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Attorney General Lockyer Announces $16 Million Settlement for American Trader Oil Spill

Ends Long-standing Litigation; Benefits Orange County Coastal Resources
Tuesday, September 14, 1999
Contact: (415) 703-5837

(SAN FRANCISCO) – Attorney General Bill Lockyer today announced a $16 million state and local government settlement that ends long-standing litigation against Attransco, the owner of the S/T American Trader which ran aground in early 1990 and caused the worst oil spill in Orange County.

The settlement comes in a 1991 lawsuit brought by the Attorney General's office on behalf of the California Department of Fish & Game; Department of Parks and Recreation; State Lands Commission; Regional Water Quality Control Board, Santa Ana Region; City of Newport Beach , City of Huntington Beach and the County of Orange.

"The American Trader oil spill was the worst in Southern California in 20 years," Attorney General Lockyer said. "This settlement brings long-standing litigation over the environmental disaster to a close and provides a majority of the $16 million for improvements to beaches, waterways and other coastal recreational areas in Orange County. This settlement also leaves intact important legal precedent for coastal protection that will be significant in prosecuting future oil spill cases."

The civil suit had been filed against Attransco and three other companies over clean-up costs and damages that resulted when the American Trader ran over its own anchor while attempting to moor 1.3 miles off Huntington Beach. The damaged tanker on February 7, 1990, spilled some 400,000 gallons of crude oil onto marine waters, killing about 1,000 birds and closing about 15 miles of beaches in Orange County for three weeks. State and local agencies spent at least $35 million in cleanup costs.

While three of the companies settled, Attransco went to trial on two government claims: damages for lost recreational uses under the Harbors and Navigation Code, and civil liabilities under the state Water Code. A Superior Court jury in December 1997 awarded the government agencies $18.1 million for the loss of public recreational use resulting from beach and harbor closures during the oil spill response. This was the first time that a California jury put a dollar figure – $13.19 million – on the lost enjoyment of the beach, boating on the ocean, or surfing. This jury also found that Attransco should pay $5.3 million under the Water Code for damage to microorganisms that anchor the marine food web.

Attransco appealed the award, moving for a full deduction of all prior settlement amounts against this judgment, but only prevailed in part. The resulting net judgment after the offsets was approximately $15.4 million.

The $16 million settlement represents a full recovery of the $15.4 million net judgment, plus a portion of the accrued post-judgement interest. Most of this new settlement money will be used to improve the beaches and waterways, and fund other projects to benefit recreational users of natural resources in Orange County. The settlement also provides that the state court judgment will neither be vacated nor appealed further. The settlement keeps intact the precedent for future public recreational losses and penalty claims under the state Water Code.

The three other companies named in the suit settled in 1994 and 1996 with state, federal and local governments. British Petroleum, the Trans-Alaska Pipeline Liability Fund, Brandenburger Marine (which provided the compulsory pilot), and Golden West Refinery (where the oil was to be unloaded) agreed to pay over $11 million in clean-up costs, biological resource damages, partial lost recreational uses, and half of their attorneys' fees and costs through April, 1996.

With respect to settlement amounts previously recovered for injuries to natural resources, the Natural Resource Trustee Council for biological resources — representatives of the Department of Fish and Game, the U.S. Fish and Wildlife Service, and National Oceanographic and Atmospheric Administration – is already planning restoration projects for sea birds and white sea bass, in the area affected by the American Trader oil spill. This Council will spend about $3 million of the settlement money that has already been received.

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