Judge nixes change in Exxon Valdez damage payout

Associated Press

ANCHORAGE, Alaska — A federal judge has rejected a seafood company’s request to rewrite a plan for dividing punitive damages to be awarded from the 1989 Exxon Valdez oil spill.

Barring an appeal of Wednesday’s ruling, lawyers hope to begin handing out punitive damages to fishermen, cannery workers, landowners, Alaska Natives and other claimants in the yearslong legal battle with Exxon Mobil Corp.

The tanker Exxon Valdez hit a reef on March 23, 1989, and spilled nearly 11 million gallons of oil into Prince William Sound, fouling beaches and killing fish and other wildlife.

In his ruling Wednesday, Judge H. Russel Holland said Seattle-based Sea Hawk Seafoods Inc. had agreed years ago to a complex plan worked out among the lawsuit’s many plaintiffs on how to divide the punitive damages. Sea Hawk operated a fish-processing plant in Valdez.


An Anchorage jury in 1994 awarded plaintiffs $5 billion in punitive damages. Exxon fought the award, arguing it already had paid billions to clean up the spill and compensate fishermen and others.

In June the U.S. Supreme Court held Exxon liable for much less — no more than $507.5 million in punitive damages. Attorneys for Sea Hawk asked Holland in October to throw out the original allocation plan.

Sea Hawk sought to replace it with one that could have steered more dollars to the company, arguing that the Supreme Court’s ruling meant that the size of punitive damage awards must be proportional to the size of compensatory damage awards already paid to plaintiffs.

In a 24-page ruling, Holland rejected Sea Hawk’s request.

After the high court ruled in June, lawyers for the company and plaintiffs worked out a partial settlement covering $383 million of the damages. They continue to battle in lower courts over interest.

With Holland’s consent, lawyers for the plaintiffs hope to hand out about $150 million of that total by year’s end to certain categories of claimants.

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