Alaska AG: Exxon Valdez case could drag on

By Chris Rizo | Aug 5, 2008

SEATTLE, Wash. (Legal Newsline)-It could be years before the Exxon Valdez case is closed, Alaska Attorney General Talis Colberg told Legal Newsline on Tuesday.

Colberg said the latest twist in the long-running case is Exxon Mobil's opposition to paying interest on the $507.5 million judgment the U.S. Supreme Court ordered the company to pay for the March 1989 Exxon Valdez oil spill.

Weeks after the high court made its ruling in June, the Irving, Texas-based company argued it should not have to pay interest on the award, which would push the amount it owes to the thousands of plaintiffs to nearly $1 billion.

"It seems like Exxon pretty much has this attitude of out-waiting anything by running through the (legal) process," Colberg said in an interview.

Colberg, who was in Seattle for a conference of western states attorneys general, said Exxon is "really, truly delaying justice."

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.

Colberg , who was appointed by Republican Gov. Sarah Palin, said Alaska's coastal communities "never have been able to recover" from the 11 million gallons of crude oil that spilled in Prince William Sound after the Exxon tanker ran aground.

He said it would not be "all that helpful" for the state to petition to intervene in the case.

"We're in the background, trying to be available" to the plaintiffs," Colberg said, noting that his office has helped prepare the plaintiffs' case.

As for when the 32,677 plaintiffs in the case might get paid, Colberg said he's hopeful that the case will be resolved this year, but conceded that was only a prediction, and an optimistic one at that.

"If their game plan is to pull another rabbit out of the hat," Colberg said the case could drag on.

In a nine-page brief to the high court, Exxon said last month that there is "no good reason" for the high court to add interest.

"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," Exxon's filing says.

An attorney for the plaintiffs that said his clients are owed about $488 million in accrued interest since an Anchorage jury awarded them $5 billion in 1994 for the historic oil spill.

The award has been slashed by the federal courts.

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.

Capping the case, a divided Supreme Court in June 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.

In its ruling, the high court majority held that the punitive damages should be equal to the compensatory damages.

"The award here should be limited to an amount equal to compensatory damages," Associate Justice David Souter wrote for the majority.

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

Joining Souter in the majority were Chief Justice John Roberts and Associate Justices Antonin Scalia, Clarence Thomas and Anthony Kennedy.

Dissenting were Associate Justices John Paul Stevens, Ruth Bader Ginsburg and Stephen Breyer.

From Legal Newsline: Reach reporter Chris Rizo at

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