newsminer.com

WASHINGTON, D.C. — Nearly two decades after the Exxon Valdez oil tanker spilled 11 million gallons of crude oil in the Gulf of Alaska, the drawn-out legal battle is finally reaching the U.S. Supreme Court and possible closure.

The high court is scheduled to hear arguments today in Exxon Mobil’s appeal on whether punitive damages awarded in the case are excessive or should be allowed at all under maritime law.

Exxon is seeking to overturn a $2.5 billion punitive damages award to thousands of fishermen, Alaska Natives, cannery workers and municipalities affected by the spill.

Exxon says it has already paid enough in compensation and fines, and doesn’t believe punitive damages are warranted for the worst oil spill ever in the United States.

“This case has never been about compensating people for actual damages,” Exxon spokesman Tony Cudmore said. “Rather it is about whether further punishment is warranted in a case where the company voluntarily compensated most plaintiffs within a year of the spill, and has spent over $3.5 billion, including compensatory payments, cleanup payments, settlements and fines.”

On March 24, 1989, the Exxon Valdez struck Bligh Reef in Prince William Sound, fouling 1,300 miles of coastline with oil. A federal study released last year shows that oil from the spill continues to show up on the region’s beaches.

In 2004, a federal jury in Alaska awarded $5 billion in punitive damages to thousands of plaintiffs in a class-action lawsuit against Exxon. The award was later reduced to $2.5 billion on appeal. Exxon appealed the case again to the Supreme Court.

The Supreme Court will consider whether the company can be punished for the actions of its ship’s captain, Joseph Hazelwood, who was accused of being drunk at the time of the incident. A state court acquitted Hazelwood of operating a vessel while under the influence.

“Imposing vicarious punitive liability on a shipowner, without requiring the jury to find that the shipowner directed, countenanced, or participated in the conduct, was in conflict with almost 200 years of unbroken maritime law,” Exxon argues in its filings with the court.

The court also will judge whether punitive damages are allowed under the Clean Water Act, which covers discharges of oil and other hazardous substances.

Gov. Sarah Palin, who was once a plaintiff in the class-action lawsuit, said the punitive damages award should be upheld as a deterrent to future environmental violations by companies operating in Alaska.

“Deterrence is the optimum word,” she said. “We don’t want this to ever happen again.”

Palin said the Exxon’s strategy of fighting the case in court for 19 years has had a “corrosive effect” on Alaskans. She pointed out that when the original award was handed down 14 years ago, it represented a year’s profits for Exxon. Today, the oil giant, which made $40.6 billion last year, earns $5 billion in a few weeks.

“It has been justice delayed,” Palin said of Exxon’s repeated appeals. “We pray that it’s not a case of justice denied.”

Palin called the company’s behavior “reckless and reprehensible” and said the state continues to suffer from the devastating environmental effects of the spill.

More than 6,000 of the nearly 32,677 fisherman, Alaska Natives, cannery workers, private landowners and other plaintiffs in the suit have died since the 1994 decision.

“Corporations have no conscience,” said Steve Smith, a commercial fisherman from Cordova. “We need to give them a conscience and punitive damages are a way to do that. Kind of like a public spanking.”

U.S. Sen. Lisa Murkowski, R-Alaska, urged the court to bring closure to the case with a ruling in favor of those impacted by the spill.

“This litigation simply needs to end,” Murkowski said Tuesday in a speech on the Senate floor. “Nineteen years is too long for these plaintiffs to wait to be compensated for their lost income.”

Supreme Court Justice Samuel Alito has recused himself from the case because he owns Exxon stock. That means plaintiffs only need a split decision between the remaining eight judges for the award to stand.

The $2.5 billion award is worth an estimated $4.8 billion today because of interest that has accrued since the case was first decided.

“I think we’d be disappointed, but there’s not much we could do,” Steve Smith, a commercial fisherman from Cordova, said. “There’s nowhere else to appeal. Sometimes it’s a bitter pill and you have to swallow it and move on.”

The court is expected to issue its ruling this spring.