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Supreme Court won't rule on Exxon interest

Order says 9th U.S. Circuit Court of Appeals should decide in punitive damages case

Posted: Wednesday, August 13, 2008

ANCHORAGE - The U.S. Supreme Court on Tuesday declined to decide whether Exxon Mobil Corp. must pay interest on punitive damages awarded in the nation's worst oil spill.

In a brief order, the court said the 9th U.S. Circuit Court of Appeals, based in San Francisco, should decide the matter of interest arising from punitive damages for victims in the 1989 Exxon Valdez disaster.

Stanford University law professor Jeffrey Fisher, an attorney who represents commercial fishermen, Alaska Natives, landowners, businesses and local governments in the case, said justices rejected Exxon Mobil's bold attempt to take away interest.

"It's nice to see the court refusing to do the outlandish thing Exxon wanted," Fisher said.

The issue is whether interest accrued since 1994, when a federal jury first awarded punitive damages for the supertanker's spill of 11 million gallons of crude oil into Alaska's Prince William Sound.

The company contends that if interest is paid, it should be calculated from the date the punitive damages were awarded by the Supreme Court, not all the way back to 1994, said Exxon Mobil spokesman Alan Jeffers. The company will pursue that contention with the 9th Circuit.

"We will participate in that process on the timetable that's mandated by the court," he said Tuesday.

Fishermen and others affected by the spill said if interest is not owed from the earlier date, the value of the award when adjusted for inflation would be cut in half.

The jury in 1994 awarded $5 billion. That was cut in half by the 9th Circuit. The Supreme Court in late June, by a 5-3 vote, reduced the total to $507 million.

Interest calculated since 1994 would add an estimated $488 million, boosting awards to individuals from roughly $15,000 to about $29,400.

The 9th Circuit Court of Appeals has never not awarded interest in a similar case, Fisher said.

"We have no reason to think the court would deviated from its precedent," he said.

Fisher said his main concern is to have the money paid out expeditiously to clients who experienced the effects of the spill nearly 20 years ago.

Tim Joyce, the mayor of Cordova, home to many of the fishermen affected by the spill, said he was frustrated by the justices' decision.

"I don't understand why they made that decision," he said. "I would have thought it would have been pretty straightforward and simple."

Cordova residents remain disappointed with the reduction of the 9th Circuit Court's award, Joyce said, calling the case "justice delayed and then justice denied."

People want a final resolution, he said.

"Whatever little issue can be found to delay this thing, it seems to be happening," he said.

Jerry McCune, a commercial gillnet fisherman and president of Cordova District Fishermen United, said it would have been nice if the Supreme Court had made a final ruling.

"We just want to get this thing over with. Come on," he said.

He fears Exxon Mobil will appeal a negative decision, delaying payments again.

"I'm just sick and tired of dealing with Exxon. It's just ridiculous," he said.

If Exxon Mobil is not required to pay interest from 1994, huge companies will lack deterrents to prevent industrial accidents, he said.

Jeffers, the Exxon Mobil spokesman, emphasized that the case is about punitive damages, not compensation for loss. Most who claimed compensation were paid, he said.

Punitive damages would be in addition to the more than $3.5 billion the company has paid in settlements, fines and the cleanup itself, he said.

"We have no desire to delay a final outcome," Jeffers said. "Like everyone involved in this tragic accident, Exxon Mobil is anxious to have it resolved."



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