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SUPREME COURT APPROVES, BUT DRASTICALLY CUTS, EXXON VALDEZ CASE PUNITIVE DAMAGES AWARDS:

On 25 June, nearly 20 years after the event, the U.S. Supreme Court finally ruled on the award of punitive damages to the roughly 33,000 plaintiffs in a massive class action suit for damages caused by the Exxon Valdez oil spill. Exxon Valdez’s commanding officer and Exxon Corporation employee, Captain Joseph Hazelwood, had a known drinking problem and was drunk and had abandoned his post at the time the vessel ran aground in Prince William Sound, Alaska, on 24 March 1989. He was the only officer aboard certified to take the giant supertanker through the sound.

That 11 million gallon oil spill, the largest in U.S. history, damaged fisheries in the ecologically sensitive Prince William Sound, previously one of the world’s richest fisheries, and spread oil for hundreds of square miles. Thousands of commercial fishermen, fishing dependent businesses and native Alaskans dependent on subsistence fisheries were damaged, and the fishery has never fully recovered. The trial court had awarded $5 billion in punitive damages, which was trimmed by the 9th Circuit Court of Appeals court to $2.5 billion in 1994.

Exxon Corporation argued before the Supreme Court, based on an ancient maritime case (The Amiable Nancy) 16 U.S. 546 (1818), that punitive damages are not appropriate in maritime cases to charge a ship’s owner for the negligence of a captain at sea, on the grounds that once out to sea the ship’s owners could not exercise any communication or control over the captain’s actions. PCFFA filed an Amicus brief in the case in support of punitive damages for fishermen that noted that unlike in 1818, commercial ships at sea today such as the Exxon Valdez are in nearly constant ship-to-shore radio, satellite and email touch with company officials, were not only responsible for employment of a known drunk in such a sensitive position with no backup, but who were in constant touch with the vessel and could have taken action at any point to prevent the accident.

By a split 4-4 vote, the Justices failed to rule on the issue of whether punitive damages were assessable to a ship’s owner in maritime cases, leaving the 9th Circuit Court of Appeals Court ruling that they were intact, but not resolving this issue at the higher Court. But by a 5-3 majority, however, the Justices decided that absent malice or intention, punitive damages attributable to mere negligence should be comparable to actual compensatory damages on a roughly 1-to-1 basis, and thus cut the punitive damages award to $507.5 million plus interest. This is the equivalent of roughly 5 days of Exxon Corporation profits as of 2007. The average claimant among the 33,000 plaintiffs will not get about $15,000. Nearly 20 percent of the claimants have died since the disaster in 1989, but their heirs or estate could qualify for this payment. Justice Alito recused himself from the proceedings because he owns Exxon Corporation stock.

Many, but not all of the class members entitled to compensation have been identified and contacted, and some claimants have been out of touch and need to update their contact information. If you have already been contacted and have moved, or alternatively if you are the heir of a prior claimant, or think you might otherwise be qualified to receive some of this compensation, you can find out more information on the Internet at: www.exspill.com or by calling (800)397-7455 ((800)EXSPILL). Copies of the pleadings and briefs, the final Supreme Court decision, as well as a Frequently Asked Questions section about the claims and case are on that website.

If you were fishing in Alaska during spring of 1989, or working in any fishing industry capacity in Alaska during that year, and think you may be a claimant, you may also get additional information on whether you are on the claimant list from the Law Firm of Faegre & Benson (www.faegre.com), which was handling much of the litigation, as well as more information on the case at: www.faegre.com/articles/article_751.aspx, or from the Law Firm of Jamin, Schmitt, St. John in Kodiak, AK, which can be contacted at (907)486-6024.

For media coverage of the decision see the 26 June Oregonian article at: www.oregonlive.com/news/oregonian/index.ssf?/base/news/121445251742580.xml&coll=7 and the Juneau Empire 26 June articles http://juneauempire.com/stories/062608/sta_295993319.shtml and http://juneauempire.com/stories/062608/sta_295993306.shtml.

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