Appeal threatens Exxon Valdez payments

The Associated Press

Prince William Sound commercial fishermen have waited 19 years for punitive damages against Exxon Mobil Corp. in the nation’s worst oil spill, and now that a payout is imminent, another delay may be coming from those expecting a piece.

Lawyers for Sea Hawk Seafoods Inc., a Seattle-based company that ran a fish-processing plant in Valdez, have filed court papers objecting to the allocation plan.

They are seeking a new plan that conforms to the U.S. Supreme Court ruling in June, which awarded up to $507.5 million in punitive damages to nearly 33,000 commercial fishermen, cannery workers, land owners, Alaska Natives and others who claimed harm from the 1989 crude oil spill. The plaintiffs had been seeking $5 billion.

After the Supreme Court decision, lawyers for the plaintiffs and Exxon worked out a partial settlement under which Exxon agreed to release $383 million.

The money was to be distributed under an allocation plan approved in 1996 by Anchorage federal Judge H. Russel Holland, and Sea Hawk contends that it is flawed.

According to the company, the Supreme Court decided that the size of punitive damage awards must be proportional to the size of compensatory damage awards already paid to plaintiffs. The company argues the current plan assigns some plaintiffs larger or smaller shares than they deserve.

If the company prevails in its objection, it’s likely that cannery workers would be awarded more money than called for in the current plan, and commercial fishermen would receive less.

Plaintiffs will fight change

“They just want a whole lot more money that they’re not really entitled to, in my opinion,” Oesting said.

If Sea Hawk gets its way, many other plaintiffs would be deprived of shares they’ve long expected, he said.

Oesting estimated the Sea Hawk challenge could take 18 months. Until then, the money can’t be paid out, he said.

Frank Mullen, a Homer commercial salmon fisherman, said he and other plaintiffs were exasperated by how long it took the courts to decide on punitive damages. Some plaintiffs have since died, and the Sea Hawk motion only adds to the frustration, Mullen said.

Fishermen were hoping the settlement with Exxon might yield checks between Thanksgiving and Christmas, Mullen said.

He’s hoping the judge will deny the company motion. It was difficult enough getting thousands of people to agree on the allocation plan, which includes numerous classes of plaintiffs, and it would be calamitous to reopen that debate, Mullen said.

Sea Hawk’s lawyers argue it would be fairly simple to replace the allocation plan with a new one leading to “a fair and expeditious distribution” of punitive damages.

Holland warned last year it would be “an embarrassment” to allow infighting to delay a payout.