Appeal could hold up Exxon payments

ANCHORAGE - Prince William Sound commercial fishermen have waited 19 years for punitive damages in the 1989 Exxon Valdez crude oil spill case and another delay may be coming.

Lawyers for Sea Hawk Seafoods Inc., a Seattle-based company that ran a fish-processing plant in Valdez, have filed court papers objecting to the current allocation plan.

They are seeking a new plan that conforms to the U.S. Supreme Court ruling in June.

Justices in June ordered lower courts to award up to $507.5 million in punitive damages to nearly 33,000 commercial fishermen, cannery workers, land owners, Alaska Natives and others who claimed harm from the spill. They had been seeking $5 billion awarded by an Anchorage jury in 1994.

After the Supreme Court decision, lawyers for the plaintiffs and Exxon worked out a partial settlement under which Exxon agreed to release $383 million.

The money was to be distributed under an allocation plan approved in 1996 by Anchorage federal Judge H. Russel Holland.

Lawyers for Sea Hawk Seafoods filed their paperwork Oct. 9. They say the Supreme Court held that the size of punitive damage awards must be proportional to the size of compensatory damage awards already paid to plaintiffs.

The current allocation plan is flawed because some plaintiffs stand to receive larger or smaller shares than they deserve, the Sea Hawk lawyers argue.

Anchorage attorney David Oesting, the lead lawyer for Exxon Valdez plaintiffs, said he will fight Sea Hawk's effort.

"They just want a whole lot more money that they're not really entitled to, in my opinion," Oesting said.

If Sea Hawk gets its way, many other plaintiffs would be deprived of shares they've long expected, he said.

Oesting estimated the Sea Hawk challenge could take 18 months. Until then, the money can't be paid out, he said.

The company's interpretation could mean more money for cannery workers and less for commercial fishermen.

Frank Mullen, a Homer commercial salmon fisherman, said he and other plaintiffs were exasperated over the years it took the courts to decide on punitive damages and the Sea Hawk motion adds to the frustration.

Some plaintiffs have died.

Fishermen were hoping the settlement with Exxon might yield checks between Thanksgiving and Christmas, Mullen said.

He's hoping Holland will deny the company motion. It was difficult getting thousands of people to agree on the allocation plan, which includes numerous classes of plaintiffs, and it would be calamitous to reopen that debate, Mullen said.

"We might as well just start ordering the pine box," he said.

Sea Hawk's lawyers argue it would be fairly simple to replace the allocation plan with a new one leading to "a fair and expeditious distribution" of punitive damages.

Holland warned last year it would be "an embarrassment" to allow infighting to delay a payout.