WASHINGTON - When a federal jury in Alaska in 1994 ordered Exxon to pay $5 billion to thousands of people who had their lives disrupted by the massive Exxon Valdez oil spill, an appeal of the nation's largest punitive damages award was inevitable.
But almost no one could have predicted the incredible round of legal ping-pong that only this week will reach the Supreme Court.
In the time span of the battle - 14 years after the verdict, nearly two decades since the spill itself - 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.
"That's the most upsetting thing, that more than 6,000 people have passed and this still isn't finished," said Mike Webber, a Native Alaskan artistic carver and former fisherman in the Prince William Sound community of Cordova. "Our sound is not healthy, and neither are the people. Everything is still on the surface, just as it was."
The high court is scheduled to hear arguments Wednesday on whether punishment is excessive or even permitted under maritime law. 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. In the eyes of the justices, the case may turn on an 1818 Supreme Court decision that restricts the liability of ship owners for the conduct of their crews, or the more recent damage 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, Governor Sarah Palin, a Republican, said in an interview.
"Every Alaskan life was affected by this," said Palin, elected in 2006. "When I got in here, that was one of the first orders of business: to find out how in the world can this administration speak on behalf of all Alaskans who have been so adversely affected by this spill." 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.
The award has been reviewed three times by a district judge and twice by the US Court of Appeals for the Ninth Circuit with more than four years elapsing between one appeal and a decision.
Jeffrey Fisher, a Stanford law professor who will argue the case for plaintiffs, has sent the court a video of Exxon executives acknowledging fault, and an audiotape of the distress call made by what plaintiffs assert to be a drunk Captain Joseph Hazelwood reporting that the Exxon Valdez had hit Bligh Reef.
Fisher said it is important to remind the justices of the events of 19 years ago, and that the jury was punishing Exxon for "socially outrageous behavior."
The Exxon Valdez was loaded with 53 million gallons of crude oil on March 23, 1989, when it strayed out of the shipping lane to avoid ice. Hazelwood instructed the third mate on 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, spilling 11 million gallons of oil.
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 that Hazelwood was acquitted by a state court jury of operating a vessel under the influence. Whatever misdeeds were committed by the captain, Dellinger said, they were not the misdeeds of Exxon.
© 2008 The Washington Post