Brian O'Neill

WASHINGTON (Legal Newsline)-Thousands of plaintiffs in the Exxon Valdez case who recently had their punitive damage award slashed by the U.S. Supreme Court are asking the high court to ensure that Exxon pays them interest.

A divided Supreme Court last month reduced the $2.5 billion punitive damages award in the long-running lawsuit to no more than $507.5 million, ruling 5-3 that the original award was excessive. The majority held that the punitive damages should be equal to the compensatory damages.

Some-32,000 plaintiffs are owed about $488 million in accrued interest since an Anchorage jury awarded plaintiffs $5 billion in 1994 for the 11 million gallons of crude oil that leaked into the waters of Prince William Sound in March 1989, their attorney said in court papers.

To help ensure that his clients get the accrued interest, Brian O'Neill, a Minneapolis-based trial lawyer who represents the plaintiffs, filed a brief with the Supreme Court asking the high court to specify the plaintiffs are entitled to interest.

Judges have discretion in whether to award interest payments. In the federal courts, rules say that interest payments are calculated by a certain Federal Reserve rate available at the time of the award. In the Exxon case, that rate was 5.9 percent.

The 32,677 plaintiffs in the case have been waiting for their award since 1994, when an Anchorage jury returned a $5 billion punitive-damages verdict against Exxon Mobil Corp.

In 2006, the 9th U.S. Circuit Court of Appeals in San Francisco reduced the award to $2.5 billion. Exxon then appealed to the U.S. Supreme Court.

Exxon based its appeals on an 1818 court decision that holds that ship owners aren't liable for punitive damages for the actions of their agents at sea unless they're complicit in their behavior.

The Irving, Texas-based company also argued it should not face any punitive damages because the company already has paid out $3.4 billion in fines and penalties, cleanup costs, claims, among other expenses.

The case is Exxon Shipping Co. v. Baker, 07-219.

From Legal Newsline: Reach reporter Chris Rizo by e-mail at

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