Exxon maintains it doesn't owe interest

$488 MILLION: Company files brief opposing plaintiffs' request.

July 15, 2008 

JUNEAU -- Exxon Mobil Corp. is fighting to avoid paying interest on the $507.5 million judgment the U.S. Supreme Court ordered it to pay for the Exxon Valdez oil spill.

Lawyers for the Texas-based energy giant on Tuesday submitted a nine-page brief to the high court opposing the application of interest, which could bring the total punitive damages Exxon owes for the 1989 spill to nearly $1 billion.

Exxon argues "there is no good reason" for the court to add interest.

"Exxon does not agree that there is any sound basis to award plaintiffs what they seek -- approximately $488 million over and above the $507.5 million that this Court determined was the legally proper amount to punish and deter," according to Exxon's filing.

Lawyers for commercial fishermen and other plaintiffs last week asked the Supreme Court to clarify whether interest would apply. The question came up after the court decided the long-running case on June 25, cutting the amount of damages from $2.5 billion to $507.5 million without mentioning interest.

Alaska lawyers representing the fishermen and other plaintiffs either didn't return calls Tuesday or declined to comment.

One Cordova commercial salmon fisherman, RJ Kopchak, said he wasn't surprised at Exxon's move.

"Everybody should be just livid about this kind of thing," he said. "We're all exhausted at this point. The big guy in the corner just keeps kicking our asses."

Exxon spokesman Tony Cudmore said Exxon believes interest should be applied only from the day the Supreme Court ruled, and not for prior years.

Cudmore added the company isn't trying to drag out a nearly 20-year case even longer.

"Again, like everyone involved in the tragic Valdez accident, we're anxious to have the matter resolved. We know this has been a very difficult time for all involved," Cudmore wrote in an e-mail.

With interest, and minus attorney fees, an estimated $628 million would be divided among the more than 32,000 plaintiffs in the civil case.

Just when the Supreme Court justices might rule on the interest question is unclear.

The court recessed at the end of June, having remanded the case to the 9th U.S. Circuit Court of Appeals in San Francisco to carry out the punitive damages award. According to the high court's Web site, during the summer the justices continue to analyze new petitions, consider motions and prepare for cases scheduled for fall argument.

In its brief, Exxon's lawyers say that under court rules, if an appellate court "fails to provide directions" on payment of interest on a judgment, then no interest is allowable.

The company's lawyers add that Exxon shouldn't be forced to pay interest as a way to further deter future spills, or because the case dragged on.

They say the blame for the case lasting so long is on fishermen and other plaintiffs who kept urging a U.S. District Court judge in Anchorage to "disregard the plain command" of the appeals court that a jury's original $5 billion award in 1994 had to be reduced.

"There is ... no reason to penalize Exxon by awarding another $488 million in damages when the substantial delay here was not in any sense Exxon's fault," the company's brief says.

Also Tuesday, the head of an industry watchdog group formed after the Exxon Valdez oil tanker hit a charted reef and spilled 11 million gallons of crude asked Gov. Sarah Palin to encourage Congress to censure "the five activist justices who recklessly issued" the "pro-business" decision on June 25.

"Without the possibility of significant punitive damage awards, the task of keeping oil tanker traffic in Prince William Sound environmentally safe will become much more difficult for organizations such as ours," said John Devens, head of the Prince William Sound Regional Citizens' Advisory Council, in a letter to Palin.


Find Wesley Loy's commercial fishing blog online at adn.com/highliner or call him in Juneau at 586-1531. Reporter Erika Bolstad contributed to this story.

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