Exxon plaintiffs pursue interest

SAFEGUARD: Lawyers file brief in an effort to prevent another appeal.

July 11, 2008 

WASHINGTON -- People owed money from the Exxon Valdez lawsuit have asked the U.S. Supreme Court to make it clear that they should receive interest payments, even though the court cut the punitive damages award last month from $2.5 billion to $507 million.

Lawyers for the fishermen and other plaintiffs in the case have calculated that interest will add up to about $488 million, bringing the total amount owed by Exxon Mobil from the 1989 oil spill to nearly $1 billion. Minus attorney fees, an estimated $628 million will be divided among more than 32,000 plaintiffs.

The punitive damages were originally awarded in 1994 as punishment for Exxon's role in the spill, which leaked 11 million gallons of crude oil into the fishing waters of Prince William Sound.

Lawyers for the plaintiffs believe they're entitled to interest, but after so many years of wrangling with Exxon, they're just making sure, said Brian O'Neill, a Minnesota lawyer who represents the plaintiffs. He filed a brief with the Supreme Court earlier this week as a safeguard.

"It's to make sure that we don't make a technical mistake," O'Neill said. "It's just to make sure that we are clearly entitled to the interest ... and that we don't waive it. With this amount of money at stake, you use a belt and suspenders."

That doesn't mean they're not worried about Exxon, as they point out in their filings. "If past is prologue, there is real risk that Exxon would exploit any lack of clarity concerning interest to prolong this litigation still further," lawyers for the plaintiffs wrote.

Exxon has been cagey about whether it will appeal the interest owed in the case. A spokesman for the company wouldn't say whether Exxon plans to fight the interest payments.

Company lawyers are reading what the plaintiffs just filed and waiting for the case to be sent back to the appellate court in San Francisco, and, finally, to the U.S. District Court in Anchorage where it was first heard, said Exxon spokesman Tony Cudmore.

"I think we need to understand what the court will order on that question," Cudmore said. "We need to understand what the plaintiffs have asked for in their submission, we need to review that, and we need to understand the court's views. We will certainly comply with the final order."

But Cudmore also added: "Just to be clear, we are anxious to have the matter resolved. We've got no desire to delay a final outcome."

In this case, Exxon never disputed the district court's determination that the plaintiffs are entitled to interest dating back to the original judgment, O'Neill said in the brief filed this week with the Supreme Court.

The Supreme Court recessed at the end of June, but, according to its Web site, during the summer the justices continue to analyze new petitions for review, consider motions and applications, and prepare for cases scheduled for fall argument.

Courts have discretion in whether to award interest but usually do, said Paul Rothstein, a professor at Georgetown University Law Center. Federal court rules call for interest to be paid at a particular Federal Reserve rate available at the time of the award. In this case, it was 5.9 percent.

When deciding whether to award interest, judges take into account a number of factors, Rothstein said, such as how long the litigation went on and the recalcitrance of the people who own the money -- that is, whether they've been dragging the case out deliberately.

"The court can make a decision one way or the other whether interest will accrue, but generally, it does accrue," Rothstein said.

The Supreme Court issued its 5-3 opinion on June 25. The court held that in maritime cases punitive damages should be no more than the compensatory, or actual, damages. That 1-to-1 ratio, a new legal standard for punitive awards, applies only to punitive damages meted out under maritime law. It was designed to address "the stark unpredictability of punitive awards," the court decided.

Find Erika Bolstad online at adn.com/contact/ebolstad or call her in Washington, D.C., at 1-202-383-6104.

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