Alaska editorial: It is time for Exxon to pay what it owes

Posted: Friday, January 05, 2007

This editorial appered in the Peninsula Clarion:

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It's a slap in the face. That's how many people in the state feel about the appeals court decision to cut in half a $5 billion jury award for punitive damages against ExxonMobil Corp. in the 1989 Valdez oil spill that smeared oil across roughly 1,500 miles of Alaska coastline.

This is the third time the appeals court has ordered the Anchorage court to reduce the award, the nation's largest at the time, saying it was unconstitutionally excessive.


In 1994, a federal jury found recklessness by Exxon and the captain of the Exxon Valdez, Joseph Hazelwood, who caused the tanker to run aground. That finding of malfeasance made Exxon liable for punitive damages.

According to official reports, the ship carried 53,094,510 gallons of oil, of which 10.8 million gallons spilled.

The accident was tragic for 34,000 fishermen and other Alaskans who had their property and livelihoods affected. Thirty-four thousand.

U.S. District Judge H. Russel Holland of Anchorage declared Exxon's conduct "reprehensible" and set the figure at $4.5 billion, plus interest, ruling that the Supreme Court's precedent did not directly apply to the case.

Holland reluctantly complied in 2002 and reduced damages to $4 billion. But it wasn't enough. The Irving, Texas-based Exxon appealed the decision again.

The next year, the appeals court ordered Holland to revisit his decision, and balance it against a new 2003 Supreme Court ruling that said punitive damages usually could not be more than nine times general damages. The Anchorage jury awarded $287 million in general damages - and issued punitive damages that were 17 times that amount.

Exxon appealed again, saying it shouldn't have to pay more than $25 million in punitive damages. Exxon, which earned $36.1 billion last year, the highest ever by any U.S. corporation, says it's spent more than $3 billion to settle federal and state lawsuits and to clean Prince William Sound.

Talk on the central Kenai Peninsula is no one will ever see any of the money, because Exxon has the power, the funds and the time to reduce the amount owed to zero. The sad part is 34,000 would never get their justice. Some of them already have long since died without seeing a dime.

Alaska has done its part to help make Exxon rich and successful. It's time for them to step up to the plate and pay their debt.

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