Exxon Mobil ordered to pay $6.75 billion for spill
11 million gallons of crude oil in 1989's Valdez incident in Alaska
ANCHORAGE, Alaska - A federal judge on Wednesday ordered Exxon Mobil Corp. to pay about $6.75 billion in punitive damages and interest to thousands of Alaskans affected by the 1989 Exxon Valdez oil spill.
Exxon Mobil has 30 days to appeal the order by U.S. District Judge Russel Holland, who or. Mired the Texas company to pay $4.5 billion in punitive damages and about $2.25 billion in interest.
The money is to go to 32,000 fishermen, Alaska Natives, landowners, small businesses and municipalities affected by the 11-million-gallon spill in Prince William Sound.
"We have now closed the trial court doors for the last time in this litigation after 15 years," said David Oesting, lead attorney for the plaintiffs. "Were definitely on track to the end of the entire dispute."
Exxon Mobil said it plans to appeal. Spokesman Tom Cirigliano said the U.S. Circuit Court of Appeals in San Francisco has twice vacated Holland's decision in the case.
The judge had been ordered by the appellate court to reconsider the damages awarded in an earlier ruling in light of a US. Supreme Court decision last year about punitive damages.
"This ruling flies in the face of the guidelines set by the appeals court," Cirigliano said.
In 2002, Holland reduced the Exxon punitive damages award to $4 billion after a three-judge panel sent the original $5 billion verdict back, saying it was excessive.
For his latest ruling, the judge was to consider a U.S. Supreme Court decision last year involving a Utah traffic accident and damages awarded in that case.
Attorneys from both sides argued that the Supreme Court case, Stale Farm Mutual Automobile Insurance Co. vs. Campbell, supported their damages claims. In that case, the Supreme Court ruled that a state court jury's award of $145 million to punish the insurance company was grossly excessive when actual damages were $1 million.
The high court held that the ratio of punitive to actual damages should not exceed single digits, or 9-In-1.
Exxon attorneys argued that injury to plaintiffs was only economic and damages should be based on a lower ratio. Exxon has already paid $3.2 billion for clean-up, settlements and other fees and penalties, attorneys said.
But lawyers for the plaintiffs argued that the key issue is conduct, and that Exxon's was among the worst. They said Exxon knew that tanker Capt. Joe Hazelwood had alcohol problems but still allowed him to pilot the Eason Valdez. Attorneys calculated the actual damages caused by the spill at more than $550 million, which equals roughly $5 billion when the 9-1 ratio is applied.
The spill occurred March 23, 1989, less than three hours after the 987-foot ship Exxon Valdez Left the Alyeska Pipeline terminal in Valdez. The ship grounded at Bligh Reef, rupturing eight of its 11 cargo tanks and spewing some 10.8 million gallons of crude oil into the sound.
