Exxon Valdez case sent back to Alaska court

David Koenig

Associated Press business writer

The 9th U.S. Circuit Court of Appeals in San Francisco has again ordered a court in Alaska to reconsider a multibillion dollar punitive damages award against ExxonMobil for the Exxon Valdez oil spill.

ExxonMobil said Aug. 22 it should pay no more than $25 million in damages.

A jury in Alaska approved a $5 billion award to punish the company for spilling 11 million gallons (41.6 million liters) of crude oil into Prince William Sound in 1989.

In 2001, the 9th U.S. Circuit Court of Appeals said the award to fisherman and other Alaskans was excessive and sent it back to U.S. District Court in Anchorage, which reduced the award to $4 billion last year.

Both sides appealed. Exxon Mobil said the reduced figure was still too high because of a U.S. Supreme Court decision this year that a $145 million punitive damage award against State Farm Insurance was excessive.

The decision to review the Valdez award was not a surprise. State and federal appeals courts throughout the nation have been reviewing other cases in light of the Supreme Court ruling in the State Farm case.

After the State Farm case, ExxonMobil spokesman Tom Cirigliano said the punitive damages should be as low as $25 million, which he said is the amount ExxonMobil has been ordered to pay for actual damages from the spill.

David Oesting, lead counsel for the 32,000 plaintiffs in the case, said the State Farm case was unrelated. He said sending the case back to Alaska would drag it out another six to 12 months.

ExxonMobil said it cleaned up the spill and voluntarily compensated those who claimed direct damages. The company said it paid $300 million immediately to more than 11,000 Alaskans and businesses affected by the spill, $2.2 billion more for cleanup operations from 1989 to 1992, and $1 billion in settlements with the state and federal governments.