We'll publish this story in our newspaper tomorrow:
By WESLEY LOY
It took better than 19 years for commercial fishermen and other plaintiffs to win sizeable punitive damages from Exxon Mobil Corp. for the disastrous 1989 oil spill in Prince William Sound.
Now that some money is in hand – about $383 million – it still could be months away from distribution.
Because of new legal squabbling among the plaintiffs about how to slice the pie.
It’s the kind of situation Anchorage federal Judge H. Russel Holland warned about last year, when he told lawyers in the epic case it would be “an embarrassment” to allow infighting to delay a payout.
The U.S. Supreme Court in June ordered the lower courts to award up to $507.5 million in punitive damages to nearly 33,000 commercial fishermen, cannery workers, land owners, Alaska Natives and others who claimed harm from the spill.
The judgment was a disappointment to the plaintiffs, far less than the $5 billion an Anchorage jury had awarded them in 1994.
Nevertheless, after the Supreme Court decision lawyers for the plaintiffs and Exxon worked out a partial settlement under which Exxon agreed to release $383 million.
The money is to be distributed under a complex allocation plan Holland approved in 1996.
But on Oct. 9, lawyers for Sea Hawk Seafoods Inc., a Seattle-based company that ran a fish-processing plant in Valdez, filed court papers that essentially say, “Whoa, wait a minute,” on handing out the money.
Sea Hawk is asking the judge to toss out the allocation plan and install a new one that conforms to the Supreme Court ruling. The company’s lawyers argue the high court held that the size of punitive damage awards must be proportional to the size of compensatory damage awards already paid to the plaintiffs.
The current allocation plan is flawed because some plaintiffs stand to receive disproportionately larger or smaller shares than they deserve, the Sea Hawk lawyers argue.
They don’t specify in their 24-page motion just what’s at stake for Sea Hawk in dollar terms. The lawyers could not be reached over the weekend for comment.
Anchorage attorney David Oesting, the lead lawyer for Exxon Valdez plaintiffs, said he intends to fight Sea Hawk’s effort.
“They just want a whole lot more money that they’re not really entitled to, in my opinion,” Oesting said.
If Sea Hawk gets its way, many other plaintiffs would be deprived of shares they’ve long expected, he said.
Oesting estimated the Sea Hawk challenge could take 18 months to wind its way through the courts.
Until then, the money can’t be paid out, he said.
Sea Hawk’s motion seems to confirm a major shakeup in the way the Exxon money would be divided if the judge accepts the company’s proposed allocation method. For example, cannery workers could receive millions more dollars and commercial fishermen millions less.
The company’s lawyers argue this reshuffling is only fair and proper, as the Supreme Court ruled punitive damages should match compensatory damages.
Frank Mullen, a Homer commercial salmon fisherman who has followed the Exxon case closely, said he and other plaintiffs were exasperated over the years it took the courts to decide on punitive damages, and the Sea Hawk motion just adds to the frustration.
Fishermen, many of whom have died over the course of the Exxon case, were hoping the settlement with Exxon might yield checks between Thanksgiving and Christmas, but the Sea Hawk matter might dash those hopes, Mullen said.
He’s hoping Holland will deny Sea Hawk’s motion. It was difficult getting thousands of people to agree on the allocation plan, which includes numerous classes of plaintiffs, and it would be calamitous to reopen that debate, Mullen said.
“We might as well just start ordering the pine box,” he said.
But Sea Hawk’s lawyers argue it would be fairly simple to replace the allocation plan with a new one leading to “a fair and expeditious distribution” of punitive damages.
Find Wesley Loy’s commercial fishing blog online at adn.com/highliner or call 257-4590.