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Justices Consider Exxon’s Valdez Damages Challenge

The Supreme Court heard arguments Wednesday in Exxon's appeal of a civil suit that awarded $2.5 billion in punitive damages to victims of the 1989 Exxon Valdez shipwreck and oil spill in Alaska. The National Law Journal's Marcia Coyle recaps the case.

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  • JIM LEHRER:

    Next, today's Supreme Court Exxon Valdez argument. Margaret Warner begins with some background.

  • MARGARET WARNER:

    Nineteen years after the Exxon Valdez dumped 11 million gallons of oil into Alaska's Prince William Sound, the legal wrangling over culpability for the disaster continues.

    The tanker was captained by Joseph Hazelwood, a relapsed alcoholic who admits he was drinking before the accident. In the early morning hours of March 24, 1989, he radioed the Coast Guard that his ship had run aground on a reef and was leaking oil.

    JOSEPH HAZELWOOD, captain, Exxon Valdez: Yes, it's Valdez back. We've — should be on your radar there. We've fetched up, hard aground north of Goose Island off Bligh Reef, and evidently leaking some oil. And we're going to be here for a while. And if you want, so you're notified. Over.

  • MARGARET WARNER:

    Earlier that evening, Hazelwood had steered the tanker out of the Port of Valdez, going outside the shipping lanes to avoid ice. He then turned over the wheel to his third mate and left him alone on the bridge, a violation of company policy.

    Shortly after midnight, the crewman grounded the 950-foot tanker on Bligh Reef.

    In the weeks after the spill, Exxon vowed to devote its resources to the cleanup.

    LAWRENCE RAWL, chairman, Exxon Inc.: In time, when the job is done, I'm confident that it will be evident to every fair-minded person that our employees met this major challenge with a high level of determination and professionalism, one that was worthy of our longstanding reputation for excellent operations.

  • MARGARET WARNER:

    But before the oil could be contained, it spread over 10,000 square miles. Hundreds of thousands of birds, seals, fish and other marine mammals were killed.

    Over the following years, Exxon paid more than $3.4 billion in cleanup costs, fines and compensation to federal, state and local authorities. But many Alaskans argued that wasn't enough.

    WENDALL JONES, commercial fisherman: They're the ones that didn't monitor their drunken captain. They're the ones that have destroyed our lives and have taken away all of our kids' education. And we can't pay for our homes. Why the hell shouldn't they pay?

  • MARGARET WARNER:

    In 1994, a jury awarded $5 billion in punitive damages to nearly 33,000 commercial fishermen, native Alaskans and coastal residents. That award later was cut in half by other courts.

    Still, Exxon continued to appeal, which is the case that was heard at the Supreme Court today.