Appeals court orders Exxon to pay interest

By MARK THIESSEN

Associated Press Writer

Exxon Mobil Corp. was ordered June 15 to pay about $500 million in interest on punitive damages for the Exxon Valdez oil spill off Alaska, nearly doubling the payout to Alaska Natives, fishermen, business owners and others harmed by the 1989 disaster.

The ruling was issued by the 9th U.S. Circuit Court of Appeals in San Francisco.

In June 2008, the U.S. Supreme Court set punitive damages at $507.5 million. But two months later, the high court declined to decide whether Exxon Mobil must pay interest on the punitive damages awarded in the nation’s worst oil spill and instead sent it back to the appeals court.

The June 15 decision would double the average payout of about $15,000 for the nearly 33,000 claimants.

“We’re just happy that we’ve cleared another hurdle, and hopefully we can get the case tied up as soon as possible,” Stanford University law professor Jeffrey Fisher, an attorney for the plaintiffs, told The Associated Press June 15. “What we want more than anything now is just to bring this case to a close.”

Exxon could appeal the decision on the interest payments to the Supreme Court. A spokesman for Exxon told the AP in an e-mail that the company would comment after the decision has been reviewed.

The case grew out of the 1989 crash of the Exxon Valdez, a supertanker that dumped 11 million gallons of crude oil into Alaska’s Prince William Sound, fouling 1,200 miles of coastline.

Plaintiffs originally were awarded $5 billion, but that amount was cut in subsequent appeals by Irving, Texas-based Exxon.

A jury decided in 1994 that Exxon should pay $5 billion in punitive damages. In 2006, a federal appeals court cut that verdict in half.

The Supreme Court last June slashed the $2.5 billion punitive damages award to $507.5 million.

Exxon had contended that if interest were paid, it should be calculated from the date the punitive damages were set last year by the Supreme Court. But in the June 15 ruling, the court said interest on the $507.5 million judgment should run from 1996, when the original settlement was entered into court records, at a rate of 5.9 percent.

The spill killed hundreds of thousands of birds and other marine animals, inflicting environmental damage from which the region has not fully recovered, according to numerous scientific studies.

ExxonMobil countered that many studies have found the area healthy and thriving. The company had argued punitive damages would be excessive punishment on top of the $3.4 billion in cleanup costs, compensatory payments and fines it already has paid.

Exxon maintained it should not be liable for the actions of the supertanker’s skipper, Joseph Hazelwood, when the nearly 1,000-foot vessel ran aground with 53 million gallons of oil in its hold.

According to prosecutors, Hazelwood was drunk, but he denied it and was acquitted of the charge in criminal court.