Appendix — Cook Inlet Processors, Inc. v. Baker

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FILED

No, 901664 APR 2 6 2002

IN THE SUPREME COURT Of YFREUNFLED STATES _

October Term, 2000

COOK INLET PROCESSORS, INC.,

Petitioner,

GRANT BAKER, as class representatives of the Mandatory

Punitive Damages class; and all persons similarly situated;

et al.

Respondants; and

EXXON CORP., aka Exxon Mobil Company; Captain

JOSEPH HAZELWOOD; EXXON SHIPPING CO.,

Respondants.

ON PETITION FOR WRIT OF CERTIORARI TOTHE .

UNITED STATES COURT OF APPEALS FOR THE

NINTH CIRCUIT

APPENDIX TO PETITION FOR WRIT OF CERTIORARI

WEIDNER & ASSOCIATES, INC.

Attomeys for Petitioner

By: CL Ms LD lo) asibrs

Phillip Paul Weidner

Attomey of Record

330 "L" Street, Suite 200

Anchorage, Alaska 99501

(907) 276-1200

(SAP

TABLE OF CONTENTS

Document

Memorandum, filed in Cook Inlet Processors,

Inc. v. Grant Baker, et al., Ninth Circuit No.

99-35864, and Nautilus Marine Enterprises,

Inc. v. Grant Baker, et al., Ninth Circuit No.

99-35866, on December 14, 2000 ................ccceees

Opinion, filed in Icicle Seafoods, Inc., et al.

and Exxon v. Grant Baker, et al., Ninth Circuit

No. 96-36038 and Icicle Seafoods, Inc.., et al.

v. Alaska Sportfishing Assoc.., Inc., et al.,

Ninth Circuit No. 97-35036, and Icicle

Seafoods, Inc., et al. v. Grant Baker, et al.

v. Exxon, Ninth Circuit No. 97-35190, on

fg tee. RSS NI ALON RO Oe ee

Memorandun,, filed in Sea Hawk Seafoods

Inc., et al., and Western Alaska Fisheries

Inc. v. Exxon, Ninth Circuit No. 99-35878,

oh TO FE ee win iitasabahetisscadadiiccinisiicrierancias

Order No. 348—Final Approval of the Plan

of Distribution of Allocations to the

Processor Claim Category, filed in In re

The Exxon Valdez, U.S.D.C. No.

PP-OFS, CR TUEG BD, BOI F seicccsicdsssnnsessarsosscsvesapses

Order, filed in Cook Inlet Processors

Inc. v. Grant Baker, et al., Ninth Circuit

No. 99-35864, and Nautilus Marine

Enterprises, Inc. v. Grant Baker, et al.,

Ninth Circuit No. 99-35866, on

Page No.

BOURAUEY DO, BIN cicipicr ascitic etapa nsassaepntimnncesoacienins 38

Judgment in a Civil Case, filed in

In re the Exxon Valdez, U.S.D.C.

No. A89-095 on September 16, 1994.0... eccceeeeeeeees 42

Order No. 204—Order Granting

Conditional Final Approval and

Certifying Mandatory Punitive

Damages Class, filed in In re

the Exxon Valdez, U.S.D.C. No.

ABD-ODS, Cm PREG 1D, Fe acidic cea asccrseresocinctecoees 45

Cook Inlet Processing Partial Release

Cathal WES 20, TRI wcutctnicaitancaidtmaimeninisnstbnanccsaeinisases 50

Complaint (Cook Inlet v. Exxon)

mien BR ae, Tee cists chic stats ect ceepareeseten cinco 54

Agreement Among Counsel Regarding

Joint Prosecution, Settlement, and

Damages Allocation Agreement, :

Retin: Aageth 1G, FIG vacccsscsncedunGnnnaniicasaipnictnscieiiiasesinbsnscein 57

Plaintiffs’ Memorandum in Support of

Joint Motion of Plaintiffs and Defendants

for Preliminary Approval of Phase IV

Settlement, Plaintiffs’ Motion for

Preliminary Approval of Plan of

Allocation of Recoveries Obtained by

Plaintiffs in Litigation Arising from the

Exxon Valdez Oil Spill, and the Orders

Requested in those Motions Scheduling a

Hearing on Final Approval of the Phase

IV Settlement and Plan of Allocation,

and Authorizing Notice to Class

Members, filed in In re the Exxon Val

U.S.D.C. Case No. A89-095

Dated January 12, 1996 ...s.....csccsccicshosemasesa Saeed 62

Memorandum in Support of All Plaintiffs’

Motion for Order Preliminarily Approving

Plan of Distribution for Seafood Processor

Claimants, filed in In re the Exxon Valdez,

U.S.D.C. Case No. A89-095

Snaes Bley 8S, BOTT iickenieinccncaccictiiciaeeece es 100

Plaintiff Cook Inlet Processing’s

Objection to the Plan of Distribution of

Recoveries Obtained on Behalf of

Processors, filed in In re the Exxon Valdez,

U.S.D.C. No. A89-095; dated June 27,

a cibttrlatiia tabi a8 eal peaintaiatdilciiabUdiddiidsbekaiostenccasine cs. 113

Supplemental Notice of Position by Polar

Equipment, Inc. D/B/A Cook Inlet

Processing Relating to Objections by

Cook Inlet Processing to Plan of

Distribution of Recoveries Obtained

on Behalf of Processors, filed in

In re The Exxon Valdez, U.S.D.C.

No. A89-095 on August 8, 1997 oooooccccccccccccccceceeeececee.. 118

Second Supplemental Notice of Position

by Polar Equipment, Inc. d/b/a Cook

Inlet Processing Relating to Objections

by Polar Equipment, Inc. d/b/a Cook

Inlet Processing to Plan of Distribution

of Recoveries Obtained on Behalf of

Processors, filed in In re the Exxon Valdez,

U.S.D.C. No. A89-095; dated September 23,

og I RE RNA 121

Federal Rule of Civil Procedure 23

FILED

DEC 14 2000

CATHY A. CATTERSON, CLERK

U.S. COURT OF APPEALS

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

In re: THE EXXON VALDEZ _) No. 99-35864

| )

| ) DC# CV-89-

COOK INLET PROCESSORS, __) 00095-HRH

INC., )

) MEMORANDUM!

Plaintiff-Appellant,

)

GRANT BAKER, as class )

representatives of the Mandatory _)

Punitive Damages class; and all )

persons similarly situated; ALASKA )

SPORT FISHING ASSOCIATION; )

LOUIS E. ALBER, AHMET )

ARTUNER; JEFFREY BAILEY; _)

WILLIAM BENNETT; MICHAEL )

WAYNE BULLOCK, ROBYNE )

L. BUTLER; ALBERT RAY )

CARROLL; DEBRA LEE, INC.; _ )

DEW DROP, INC.; LARRY L. )

DOOLEY, MARK DOUMIT; )

STEVE DOUMIT; DOUGLAS R. )

JENSEN; DENNIS G. JOHNSON; )

DONALD P. KOMPKOFF, Sr.; )

JOSEPH KOPECKY; DANIEL )

l This disposition is not appropriate for publication and may

not be cited to or by the courts of this circuit as may be

provided by 9" Cir. R. 36-3.

LOWELL; ANDREAN E.

MARTUSHEFF; CAROL ANN

MAXWELL; JACQUELAN JILL

MAXWELL; ROBERT A.

MAXWELL, Sr.; MICHAEL

McLENAGHAN; ELENORE E.

McMULLEN; LESLIE R.

MEREDITH; NATIVE VILLAGE

OF TATITLEK; LEONARD S.

OGLE; STEVEN T. OLSEN;

AUGUST M. PEDERSEN, Jr.;

MARY LOU REDMOND; JOSEPH

DAVID STANTON; JEAN A.

TISDALL; DARRELL WOOD,

Plaintiffs-Appellees,

and

EXXON CORP., aka Exxon Mobil

Company; Captain JOSEPH

HAZELWOOD; EXXON

SHIPPING CO.,

Defendants-Appellees. )

i i ee ee ee ee ee ee ee ee ee ee ee es

NAUTILUS MARINE No. 99-35866

ENTERPRISES, INC.,

DC# CV-89-

Plaintiff-Appellant, 00095-HRH

Vv.

GRANT BAKER, et al., as class

representatives of the Mandatory

Punitive Damages class; and ail

persons similarly situated; ALASKA

SPORT FISHING ASSOCIATION;

LOUIE E. ALBER; AHMET

ee ee ee ee oe ee ee ee ee ee ee

ARTUNER; JEFFREY BAILEY; )

WILLIAM BENNETT; MICHAEL )

WAYNE BULLOCK; ROBYNE L. )

BUTLER; ALBERT RAY )

CARROLL; DEBRA LEE, INC; )

DEW DROP, INC.; LARRY L.__)

DOOLEY, MARK DOUMIT: )

STEVE DOUMIT; DOUGLAS R._ )

JENSEN; DENNIS G. JOHNSON; )

DONALD P. KOMPKOFF, Sr; )

JOSEPH KOPECKY; DANIEL _+)

LOWELL; ANDREAN E. )

MARTUSHEFF; CAROL ANN)

MAXWELL; JACQUELAN JILL)

MAXWELL; ROBERT A. )

MAXWELL, Sr.; MICHAEL )

McLENAGHAN; ELENOREE. _)

McMULLEN; LESLIE R. )

MEREDITH; NATIVE VILLAGE )

OF TATITLEK; LEONARDS. _)

OGLE; STEVEN T. OLSEN: )

AUGUST M. PEDERSEN, Jr; _—+)

MARY LOU REDMOND; JOSEPH )

DAVID STANTON; JEAN A. )

TISDALL; DARRELL WOOD, __—i+)

)

Plaintiffs-Appellees,

and

EXXON CORP., aka Exxon Mobil

Corporation; EXXON SHIPPING

CO.; JOSEPH HAZELWOOD,

Captain,

Defendants-Appellees.

Appeal from the United States District Court

for the District of Alaska

H. Russel Holland, Chief District Judge, Presiding

Argued and Submitted November 9, 2000

San Francisco, California

BEFORE: SCHROEDER Chief Judge, BROWNING and

KLEINFELD, Circuit Judges.

Cook Inlet Processors and Nautilus Marine

Enterprises appeal the district court’s approval of a seafood

processor plan of distribution, which excluded them from

recovering a portion of the $5 billion punitive damage

verdict against Exxon for the Valdez oil spill. The plan

excluded the processors on the basis of settlement

agreements they both signed, which contained full punitive

damage releases. We review the district court’s approval of

a plan of distribution for an abuse of discretion, In re Exxon

Valdez, 229 F.3d 790, 795 (9" Cir. 2000), and we affirm.

Cook Inlet’s settlement agreement released Exxon from

“all punitive damage claims of any kind arising at any time.”

Similarly, Nautilus Marine’s settlement agreement released

Exxon from “any and all claims for punitive damages in any

way associated with [the Valdez spill].” The district court

did not abuse its discretion when it approved the plan which

excluded the processors from punitive damage recovery

based on the release language.

The processors’ arguments for invalidating the

releases on the grounds of economic duress and waiver also

fail. The processors presented no evidence to support setting

aside the releases on the basis of economic duress. Exxon

did not waive the releases by failing to plead them as

affirmative defenses because the complaints did not request

punitive damages.2

AFFIRMED.

2 Cook Inlet’s and Nautilus Marine’s remaining contentions

are rejected as meritless.

Z ibitineeteg

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

In Re:

THE EXXON VALDEZ

ICICLE SEAFOODS, INC.; SEVEN SEAS

CORPORATION; OCEAN BEAUTY

SEAFOODS, INC.; OCEAN BEAUTY

ALASKA, INC.; WARDS COVE

PACKING COMPANY, INC.; ALASKA

BOAT COMPANY; NORTH PACIFIC

PROCESSORS; TRIDENT SEAFOODS

CORPORATION; NORTH COAST

SEAFOOD PROCESSORS, INC.; ADF,

INC., dba Aleutian Dragon

No. 96-36038

D.C. No.

CV-89-00095-

Fisheries, HRH

Plaintiffs-Appellants,

and

EXXON SHIPPING COMPANY; EXXON

CORPORATION,

Defendants-Appellants,

GRANT BAKER, et al., as

representatives of the Mandatory

Punitive Damages Class, 3

Plaintiffs-A ppellees.

13063

ICICLE SEAFOODS, INC.; PETER PAN

SEAFOODS, INC.; SEVEN SEAS

CORPORATION; STELLAR SEAFOODS,

INC.; OCEAN BEAUTY SEAFOODS,

INC.; OCEAN BEAUTY ALASKA, INC.;

WARDS COVE PACKING COMPANY,

INC.; ALASKA BOAT COMPANY;

NORTH PACIFIC PROCESSORS; ADF,

INC.; dba Aleutian Dragon :

Fisheries; TRIDENT SEAFOODS

CORPORATION; NORTH COAST

SEAFOOD PROCESSORS, INC.,

Plaintiffs-Appellants,

¥,

ALASKA SPORTFISHING ASSOC.,

INC.; No. 97-35036

LOUIE E. ALBER; AHMET ARTUNER; D.C. No.

GRANT C. BAKER; JEFFREY BAILEY;

CV-96-00056-

WILLIAM BENNETT; MICHAEL HRH

WAYNE BULLOCK; ROBYNE L.

BUTLER; ALBERT RAY CARROLL;

DEBRA LEE, INC.; DEW DROP, INC.;

LARRY L. DOOLEY; MARK DOUMIT;

STEVE DOUMIT; DOUGLAS R.

JENSEN; DENNIS G. JOHNSON;

DONALD R. KOMKOFF, SR.; JOSEF

KOPECKY; DANIEL LOWELL; ANDREW

E. MARTUSHEFF; CAROL ANN

MAXWELL; JACQUELAN JILL

MAXWELL; ROBERT A. MAXWELL,

SR.; MICHAEL MCLENAGHAN;

ELENORE E. MCMULLEN; LESLIE R.

MEREDITH; THE NATIVE VILLAGE OF

TATITLEK; LEONARD S. OGLE;

13064

STEVEN T. OLSEN; AUGUST M.

PEDERSON, JR.; MARY LOU

REDMOND; JOSEPH DAVID STANTON;

JEAN A. TISDALL; DARRELL WOOD,

Defendants-Appellees.

In Re:

THE EXXON VALDEZ

ICICLE SEAFOODS, INC.; PETER PAN

SEAFOODS, INC.; SEVEN SEAS

CORPORATION; STELLAR SEAFOODS,

INC.; OCEAN BEAUTY SEAFOODS,

INC.; OCEAN BEAUTY ALASKA, INC.;

WARDS COVE PACKING COMPANY,

INC.; ALASKA BOAT COMPANY;

NORTH PACIFIC PROCESSORS; ADF,

No. 97-35190

INC., dba Aleutian Dragon

D.C. No.

Fisheries; TRIDENT SEAFOODS

CV-89-00095-

CORPORATION; NORTH COAST HRH

SEAFOOD PROCESSORS, INC.,

OPINION

Plaintiffs-Appellants.

Vv.

GRANT BAKER, et al., as

representatives of the Mandatory

Punitive Damages Class,

Plaintiffs-Appellees,

EXXON CORPORATION, EXXON

SHIPPING COMPANY,

Defendants.

13065

Appeals from the United States District Court

for the District of Alaska

H. Russel Holland, District Judge, Presiding

Argued and Submitted ri

May 3, 1999—Seattle, Washington

Filed October 12, 2000

Before: James R. Browning, Mary M. Schroeder,1 and

Andrew J. Kleinfeld, Circuit Judges.

Opinion by Judge Schroeder

1 Judge Schroeder was drawn to replace Judge Wiggins.

She has read the briefs, reviewed the record and listened to

the tape of oral argument held on May 3, 1999.

13066

13067

13068

COUNSEL

David C. Tarshes, Davis Wnght Tremaine, LLP, Anchorage,

Alaska, for the plaintiffs-appellees.

James vanR. Springer, Dickstein Shapiro Morin & Oshinsky,

Washington, D.C., for the plaintiffs-appellees.

Brian B. O’Neill, Faegre & Benson, Minneapolis,

Minnesota, for the plaintiffs-appellees.

John F. Daum, O’Melveny & Myers, LLP, Los Angeles,

California, for defendants-appellants Exxon Corporation.

Bradley S. Keller, Byrnes & Keller, LLP, Seattle,

Washington, for plaintiffs-appellants North Coast Seafood

rs, Inc.

OPINION

SCHROEDER, Circuit Judge:

This appeal represents a small part of the massive litigation

generated by the 1989 Exxon Valdez oil spill into the waters

of Prince William Sound, Alaska. The dispute we consider

here arises from the punitive damages claims filed against

Exxon? by private parties injured by the spill and

consolidated

13069

into a single mandatory class action in federal court. Aligned

on one side in this appeal are Exxon and a group of plaintiff

seafood processors known as the Seattle Seven. The Seattle

Seven reached a $64 million settlement agreement with

Exxon in the immediate aftermath of the Valdez spill. On

the other side are the remaining class plaintiffs, referred to in

this opinion as “plaintiffs.”

The critical factual element is the settlement agreement

between Exxon and the Seattle Seven. The Seattle Seven,

who process seafood caught in Prince William Sound, sued

Exxon for compensatory and punitive damages after the spill

forced their operations to shut down for significant periods of

time. The settlement agreement they reached with Exxon did

2 We follow the practice of other panels of this court who

have decided cases involving the Exxon Valdez, and use

“Exxon” to refer to Exxon Corporation, Exxon Shipping

Company, Exxon Transportation Company, and any other

related entity. See Eyak Native Village v. Exxon Corp., 25

F.3d 773, 774 n.1 (9" Cir. 1994).

ove i

not include a release and therefore did not formally terminate

the Seattle Seven’s claims against Exxon. The Seattle Seven

agree, however, that they would not execute on any

compensatory damages award entered in their favor and also

would pay or “cede” back to Exxon any punitive damages

they might recover. The agreement was subsequently

modified to permit the Seattle Seven to retain a portion of the

punitive damages award received.

Although both the district court and the plaintiffs knew that

there had been a settlement agreement between Exxon and

the Seattle Seven, neither knew of the existence of the cede

back provision. Acting in its own best interest, Exxon chose

not to inform the punitive damages jury either. On

September 16, 1994, the jury assessed punitive damages

against Exxon in the amount of $5 billion. The plan of

allocation the plaintiffs eventually proposed for this award,

and that the district court approved, did not include the

Seattle Seven.

The central issue for us to decide is whether the jury should

have been told of the cede back provision during the last

phase of the punitive damages trial. The district court,

agreeing with the class plaintiffs, held that Exxon’s failure to

affirmatively disclose this information to the jury merited

13070

exclusion of the Seattle Seven from the plan of allocation.

Exxon and the Seattle Seven appeal this ruling.

Exxon’s liability for any punitive damages, and the amount

of punitives the jury imposed are challenged in related

appeals. We here assume without deciding, for purposes of

this appeal, the validity of the judgment against Exxon. We

do not intimate what the result of that appeal will be.

BACKGROUND

The oil tanker Exxon Valdez ran aground on the Bligh Reef

in Prince William Sound, Alaska on the evening of March

23, 1989. Damage to the Valdez’s cargo holds caused it to

spill 11 million gallons of oil into the Sound, resulting in a

great environmental disaster. The spill grievously injured

both the environment and the economic livelihood of those

individuals who relied on the theretofore abundant marine

life of the region for their livelihood.

The State of Alaska and the United States brought actions

against Exxon for the injury to the environment. Those cases

were resolved by entry of a consent decree on October 8,

1991, under the terms of which Exxon agreed to pay at least

$900 million to restore damaged natural resources. See Eyak

Native Village v. Exxon Corp., 25 F.3d 773, 775 (9 Cir.

1994).

The hundreds of private civil actions filed in federal court

were consolidated before Judge H. Russel Holland of the

District of Alaska. First the plaintiffs, and then Exxon

moved the district court to certify a mandatory punitive

damages class. Judge Holland granted Exxon’s motion on

April 19, 1994. Alaska’s state courts agreed to recognize the

class action as the only avenue through which any plaintiff,

whether in state or federal court, could recover punitive

damages from Exxon. See Chenega Corp. v. Exxon Corp.,

991 P.2d 769, 775 (Alaska 1999).

13071

The Seattle Seven, the largest of the region’s seafood

processors, sued Exxon in 1989. Exxon sought to reach a

settlement as quickly as possible, but its negotiations with

the Seattle Seven and other plaintiffs revealed a roadblock

posed by the increasing likelihood that a mandatory punitive

damages class would be certified. Claims for compensatory

damages could be easily disposed of by exchanging payment

for releases, tut a plaintiff's release of its slice of the future

lump-sum punitive damages award merely reduced the

number of claimants sharing the punitive damages pie, not

the size of the pie itself. Exxon thus actually faced a

financial disincentive to settle, because any amount of money

it paid to persuade a plaintiff to forgo its slice would .

nevertheless be included in the amount of the eventual

award.

On January 8, 1991, the Seattle Seven and Exxon settled the

Seattle Seven’s claims for the 1989 and 1990 fishing seasons

in exchange for a payment of $63.75 million. To avoid the

punitive damages dilemma, the parties included in the

agreement a “cede back” provision. The provision stated

that the Seattle Seven would not release their punitive

damages claims against Exxon but would instead remain

' parties to the litigation in order to receive their share of an

eventual punitive damages award, which they would then

cede back to Exxon. The existence of a settlement

agreement was made known to the rest of the subsequent

punitive damages class, but its terms were kept confidential.

The mandatory punitive damages class action was tried to a

jury in three phases in 1994. The first determined that

Captain Joseph Hazelwood’s behavior had been reckless, a

necessary prerequisite for an award of punitive damages.

The second phase assessed the amount of compensatory

damages attributable to the spill to give the jury guidance in

fixing the appropriate amount of punitive damages. For

purposes of this appeal, we need not question the

determinations during those phases. The third phase fixed

the amount of punitive damages. -

13072

Before the third phase began, the parties entered into an

Impact Stipulation. This described the harm the Valdez spill

had caused private parties and quantified part of it by

referring to the total amount already paid by Exxon to private

parties in compensation (approximately $300 million). This

figure included the approximately $64 million paid to the

Seattle Seven under the 1991 settlement agreement.

In the third phase of the punitive damages proceedings, the

plaintiffs emphasized to the jury the magnitude of the harm

and the resulting need for punishment and deterrence.

Exxon, for its part, sought to demonstrate that it had already

accepted corporate responsibility by pointing to the fact that

in many cases, it had paid money to injured parties without

requiring anything in return but a receipt and without

requiring releases. Exxon’s president testified that Exxon

had paid “over $300 million” receiving only receipts in

return, and thus, that it had received nothing of in

return for its payments. Exxon’s counsel reiterated this in

his closing argument. In fact, however, because the $300

million figure included amounts paid to parties such as the

Seattle Seven, who did agree to settle their claims, these

statements were inaccurate. The amount paid in return for

nothing but receipts was actually somewhere around $168

million.

Exxon’s apparent strategy to maximize to the jury what

Exxon had already paid in order to minimize punitive

damages did not work well. On September 16, 1994, the

jury awarded punitive damages in the sum of $5 billion, at

that time the largest award of its kind in history.

The next step was to allocate those damages among the

plaintiffs in a manner proportionate to their injury. The

original plan of allocation, drawn up by the non-settling

plaintiffs, did not include the Seattle Seven because the

Seven’s lack of a financial interest in the recovery meant that

they also lacked motivation to pursue a stake in the award.

In order to create a financial incentive for the Seattle Seven,

in 1996 Exxon

13073

negotiated a modification to the 1991 settlement agreement

with the Seattle Seven. The modification permitted the

Seattle Seven to retain $12.4 million of their punitive

damage allocation rather than ceding it all back to Exxon.

The Seattle Seven then filed an objection to the proposed

allocation with the district court, contesting their exclusion

from the plan. At this point, the reason for the requested

modification, the cede back provision, became known both

to the district court and to the plaintiffs. The plaintiffs began

vigorously to oppose inclusion of the Seattle Seven in the

plan of allocation.

The district court agreed with the plaintiffs, originally taking

the position that the cede back provision itself was unlawful

as against public policy. The Seattle Seven and Exxon

moved for reconsideration, supporting their motion with

declarations of numerous legal luminaries, including former

U.S. Attorneys General, judges of various U.S. Courts of

Appeal, law professors, and an Alaska Supreme Court

Justice, all to the effect that cede back agreements are ethical,

enforceable, and necessary for the orderly administration of

justice in mass tort cases.

Upon reconsideration, the district court agreed that the cede

back agreement was not in and of itself unethical, but held

that the Seattle Seven were nonetheless barred from

participating in the allocation of damages because the jury

was not told of the agreement’s existence. The court’s order

stated that the problem was Exxon’s failure to tell the jury

“the whole story” regarding the agreements. The court

emphasized its belief that the jury should have been entitled

to determine how much Exxon should actually pay in

punitive damages, out of its own pocket, stating: “Punitive

damages are imposed to punish the conduct which juries

determine to be reckless. The court has no doubt that the

Exxon Valdez jury would be outraged if Exxon, through the

Seattle Seven settlement

13074

agreement, rather than the claimants, were to wind up with

almost 15% of the punitive damages award.”

In this appeal, appellants Seattle Seven and Exxon contend

both that cede back agreements are lawful and that for their

proper administration, they must not be disclosed to juries.

Otherwise, appellants argue, the jury in order to compensate

for them or to prevent the defendant from paying less than

what the jury believes is appropriate punishment will inflate

the punitive damages award.

The appellee plaintiffs defend the district court’s reasoning,

arguing that such agreements are unethical and

unenforceable unless juries are told of them. They also

contend that even if juries should ordinarily not be told,

disclosure in this particular case was warranted by Exxon’s

exaggerated statements to the jury regarding the amount paid

to claimants without releases in return. We review approval

of the plan of allocation for abuse of discretion and any

necessary legal questions do novo. See In re Mego Financial

Corp. Sec. Litig., 213 F.3d 454, 460 (9® Cir. 2000).

There are accordingly three principal issues that we must

consider in the disposition of this appeal: (1) the lawfulness

and enforceability of cede back agreements like the one in

this case; (2) whether, if lawful and enforceable, they should

generally, as a matter of law, be kept from the jury; and (3) if

they should ordinarily be kept secret, whether there were

circumstances present in this case that should have required

Exxon to tell the jury about the existence of this particular

agreement. We hold that cede back agreements are

enforceable; that in accordance with the general principle

that indemnification arrangements should not be allowed to

affect a jury’s determination of damages, cede back

agreements should not be disclosed to the jury; and, finally,

that there are no circumstances in this case that would have

warranted disclosing the terms of this cede back provision to

the jury. We therefore conclude that the district court abused

its discretion

13075

in approving a plan of allocation that denied enforceability of

the settlement agreement between Exxon and the Seattle

Seven and that barred the Seattle Seven from receiving any

allocation of punitive damages.

I. ENFORCEABILITY OF THE CEDE BACK

PROVISION

In recent years, federal courts have become all too familiar

with the peculiar problems posed by mass tort litigation.

See, for example, Amchem Products, Inc. v. Windsor, 521

U.S. 591 (1997) (asbestos); Valentino v. Carter-Wallace,

Inc., 97 F.3d 1227 (9" Cir. 1996) (epilepsy medication); In re

Agent Orange Product Liability Litigation, 818 F.2d 145 (2d

Cir. 1987). Such litigation oe dockets for decades,

creating burdens on the judicial system and delaying relief

for injured parties. As a result, the general policy of federal

courts to promote settlement before trial is even stronger in

the context of large-scale class actions. See Franklin v.

Kaypro Corp., 884 F.2d 1222, 1229 (9 Cir. 1989) (stating

that the fact that “there is an overriding public interest in

settling and quieting litigation...is particularly true in class

action suits.”). It is unfortunately also true, however, that

such settlements are difficult to reach. “[O]btaining a

settlement in multi-party litigation may be quite complex.”

Id. at 1225. It will frequently be very close to impossible for

a mass tort defendant to achieve a settlement with every

potential plaintiff. The resulting presence of non-settling

defendants, non-settling plaintiffs, or both, may seriously

affect the parties’ incentives to settle in the first place.

In addition to encouraging individual settlements, courts

have encouraged the use of mandatory class actions to handle

punitive damages claims in mass tort cases. Mandatory class

actions avoid the unfairness that results when a few

plaintiffs—those who win the race to the courthouse—

bankrupt a defendant early in the litigation process. They

also avoid the possible unfairness of punishing a defendant

over and over

13076

again for the same tortious conduct. As a result, mandatory

classes have been endorsed by many courts and

commentators. See In re A.H. Robins Co., Inc., 880 F.2d

709, 738 (4" Cir. 1989) (recognizing that “the ‘trend’ of the

authorities is clearly in the direction of a more liberal

approach to the certification of the mass tort action”). See

also II The American Law Institute, Enterprise

Responsibility for Personal Injury 263 (Reporters’ Study

1991) (recommending federal legislation to create

nationwide mandatory punitive ages classes); Richard A.

Seltzer, Punitive Damages in Mass Tort Litigation:

Addressing the Problems of Fairness, Efficiency and

Control, 52 Fordham L. Rev. 37, 61 (1983) (arguing that

only class actions provide a practical means for resolving the

problems that accompany punitive damage awards in mass

tort litigation).

One drawback to the mandatory class action, however, is that

it makes it even more difficult to settle the claims of any

individual plaintiff. Because punitive damages in a

mandatory class action are awarded in one sum, @

defendant has a serious disincentive to settle with any

plaintiff unless it can negotiate a settlement with them all, a

staggering feat if not a practical i ity. Partial

settlement merely reduces the number of plaintiffs who share

an eventual award. It does not reduce the award’s amount.

Because a defendant like Exxon would presumably be

indifferent as to whether it paid 10,000 plaintiffs $500,000

each or 500,000 plaintiffs $10,000 each, the creation of

mandatory punitive damages classes cuts against the strong

judicial policy of encouraging settlement in class actions.

We deal here with multiple plaintiffs suing one defendant,

but an analogous problem frequently occurs in the more

typical situation of a single plaintiff with claims against

multiple defendants. When a plaintiff is able to settle with

fewer than all of the defendants, the question becomes how

to determine what share of a jury’s total assessment of

damages a non-settling defendant should pay. Courts agree

that the non-

13077

settling defendant does not have to pay the entirety of any

eventual damages award. They diverge, however, on the

issue of apportionment, taking three distinct approaches. See

McDermott, Inc. v. Clyde, 511 U.S. 202, 215-17 (1994)

(explaining the three approaches).

Under the first ach, the non-settling defendant pays the

entire amount of the award less the actual amount the

plaintiff has already received from the settling defendant,

even if this total turns out to be in excess of the non-settling

defendant's share of the fault as determined by the jury. The

non-settling defendant then retains the right to seek

contribution from the settling defendant in order to bring

total payments in line with allocation of fault. This is called

the “pro tanto with contribution” approach, and it creates

little incentive for any defendant to settle.

The second approach is known as “pro tanto without

contribution.” Under this approach, the non-settling

defendant pays the entire amount of the award less the

amount of the settlement and does not retain the right to seek

contribution. This helps ensure that the plaintiff receives the

full amount of damages and maintains incentives to settle,

but can result in the non-settling defendant paying more than

its share of fault.

Finally, under the “proportionate share” approach, the non-

settling defendant pays only the amount of the award that is

allocable to its share of the fault, as determined by the jury.

The proportionate share approach is the law in the Ninth

Circuit, has been adopted by the Supreme Court for use in

maritime actions, and is the approach recommended by the

American Law Institute. See Kaypro, 884 F.2d at 1231. See

also McDermott, 511 U.S. at 217; Restatement (Third) of

Torts: Apportionment of Liability § 16.

The main advantage of the proportionate share approach is

that it is the only one of the three that combines fairness to

all parties with an appropriate balance of individual

incentives to

13078

settle. The effect of proportionate share apportionment,

however, is that the actual amount of damages the plaintiff

receives will deviate from the amount awarded by the jury,

unless the amount of the settlement exactly matches the

settling defendant’s share of fault as subsequently

determined by the jury. If the jury later determines that the

settling defendant’s share of fault is less than the amount

paid in settlement, this will result in a windfall to the

plaintiff. Ifthe jury’s allocation is higher, this will result in a

shortfall.

This case differs from the typical situation in that we do not

have a single plaintiff seeking to recover a ¢e award from

multiple defendants. The Exxon Valdez punitive |

class involves multiple plaintiffs seeking to recover a

award from a single defendant. Neither our court nor | 8

potential

authorities have addressed this situation. The

distortion of settlement incentives that occurs when some

go uncollected, settlement incentives would have been

preserved and the cede back provision would not have been

necessary. Exxon had no such certainty, though (and indeed,

the district court eventually refused to adopt such a method).

Exxon therefore sought to achieve a proportionate share

result without the court’s assistance by adding the cede back

provision to its settlement agreement with the Seattle Seven.

An analogous type of cede back agreement has been used in

the multiple-defendant context and is called a Pierringer

release, after the leading case to consider it, Pierringer v._

Hoger, 124 N.W.2d 106 (Wis. 1963). Pierringer ae

have been approved in Wisconsin and Minnesota. See id.;

Frey v. Snelgrove, 269 N.W.2d 9] 8, 922 (Minn. 1978).

13079

Pierringer releases have the effect of reaching a proportionate

share result and have principally been used in jurisdictions

that adhere to the “pro tanto with contribution” approach. A

plaintiff who settles with one of multiple defendants agrees

to indemnify that defendant for any eventual contribution

action brought by the non-settling defendants after the entry

of judgment. See Peter B. Knapp, Keeping the Pierringer

Promise: Fair Settlements and Fair Trials, 20 Wm. Mitchell

L. Rev. | (1994),

The Supreme Court has recognized that Pierringer releases

mitigate the adverse effect on settlement that exists under a

“pro tanto with contribution” regime, but has worried that the

prospect of indemnity actions might add “yet another

potential burden on the courts.” McDermott, 511 U.S. at

212. As a practical matter, however, Pierringer releases do

not require the actual litigation of a contribution action,

followed by an indemnity action. The portion of the

judgment allocable to the settling defendant’s fault is simply

considered uncollectible, just as it would be under the

proportionate share approach. See Austin v. Raymark Ind.,

Inc., 841 F.2d 1184, 1190 (1" Cir. 1988) (stating that through

a Pierringer release, a non-settling defendant “effectively

obtain[s] its contribution from the settling defendants by

having assessed against it only its own percentage of

liability”). Similarly, in the multiple plaintiff context, a non-

settling plaintiff through a cede back agreement obtains only

its proportionate share of the entire punitive damages award.

What Exxon and the Seattle Seven did, therefore, was use a

Pierringer device to obtain the functional equivalent of a

proportionate share allocation of damages. Since both the

Ninth Circuit and the Supreme Court have endorsed the

proportionate share approach because of its superiority in

blending fairness to the parties with incentives to settle, we

cannot hold such an agreement unenforceable as a matter of

public policy. Far from being unethical, cede back

agreements make it easier to administer mandatory class

actions for the assessment of punitive damages and

encourage settlement in mass tort cases. As a result, such

agreements should typically be enforced.

II. WHETHER CEDE BACK AGREEMENTS SHOULD

GENERALLY BE DISCLOSED TO THE JURY

The district court in this case held that cede back agreements,

though ethical, should be disclosed to the jury because the

jury should be able to take them into account in assessing

punitive damages. Exxon and the Seattle Seven contend,

however, that juries should never be told. They argue

persuasively that the salutary purposes of such agreements

would be frustrated if the jury knew about the terms of the

agreement and were permitted to offset them by increasing

damages. We agree.

If a jury was told that the defendant would eventually get

back a portion of the punitive damages assessed, the jury

would likely compensate by imposing more

thereby assuring that the defendant would y the entire

amount deemed appropriate by the jury. This is exactly what

the district court believed the jury should have been

permitted to do in this case. Yet if that were to be the result

of the settlement agreement, from the defendant’s

perspective there would be no point in settling in the first

place. The defendant would still have to pay the full amount

assessed by the jury, in addition to the amount paid in

settlement.

This is what we have recognized elsewhere in our law: that a

jury should assess damages but not determine how much

defendants should “actually” pay or how much plaintiffs

should “actually” receive. In Larez v. Holcomb, 16 F.3d

1513 (9" Cir. 1994), we held that it was prejudicial error to

inform a jury deliberating on an award of punitive damages

that the defendant would be indemnified by his employer for

any such award. See id. at 1520-21. We stated that a jury’s

task is to arrive at a “dispassionate” determination of the

proper award,

13081

and that evidence of indemnification might have tempted the

jury to inflate the award out of sympathy for the plaintiff.

See id. at 1519. Similarly, we held in Brooks v. Cook, 938

F.2d 1048 (9" Cir. 1991), that juries should not be told about

the availability of attorneys’ fees when fixing an award for a

prevailing plaintiff. We explained that “the fear is that a

jury, informed of plaintiff's right to additional funds, will

view the money as a windfall and take steps to offset it.” Id.

at 1052.

These principles are not unique to this circuit. It is uniformly

held that absent exceptional circumstances, a jury

deliberating on the amount of a damages award is not to

consider where the funds what constitute that award will

come from, or where they will end up. For example, the

states of Georgia and Oregon both have enacted tort reform

measures that provide that large portions of punitive

damages awards (75 percent in Georgia and 50 percent in

Oregon) go to the state or state-designated charities rather

than the prevailing plaintiff. Both states have held that it is

prejudicial error to inform the jury of this ultimate outcome,

because of the temptation for the jury to inflate the award in

order to more fully compensate the plaintiff. See Ford v.

Uniroyal Goodrich Tire Co., 476 S.E.2d 565, 570-71 (Ga.

1996); Honeywell v. Sterling Furniture Co., 797 P.2d 1019

(Ore. 1990). Similarly, the Supreme Court of Minnesota has

held that juries should not be informed that a finding of a

certain percentage of comparative negligence on the part of

the plaintiff will serve to reduce the damages award by that

percentage. See Rosenthal v. Kolars, 231 N.W.2d 285, 288

(Minn. 1975). Juries are also not to be told of statutory caps

on damages, or, in antitrust and RICO case, that damages

will eventually be trebled. See Sasaki v. Class, 92 F.3d 232,

237 (4" Cir. 1996) (holding that informing a jury of a

statutory cap on damages for one of plaintiff's claims may

have led to an increased award on the non-capped claim);

HBE Leasing Corp. v. Frank, 22 F.3d 41, 45-46 (2d Cir.

1994) (holding that informing a jury of RICO’s treble

damage provision may confuse or prejudice jury into

lowering the award in order to counteract the trebling effect);

13082

Pollock & Riley, Inc. v. Pearl Brewing Co., 498 F.2d 1240,

1242-43 (5" Cir. 1974) (treble damages); Semke v. Enid

Automobile Dealers Ass’n, 456 F.2d 1361, 1370 (10® Cir.

1972) (treble damages); Weiss v. Goldfarb, 713 A.2d 427,

480 (N.J. 1988) (holding that informing a jury of a statutory

cap on damages that applied to one defendant may have led

the jury to increase the amount of damages allocable to other,

non-capped defendants). The message from these cases is

the same: juries are to be kept free of any outside influence

that might lead them to inflate or reduce their damages award

in order to “secure justice” for the parties. See Rosenthal,

231 N.W.2d at 288.

In cases involving settling and non-settling defendants,

several states provide by statute that in ne fault, the

jury cannot be told of a settlement or its terms. Conn.

Gen. Stat. § 52-216a; Fla. Stat. Ch. 768.041; Maine Rev.

Stat. Ann. § 163; N.H. Rev. Stat. Ann. § 507:7-i; N.Y.

C.P.L.R. 4533-b (McKinney). The reason for this is the

danger that the jury will adjust its award of

according to the amount of the settlement. See Builder’s

Square, Inc. v. Shaw, 755 So.2d 721, 725 (FI. Ct. App.

1999). If the jury perceives that the settlement amount is

low, for example, it might be tempted to increase the amount

of fault allocable to the non-settling defendants in order to

maximize the plaintiffs recovery.

In Minnesota, a state that has recognized the validity of

agreements similar to the cede back provision in this case,

the Supreme Court has held that the existence of a Pierringer

release may be admissible for limited Purposes such as to

show witness bias. The court must exercise its discretion,

however, as to what details of the agreement should be

provided to the jury, and “as a general rule the amount paid

in settlement should never be submitted.” Frey v. Snelgrove,

269 N.W.2d 918, 923 (Minn. 1978). Thus, the existence of

an agreement between the parties is clearly relevant should

the settling defendant attempt to testify at trial in a manner

favorable to the plaintiff. The details of the agreement should

not

13083

be disclosed, though, and the evidence admitted should be

limited to avoid distorting the jury’s deliberations on

damages. See id. See also 23 Wright & Miller, Federal

Practice and Procedure § 5311 (commenting that when

evidence of a settlement agreement is admissible to show

witness bias, "it is true that often the fact of a compromise

will suffice to show bias and that exploring the details will

increase the prejudice to the opposing party without any

appreciable effect on the credibility of the witness”’);

Restatement (Third) of Torts: Apportionment of Liability §

24, Reporters’ Note, comment i (recommending that when

the fact of a settlement agreement is admissible to show

witness bias, the agreement itself should not be admitted into

evidence, and that if it is, potentially prejudicial portions of it

should be redacted).

Therefore, it is clear that cede back agreements should

generally not be revealed to juries deliberating on punitive

damages. The only remaining question is whether any

particular circumstances in this case warranted an exception

from this general rule.

Ill. SPECIAL CIRCUMSTANCES

The plaintiffs argue that even if evidence of a cede back

agreement would ordinarily be kept from a jury, Exxon

should have volunteered it in this case to correct the false

impression Exxon created when it announced that it had paid

out $300 million in compensation requiring only receipts on

return when the correct figure was approximately $168

million. They further argue that the fact that the

exaggeration went uncorrected justifies the district court’s

decision to exclude the Seattle Seven from the plan of

allocation and render the cede back provision completely

unenforceable.

The plaintiffs rely on Lawson v. Trowbridge, 153 F.3d 368

(7" Cir. 1998). Lawson holds that otherwise inadmissible

evidence of indemnification may be admitted on cross-

examination to impeach a testifying defendant who intimates

13084

to the jury that he will be financially ruined by a large

damages award. See id. at 379. Lawson does not concern

the enforceability of the underlying indemnification

agreement.

We will not extend Lawson beyond its holding to justify the

district court’s exclusion of the Seattle Seven from the plan

of allocation on the basis of Exxon’s trial conduct. Denying

the Seattle Seven recovery on the basis of Exxon’s actions

would be manifestly unfair.

As for Exxon itself, we do not condone its conduct. The

exaggerations it made at trial, however, have little, if

anything, to do with the cede back provision. Exxon stated

that it had paid out $300 million requiring only receipts in

return; the only correction necessary was the alteration of

that figure to $168 million. There would have been no need

to mention the cede back provision, and thus no need to

disturb the general rule that such agreements should be

ordinarily be [sic] kept from the jury. Furthermore, the only

conceivable prejudice the plaintiffs could have suffered when

Exxon overstated its kine benevolence would have been

a downward adjustment by the Jury of the damages award,

and the proper remedy for such prejudice would be a new

trial on punitive damages. The plaintiffs have never claimed

that $5 billion was too low an award, however, nor have they

ever sought a new trial. Refusing to enforce the cede back

provision is not a remedy that relates to the error complained

of.

IV. OTHER ARGUMENTS

The plaintiffs raise on appeal two alternative arguments in

support of the district court’s decision to exclude the Seattle

Seven from the plan of allocation. F irst, the plaintiffs claim

that because the Seattle Seven “settled” their claims against

Exxon, they have no right to claim a share of punitive

damages regardless of the existence of the cede back

provision. It is clear, however, that the settlement agreement

did not contain a release of any claims; it merely “settled”

the matter of

13085

what would happen to the claims once the claims were

finally adjudicated. Second, the plaintiffs argue that public

policy precludes any agreement that diminishes the deterrent

effect of a punitive damages award. This argument runs

contrary to the law of this circuit, which permits

indemnification agreements and the settlement and release of

punitive damages claims. As exemplified by Larez, it is not

up to the jury to decide how much a defendant must actually

pay at the end of the day, or how much a plaintiff will

actually receive. We therefore reject both of the plaintiffs’

alternative arguments.

CONCLUSION

We hold that the district court abused its discretion in

approving the plan of allocation over the Seattle Seven’s

objection. Cede back agreements are lawful and enforceable,

and generally should not be disclosed to the jury. No special

circumstances in this case justify the district court’s refusal

to enforce the cede back agreement between Exxon and the

Seattle Seven. As a result, the existence of the cede back

agreement cannot justify exclusion of the Seattle Seven from

the plan of allocation.

The approval of the Allocation Plan is VACATED and the

matter is REMANDED.

13086

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

SEA HAWK SEAFOODS, INC.: ) No. 99-35878

COOK INLET PROCESSORS,

INC.; SAGAYA CORP.; WILLIAM ) D.C. No. CV-89-

McMURREN; PATRICK L. ) 00095-HRH

McMURREN; WILLIAM W.

KING; GEORGE C. NORRIS;

HUNTER CRANZ; RICHARD

FEENSTRA; WILDERNESS

SAILING SAFARIS; SEAFOOD

SALES, INC.; RAPID SYSTEMS

PACIFIC, LTD.,

MEMORANDUM!

)

;

Plaintiffs-Appellees, )

and

WESTERN ALASKA FISHERIES,

)

Claimant-Appellant,

EXXON CORP., a New Jersey

Corp.,

l This disposition is not appropriate for publication and may

not be cited to or by the courts of this circuit except as may

be provided by 9" Cir. R. 36-3.

Defendant,

and

DISCOVERY MASTER,

Appellee. |

Appeal from the United States District Court

for the District of Alaska (Anchorage)

H. Russel Holland, Chief Judge, Presiding

Argued and Submitted November 9, 2000

San Francisco, California

Before: SCHROEDER, Chief Judge, BROWNING,

KLEINFELD, Circuit Judges.

Western Alaska Fisheries, Inc. appeals the district court’s

approval of a plan of distribution, which excluded them from

recovering a portion of the $5 billion punitive damage

verdict against Exxon for the Valdez oil spill on the ground

that they had failed to file an independent lawsuit against

Exxon. We review a district court’s approval of a plan of

distribution for abuse of discretion but consider any legal

questions de novo. See In re Exxon Valdez, 229 F.3d 790,

795 (9" Cir. 2000); In re Mego Financial Corp. Sec. Litig.,

213 F.3d 454, 460 (9® Cir. 2000).

The time periods for filing notices of appeal are governed

by Fed.R.App.P. 4. These periods are “mandatory and

jurisdictional.” Browder v. Director, Dep’t of Corrections,

434 U.S. 257, 264 (1978) (quoting United States v.

Robinson, 361 U.S. 220, 229 (1960)); see also Vahan v.

Shalala, 30 F.3d 102 (9" Cir. 1994). Unless the notice of

appeal is filed within the time fixed by Rule 4, we lack

jurisdiction. See Torres v. Oakland Scavanger Co., 487 U.S.

312, 317 (1988).

Under Fed.R.App.P. 4(a)(3), “If one party timely files a

notice of appeal, any other party may file a notice of

within 14 days after the date when the first notice was 2

Exxon filed a timely notice of on August 20, 1999,

Western Alaska filed a notice o four days later,

within the 14 days permitted by Rule 4(a)(3). Western

Alaska’s notice of appeal was therefore timely,

Fed.R.Civ.P. 23(c)(1) authorizes district courts to alter or

amend class certification orders only “before the decision on

the merits.” The reference to “before” lainly implies

disapproval of such alteration or amendment “afterward.”

Vizcaino v. U.S. District Court, 173 F.3d 713, 721, as

amended 184 F.3d 1070 (9 Cir. 1999). The mandatory

punitive damages class, as defined in the class certification

order and Plan of Allocation, consisted of all persons and

entities that “possess” or “have asserted” a claim for punitive

damages against Exxon arising from the spill. Western

Alaska plainly met the class definition. The “timely lawsuit”

requirement narrowed the mandatory class, excluding

seafood processors that had relied on the plain language of

the class certification order and notice. Such notice

expressly instructed that putative class members need not

have brought a lawsuit in any court to be a member of the

mandatory class and that they could not file an independent

lawsuit once the class was certified. The class definition was

reaffirmed in the Plan of Allocation, which imposed a

“timely lawsuit” requirement on only one of the fourteen

claim categories, the “Area Businesses” category. At no

point prior to the jury verdict was a “timely lawsuit”

requirement imposed on seafood processors; Rule 23(c)(1)

prohibits imposition of one afterward. As the order

approving the seafood processor plan of distribution was

entered on July 23, 1999, nearly five years after the jury

returned its punitive damage verdict against Exxon and

nearly three years after judgment was entered on the $5

billion award, addition of the “timely lawsuit” requirement

was untimely and an abuse of discretion

There is no merit in Plaintiff's argument that punitive

damages are unavailable, as a matter of law, to persons who

have not asserted compensatory damage claims through an

independent lawsuit. Under federal law, including federal

maritime law, punitive damages are available to any person

or entity that suffered actual injury arising from a

defendant’s violation of a federally protected right,

independent of whether legal injury is established at trial.

See Passantino v. Johnson & Johnson Consumer Products,

Inc., 212 F.3d 493, 514 (9® Cir. 2000) (“[P]unitive damages

may be awarded in the absence of compensatory or nominal

damages, as long as the plaintiff has shown that the

defendant violated a federally protected right.””); Bise v. Int’

Brotherhood of Electrical Workers, 618 F.2d 1299, 1305-06

(9 Cir. 1979) (punitive damages are permissible to vindicate

invasion of protected federal nghts, even where plaintiffs fail

to prove legal entitlement to compensatory damages); Gill v.

Manuel, 488 F.2d 799, 802 (9 Cir. 1973) (“[A]n award of

compensatory damages i is not a necessary prerequisite to an

award of punitive damages [under 42 U.S.C. § 1983].”).

The “timely lawsuit” requirement in the seafood

processor plan of distribution is vacated, with instructions to

allow Western Alaska to share in the punitive damages

recovery on the same basis as the other 33 eligible seafood

processors.

VACATED AND REMANDED.

FILED

JUL 23 1999

UNITED STATES DISTRICT COURT

DISTRICT OF ALASKA

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ALASKA

In re: )

) Case No. A89-095-

The EXXON VALDEZ ) CV

(Consolidated)

THIS DOCUMENT RELATES TO )

ALL CASES )

ORDER NO. 348

FINAL APPROVAL OF THE PLAN OF DISTRIBUTION

OF ALLOCATIONS TO THE PROCESSOR CLAIM