of nearly eleven million gallons of crude oil into Prince William Sound, sever *759 al municipalities were forced to divert employee time and municipal services to a massive cleanup operation. They later filed suit against Exxon to recover the value of these diverted services under an Alaska statute imposing strict liability for the discharge of hazardous substances. The trial court granted summary judgment to Exxon, concluding that the statute did not permit recovery of damages for the municipalities’ diverted-services claims. Because we'conclude that Alaska law does permit recovery for these diverted services, we reverse.

I. FACTS AND PROCEEDINGS

On March 24, 1989, the tanker EXXON VALDEZ ran aground near Bligh Reef, spilling nearly eleven million gallons of crude oil into Prince William Sound. In response, Kodiak Island Borough and the cities of Seward, Cordova, Old Harbor, Ouzinkie, Port Lions, and Larsen Bay (collectively, the Cities) were forced to participate in a massive cleanup operation. Municipal officials and employees devoted significant time to tracking oil flow; monitoring shoreline; acquiring oil containment equipment; meeting with Exxon, governmental representatives, and experts about the oil spill and cleanup; and booming off and cleaning key spawning areas on city-owned tidelands. Because the Cities’ employees were engaged in these activities, they were unable to provide ordinary services to their residents.

The Cities sued Exxon Corporation, which owned the spilled oil, and its maritime subsidiary, Exxon Shipping Corporation, which owned the EXXON VALDEZ (collectively, Exxon). Relying on AS 46.03.822(a), which imposes strict liability for harm caused by the release of hazardous substances, the Cities claimed damages for the costs of municipal services diverted as a result of the spill. These diverted-services claims included the value of ordinary municipal services that the spill prevented the Cities from providing their residents and. the costs of extraordinary services necessitated by the spill. 1

The superior court established as a matter of law that the oil spill violated the statutory prohibition against release of hazardous substances, that no defenses specified in the hazardous substances statute applied to Exxon, and that Exxon was therefore strictly liable under the statute for “all compensable damages” that the Cities “proved at trial to have been proximately caused by the spill.” 2

Exxon then moved for summary judgment, contending that the Cities’ diverted-services claims were not compensable under the hazardous substances statute. The superior court agreed and granted summary judgment in Exxon’s favor.

The Cities appeal.

II. DISCUSSION

A. Standard of Review

We review a grant of summary judgment de novo, 3 determining whether the record shows a genuine issue of material fact and whether the moving party is entitled to judgment on the law applicable to the established facts. 4 For purposes of determining what facts are established, we must draw all reasonable inferences in favor of the non-moving party. 5 But in answering questions of law, we apply our independent judgment and adopt “the rule of law that is most persuasive in light of precedent, reason, and policy.” 6 *760 We may affirm a grant of summary judgment on any legal ground that supports the trial court’s ruling. 7

B. The Parties ’ Arguments

Alaska Statute 46.03.822(a) provides that certain persons may be held strictly liable for various damages caused by an unpermitted release of a hazardous substance. 8 Alaska Statutes 46.03.822(a), AS 46.03.822(k), 9 and AS 46.03.824 10 together define the scope of recoverable damages.

The Cities argue that the superior court erred in concluding that their diverted-services claims are not “damages” within the meaning of these statutes. Exxon responds that the “free public services doctrine” bars the Cities’ diverted-services claims and that the superior court therefore correctly interpreted the statutes. Exxon also argues that the Cities waived their rights to these damages and that they lack standing to assert their claims. Last, Exxon argues that federal maritime law preempts the Cities’ claims. We consider each argument below.

C. Alaska’s Hazardous Substances Statutes Authorize Recovery for Diverted Services.
1. Assuming that the free public services doctrine applies as a matter of common law, Alaska’s hazardous substances statutes abrogate the doctrine to the extent that it affects municipal recovery for spill-related damages.

Exxon argues that the free public services doctrine bars the Cities’ claims for costs they incurred in responding to the oil spill. This common-law doctrine provides that the public must bear the costs of providing emergency public services, thus relieving individual tortfeasors of liability. 11 Although *761 we have had no occasion to consider the doctrine, we assume for purposes of this appeal that it applies unless abrogated by-statute.

The pertinent question thus becomes whether the legislature has in fact abrogated the doctrine insofar as it might bar municipal claims for costs of diverted services resulting from the EXXON VALDEZ oil spill. In our judgment, the answer lies in the text of AS 46.03.822. Subsection .822(a) subjects owners and shippers of oil to strict liability for various damages caused by an unpermitted release of oil. 12 Specifically, the statute imposes liability

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.... [ 13 ]

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Bluebook (online)
991 P.2d 757, 30 Envtl. L. Rep. (Envtl. Law Inst.) 20184, 1999 Alas. LEXIS 156, 1999 WL 1051950, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kodiak-island-borough-v-exxon-corp-alaska-1999.