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TOP STORY
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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