Exxon Valdez to Pay Interest on Punative Damage Award
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The 9th U.S. Circuit Court of Appeals held on Monday that the plaintiffs, mostly seafood and fishing companies and the defendant, Exxon Valdez should have to pay their own legal expenses incurred for the appeals stemming from the 1989 Exxon Valdez oil spill. However, the panel ruled 2-1 that Exxon Valdez should have to pay the interest on the punative damage award of $507.5 million.
Roughly 33,000 people were plaintiffs in the lawsuit from the initial lawsuit that was filed two decades ago, it’s been reported that Exxon has begun repaying the victims last year.
Initially, the punative damages award of $5 billion was later reduced down to $507.5 million in 2008 by the U.S. Supreme Court which held that a ratio of 1:1 was the upper limits for punitive damages under maritime law. The U.S. Supreme Court directed the decision on the interest to the appellate court.
Bloomberg News reported:
The victims are entitled to interest at the rate of 5.9 percent accruing from 1996, when the original damage award was made final, the U.S. Court of Appeals said today. Jeffrey Fisher, an attorney for the victims, said that formula comes to about $500 million in interest.
In addition the punative damage award, Exxon Valdez estimated the cleanup cost for the oil spill to have cost the company $3.4 billion and the legal fees incurred to be roughly $70 million.
The oil spill occurred on March 23, 1989, when the vessel carrying 53 million gallons of oil crashed into a reef. Over 11 million tons of oil was dumped into the Price Williams Sound destroying local businesses and wildlife. The ship’s caption, Joseph Hazelwood was accused of being intoxicated at the time of the incident. He was never criminally charged, but was convicted of negligently discharging oil, a misdemeanor. He was fined $50,000 and given 1,000 hours of community service.