The Exxon Valdez disaster
Posted: Tuesday, February 26, 2008 6:41 PM by Barbara Raab
By Pete Williams, NBC News Justice correspondent
In many ways, today's showdown at the U.S. Supreme Court over the Exxon Valdez disaster is about numbers -- the amount of oil spilled, the number of Alaskans who suffered, and the size of the damages awarded. But the most important number may be this one: eight. That's how many justices are hearing the case, and that could make all the difference.
More than 30,000 Alaskans went to court after Exxon's supertanker hit a reef in 1989. Their lawsuit said the resulting spill of nearly 11 million gallons of oil into the state's coastal waters virtually wiped out their ability to earn a living from the sea. A jury awarded them five billion dollars in punitive damages. A federal appeals court later cut that in half, but Exxon is hoping the Supreme Court will find even that excessive.
Noting that punitive damages are intended to punish for wrongdoing, Exxon says the lower court should never have awarded them because they're legally unavailable here. The company says the federal government has already done the punishing by assessing fines against Exxon. Second, Exxon says under the centuries-old law of the sea, shipping companies cannot be required to pay punitive damages based on the actions of a ship's captain. Once at sea, a ship's commander historically acted independently, and the owners had no control over him. But even if some punitive damages are allowed, the company says it has already paid $3.4 billion in fines and settlements and enough is enough.
The Alaskans say Exxon is legally responsible for the actions of the Valdez captain, claiming that the company's wrongdoing started well before the ship ever left port. They claim Exxon knew that Captain Joseph Hazelwood had a drinking problem but did nothing about it and that he had been drinking on the night the ship went aground. As for the right to sue for punitive damages, they say the government fines are assessed for polluting the environment. The Alaskans are suing to punish Exxon for what it did to them as individuals.
The Alaskans are hoping they can count on the court's four liberal members -- Stevens, Souter, Ginsburg, and Breyer. Ordinarily, that would not be enough for victory, because it takes at least five votes to win a case. But it may be enough this time. Justice Samuel Alito, who owns Exxon stock, is sitting this case out. That leaves eight justices. A four-four tie would keep the lower court ruling intact, which was a victory for the Alaskans because it ordered Exxon to pay the $2.5 billion.
A decision is expected by late June.
