Exxon Valdez suit takes another twist

Once again, plaintiffs who have been waiting for a payout in the Exxon Valdez lawsuit will have to continue their wait.

The U.S. Supreme Court on Tuesday declined to decide whether Exxon Mobil Corp. should pay interest on punitive damages, which would nearly double the $507 million award punishing the company for its role in an oil spill that leaked 11 million gallons of crude oil into the fishing waters of Prince William Sound.

The lawsuit, which was filed within days of the 1989 oil spill, has been slowly making its way through the nation's appellate courts, winding up in front of the Supreme Court in late February. The high court in June cut the punitive award from $2.5 billion to $507 million and set a 1-to-1 ratio for punitive damages in maritime cases, based on the amount of compensatory damages awarded.

Exxon has balked at paying interest, which lawyers for the fishermen and other plaintiffs in the case estimate would bring the company's total payout to $1 billion. Tuesday, the Supreme Court officially sent the case back to the 9th U.S. Circuit Court of Appeals in San Francisco to determine the interest payments and the total punitive damages.

“We can look at a few more years, huh?” said Andrew Wills, a former herring fisherman who now runs an inn and bookshop in Homer. “It would have been really simple for them to just say ‘pay the interest.' I've given up the Supreme Court.”

But lawyers for the plaintiffs say it's not unusual for the Supreme Court to shift such a decision back to the 9th Circuit. They don't see Tuesday's move as a setback, said Stanford Law School professor Jeffrey Fisher, who argued the case for the plaintiffs in front of the Supreme Court.

“It is typical procedure for the Supreme Court to decide the big legal questions and to leave it to the lower courts to do the housekeeping,” Fisher said. “Having said that, we're going to do everything we can to bring this to a quick and expeditious close.”

Lawyers for the fishermen and other plaintiffs in the case have calculated that interest will add up to about $488 million, bringing the total amount that Exxon owes from the 1989 oil spill to nearly $1 billion. Minus attorney's fees, they had estimated that $628 million would be divided among the more than 32,000 plaintiffs in the case.

Their calculations are based on interest accruing since 1994, when an Alaska jury originally awarded $5 billion in punitive damages, an amount that was cut to $2.5 billion by an appeals court and then to $507 million by the Supreme Court. Lawyers for the plaintiffs calculated the interest on the $507 million, however, not on the original $5 billion award.

Exxon argued in its brief submitted to the Supreme Court that the amount the court decided on was “the legally correct amount necessary to deter Exxon and others from future oil spills,” and that there was no intent to allow millions more in interest to accrue.

The company continues to maintain that if interest is payable, it should be from the date the Supreme Court determined the damages – June 25.