Plaintiffs want appeals court to revisit spill damage issue

Posted: Friday, November 30, 2001

ANCHORAGE (AP) -- Plaintiffs in the Exxon Valdez oil spill damage lawsuit have asked the 9th Circuit Court of Appeals to overturn a ruling by a three-judge panel of that court that the $5 billion in punitive damages ordered by an Anchorage jury is too high.

The appeals panel ruled three weeks ago that the punitive damage award was excessive, and sent it back to a lower court for a new calculation of what Exxon should pay commercial fisherman, Alaska natives, property owners and others harmed by the nation's worst oil spill back in 1989.

The motion filed this week asks the three-judge panel to basically reverse itself or, failing that, for a hearing before a bank of 11 appeals court judges to review the panel's decision regarding punitive damages.

The appeals panel was wrong to look simply at the ratio between actual damages and punitive damages awarded by the 1994 Anchorage jury, the motion argues. That would exclude several hundred million dollars that Exxon Corp. paid to compensate people for damages before the trial began in 1994, the plaintiffs' lawyers say.

''The panel's approach boils down to the troubling proposition that a defendant whose reckless conduct causes obvious and catastrophic damage -- leaving it no choice but to make immediate and substantial payments to clean up the mess -- will automatically owe less in punitive damages,'' the plaintiffs' lawyers argue in their motion.

''Under the panel's opinion,'' it says, ''members of a punitive damage class would forfeit punitive damages unwittingly if they were to accept pretrial payments for their injuries.'' And since punitive damages can be several times the actual damages, the victims would give up vastly more than they received, the lawyers maintain.

The $5 million in punitive damages was equal to a year's worth of Exxon's profits at the time, and was then the largest punitive damage award ever.

The appeals panel in San Francisco said earlier this month that some damages were justified to punish the company for its harmful behavior, but that $5 billion was excessive.

Whatever the outcome at the appellate court level, the case is likely to be appealed to the U.S. Supreme Court, a process that will probably stretch out for years.

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