Decision Nears on Exxon Valdez Interest
NEW YORK -- After reducing the punitive damages award from $2.5 billion to $507.5 million last month, the U.S. Supreme Court is preparing to hand down its judgment to ExxonMobil on whether it must pay $488 million in interest to tens of thousands of victims of its 1989 Alaska oil spill, Bloomberg News reported.
ExxonMobil, the world's largest energy company, stated in court papers filed earlier this month that the interest question "should be decided by this court and should be decided now." Victims of the spill, which caused 11 million gallons of oil to leak into Alaska's Prince William Sound, are seeking 5.9 percent interest, under federal law, which dates back to the original trial court judgment in 1996, according to Bloomberg News.
Jeffrey Fisher, the lawyer who argued the victims' case before the justices, said the issue is one that has never been addressed by the nation's highest court.
ExxonMobil petitioned the court to award interest accruing from the date of the forthcoming Supreme Court ruling, which would provide victims with a fraction of the amount they are seeking. "There is also no reason to penalize Exxon by awarding another $488 million in damages when the substantial delay here was not, in any sense, Exxon's fault," the company argued.
Conversely, the victims stated in court papers that without interest the awards would lose their "punitive sting" during appeal. "The practical effect of granting ExxonMobil's request would be to reduce the punitive award allowed by this court to $257.5 million in 1996 dollars, or roughly one-half of the $507.5 million this court held the jury was entitled to award them," the group stated.
The group has argued that ExxonMobil, by not paying the award immediately, has earned $3.9 billion on the money based on its internal rate of return, Bloomberg News reported.
While the judgment can be delivered as early as July 28, the justices have several options and could either rule on the issue themselves or leave it for a federal appeals court.
ExxonMobil, the world's largest energy company, stated in court papers filed earlier this month that the interest question "should be decided by this court and should be decided now." Victims of the spill, which caused 11 million gallons of oil to leak into Alaska's Prince William Sound, are seeking 5.9 percent interest, under federal law, which dates back to the original trial court judgment in 1996, according to Bloomberg News.
Jeffrey Fisher, the lawyer who argued the victims' case before the justices, said the issue is one that has never been addressed by the nation's highest court.
ExxonMobil petitioned the court to award interest accruing from the date of the forthcoming Supreme Court ruling, which would provide victims with a fraction of the amount they are seeking. "There is also no reason to penalize Exxon by awarding another $488 million in damages when the substantial delay here was not, in any sense, Exxon's fault," the company argued.
Conversely, the victims stated in court papers that without interest the awards would lose their "punitive sting" during appeal. "The practical effect of granting ExxonMobil's request would be to reduce the punitive award allowed by this court to $257.5 million in 1996 dollars, or roughly one-half of the $507.5 million this court held the jury was entitled to award them," the group stated.
The group has argued that ExxonMobil, by not paying the award immediately, has earned $3.9 billion on the money based on its internal rate of return, Bloomberg News reported.
While the judgment can be delivered as early as July 28, the justices have several options and could either rule on the issue themselves or leave it for a federal appeals court.