Corporation's Expenses Keep Growing and Growing

IN his unsuccessful attempt to convince a United States District Court jury that the Exxon Corporation of Irving, Texas, needs no further punishment for its 1989 tanker disaster, one company lawyer pointed to a chart showing why the nation's worst oil spill was the world's most expensive.

Even without a punitive fine, Exxon faces $2.8 billion in past and potential after-tax costs for cleanup, settlements, and legal penalties, Jim Neal said in federal court three weeks ago. ``Ladies and gentlemen ... this is getting the message,'' he said.

But the bill is still being tallied, and Attorney Neal's total requires adjustments.

Until Friday's award, Exxon's most notable legal cost was the $1.025 billion civil and criminal settlement the corporation and US and state governments signed in 1991. Spread over 10 years without interest, and with qualifiers that remit the governments and Exxon for some spill-response costs, the true present value is a little more than half its nominal total. Most of the money will go toward an environmental-restoration trust fund.

In the federal trial's second phase, the jury awarded $286.8 million to 10,000 fishermen for lost harvests and income.

As jurors were deliberating that total, Exxon struck a partial settlement with some 3,500 native Americans for compensation for ``subsistence'' foods lost to the spill.

After two months of trial, a state Superior Court jury is deliberating claims for $120 million that six Alaska native corporations and the Kodiak Island Borough sought. That case is considering damages to land and archaeological sites and lost business opportunities. Earlier in the trial, six municipalities settled with Exxon for $1 million to cover unpaid bills left over from the spill response.

Other claims totaling some $175 million are part of the federal trial's ``Phase Four,'' court documents say.

Some 5,000 fishing-industry plaintiffs, whose suits were returned to state court by an appellate decision, will go to trial this winter. Among them are fish processors and others whose cases US District Court Judge H. Russel Holland threw out as invalid under restrictive federal maritime law. Superior Court Judge Brian Shortell has a broader interpretation of the law's technicalities and has ruled the claims valid.

Alaska natives, who blocked Exxon's earlier attempt to have subsistence claims dismissed, are moving for an expedited appeal on their claims for some $200 million in cultural and social losses. Judge Holland ruled before the trial started that those losses were not compensable under maritime law, but natives hope that the Ninth Circuit Court of Appeals disagrees.

Questions about who is entitled to recovery for damages from future spills are likely to be easier to answer. The federal Oil Pollution Act of 1990 lists fishermen, natives, coastal businesses, and other groups - many shut out of the Valdez litigation - as valid.

of 5 stories this month > Get unlimited stories
You've read 5 of 5 free stories

Only $1 for your first month.

Get unlimited Monitor journalism.