Exxon Pleads Valdez Case to Supreme Court
On Feb. 27, the U.S. Supreme court heard arguments in Exxon Mobil's appeal to overturn or reduce the $2.5 billion penalty for the 1989 Valdez tanker oil spill in Prince William Sound, Alaska.
Residents and small businesses, including fishermen and seafood processors, filed suit in 1989 and by 1994 were granted a $5-billion award. Since then, the case has been in the court system and no awards have been cashed in.
The company reportedly has paid $3.4 billion in cleanup and other costs.
According to an article by Bloomberg, Alaska's top political leaders, including its Republican governor and U.S. senators, are backing the victims, as are 34 states. The Bush administration, taking a low profile, didn't file a Supreme Court brief even though the dispute involves the meaning of the U.S. Clean Water Act.
The company also contends that, even if punitive damages are permissible, the Valdez award is too large. Should the company pay the full award, plus more than $2 billion in accrued interest, it would be the largest-ever punitive-damage payment.
The article said that Exxon, based in Irving, Texas, has obtained a letter of credit and set aside $5.4 billion to cover payments.