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ALASKA Judge: Exxon must pay millions to those hurt by '89 Valdez accident

Saturday, January 31, 2004

Exxon Mobil hopes to overturn judge's decision for a third time.
ANCHORAGE, Alaska (AP) -- Forming another appeals court showdown, a federal judge is ordering Exxon Mobil Corp. to pay $4.5 billion in punitive damages plus interest to thousands of Alaskans who suffered losses from the 1989 Exxon Valdez oil tanker catastrophe.
Exxon Mobil said it will appeal the decision released Wednesday by U.S. District Judge Russel Holland, who also ordered the Irving, Texas-based company to pay an estimated $2.25 billion in interest from the case.
The money is for 32,000 fishermen, Alaska Natives, landowners, small businesses and municipalities affected by the 11-million gallon spill in Prince William Sound.
Yet the 9th U.S. Circuit Court of Appeals has twice vacated Judge Holland's decision in the case, Exxon Mobil spokesman Tom Cirigliano said.
The appellate court directed Judge Holland to reconsider the damages awarded in an earlier ruling in light of a U.S. Supreme Court decision last year about punitive damages.
Damages had been reduced
In 2002, Judge Holland reduced the Exxon punitive damages award to $4 billion after a three-judge panel sent the original $5 billion verdict back, saying it was excessive.
For his latest ruling, the judge was to consider a U.S. Supreme Court decision last year involving a Utah traffic accident and damages awarded in that case.
The high court held that the ratio of punitive to actual damages should not exceed single digits, or 9-1.
Exxon attorneys argued that the plaintiffs suffered only economic injury and that damages should be based on a lower ratio. Exxon has already paid $3.2 billion on cleanup, settlements and other fees and penalties, attorneys said.
But lawyers for the plaintiffs argued that the key issue is conduct, and that Exxon's was among the worst. They said Exxon knew that tanker Capt. Joe Hazelwood had alcohol problems but still allowed him to pilot the Exxon Valdez.
Attorneys calculated the actual damages caused by the spill at more than $500 million, which equals roughly $5 billion when the 9-1 ratio is applied.