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Exxon Valdez Plaintiffs Want $5B Penalty Restored

By Reuters
Friday, 31 Aug 2007 | 7:36 AM ET

Plaintiffs in the long-running case surrounding the 1989 Exxon Valdez oil disaster this week asked the U.S. Supreme Court to restore a $5 billion punitive fine against Exxon Mobil, a petition filed with highest U.S. court shows.

The petition, filed Tuesday, followed one filed last week by Exxon Mobil that asked the Supreme Court to overturn the $2.5 billion punitive fine assessed by the 9th Circuit Court of Appeals.

The appeals court had halved a $5 billion fine imposed in 1994 by a federal district court jury sitting in Anchorage. The class-action suit involves about 32,000 commercial fishermen, Alaska Natives, property owners and others harmed by the spill.

In perhaps the most infamous oil accident in U.S. history, the tanker Exxon Valdez ran aground, spilling 11 million gallons of crude oil that spread to about 1,300 coastline miles. It closed commercial fisheries in Prince William Sound and the Gulf of Alaska and killed thousands of marine mammals and hundreds of thousands of seabirds.

The plaintiffs will respond by Sept. 20 to Exxon's effort to overturn the $2.5 billion fine, said David Tarshes, one of the plaintiff's attorneys.

The plaintiffs' petition argues that no Supreme Court review is needed, and that it "could prolong the case for many years to come."

Plaintiffs say the case has already dragged on too long.

They say that in the years that Exxon and its successor Exxon Mobil have challenged the jury's verdict, a fifth of the plaintiff class members have died while the oil giant has recouped the entire $5 billion though its internal corporate rate of return, the petition said.

And Exxon Mobil earned record profits recently, setting quarterly and annual highs for the most money made in corporate history.

In a prepared statement, Exxon Mobil spokesman Tony Cudmore said the company has already paid $3.5 billion in cleanup costs, compensation and settlements and does not deserve to be further punished for the spill.

"We acknowledge that the Exxon Valdez oil spill was a very emotional event for many in Alaska, and to some, those feelings remain strong even today," the statement said. "As we have said many times, the Valdez oil spill was a tragic accident, one which the corporation deeply regrets, and one for which the corporation has paid significantly."

If the Supreme Court does take up the case, it should restore the original verdict, the petition said. They say Exxon

Exxon Mobile
Exxon Mobile

Mobil deserves the punitive fine because of its "reprehensible" conduct before the spill, and cited a pattern of bad behavior by Exxon Valdez Captain Joseph Hazelwood, who the plaintiffs say was drunk when the tanker hit a reef.

"Hazelwood was a relapsed alcoholic, and Exxon knew it," the petition said.

The plaintiffs' petition also dismisses claims by the oil company that it should be credited for its vigorous cleanup efforts.

The cleanup recovered only about 14 percent of the spilled oil, and tape-recorded comments from an Exxon official at the time suggested that it was mounted more for publicity than effectiveness, the petition said.

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