ANCHORAGE - Oil giant Exxon Mobil Corp. has decided not to appeal hundreds of millions of dollars in interest on punitive damages resulting from the 1989 Exxon Valdez oil spill.
The Irving, Texas-based company will pay approximately $470 million in interest on more than $507.5 million in punitive damages following the 11-million gallon spill of crude in Prince William Sound, company spokesman Tony Cudmore said Monday.
The company expects to make payment on the interest in the next few days, said plaintiffs' lawyer David Oesting. Exxon's decision was first reported Monday by the Anchorage Daily News.
"I think they recognized they weren't going any further from a legal standpoint," he said.
The decision is a turnaround for the company. Exxon Mobil since the mid-1990s has appealed court rulings on punitive damages.
"They repeatedly lost in court on the point," Oesting said.
Earlier this month, Exxon Mobil was ordered to pay interest on the punitive damages. The ruling issued by the 9th U.S. Circuit Court of Appeals in San Francisco nearly doubled the payout to Alaska Natives, fishermen, business owners and others harmed by the environmental disaster that fouled 1,200 miles of shoreline.
Numerous studies have found the region has not fully recovered from the disaster, the nation's worst crude oil spill.
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 and instead sent it back to the appeals court.
Cudmore said he couldn't elaborate much on why Exxon Mobil decided to pay interest, except to say the company felt it should adhere to the appeals court decision.
Exxon argued unsuccessfully that if interest had to be paid, it should be calculated from the date the punitive damages were set last by the Supreme Court. But the appeals 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 legal battles over the Exxon Valdez spill have dragged on for years but now appear to be coming to an end. The only remaining sum in dispute is $70 million in court fees, Cudmore said.
"We believe that given the Supreme Court's decision last year that that amount should not be payable," he said.
An Anchorage jury in 1994 awarded plaintiffs $5 billion. That was cut in half by the 9th Circuit. The Supreme Court in a split decision reduced the total to $507.5 million.
Oesting said the plaintiffs' have "clearly prevailed" in the case, even if the original $5 billion judgment against Exxon Mobil was drastically reduced.
Monday's decision doubles the average payout of about $15,000 for the nearly 33,000 claimants.
About three-quarters of the plaintiffs can expect to receive the money by mid-August, Oesting said.
"What is owed is getting paid now," he said.