19 years later, Exxon Valdez spill checks have been mailed

Posted: Monday, December 15, 2008

Nineteen years after the Exxon Valdez oil spill disrupted the livelihood of thousands of Alaskans, and fourteen years after a federal jury found Exxon Mobil Corporation liable for compensatory and punitive damages from the spill, many of the 32,000 Exxon lawsuit claimants heard last week a phrase some thought they'd never hear.

The check's in the mail.

After repeated appeals by Exxon, after numerous back-and-forth decisions by U.S. Federal Court, Ninth Circuit Court of Appeals and U.S. Supreme Court judges -- including a decision last June by the Supreme Court cutting punitive damages from what started as $5 billion to $507.5 million -- the Exxon Qualified Settlement Fund began directly depositing payments Dec. 8. The first round of payments should be completed by today, said Lynn Sarko, the settlement fund administrator.

Homer fishermen weren't popping champagne corks this week -- or buying expensive toys.

"It's hard to whoop and holler when you've got your back side caved in so many times," said Frank Mullen, a fisherman for more than 44 years and an investment advisor with Raymond James Financial Services. "The comparison between what we once expected and what we're now getting, it's huge. It's a mere pittance compared to what we hoped for," he added.

"I don't think there's a lot to be said right now, other than 'about time,'" said United Cook Inlet Drift Association president Drew Sparlin.

Prince William Sound fishermen Andy Wills got his payment last week, about $9,300 after legal fees awarded for the drift permit portion of his settlement. At one point he expected $100,000. Attorneys get 22.4 percent of the payments.

A herring fisherman who hasn't fished since the spill, Wills will get another share of the settlement for damages to his herring permit. Wills owns Old Inlet Bookshop and Mermaid Cafe and said he'd already put his settlement check back into his business.

"It's all spent. It's bills," Wills said. "Nothing for me, not even a new pair of socks."

Wills' post-lawyer check is typical of what most fishermen will receive. According to claimant lists filed last month in U.S. District Court, checks run from under $100 to as high as $400,000. Most claims are from $10,000 to $20,000. Some Homer claimants will get almost $100,000. How much a claimant receives depends on complicated calculations that includes things like the value of a fishery affected by a spill.

Ken Castner said he should get $77,000 after legal fees. Back when the punitive award was higher, like many Castner expected much larger claim checks. Castner and others helped establish the Homer Foundation to give claimants a way to plan philanthropic giving -- and not blow the money.

"I've always said there will be 30 new Ford F-350 pickups around town, but I don't think that will happen," Castner said.

With the punitive award dramatically reduced after the Supreme Court decision, the Homer Foundation and other nonprofits may not get much, either.

"We were all looking at much larger amounts when we talked about that," Castner said.

How Wills spent his check is how Mullen and Castner advised other claimants to spend their spill money.

"My advice is to reduce your debt and pay your taxes," Castner said.

"Pay off your credit cards if you have credit card debt," Mullen said. "Take care of that rotten tooth you have and you've been waiting 10 years to take care of. Take the rest and think long-term with it for retirement planning."

That's advice fishermen have been hearing in the United Cook Inlet Drift Association, Sparlin said. Many of the spill claimants are in their 50s and 60s and nearing retirement age.

"The people that are going to take that fund hopefully are going to pay off the debt they can't handle otherwise and put the rest into some kind of retirement," Sparlin said.

Tempering much of the enthusiasm over receiving spill checks is lingering anger over the Exxon Valdez spill and the dramatic reduction in punitive damages by the Supreme Court.

"Punitive damages are designed to punish," Mullen said. "So here I am getting $2.98. Now there's some real punishment for Exxon, damn it."

"It's very bittersweet," Wills said. "It's not a windfall at all. We're just trying to hang in there. My business is doing terrible this Christmas."

"We want it gone. It was a catastrophe. There's no doubt about it," Sparlin said. "To try to claim it wasn't negligence -- I just can't buy that."

More payments will come in the first quarter of 2009, including a projected $1.5 million to the city of Homer. That will go into the city's permanent fund, said City Manager Walt Wrede. Still being decided by the Ninth Circuit Court of Appeals is if Exxon should pay interest on the punitive damages back to 1994. If awarded, the interest payments could equal what's being paid now.

"People are sick of it," Mullen said of the years-long court case. "If we can ever get this thing finally behind us, everybody will be happy not to think about this one."

Michael Armstrong can be reached at michaelarmstrong.@homernews.com.

(Dec. 15)

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