WASHINGTON -- Nearly two decades after one of the nation's most horrific environmental crimes, the U.S. Supreme Court will decide whether the multibillion-dollar punishment meted out to Exxon in 1994 was excessive.
The Supreme Court announced Monday it will look at the fundamental legal issues in the case, including whether the oil giant can be punished for the behavior of its ship captain when the Exxon Valdez hit a reef in Prince William Sound in 1989 and spilled nearly 11 million gallons of crude oil.
The court is expected to decide the case next year.
An Exxon spokesman said the company is pleased to have a Supreme Court hearing in a case the company has been appealing since 1994, when an Anchorage jury returned a $5 billion punitive damages award against the company. Last year, the 9th U.S. Circuit Court of Appeals in San Francisco cut the award to $2.5 billion; Exxon appealed that decision to the Supreme Court.
The company has long argued that it invested significant amounts of time, money and effort to address what happened to the environment, wildlife and Alaska residents after the oil spill. Exxon doesn't believe that any further punishment is warranted, said spokesman Tony Cudmore.
For Exxon, "this case has never been about compensating people for actual damages," Cudmore said. "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."
But for fishermen and Alaska residents who have hoped for 13 years for some sort of resolution to the case, Monday's announcement was yet another bitter setback. They wanted the court to end the case by rejecting Exxon's appeal, clearing the way for the payout of the $2.5 billion lower court judgment, plus interest.
"Here we are once again, looking at more delays, more sort of legal-beagle maneuvering by people who have damaged the lives of literally tens of thousands of citizens," said Roland Maw, executive director of United Cook Inlet Drift Association, a commercial fishing group. "I just can't image the Supreme Court letting Exxon walk away from this thing, but they very well may, and what a sad day it will be."
Alaska Gov. Sarah Palin called it a case of "justice delayed being justice denied.
"For us it was like a kick in Alaska's collective gut," she said during a press conference in Juneau.
After repeated disappointments, many of the commercial fishermen and other plaintiffs have stopped hoping or dreaming for a payout.
"I'm one of the people who kind of put it on the back burner a long time ago," said Joe Childers, a Juneau salmon troller and president of United Fishermen of Alaska, the state's top commercial fishing trade group.
Said Frank Mullen, a longtime Cook Inlet drift fisherman whose shoreside job is professional financial planner, "We'll just go on looking at the tide book and getting ready for next season. I'm encouraging people to hang a net and have winter dreams of nets full of fish and jumping salmon. That's where people need to be."
READY TO BE PAID
But anticipation that the case might finally be resolved was heightened in September when Keller Rohrback, the Seattle law firm that would handle distribution of money, sent packets to fishermen and other claimants explaining how to request direct bank deposit of Exxon payments.
The mailing also contained information on taxes and liens, and how to deal with situations where an approved claimant has died. According to the law firm, some 8,000 members of the class that sued Exxon have passed away during the long-running case.
In Cordova, the Prince William Sound commercial fishing port hit hardest by the 1989 spill, few were surprised by the latest court decision.
"I'm just a little numb to that anymore," said Bill Webber Jr., a salmon gillnetter and boat builder whose shop is a popular gathering spot for fishermen.
ALL THE SKIPPER'S FAULT?
The court will be addressing one of the most basic issues of maritime law: whether a ship owner can be punished for the actions of its agents at sea.
Current case law, dating back to an 1818 case, says that ship owners can't be punished for the actions of their crew unless they "directed," "countenanced" or "participated" in them.
But such laws come from a different era, when captains ventured from their home port for years, argued David Oesting, the lead attorney for the more than 30,000 plaintiffs in the case.
Exxon officials said Monday in a statement that the company will continue to argue "ship-owners are not liable for punitive damages based upon conduct by the ship-master who disregarded the owner's rules and policies."
The company also will argue that it shouldn't be assessed punitive damages by a court, since it was already punished under the Clean Water Act.
The Supreme Court also has agreed to consider whether such a large award is allowed by the limits of maritime law. The court declined to take up the question of whether the $2.5 billion award violates the U.S. Constitution, which means that their deliberations will be limited to whether the damages are appropriate under maritime law.
BUSINESS GROUPS BACK EXXON
Exxon does believe that the Supreme Court needs to provide "more definitive guidance to the lower courts on the law governing punitive damages," said Cudmore, the Exxon spokesman.
Other pro-business organizations felt the same way, and filed friend-of-the-court briefs on the company's behalf. They included the U.S. Chamber of Commerce, the American Chemistry Council, the National Association of Manufacturers, the Western States Petroleum Association and the American Tort Reform Association.
The organizations were especially interested in the question of punitive damages. For business groups, there was the possibility that the high court could turn it into a tort-reform case and weigh in on the amount of money that juries could award as punitive damages.
But they're still pleased that the court agreed to take up such a case, said Robin Conrad, executive vice president of the National Chamber Litigation Center.
"Any time the court takes a punitive damages case, that's a big deal for the business community," she said.
Find Erika Bolstad online at adn.com/contact/ebolstad or call her in Washington, D.C., at 1-202-383-6104. Find Wesley Loy online at adn.com/contact/wloy or call him in Anchorage at 257-4590. Daily News reporters Sean Cockerham and Tom Kizzia contributed to this article.
