Decision on interest nearly doubles punitive award in Exxon Valdez case
SAN FRANCISCO (Legal Newsline) - A federal appeals court has ordered ExxonMobil to pay nearly $500 million in interest on punitive damages awarded in lawsuits over the 1989 Exxon Valdez oil spill off the coast of Alaska.
The decision forces Exxon to pay at least $480 million to plaintiffs whose punitive damages payments were delayed, nearly doubling a $507 million punitive damages judgment against the company. That amount had been slashed down from $5 billion by several courts.
The U.S. Supreme Court declined to hear the interest issue and placed it in the hands of the 9th U.S. Circuit Court of Appeals. The $5 billion verdict was reached in 1994.
Exxon was also ordered to pay $70 million for a security bond that allowed it to keep its appeal alive.
The plaintiffs are entitled to interest, starting in 1996, at the rate of 5.9 percent
"Although Exxon has succeeded in reducing an original jury verdict of $5 billion by about 90 percent, it remains liable for a far-from nominal punitive damage award of more than $500 million," the ruling says.
The ship spilled more than 11 tons of oil into the Prince William Sound after hitting the Blight Reef, and the ship's captain was found to have been drinking.
Exxon had argued it should not have to pay interest on the award, saying there is "no good reason" for the high court to add interest to the judgment.
"Exxon does not agree that there is any sound basis to award plaintiffs what they seek -- approximately $488 million over and above the $507.5 million that this Court determined was the legally proper amount to punish and deter," a filing to the U.S. Supreme Court said.
From Legal Newsline: Reach John O'Brien by e-mail at firstname.lastname@example.org.
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