Jury sides with Exxon Mobil in spill compensation suit

Posted: Thursday, July 18, 2002

ANCHORAGE, Alaska (AP) -- An Anchorage jury on Wednesday rejected claims by six Alaska communities that Exxon Mobil Corp. owned them $12 million in costs associated with the 1989 Exxon Valdez oil spill in Prince William Sound.

During a six-week trial in state Superior Court, Exxon Mobil disputed the contention it owed money to Kodiak Island Borough, Seward, Cordova, Old Harbor, Larsen Bay and Port Lions. The Irving, Texas-based corporation said it already paid its bills -- more than $3.7 million.

''Our intention all along was to fully pay anyone with a legitimate claim,'' said Exxon spokesman Tom Cirigliano. ''The issue here was whether those six plaintiffs had legitimate claims not reimbursed in the past. And the jury agreed with Exxon Mobil that the claims were not legitimate.''

The plaintiffs ''obviously were disappointed'' in the verdict, said Dave Oesting, one of the attorneys representing the communities.

''Apparently, the jury didn't believe our facts or our economic expert,'' he said. ''This case wasn't terribly complicated.''

The case is unrelated to the main unsettled issue in federal court of how much Exxon Mobil will be ordered to pay in punitive damages to thousands of commercial fishermen, Alaska Natives, property owners and others harmed by the 11-million gallon spill.

The 9th U.S. Circuit Court of Appeals in November found the $5 billion award levied against the international corporation in 1994 by an Anchorage jury to be excessive. The appeals court ordered the Anchorage federal district court to reduce it. Exxon Mobil has since told the court the award should be no more than $40 million.

On Wednesday, Oesting filed a 100-page brief in the federal case, detailing the plaintiffs' opposition to that amount. Plaintiffs now contend punitive damages should be no less than $4 billion.

In the reimbursement lawsuit filed in state court, plaintiffs said Exxon did not compensate them for thousands of hours spent on cleanup by city employees that took them away from their regular duties.

Michael Smith, an Exxon Mobil attorney, said the plaintiffs also sought interest, which could have increased the award to as much as $30 million.

The state Superior Court initially dismissed the case, saying municipalities and villages could not ask for money for services they were hard-pressed to provide to residents during the cleanup.

But on appeal, the state Supreme Court said the cities' claims were valid and ordered a retrial in Superior Court.

During the trial, Darryl Schaefermeyer, deputy city manager of Seward at the time of the spill, testified he received spill-related calls every day, including weekends, during the summer of 1989. He said that led him and other city employees to underestimate the amount of time they worked on cleanup when reporting the hours.

Also testifying on behalf of the plaintiffs was Edward Whitelaw, a University of Oregon economist who interviewed community officials to arrive at the figure Exxon allegedly owed.

Exxon attorneys, however, argued that cities can't ask for reimbursement years later.

''We believe the jury recognized that we had, in fact, paid our bill and acted responsibly,'' Smith said.

Plaintiffs have not yet decided whether they will appeal the verdict, according to Oesting.

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