Anchorage Daily News

WASHINGTON -- Exxon violated the social compact it had entered into with the state of Alaska when the company's tanker spilled 11 million gallons of crude oil in Prince William Sound in 1989, the state Legislature and four former governors said in a new brief filed with the U.S. Supreme Court.

As a result, the company should be subject to punitive damages for the environmental catastrophe, state lawmakers argued in their friend-of-the-court brief. The court will hear oral arguments in the company's appeal on Feb. 27.

"Punitive damages are appropriate here because Exxon acted recklessly and violated its solemn vow to the people of Alaska to protect Alaska's marine ecology and marine-based economy," according to the brief.

State lawmakers, who authorized filing the brief in a recent meeting of the Legislative Council, cite the Trans-Alaska Pipeline Authorization Act of 1973. The federal law expanded the liability of oil companies in the event of a spill, according to the brief, but it was the price businesses paid for permission to construct and operate the pipeline.

Exxon has been appealing the case since an Anchorage jury in 1994 returned a $5 billion punitive damages award against the company, one of the largest verdicts ever against a U.S. corporation. The 9th U.S. Circuit Court of Appeals in San Francisco cut the award to $2.5 billion in 2006; Exxon appealed that decision to the Supreme Court.

Lawmakers decided that court hearing was their final chance to speak for the fishermen, Alaska Natives and other residents who lost their livelihoods because of the economic effects of the oil spill, state Rep. John Coghill, R-North Pole, said. They thought that the former governors would add historical heft to their brief.

"To me, it was a way of saying that we the people feel that the social contract was that important," Coghill said. "There are windows of opportunity, and this was one of the few opportunities we could use to make a case for so many Alaskans we represent. The Legislature felt that for the people of Alaska, it was time to speak up."

But Exxon has always maintained that the punitive damages were excessive punishment on top of the $3.5 billion in compensatory payments, cleanup payments, settlements and fines the company paid out. The company argues in its own brief that other areas of U.S. law -- including the Clean Water Act -- address punitive damages, and were applied to the company.

"The Valdez oil spill was a tragic accident, and one which the corporation deeply regrets," said company spokesman Tony Cudmore. "We took immediate responsibility for the spill, cleaned it up, and voluntarily compensated thousands of Alaskans and businesses affected by the spill."

The brief filed by legislators is one of dozens of friend-of-the-court filings entered in the case, and was signed by the state Legislature as well as four former governors: Wally Hickel, Tony Knowles, Steve Cowper and Bill Sheffield. Cowper was governor at the time of the spill.

Most of the other friend-of-the-court briefs come from business groups supporting Exxon, including the American Petroleum Institute and the U.S. Chamber of Commerce.

Exxon has argued since 1994 that trial and appellate courts erred in blaming the company for the actions of its ship captain in 1989. The company's case in front of the Supreme Court is expected to make the claim that nearly two centuries of American maritime law uphold the company's argument.

"The punitive damages case has never been about compensating people for actual damages," Cudmore said. "Rather it is about whether further punishment of Exxon Mobil is warranted. The company does not believe any punitive damages are warranted in this case."

While the Supreme Court has agreed to consider whether the size of the award is allowed by the limits of maritime law, it decided against addressing the question of whether the $2.5 billion award violates the U.S. Constitution.

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

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