Exxon contests basis for damages

Company says verdict contradicts 200 years of maritime law

Posted: Friday, December 21, 2007

JUNEAU - Exxon Mobil Corp. says a $2.5 billion punitive damages verdict for one of the nation's worst oil spills contradicts 200 years of maritime law.

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That is essentially its argument to go before the U.S. Supreme Court next year, according to a recent court brief the company filed.

The Exxon Valdez tanker hit a reef in Prince William Sound and spilled 11 million gallons of crude oil that marred more than 1,200 miles of coastline in Prince William Sound 18 years ago.

The Irving, Texas, oil giant has been fighting the civil judgment, originally set at $5 billion, since the 1994 trial.

The company has held that it should not be responsible for the ship's captain, Joseph Hazelwood, who the company says violated clear company rules when the ship ran aground on March 23, 1989.

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In its brief, filed Monday, the company asserts:

• Punitive damages should not be "awarded against a ship owner based solely on the conduct of a ship's master."

• Punitive damages for spills such as the Exxon Valdez are "not available in federal maritime tort actions.

• Maritime law does not permit punitive damages.

The plaintiffs' attorneys have argued that the maritime law Exxon embraces no longer has current application. Rather, it was meant for ships leaving port and risking never being seen again by their owners for months, if not years. Technological advances mean communication is ongoing, they argue.

Since the accident, the company says it took immediate responsibility and has spent $3.5 billion in compensation, fines and clean up.

The company says even the reduced civil judgment of $2.5 billion is excessive and wants the Supreme Court to overturn the trial and appellate courts collective rulings.

Gov. Sarah Palin has said the state of Alaska will file a legal brief supporting the 33,000 plaintiffs mired in a dispute with Exxon Mobil.

Palin said Attorney General Talis Colberg will file an amicus brief with the U.S. Supreme Court by early next year.

Such legal filings reflect backing for one side of an argument, but come from someone not directly involved with the case.

Exxon has already had such backing from business groups and shipping associations, including the American Petroleum Institute and the U.S. Chamber of Commerce. Both object to the size of the verdict.



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