Judge nixes changing Exxon damages plan

Plaintiffs hope to hand out $150 million to claimants by year's end

Posted: Friday, November 14, 2008

ANCHORAGE - A federal judge has rejected a bid to create a new allocation plan for punitive damages from the 1989 Exxon Valdez oil spill.

Judge H. Russel Holland ruled Wednesday that Seattle-based Sea Hawk Seafoods Inc., which operated a fish-processing plant in Valdez, had agreed years ago to a complex allocation plan worked out among plaintiffs in the lawsuit.

Attorneys for Sea Hawk Seafoods in October asked Holland to throw out the original allocation plan and replace it with one that could have steered more dollars to the company.

They claimed the U.S. Supreme Court held that the size of punitive damage awards must be proportional to the size of compensatory damage awards already paid to plaintiffs.

In a 24-page ruling, Holland rejected Sea Hawk's request.

Barring a Sea Hawk appeal, lawyers for the plaintiffs hope to start paying out damages secured from Exxon Mobil Corp. to fishermen, cannery workers, land owners, Alaska Natives and other claimants.

The tanker Exxon Valdez on March 23, 1989, hit Bligh Reef and spilled nearly 11 million gallons of oil into Prince William Sound.

An Anchorage jury in 1994 awarded plaintiffs $5 billion in punitive damages. Exxon fought the award, arguing it already had paid billions to clean up the spill and compensate fishermen and others.

In June the U.S. Supreme Court held Exxon liable for no more than $507.5 million in punitive damages.

Lawyers for the company and plaintiffs subsequently worked out a partial settlement covering $383 million of the damages. They continue to battle in lower courts over interest.

With Holland's consent, lawyers for the plaintiffs hope to hand out about $150 million by year's end to certain categories of claimants.

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