The Ninth Circuit upheld the district court's determination that appellants were properly denied compensation from the Trans-Alaska Pipeline Liability Fund (the Fund) for business losses allegedly resulting from the 1989 Exxon Valdez oil spill. The Fund, established in 1973 by the Trans Alaska Pipeline Authorization Act (the Act),112 imposes strict liability for damages caused by Alaska crude oil spills transported through the Trans-Alaska pipeline and loaded onto vessels at pipeline terminals. Money for the fund comes from a tax on oil moving through the pipeline.

In 1990, the district court ordered that the Fund be used to reimburse losses caused by the Valdez oil spill. More than 29,000 claims were filed. Although the Fund instituted an expedited claims process, it repeatedly extended deadlines to submit documentation supporting those claims. Appellants argued that the Fund's expedited claims process violated due process because the Fund required claimants to submit information to the Fund within 30 days of the spill. However, the Ninth Circuit reiterated that under Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519 (1978), the court will defer to an administrative agency's procedures absent constitutional constraints or compelling circumstances. Given the number of pending claims, the court found that the procedure and deadlines adopted by the Fund were reasonable.

Appellant businesses also argued against the Fund's determinations that their losses were not proximately caused by the Valdez spill. Recovery under the Act is properly denied for damage not caused directly by the oil spill, but flowing from a series of intervening events triggered by the spill. The Fund denied all four appellants claims because the business losses suffered were too remote due to the presence of intervening causes, or were too remote geographically to qualify as "caused by the spill."

The Ninth Circuit upheld this decision. In deciding whether a loss was caused by the spill, the Fund may consider remoteness of time, place, and other factors. Because the determination of proximate cause is largely factual, judicial review is deferential. The Fund's determinations were consistent with the Act's purpose that funds be used for "damages arising out of the physical effects of oil discharges . . . [not] remote and derivative damages."113