WASHINGTON -- Exxon Mobil will argue in front of the U.S. Supreme Court that the $2.5 billion verdict the company was ordered to pay as punishment for one of the nation's worst oil spills conflicts with more than 200 years of maritime law.

Exxon filed a brief in the case Monday, arguing mostly that trial and appellate courts erred in blaming the company for the actions of its ship captain in 1989 when the Exxon Valdez hit a reef in Prince William Sound and spilled nearly 11 million gallons of crude oil.

The company will also argue that it was punished enough, said Exxon spokesman Tony Cudmore, and that the multibillion-dollar punitive damages award -- one of the largest ever against an American corporation -- was excessive.

"The company has spent over $3.5 billion on compensation, cleanup payments, settlements and fines. It's a case about whether further punishment is warranted, and we do not believe that punitive damages are warranted in this case," Cudmore said.

The Supreme Court announced in October that it will examine the fundamental legal issues in the case, which dates to the early 1990s. Exxon 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 to the Supreme Court.

The Supreme Court has agreed to consider whether the size of the award is allowed by the limits of maritime law. The court decided against deciding whether the $2.5 billion award violates the U.S. Constitution.

One of Exxon's main arguments is that a ship owner shouldn't be punished for the actions of its agents at sea. Maritime law, dating to an 1818 decision, has well-established prohibition on punitive damages against ship owners for the actions of their crew unless they "directed," "countenanced" or "participated" in them.

Plaintiffs' attorneys have said in interviews that the maritime law Exxon embraces applies to a long-gone time when ships left port and might not be seen again by their owners for months or years. Communication is continuous with modern ships.

Exxon also plans to argue that the Clean Water Act has a clearly defined set of fines and punishments for oil spills, and that "punishment and deterrence for maritime discharges were already covered" in federal law.

"All of those policies preclude assessment of gargantuan punitive damages," Exxon wrote in its brief.

The company has long argued that it invested significant amounts of time, money and effort to address the effects of the oil spill on the environment, wildlife and Alaska residents.

'FRIENDS' WEIGH IN

More than a dozen business groups and shipping associations, such as American Petroleum Institute and the U.S. Chamber of Commerce, have filed friend-of-the-court briefs on Exxon's behalf. They object to the size of the verdict and how maritime law was applied in the case.

Now, the State of Alaska is expected to step in, in support of the state's residents. Alaska Gov. Sarah Palin has asked the attorney general to file a friend-of-the-court brief on behalf of the fishermen and residents who first brought the suit. The brief is expected to offer the state's perspective on the "harm to Alaskans caused by the spill," Palin's office said.

Until now, the state hasn't waded into the case, but this is the right time, said Craig Tillery, deputy attorney general. The state is working on its brief now, Tillery said.

"We will try to put some perspective on the idea that Exxon advances that somehow the money they paid to the government in fines and damages is enough," Tillery said. "We'll also be talking about the potential impacts to the state about the points of law they're trying to make."

DELEGATION WANTS DAMAGES

The state also is likely to have the backing of the Alaska congressional delegation, all Republicans. They are considering signing the attorney general's brief, which is due Jan. 22. Oral arguments are expected this spring.

"It is in Alaska's interest to see justice concluded for the 33,000 Alaskan commercial fishermen, cannery workers, landowners and Natives impacted by this horrendous spill," said Meredith Kenny, a spokeswoman for U.S. Rep. Don Young. "Representative Young has always been predisposed to signing on to the brief, and looks forward to reviewing a final copy of it to accomplish that action."

U.S. Sen. Ted Stevens also is waiting to see the state's brief, and won't commit to signing it until he has read it, said spokesman Aaron Saunders.

"He's long supported ensuring that the victims of this spill get fairly compensated and are treated fairly in the process," Saunders said.

Sen. Lisa Murkowski has already put provisions in the farm bill that will offer a tax break to the plaintiffs, if the Supreme Court decides in their favor and releases the $2.5 billion verdict.

The legislation would allow them to "income average" their settlement over three years, to help with the tax wallop from the windfall. Plaintiffs also will be able to put as much as $100,000 of their award in retirement accounts, without having to pay taxes on it.

"You don't want them to get their settlement money from Exxon, and then the next day have to write a check to Uncle Sam," she said. "They will have to do that, but this softens that blow."

Find Erika Bolstad online at adn.com/contact/ebolstad or call her in Washington, D.C., at 202-383-6104.

COMPANY'S CASE: Read the brief Exxon filed with the U.S. Supreme Court

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