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Exxon to pay interest on spill damages
Elizabeth Bluemink - McClatchy NewspapersIssue date: 6/25/09 Section: Real News
ANCHORAGE, Alaska - Exxon Mobil Corp. said Monday it won't appeal nearly $500 million in interest that a court recently ordered it to pay to Alaska fishermen, business owners and others harmed by the 1989 Exxon Valdez oil spill.
Exxon said it will pay $470 million in interest on the $507.5 million in punitive damages it has already begun paying out to claimants. The only sum that remains in dispute in the long-running lawsuit is $70 million in court fees, according to a company spokesman.
"We expect to make payment on the interest in the next few days," said Alan Jeffers, the Exxon spokesman.
The request for punitive damages was filed by Alaska Natives, fishermen and others who claimed damages to their livelihoods after the Exxon tanker ran aground in Prince William Sound, spilling an estimated 11 million gallons of North Slope crude and sullying 1,200 miles of Alaska coast. Since the mid-1990s, Exxon has appealed court rulings on punitive damages.
The 9th U.S. Circuit Court of Appeals this month finalized the punitive damages at $507.5 million, ordered Exxon to pay interest on that amount since 1996 and set the interest rate at 5.9 percent a year.
The $470 million will roughly double the average punitive damage award to 32,000 to 35,000 claimants, said David Oesting, an attorney for the plaintiffs. He said he would sign Exxon's paperwork on Monday.
"It's a blessing for everyone involved," Oesting said.
Jeffers said he couldn't immediately provide an explanation for Exxon's decision not to challenge the court-ordered interest payment.
When asked if Exxon gave him a reason, Oesting said, "No, and I didn't ask."
The interest money will be wired to the lawsuit's qualified settlement fund this week, Oesting said.
He said he hopes that 75 percent of the interest payment will be sent to the claimants by the end of July, he said.
Not all plaintiffs are owed additional money under the formula set up by attorneys for an equitable distribution of the damages, he added.
Homer, Alaska fisherman Frank Mullen, an Exxon claimant, said he's relieved that Houston-based oil company isn't appealing the interest.
"It looks like the end to the whole nonsense is near," Mullins said.
Mullen said he was "disgusted" that the company contested the $5 billion in punitive damages awarded by an Alaska jury all the way to the U.S. Supreme Court. The appeals court several years ago lowered the punitive award to $2.5 billion. Last year, U.S. Supreme Court ruled the punitive damages couldn't exceed $507.5 million, and sent the case back to the appeals court.
The $70 million that Exxon is still disputing is money the company spent on fees and other costs during the appeals.
The appeals court ruled this month that the plaintiffs shouldn't have to pay Exxon's fees.
But Exxon still contends that the plaintiffs owe up to $70 million. On Monday, Exxon petitioned the 9th Circuit on Monday for a rehearing of its claim, Jeffers said.
Exxon said it will pay $470 million in interest on the $507.5 million in punitive damages it has already begun paying out to claimants. The only sum that remains in dispute in the long-running lawsuit is $70 million in court fees, according to a company spokesman.
"We expect to make payment on the interest in the next few days," said Alan Jeffers, the Exxon spokesman.
The request for punitive damages was filed by Alaska Natives, fishermen and others who claimed damages to their livelihoods after the Exxon tanker ran aground in Prince William Sound, spilling an estimated 11 million gallons of North Slope crude and sullying 1,200 miles of Alaska coast. Since the mid-1990s, Exxon has appealed court rulings on punitive damages.
The 9th U.S. Circuit Court of Appeals this month finalized the punitive damages at $507.5 million, ordered Exxon to pay interest on that amount since 1996 and set the interest rate at 5.9 percent a year.
The $470 million will roughly double the average punitive damage award to 32,000 to 35,000 claimants, said David Oesting, an attorney for the plaintiffs. He said he would sign Exxon's paperwork on Monday.
"It's a blessing for everyone involved," Oesting said.
Jeffers said he couldn't immediately provide an explanation for Exxon's decision not to challenge the court-ordered interest payment.
When asked if Exxon gave him a reason, Oesting said, "No, and I didn't ask."
The interest money will be wired to the lawsuit's qualified settlement fund this week, Oesting said.
He said he hopes that 75 percent of the interest payment will be sent to the claimants by the end of July, he said.
Not all plaintiffs are owed additional money under the formula set up by attorneys for an equitable distribution of the damages, he added.
Homer, Alaska fisherman Frank Mullen, an Exxon claimant, said he's relieved that Houston-based oil company isn't appealing the interest.
"It looks like the end to the whole nonsense is near," Mullins said.
Mullen said he was "disgusted" that the company contested the $5 billion in punitive damages awarded by an Alaska jury all the way to the U.S. Supreme Court. The appeals court several years ago lowered the punitive award to $2.5 billion. Last year, U.S. Supreme Court ruled the punitive damages couldn't exceed $507.5 million, and sent the case back to the appeals court.
The $70 million that Exxon is still disputing is money the company spent on fees and other costs during the appeals.
The appeals court ruled this month that the plaintiffs shouldn't have to pay Exxon's fees.
But Exxon still contends that the plaintiffs owe up to $70 million. On Monday, Exxon petitioned the 9th Circuit on Monday for a rehearing of its claim, Jeffers said.
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