Anchorage Daily News

Any Monday in the next four weeks, the U.S. Supreme Court is expected to issue its decision on the Exxon Valdez oil spill lawsuit, a case Alaskans have been waiting on for nearly 14 years.

The court generally issues its decisions on Mondays. The Exxon case is due out before the Supreme Court term ends June 23. Justices give no hint of their decisions until they are released.

The Supreme Court appeal, a dispute over $2.5 billion in punitive damages, is the final legal case remaining from the March 1989 spill in which the ruptured tanker Exxon Valdez dumped at least 11 million gallons of crude oil into Prince William Sound. The court is weighing the biggest punitive damages award ever upheld in federal court, and considering what punitive standards to apply in maritime cases.

"They always leave their toughest ones until last, that's what everybody always says," said Anchorage attorney David Oesting, part of the legal team representing the commercial fishermen, Alaska Natives and others who are plaintiffs in the lawsuit against the oil giant.

In Cordova, home to much of the Prince William Sound fishing fleet, fishermen are tired of the years of waiting. They're more worried about whether they'll be allowed to go fishing Monday, given the unusually late arrival of Copper River salmon, said Jerry McCune, president of Cordova District Fishermen United.

"Everybody's just sick of the whole deal," McCune said of the Exxon lawsuit. Still, if the decision comes out during a Monday opening, radio traffic on the Copper River flats will be real busy, he added.

"We've been talking about it for 19 years," said Andrew Wills, a former herring and salmon fisherman who now runs an inn and bookstore in Homer. "We've been let down so many times. We've had this carrot dangled, then this knife in the gut. Nobody wants to be disappointed again."

32,677 PLAINTIFFS

The 32,677 plaintiffs in the case have been waiting to see their money since 1994, when a jury in Anchorage returned a $5 billion punitive-damages award against Exxon for its role in the spill. The company has been appealing the verdict since then. Some 6,000 of the original plaintiffs have died waiting.

In 2006, the 9th U.S. Circuit Court of Appeals cut the award to $2.5 billion. Exxon appealed that decision to the Supreme Court, which heard oral arguments on Feb. 27.

Lawyers for the plaintiffs have been occupying their time since February finalizing the distribution plan for the billions that the company, now known as Exxon Mobil, might be forced to pay.

Plaintiffs in the case could see checks within 180 to 200 days if the case turns in their favor, Oesting said. Lawyers have worked out a payout formula that assigns plaintiffs a share. They'll divide the award by the shares allotted to the plaintiffs and begin issuing checks and bank drafts.

In Cordova, for example, 542 gillnet permit holders would stand to divide 6.35 percent of any settlement. At $2.5 billion plus interest, that would be an average payout of around $350,000 per fisherman, though actual shares are based on a fisherman's historic catch, with highliners getting more money.

Ross Mullins, a retired Cordova fisherman and plaintiff, said talk of new "spillionaires" has been hard on fishermen and tends to turn public sentiment the wrong way. He said the average payout to every plaintiff on a $2.5 billion judgment, including crew members and small businesses, would be only $75,000.

More importantly, he said, punitive damages would force Exxon to pay to restore the livelihoods of people who depended on a healthy ecosystem for their living.

"When someone goes out and shoots a person in the street, you know what damage they've done," Mullins said. "When you go out and shoot an ecosystem like they did with that oil spill, there's no way science can accurately tell what damage they did."

80-PLUS LAW FIRMS FOR PLAINTIFFS

Fishermen contend the spill damaged later salmon runs and wiped out herring in the Sound. Exxon paid damages for 1989 economic losses, but denies that the oil affected later years.

A spokesman for Exxon said last week the company is awaiting the verdict, like everyone else. He would not speculate on how Exxon would handle a multibillion award if it loses.

"We made our case and we're awaiting the court's decision," said company spokesman Tony Cudmore. "We believe that punitive damages aren't warranted, given the work we did to clean up the spill, the fact we spent $3.5 billion on payments and cleanups and settlements and fines. We made our case and we'll await the decision."

The plaintiffs dispute Exxon's figure, saying that tax deductions and insurance settlements meant the spill cost the company only $1.75 billion.

If Exxon is ordered to finally pay the plaintiffs, it is not expected to be difficult for the world's most profitable publicly traded corporation to come up with the money.

Oesting has an affidavit from Exxon's top financial officer saying that the verdict is "not a material event for Exxon." At the time of the initial $5 billion award in 1994, the judgment was equal to about a year's net income, Oesting said. Now, Exxon makes that much in three and a half weeks, he said.

Exxon also looks to get back 11 percent of any punitive award thanks to a secret side-deal cut in 1991 with seven Seattle fish processors -- a deal called an "astonishing ruse" by a federal judge, but upheld by an appeals court.

The oil company settled with the processors for $70 million at the time. But the processors remained in the punitive lawsuit, with any eventual award to them passing instead to Exxon. If Exxon is now told to pay $2.5 billion plus interest, the company pockets the processors' share of the damages -- just over $500 million.

In addition, the 80-plus law firms working for the plaintiffs stand to take some 20 percent, or just over $800 million of the current total.

COURT SYMPATHIES APPEAR MIXED

Business groups, such as the American Petroleum Institute and the U.S. Chamber of Commerce, have been hoping that the Supreme Court would use the Exxon Valdez case as a way to rein in what they believe are large, punitive damages against corporations.

"That's the $2.5 billion question, at this point," said Robin Conrad, executive vice president of the National Chamber Litigation Center. "What's the court going to say and what's it going to mean for Exxon Mobil in particular or the business community in general?"

Former governors, the current governor, the congressional delegation, supertanker captains, environmentalists, state lawmakers, Alaska Natives and experts in maritime law all joined with the plaintiffs.

The high court has made a clear effort in recent years to knock back high punitive damage awards. In February, the court appeared somewhat sympathetic to Exxon's efforts to reduce the amount approved by the 9th Circuit. Two justices mused openly about establishing a ratio to actual damages that would mean a $1 billion award.

However, the justices showed less enthusiasm for overturning the award outright. Several justices poked at Exxon's contention that it wasn't subject to punitive damages under maritime law. Exxon based its appeal on an 1818 court decision holding ship owners aren't liable for punitive damages for the actions of their agents at sea unless they're complicit in their behavior.

Another possibility, legal experts said after oral arguments, was that the court would send the case back to the 9th Circuit with new instructions on how to reach an award. But that's unlikely, they said -- the justices are aware of how long everyone has waited for a resolution.

In Cordova, McCune dreaded the prospect of the case dragging on any longer.

"If they do that, I give up. Come on. Make a decision, for crying in the night," he said. "I'm sure the 9th Circuit court doesn't want to see it again either."

Erika Bolstad reports on Alaska issues from McClatchy Newspapers' Washington bureau and can be reached at ebolstad@adn.com. Daily News reporter Tom Kizzia reported from Homer. Reach him at tkizzia@adn.com

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