Alaskans shocked by court ruling on damages from tanker

Posted: Thursday, November 08, 2001

JUNEAU (AP) -- While others waded the oil soaked shores of Prince William Sound following the Exxon Valdez disaster, Patience Andersen Faulkner was knee deep in something much worse.

In the years following the worst oil spill in U.S. waters in history, Faulkner's job was to chronicle the damage heaped on fishermen and other people in and around Cordova after the 1989 spill. She worked for attorneys pursuing a class action lawsuit against Exxon Mobil and submitted damage claims to the company.

''It was very personal for everyone. We've had a number of suicides that I think are from the Exxon Valdez. We've had a lot of destroyed relationships,'' Faulkner said.

A 9th Circuit Court of Appeals panel ruled on Wednesday that the $5 billion in punitive damages awarded by an Anchorage jury against Exxon Mobil was excessive. The panel ordered a lower court to reduce that amount.

The ruling sparked anger among fishermen and others affected by the spill and prompted Gov. Tony Knowles to consider intervening

''That $5 billion would have at least put a finger in the dike,'' Faulkner said.

Her family owned a fishing permit valued at about $210,000 before the spill. If she still owned it, the permit would be worth about $50,000 for anyone foolish enough to buy it, she said.

Small numbers of salmon straggle back annually but the herring are long gone and local fishermen blame Exxon Mobil.

''We all recognize violence doesn't help, but we sure would like to choke them,'' Faulkner said.

R.J. Kopchak fished for about 28 years but took a job with the city of Cordova to make ends meet three years ago. Herring was about half of his income. Now he's selling his herring equipment for pennies on the dollar.

''I'm devastated. We were just hoping to be compensated for our losses out of the punitive damages,'' Kopchak said.

A federal jury in Anchorage ordered Exxon to pay $5 billion in 1994 to thousands of commercial fisherman, Alaska natives, property owners and others harmed by the nation's worst oil spill.

The amount was equal to a year's worth of Exxon's profits and at the time was the largest punitive damage award in history.

In its ruling Wednesday, the Court of Appeals in San Francisco said some damages were justified to punish the company for its harmful behavior, but that $5 billion was excessive.

The appeals court said that for every dollar in compensatory damages, the jury awarded more than $17 in punitive damages -- a ratio that would not get by the U.S. Supreme Court.

The appeals court noted the high court in 1991 ruled that a 4-to-1 ratio was ''close to the line'' between a constitutionally acceptable and unacceptable jury verdict.

Exxon Mobil argued the punitive damages award ''is completely unwarranted, unfair and is excessive by any legal or practical matter.''

Lee Raymond, chairman of the Irving, Texas oil company, said through a statement the company took responsibility for the spill and has already paid more than $3 billion in clean up costs and compensation.

The decision ''confirmed Exxon Mobil's position that the $5 billion punitive damage award related to the Exxon Valdez accident is excessive,'' he said in the statement released Wednesday.

Exxon paid $2.2 billion on the spill cleanup from 1989 to 1992 and paid $300 million in compensation to 11,000 people, the company said.

Exxon also paid another $1 billion in civil damages, fines and criminal restitution.

Raymond said the spill ''was a tragic accident that the company deeply regrets.''

David Oesting, a lawyer representing fisherman in the case, said he was considering whether to ask the 9th Circuit to reconsider its decision or to request the U.S. Supreme Court to review it.

He said that no matter the outcome, he expects Exxon will be liable for a hefty penalty.

''The average seiner fisherman's income here is a little over half what it was before the Exxon oil spill,'' said Riki Ott, a marine biologist and former fisherwoman from Cordova.

Alaska Attorney General Bruce Botelho said the court ruling affirmed that the company should be liable for punitive damages.

''We know that thousands of families have been impacted by the spill. It's not over,'' Botelho said.

The state was not part of the lawsuit but reached a negotiated agreement with the federal government and Exxon in 1991.

Gov. Tony Knowles said Wednesday he will attempt to bring the two sides to a negotiated settlement, saying the case has dragged on too long.

''The Exxon Valdez oil spill has really been a cloud that has hung over those fishing families and communities for more than a decade,'' Knowles told the Associated Press. ''The court decision today didn't bring any resolution to that.''

Knowles said he will contact the two parties to determine whether they could reach a settlement. He would not comment on what he thinks that settlement amount should be.

''Exxon does have a lot at stake here in Alaska and they want to be a responsible and good (corporate) citizen,'' Knowles said.



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