Exxon Corp. plans to appeal a multibillion judgment stemming from its big oil spill off Alaska.
The judgment involves $5 billion in punitive damages awarded by a federal jury in Anchorage, Alas. The award occurred Sept. 16 in a civil suit over damages from the Exxon Valdez tanker spill.
The award closed the third phase of lower court civil litigation related to the Mar. 24, 1989, spill. In the first phase, the jury found Exxon and Joseph Hazelwood, Exxon Valdez captain during the accident, guilty of recklessness in the accident. In the second, it awarded $287 million in compensatory damages to commercial fishermen.
In the latest phase, the jury also ordered Hazelwood to pay $5,000 in damages. The plaintiffs had asked for $15 billion.
The punitive damages award is the second biggest in U.S. history. The biggest such award also involved oil companies, when a jury ordered Texaco Inc. to pay Pennzoil Corp. $5.5 billion in damages related to the Texaco-Pennzoil battle to acquire the former Getty Oil Co.
EXXON'S RESPONSE
Exxon Chairman Lee Raymond said, "This verdict is totally unwarranted and unfair. It is excessive by any legal or practical measure. We will use every legal means available to overturn this unjust verdict, which is not a final judgment. It will be reviewed, and we trust it will be modified by the trial court or by appellate courts."
Raymond noted that at the time of the spill, Exxon promptly accepted responsibility for it, adding, "Exxon committed to clean up the spill and compensate those directly affected by the spill for the damages they sustained."
Exxon at the time set up a claims program that immediately made money available to those directly affected by the spill. Under that program, more than $300 million was paid to more than 11,000 claimants, many of whom were plaintiffs in the civil suit.
Exxon also reached settlements with the federal and Alaskan governments that provide for total payments of about $1 billion that can be used for restoration of Alaska's Prince William Sound. In addition, it spent more than $2.5 billion on a 4 year cleanup of the spill and its aftermath.
SOUND RESTORATION
"As a result of these efforts and with the help of nature's cleansing powers, Prince William Sound has essentially recovered from the oil spill," Raymond said.
"We are pleased with the third largest run of pink salmon in Prince William Sound that has occurred in 1994. In fact, 3 of the 5 years since the Valdez oil spill have seen the three highest runs of pink salmon in the sound's history."
Raymond also cited Exxon's efforts to strengthen its environmental, health, and safety policies and to take measures to avoid similar accidents. Those measures include barring persons with a history of substance abuse from working in safety sensitive jobs and developing improved vessel navigation systems.
"The company's prompt and comprehensive response to the spill, the $2.5 billion it has already spent for cleanup and compensation, the $1 billion settlements with the federal and. Alaska governments, and the steps we have taken to review and improve our operations clearly demonstrate that no punitive damage award was warranted," Raymond said.
Copyright 1994 Oil & Gas Journal. All Rights Reserved.
