People in theIndustry pg. 3

Liberty Mutual’sGolden Eagle pg. 8

Win $500 pg. 11

• Erin Brockovichand Exxon pg. 4

• Erin Brockovichand Exxon pg. 4

Visit us online at www.adjuster.com

Winter 2002 • Volume 4, Issue 2

T h e M a g a z i n e f o r C l a i m s A d j u s t e r sT h e M a g a z i n e f o r C l a i m s A d j u s t e r s

T h e N e w s M a g a z i n e F o r C l a i m s A d j u s t e r s2

Robert Warne,Managing Editor

From the EditorAs the leaves turn brilliant shades of red and yellow, and with the slightest breeze are

blown to the ground forming a leaf blanket for the earth to protect itfrom the fast approaching winter season, think of claims. Because whilethe various shades of our industry color the claims of today, with thedawning of another year, they become the fabric of our past and form aquilt of experience that will be there for you when things get cold.

For many, seeing SB 71 fade into the sunset was a beautiful sight.The workers’ compensation benefits increase legislation was no T-bone.There were attempts to trim the financial impact of the legislation, but inits final form there was more fat than meat, prompting Gov. GrayDavis to throw it all out.

SB 71 did highlight the fact that most everyone agrees a benefitincrease is needed along with workers’ compensation reform. It will be interesting to see if thiswill happen as a result of some silver bullet legislation or if voters will be called to the polls.Much of this may be left for the new insurance commissioner and his administration to sortout.

With the commissioner’s race gaining momentum it is sure to incite some passionatediscussions because this will be the first elected insurance commissioner since ChuckQuackenbush’s 1998 re-election. Voters have a wide selection of possible candidates tochoose from.

Commissioner Harry Low chose not to run, and instead focus his energies onreforming the workers’ compensation system in California. When he announced his decision torecommend a 10.2 percent pure premium increase for 2002 he said, “I plan to work activelywith all those involved to ensure California has a fair and viable workers’ compensationmarket.”

The 10.2 percent increase may just be a starting point for Low since the Workers’Compensation Insurance Rating Bureau has now recommended a 15.6 percentincrease.

So on the eve of policy renewals across all commercial lines, we’re in a different positionthan we ever were before the events of Sept. 11. These events impacted the insurance industryacross the board. Insurance companies and reinsurance companies were not only hit withextraordinary claims resulting from Sept. 11, insurers and reinsurers with office space in theTwin Towers suffered from the tragedy directly.

While insurers and reinsurers have been able to cover all of the claims from Sept. 11, theyare maxed out and need backing from the federal government for a couple of reasons. One,they need protection from a chain of future similar events. Two, companies rely on insurers foradequate levels of liability coverage at a reasonable cost to get loans and maintain business asusual operations.

And if adjusters weren’t already under enough pressure, the California SupremeCourt recently ruled that insurance companies could be held liable for failing to coverNorthridge earthquake damages its adjusters mistakenly overlooked despite expired deadlines.

As you can see, there is a lot going on around us. I hope you find the articles aboutExxon Valdez and Liberty Mutual/Golden Eagle informative and entertaining.Break out your claims blanket of experience, get cozy, and please enjoy this issue ofadjuster.com Magazine.

People in the IndustryBy Robert Warne

and Michelle Logsdon

3

Brockovich Takes on Another Industry's Heavyweight: ExxonBy Michelle Logsdon

and Robert Warne

4

Free Bird: Golden Eagle Post '97By Robert Warne

8

Win $500 CashHappy Holidays from adjuster.com

11

INSIDETHIS ISSUEC

ONTENTS

•

CONTACTS

EDITORIAL STAFF

Managing Editor: Robert Warne rwarne@adjuster.com

Senior Correspondent: Michelle Logsdonmlogsdon@adjuster.com

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Moorpark, CA 93021Tel: (805) 531-6760Fax: (805) 531-6764www.adjuster.com info@adjuster.com

T h e N e w s M a g a z i n e F o r C l a i m s A d j u s t e r s

More than a decade after theExxon Valdez spilled 11million gallons of crude oil into

Alaska’s Prince William Sound, the claimscontinue to spill forth as the big guns arecalled in to clean up the mess. Theirnames are Edward Masry and ErinBrockovich.

Masry is a partner at the law offices ofMasry & Vititoe in Westlake Village, CA.He, and his legal investigator Brockovich,are partnering with Anchorage, AKattorney Michael Schneider toinvestigate health claims possibly linkedto the Exxon cleanup in March of 1989.

These types of lawsuits are nothing newfor Masry and Brockovich. The duo gainedfame after a March 2000 movie namedafter Brockovich chronicled their landmark

suit against Pacific Gas & ElectricCo. (PG&E). The company was foundliable for releasing toxins into thegroundwater of Hinkley, CA causingsignificant health problems for hundredsof residents.

Today the team is taking on Exxon (nowExxonMobil) and its cleanup partnersVECO Corp. alleging the oil spillcleanup caused chronic health problemsfor hundreds, maybe even thousands, ofclean-up workers.

Approximately 11,000 people from acrossthe country converged on Prince WilliamSound to help remove the North Slopecrude oil polluting 15,000 miles ofcoastline. They worked 12-hour days for14 days straight, then had seven days off.Some came as stewards of theenvironment, others came for the money;

but many claim they left with much morethan a good feeling and a pocket full ofcash.

Since the spill, hundreds of workers havereported respiratory problems, some havenervous system dysfunctions, and othershave died from cancer. According to a 1989document of the Alaska StateWorkers’ Compensation ClaimSystem, a total of 1,811 claims were filedby oil spill clean-up workers. Of those, 264were respiratory illnesses, 44 weredermatitis, 34 were poisoning, and 235 werecategorized as ill defined or other.

Masry and Brockovich want to talk to thosepeople and anyone else who worked on thesite and is suffering health problems now.Brockovich sent out a letter Oct. 25 seekingcandidates for the lawsuits. “If you realize,

after you read this letter, that your healthproblems could stem from chemicaloverexposure – chemical poisoning – duringthe cleanup, I encourage you to contact myoffice.”

Masry and Brockovich created aquestionnaire to send to potential clients.They will review those forms with the help ofa toxicologist and create a list of plaintiffs.“Based upon the inquiries we have so farwe probably will proceed,” Masry toldadjuster.com. “It looks like we will havein the low hundreds of people who becamepermanently disabled or injured as a resultof this.”

It All Started with a Book and a MovieThe plight of these workers was brought tothe attention of Masry and Brockovich byMarine Biologist Riki Ott. An Alaska

resident, Ott was working as a spokespersonfor the commercial fishing industry when shestarted writing a book about the spill and itsaftermath. At first she focused on theenvironmental impacts. Later she looked atthe effects on people. Last year, when shestarted to compile her data she noticedsimilar health complaints among clean-upworkers. She believed they were consistentwith toxic exposure.

She heard stories like that of GarryStubblefield. During the cleanupStubblefield operated a barge crane thatsprayed high pressure, hot water on thecoastline. He was surrounded by oily mistand exhaust throughout his two-month stinton the project. At that time he began tosuffer from coughing, wheezing andshortness of breath. Stubblefield’s doctorsdetermined that he had chemical poisoningand said he might eventually develop cancer.Stubblefield has not worked since thecleanup.

Ron Smith hauled oily trash off thebeaches and transported beach crews in asmall skiff. He remembers seeing oil vaporswafting off the water. Smith cleaned his boatdaily with industrial solvents. He quicklydeveloped chronic headaches. Later hesuffered from depression, fatigue, achy joints,

4

Brockovich Takes On Another

Erin Brockovich

FEATURE

…many claim they left with much more thana good feeling and a pocket full of cash.

Visit us online for more news and features at www.adjuster.com

By Michelle Logsdon, Senior Correspondentand Robert Warne, Managing Editor

T h e N e w s M a g a z i n e F o r C l a i m s A d j u s t e r s

stomach problems and memory lapses. Achemical decontamination clinic discoveredhigh levels of chemicals found in crude oiland cleansers in Smith’s blood. Smith wastreated for chemical poisoning and his healthhas improved somewhat but not fully.

Ott took these stories, and several others,and produced a video that she sent tolawyers and media across the country,including Masry and Brockovich. She washoping to find strong support from the legalcommunity. Ott told adjuster.com, “Ifigured if I asked for the moon I just mightget it.”

She did.

Yes, Oil is Dangerous But Not ThatDangerous?While Brockovich scans the nation forchemical poisoning victims from the spill,Exxon and some federal officials say shewon’t find any that were actually poisonedby the oil.

The National Institute forOccupational Safety and Health(NIOSH) conducted three separateinvestigations of the clean-up efforts.According to its report dated May 1991,“Inhalation exposure to volatile components

of ‘weathered’ crude oil was insignificant forthose work situations evaluated.”

Crude oil is composed of several toxicelements, most notably hydrocarboncompounds such as benzene, but most of thesecomponents, according to the NIOSH report,are significantly weakened after 24 to 48 hoursof exposure to the marine environment. “Themost toxic components in fresh crude oilevaporate quickly and would not have been ofconcern to those responding to the spill,” saidExxon spokesman Tom Cirigliano.

Some workers and their families disagree.Sandy Elvsaas told the Los AngelesTimes that her brother Tim Burt steam-cleaned the oil tanks at the spill site. She saidhis lungs were covered with oil and began tofail according to his doctors. Burt was takingpainkillers for his terrible headaches but after

awhile they stopped working. He hadmentioned to his sister that he wanted to die.In 1995 Burt died of a drug overdose. “Hefigured he had nothing to lose,” said Elvsaas.“He was dead already.”

NIOSH investigators point out in their reportthat the “weathered” crude oil is potentiallyhazardous if it touches skin. “There was stillconcern that the crude oil, even in its‘weathered’ state, might still pose a health riskfrom skin exposure (dermatitis and skincancer).”

Jim Reynolds of Hampton, VA knows thatall too well. Reynolds told the Los AngelesTimes he worked as a mechanic on oil-skimming boats at the spill. After three monthson the project he developed a swollen, itchyrash that resurfaces to this day if he gets toohot or sweaty. The rash was diagnosed as areaction to the oil.

Of the 1,811 workers’ compensation claimsfiled by clean-up crewmembers, 24 turned into

lawsuits over toxic injury. Eight of thosecases were dismissed and seven weresettled. Frank Sprow, Exxon’s vicepresident of safety, health & environment,said in a prepared statement, “Fewer than25 of the 15,000 workers have filed suitalleging health problems arising from theirinvolvement in the cleanup. These claims,which are no longer pending, were highlyindividualized, revealing no pattern in termsof symptoms and no evidence of a causeand effect relationship.”

Hidden DocumentsBut some people think a pattern didemerge among the workers and residentsof Valdez: consistent complaints of upperrespiratory infections. The NIOSH reportacknowledges the pattern but attributes itto a virus, “Upper respiratory infectionsamong workers were reportedly common,their spread presumably facilitated by thecrowded living conditions.” The illness wasdubbed the “Valdez Crud.”

5

Industry’s Heavyweight: Exxon

(continues on page 6)

The Exxon Valdez spilled 11 million gallonsof crude oil; polluting more than 15,000miles of Prince William Sound coastline.

FEATURE

The illness was dubbed the “Valdez Crud”

Workers had to use industrial-strengthcleaners to remove the oil from therocks.

T h e N e w s M a g a z i n e F o r C l a i m s A d j u s t e r s

Accurate medical records for the ill workerswere difficult to obtain. NIOSH was unable todistinguish between the Anchorage hospitalrecords of oil spill workers and those ofpatients not involved in the cleanup. Routinemedical testing of the workers was consideredbut not implemented because it was deemedunnecessary.

Yet during Stubblefield’s case against Exxon,his attorney Dennis Mestas uncovereddocuments showing crewmembers visited thehospital 6,722 times for respiratory illness. Thatnumber may include more than one visit perpatient but if not, then nearly half of thepeople working on the spill suffered from thesame malady.

Because most of the workers on the site wereVECO employees, some sources say thecompany made it difficult to obtain healthrecords for the clean-up crew. “I am not awareof any time during the spill that this companyrefused to give information to the officials whorequested it,” Jamie Slack, vice presidentand manager of personnel services for VECO,told adjuster.com. “That is not how we dobusiness.”

“Tide Just Wouldn’t Cut the Grease”VECO, as the organization in charge of thecleanup, is as much under the gun as Exxon.Brockovich and Ott believe many of the long-term health problems of the workers can betraced back to the dispersants and solventsused to clean the oil off of the beaches andwash the crew’s protective equipment.

Leona McJemsey worked in thedecontamination unit where she did thelaundry for the oil recovery technicians(ORTs). She used industrial cleaners likeSimple Green and De-Solv-It® to clean theiryellow rain slickers, hard hats, gloves, andrubber boots. McJemsey suffered from sorethroats while working at the cleanup.Afterwards she was sensitive to chemicalssuch as perfume and often had dizzy spellsand hives. McJemsey settled with Exxon in1994 for $10,000 according to theAnchorage Daily News. She died fromcancer two years later.

Several different solvents and cleansers wereused including Simple Green, De-Solv-It®,CitroClean and Inipol. Industrial cleaners likethese contain 2-butoxyethanol “a potentlung irritant when inhaled at any level,” saidBrockovich.

Exxon provided the workers with MaterialSafety Data Sheets (MSDSs) for each of the

chemicals to be used during the cleanup. TheMSDS explains the short- and long-termhealth effects that are possible throughoverexposure to that chemical. The MSDS for2-butoxyethanol describes it as a skin andeye irritant that is poisonous if inhaled oringested. Overexposure to 2-butoxyethanolcan damage the blood, kidneys, centralnervous system, and lungs.

During the cleanup Phyllis La Joievolunteered to do the same work asMcJemsey in the decontamination unit.Cameras were not allowed in most areas ofthe cleanup but La Joie worked on a bargewhere she could take pictures so she made ascrapbook documenting her work. “Theyshowed her working in a non-ventilatedlaundry room,” said Ott. “In the pictures youcan see Simple Green bottles on the shelf.”In a court deposition, according to Ott, LaJoie said, “Tide just wouldn’t cut thegrease.” La Joie also said her life has beenruined by her act of good faith in 1989. Shenow has diabetes, emphysema, asthma, an

enlarged liver, and problems with herintestinal system.

“They were working with very, very strongsolvents,” said Masry. “Imagine how strong asolvent must be if it’s going to take crude oiloff of an object. These solvents were probablyfar more dangerous than the crude oil itself.”

Not only were the chemicals dangerous in andof themselves, some workers say the way theywere handled could have made them lethal.

Safety QuestionsLa Joie admits she rarely wore a respirator inthe decontamination unit because they werenot available.

“When this disaster occurred, of coursenaturally what Exxon, and not only Exxon buteverybody wanted was to clean it up as fastas possible,” said Masry. “A lot of peoplejumped into the breach, including Exxon,without really saying to themselves, ‘Well, wait

a minute are we getting into more hot waterby just jumping in here or should we wait forthe equipment to arrive.’”

Everyone involved in the cleanup agrees thespill was unprecedented in size and scope butExxon and VECO officials say safety was stilltop priority. Sprow said, “Worker safety hasalways been an absolute requirement for us[Exxon].”

“This was not a rush job,” said Slack. “Everypossible thing was addressed for safetyequipment. For this size of effort, there wereno corners cut on safety. Safety was of theutmost concern.”

Yet carrying out the commitment to safety onsite was a different story in some respects. TheNIOSH report confirms that equipment wasnot always available or workers chose not touse it.

The standard issue of Personal ProtectiveEquipment (PPE) for each worker included:

6

Brockovich (continued from page 5)

Beach cleaners worked 12-hour days fortwo weeks straight. They were notrequired to wear respirators.

FEATURE

“This was not a rush job”

T h e N e w s M a g a z i n e F o r C l a i m s A d j u s t e r s

one pair of heavy cotton coveralls; oneTyvek® suit; one set of rain gear (pants andjacket); one pair of deck shoes; one personalflotation device; one pair of boots; six pairsof wool socks; one hard hat; one laundrybag; one pair of safety glasses; five pairs ofoil resistant gloves; and five pairs of cotton

work gloves. NIOSH said gloves were oftenin short supply and workers often took offthe Tyvek® suit because it was too hot. “Thewearing of PPE was not consistentlyenforced from work site to work site,” saidNIOSH. “When PPE was worn incorrectly,worker’s skin became visibly contaminatedwith ‘weathered’ crude.”

Masry said workers may not have beenfollowing the rules because of a lack oftraining. During a meeting in April of 1989key government, union, state, and industryofficials reviewed the situation anddetermined that it was not a hazardouswaste cleanup. That designation would haverequired 40 hours of training. Insteadworkers received four hours of training.

“They didn’t have time for a week’s worth oftraining,” said Masry. “You can imagine thechaos that must have been going on whenthese millions of gallons of crude oil werecoming up in the ocean, on the beach, onanimals. Someone in the government saidlets just waive the requirement. They reallyshould have been a little more careful, butyou can understand their predicament.”

The AftermathExxon points out that for a cleanup of thissize their safety record is commendable:there were only two fatalities during theproject. VECO officials make the same point.“We had 10,000 employees working at thetime of the spill and we were responsible forthem 24/7,” said Slack. He also said most ofthe injuries filed under workers’compensation actually happened during

non-working hours while employees wereparticipating in extracurricular activities.

Since the spill, Exxon has paid more than$300 million to workers and Alaska residents“directly affected by the spill,” said Cirigliano.The cleanup itself cost Exxon over $3 billion.

A recent federal appeals court overturned a1994 jury decision ordering the oil giant topay $5 billion in punitive damages tocommercial fisherman and other Alaskaresidents and businesspeople. The appellatecourt said $5 billion was excessive.

In Ott’s opinion it’s difficult to say whatamount is excessive. “Exxon paid $300million back in 1989 because the press washanging around and there was obvious short-term damage. But the long-term damageshaven’t been compensated for yet,” she said.“Basically the $300 million in 1989 was likeputting lollypops in our mouths so wewouldn’t whine to the press. If they don’twant us to whine now they need to give ussome more suckers.”

Lessons LearnedMasry said it would probably be about twoyears before any of the cases go to trial.Currently, he and Brockovich are working ona letter to send to members of Congressconcerning the availability of safetyequipment for disasters like the Exxon spill.They propose having a central storage unitwith full sets of equipment ready to respondto future emergencies. “We really think thatthere should be a central location becausethe Exxon Valdez may happen again: wedon’t know. We just think it is a good idea,”he said.

Masry hopes to gain government support foremergency preparedness but some accidents,like the Exxon spill, are unfathomable anddifficult to predict. The Exxon spill was amodel cleanup in some respects but many

lessons were learned from the mistakesmade. Congress is using that knowledgeto deal with the country’s latestunfathomable tragedy – Sept. 11.A decade-old slew of claims are helpingthe government prepare for the possibleonslaught of claims resulting from thecurrent cleanup at Ground Zero.

7

Injury/Ilness Data from the Alaska State Workers’

Compensation Claim System (1989)

Injury or Illness FrequencyAmputation/Enuclea 1Burn (Heat) 26Burn (Chemical) 13Concussion 7Infective/Parasitic 49Contusion, Crushing 144Cut, Laceration 150Dermatitis 44Dislocation 20Electric Shock 4Fracture 47Exposure to Low Temp 6Hearing Loss/Impairment 4Environmental Heat 4Hernia, Rupture 9Inflammation 36Poisoning 34Pneumoconiosis 1Radiation Effects 8Scratches, Abrasion 61Sprains, Strains 506Hemorrhoids 3Hepatitis 3Multiple Injuries 23Cerebrovascular 5Complications – Media 2Eye Disaster 15Mental Disorders 2Nervous System 19Respiratory System 264Symptoms & Ill-Defined 127No Injury or Illness 20Damage to Prosthetic 11Other Dis/Inj NEC 108TOTAL 1811

Source: Health Hazard Evaluation Report,HETA 89-200 & 89-273-2111; Exxon/ValdezAlaska Oil Spill; National Institute forOccupational Safety & Health; May 1991.

Workers wash the shoreline ofLatouche Island, Alaska after the ExxonValdez oil tanker ran aground in 1989.

FEATURE

“…the $300 million in 1989 was like putting lollypops in our mouths

so we wouldn’t whine to the press.”