Lawsuit could delay Exxon Valdez payments

Chris Rizo Oct. 21, 2008, 2:00am

ANCHORAGE, Alaska (Legal Newsline) -The first payment to victims of the Exxon Valdez oil spill could be delayed because of a lawsuit filed by a fish processing plant that objects to how the money is set to be allocated.

Sea Hawk Seafoods Inc., a Seattle, Wash.-based fish processing company that ran a fish- plant in Valdez, has filed a lawsuit challenging the way the $383 million partial settlement will be paid to thousands of people who claimed harm from the 1989 crude oil spill.

The allocation plan, which was approved in 1996 by U.S. District Court Judge Russel Holland of Anchorage, is flawed, Sea Hawk's lawyers claim in court papers.

The company contends that the U.S. Supreme Court decided in June that the size of punitive damage awards must be proportional to the size of compensatory damage awards already paid to plaintiffs.

But the Holland plan, they say, would give some plaintiffs would get disproportionately larger or smaller shares than they deserve from the maritime accident in which 11 million gallons of crude oil spilled in Prince William Sound after the Exxon Valdez ran aground.

Anchorage attorney David Oesting, the lead lawyer for Exxon Valdez plaintiffs, said he plans to oppose Sea Hawk's legal maneuver.

"They just want a whole lot more money that they're not really entitled to, in my opinion," Oesting was quoted by the Anchorage Daily News as saying.

When the U.S. Supreme Court reduced the $2.5 billion Exxon Valdez punitive damages award to no more than $507.5 million, the high court, voting 5-3, said the original award was excessive under federal maritime law.

In the Supreme Court's majority opinion, Associate Justice David Souter wrote that the punitive damages award should be brought into line with compensatory damages awarded earlier in the case.

"The award here should be limited to an amount equal to compensatory damages," Souter wrote.

He said, "A 1:1 ratio, which is above the median award, is a fair upper limit in such maritime cases."

From Legal Newsline: Reach reporter Chris Rizo at

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