- The Washington Times - Wednesday, January 28, 2004

ANCHORAGE, Alaska (AP) — A federal judge yesterday ordered Exxon Mobil Corp. to pay about $6.75 billion in punitive damages and interest to thousands of Alaskans affected by the 1989 Exxon Valdez oil spill.

Exxon Mobil has 30 days to appeal the order by U.S. District Judge Russel Holland, that the Irving, Texas, company pay $4.5 billion in punitive damages and about $2.25 billion in interest.

The money is to go to 32,000 fishermen, Alaska Natives, landowners, small businesses and municipalities affected by the 11-million gallon spill in Prince William Sound.

“We have now closed the trial-court doors for the last time in this litigation after 15 years,” said David Oesting, lead attorney for the plaintiffs. “We’re definitely on track to the end of the entire dispute.”

Exxon Mobil said it plans to appeal. Spokesman Tom Cirig-liano said the 9th U.S. Circuit Court of Appeals has twice vacated Judge Holland’s decision in the case.

The judge had been ordered by the appellate court to reconsider the damages awarded in an earlier ruling in light of a U.S. Supreme Court decision last year about punitive damages.

“This ruling flies in the face of the guidelines set by the appeals court,” Mr. Cirigliano said.

In 2002, Judge Holland reduced the Exxon punitive damages award to $4 billion after a three-judge panel sent the original $5 billion verdict back, saying it was excessive.

For his latest ruling, the judge was to consider a U.S. Supreme Court decision last year involving a Utah traffic accident and damages awarded in that case.

Attorneys from both sides argued that the Supreme Court case, State Farm Mutual Automobile Insurance Co. v. Campbell, supported their damages claims.

In that case, the Supreme Court ruled that a state-court jury’s award of $145 million to punish the insurance company was grossly excessive when actual damages were $1 million.

The high court held that the ratio of punitive to actual damages should not exceed single digits, or 9-to-1.

Exxon attorneys argued that injury to plaintiffs was only economic and damages should be based on a lower ratio.

But lawyers for the plaintiffs argued that the key issue is conduct, and that Exxon’s was among the worst.

They said Exxon knew that tanker Capt. Joe Hazelwood had alcohol problems but still allowed him to pilot the Exxon Valdez. Attorneys calculated the actual damages caused by the spill at more than $500 million, which equals roughly $5 billion when the 9-to-1 ratio is applied.

The spill occurred March 23, 1989, less than three hours after the 987-foot ship Exxon Valdez left the Alyeska Pipeline terminal in Valdez. The ship grounded at Bligh Reef, rupturing eight of its 11 cargo tanks and spewing about 10.8 million gallons of crude oil into the sound.

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