Exxon Valdez case drags on; many claimants dead

WASHINGTON — When a federal jury in Alaska in 1994 ordered Exxon to pay $5 billion to thousands of people whose lives were disrupted by the Exxon Valdez oil spill, an appeal of the nation's largest punitive damages award was inevitable.

But almost no one could have predicted the round of legal ping-pong that only this month lands at the Supreme Court, nearly two decades since the spill itself.

In that span, claimants' lawyers say there is a new statistic to add to the grim legacy of the disaster in Prince William Sound: Nearly 20 percent of the 33,000 fishermen, Native Alaskans, cannery workers and others who triumphed in court that day are dead.

"The bottom line," said Tim Joyce, the mayor of Cordova, where half the town's 2,400 full-time residents are parties to the suit, "is that there is still oil on the beaches. And this lawsuit still isn't finished."

The high court is scheduled to hear arguments Wednesday on whether punishment is excessive or even permitted under maritime law. The case may turn, in the eyes of the justices, on a nearly 200-year-old precedent set when privateer ships sailed the oceans, or on the more recent provisions of the Clean Water Act.

But in Alaska, the lawsuit is seen as a test of justice and corporate responsibility, and its resolution is seen as critical to healing the scars left by an epic event that defines the state's modern history, Republican Gov. Sarah Palin said.

Exxon officials contend that such sentiments ignore the facts of the case and note that the company already has spent more than $3.4 billion in compensation for losses, cleanup and fines.

"This case is about whether further punishment is warranted," Exxon spokesman Tony Cudmore said. "We've spent $3.5 billion, which is a significant sum of money we think is adequate to deter anyone" from future wrongdoing.

But that figure no longer impresses Palin and others. When the jury awarded $5 billion in 1994, that represented a year of Exxon profits. An appeals court subsequently reduced the damages to $2.5 billion — "about three weeks of Exxon's current net profits," the plaintiffs told the Supreme Court in their brief.

"I'm a capitalist, I'm a conservative Republican, I am pro-development and pro-industry," said Palin, who is herself a former commercial fisherman once party to the suit. "But consider what Exxon has made in terms of profits in all these years. The American judicial system came down with this judgment, and they've appealed and they've appealed and they've appealed."

The award has been reviewed three times by a district judge and twice by the U.S. Court of Appeals for the 9th Circuit, based in San Francisco, with more than four years elapsing between one appeal and a decision.

The passage of time is a worry for claimants, and they have responded with public relations and legal tactics unusual for Supreme Court cases.

Justices have extended the allotted time for oral arguments, and the briefs filed on both sides indicate the events of the grounding might yet be explored again.

Some things are not in dispute. The Exxon Valdez left port late on the evening of March 23, 1989, loaded with 53 million gallons of crude oil. It strayed out of the shipping lane to avoid ice. Capt. Joseph Hazelwood told the third mate when to make the turn back into the lane, and then left the bridge, a violation of regulations. Just after midnight, the crewman ran the nearly 1,000-foot tanker aground, and 11 million gallons of oil oozed into Prince William Sound, eventually spreading more than 600 miles.

The plaintiffs charge that Hazelwood, an alcoholic, was drunk. They say Exxon knew Hazelwood, once treated for his disease, had resumed drinking.

Courts have agreed. "Spilling the oil was an accident, but putting a relapsed alcoholic in charge of a supertanker was not," the appeals court ruled in upholding the punitive damages.

Exxon's lawyer in the case, Walter Dellinger, told the court in his brief that it is "hotly disputed" whether Hazelwood was drunk at the time of the accident and points out Hazelwood was acquitted by a state-court jury of operating a vessel under the influence.

Whatever misdeeds were committed by Hazelwood, Dellinger argues, they were not the misdeeds of Exxon.

Exxon also argues that the punishment for discharges of oil and other hazardous substances is governed by the Clean Water Act, and it does not provide for private punitive damages.

Justice Samuel Alito Jr. owns Exxon stock and has recused himself from the case. That leaves eight justices to hear it, and an even split would mean that the award stands.