After 19 years, Exxon-Valdez oil spill before Supreme Court

Business Materials 27 February 2008 23:10 (UTC +04:00)

( AP )- The US Supreme Court Wednesday heard a case that could once and for all decide whether ExxonMobil should pay damages for one of the worst environmental disasters in history.

The justices appeared divided over the central question of whether a shipowner should be liable for its ship captain's mistake.

Justices heard arguments over the 1989 Exxon Valdez oil spill, which devastated the shores of northern Alaska and cost fisherman and businesses their livelihood.

ExxonMobil has already paid about 3.5 billion dollars in economic compensation and environmental clean-up efforts since the disaster. It is appealing to the Supreme Court against an order that it pay another 2.5 billion dollars in punitive damages to more than 35,000 people affected in the community.

At the helm of the Exxon Valdez on March 23, 1989, was Joseph Hazelwood, who it was later found was a relapsed alcoholic and may have been drinking on the night.

Attorney Jeffrey L Fisher argued on behalf of victims Wednesday that Exxon heard "over and over and over again" during a three-year period that Hazelwood was an alcoholic, and refused to take action.

Exxon had clearly not learned its lesson, Fisher said, as they "have taken no action inside the company to express in a meaningful way that they have been deterred" from allowing another disaster.

But Exxon maintains Hazelwood violated the company's clear policy on alcohol and it could have done little more to prevent the accident. Exxon's attorney Walter Delinger argued that there was no "malice" or "profit motive" for the company in allowing such a disaster to happen.

"Exxon gained nothing by what went wrong in this case," Delinger said , an argument that seemed to resonate with justices concerned about the far-reaching implications of a potential verdict.

"What if there's a breach of the corporate policy?" asked Chief Justice John Roberts. "What more can the corporation say other than 'here's our policy'?"

"Apart from adopting a policy, they need to implement it soundly," Fisher responded.

The more than 35,000 victims would receive 76,000 dollars each should the Supreme Court uphold the verdict of the lower Ninth Circuit Court in 2001, which had already reduced the penalty from an earlier 4.5 billion dollars.

Fisher acknowledged that there had been some dispute in the lower courts over the appropriate penalty, in what both sides recognise is a landmark case, and said he assumed it was that dispute which led the Supreme Court to hear the case.

"That, and 3.5 billion dollars," Justice Anthony Kennedy quipped.