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Decades After Spill, Exxon Valdez Case Back In Court

Date: 04-Mar-11
Country: ALASKA
Author: Yereth Rosen

Decades After Spill, Exxon Valdez Case Back In Court Photo: Mike Blake
Sea lions rest on a rock in the oily waters of Prine William Sound near Knight Island, in this April 2, 1989 file photo, after the worst oil spill in U.S. history, caused by the Exxon Valdez.
Photo: Mike Blake

More than two decades after the Exxon Valdez supertanker struck a reef and unleashed the nation's biggest tanker spill, a lingering legal dispute about the disaster heads back to court on Friday.

At issue in a U.S. District Court hearing in Anchorage is an unpaid $92 million claim by the U.S. Justice Department and the state of Alaska for what they consider long-term environmental damage unexpected at the time of the grounding.

The claim was made five years ago under a special "reopener" provision of the governments' 1991 civil settlement with Exxon, in which the oil company paid $900 million.

That money was paid over a decade into a trust account that funds environmental restoration projects and scientific work.

But persisting environmental impact prompted the federal and state governments to present the reopener bill to Exxon Mobil, Exxon Corp's successor.

The money should go to projects to address unforeseen damages, including surprising amounts of oil lingering in Prince William Sound beaches, the governments said in 2006.

Exxon has not paid the bill, and the governments have yet to take the matter to court.

Now an Alaska environmentalist is seeking to persuade a federal judge to compel Exxon to pay the $92 million, plus another $23 million in interest.

At stake is more than money that could be used restore a Prince William Sound still injured by the 11 million gallon spill, said Rick Steiner, the retired University of Alaska marine science professor and longtime Alaska activist who filed the motion to compel the payment.

PRECEDENT FOR GULF

The outcome will be a precedent for a potential legal settlement over the Deepwater Horizon oil blowout in the Gulf of Mexico or any other environmental disaster with long-term but unknown consequences, Steiner said.

"If this reopener is not paid here and won't be, then how in good conscience can the governments and the public and the courts settle the case down in the Gulf using a similar reopener provision?" he said.

Steiner faults the federal and state governments for being too passive about the claim, which he said should be invoked to address long-lasting damages such as the collapse of herring stocks.

"It's really pretty outrageous that they let this languish for so long," he said.

And he faults Exxon for refusing to pay what he considers a paltry sum compared to the oil giant's annual profits.

The state and federal governments have not responded to Steiner's efforts with any court documents related to his motion. But one former governor, Republican Frank Murkowski, sent a letter to the court supporting Steiner.

"Alaska deserves closure on this issue after 22 years," Murkowski, whose administration made the reopener claim in 2006, said in his letter.

EXXON SAYS ENOUGH

Exxon argued in a motion filed last week that it should not pay anything more for the Valdez disaster. No long-term impacts have been serious or surprising, so no reopener payment for unforeseen damages is justified, the company argued.

"In fact, the more than 20 years of intensive scrutiny of the Prince William Sound ecosystem by hundreds of scientists confirm that Prince William Sound and the oil spill area are in good ecological shape.

"The isolated pockets of oil residues remaining in the Sound are so effectively sheltered that they have resisted natural environmental removal for two decades," the company said in its motion.

"The Spill reconfirmed what has long been known, that oil spills have acute dramatic effects but that they are essentially short-term events, with some isolated consequences that may persist for many years," the company's motion said.

Exxon says it has already spent $4.3 billion as a consequence of the spill, including cleanup costs and various legal settlements, court verdicts and criminal fines.

The governments' civil settlement is separate from a long-running class-action lawsuit filed by Alaska fishermen, Alaska Natives, property owners and other individuals and groups affected by the Exxon Valdez spill.

Those private plaintiffs, totaling about 32,000, won more than $500 million in compensation through court verdicts and settlements and a $5 billion punitive damages fine levied against Exxon in a 1994 federal trial.

An appeals court cut that to $2.5 billion, and the U.S. Supreme Court in 2008 cut the punitive fine down to $507.5 million.

(Editing by Jerry Norton)

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