ExxonMobil Still Fighting Hard to Avoid Making Interest Payments in Valdez Oil Spill Debacle
by Jeremy Elton Jacquot, Los Angeles on 11. 1.08
Image from marinephotobank
For a company that supposedly prides itself on being more than just your "regular" oil firm (is it just me or was every other ad during the Beijing Olympics an ad for ExxonMobil's "softer" side?), ExxonMobil sure has a strange way of showing it. Indeed, while it continues to rake in record profits (most of which I'm guessing does not derive from its non-oil initiatives), it has fought tooth and nail in court to avoid making the interest payments it owes to the victims of the 1989 Valdez oil spill. The Center for Public Integrity's Marianne Lavelle, who got the scoop on the story, notes that the amount it owes, roughly $500 million, corresponds to about three days' worth of its profits.
Image from YourLocalDave
Supreme Court decision spared Exxon from worst of punitive measures
You may remember that Exxon got off relatively easy in the lawsuit filed against it by a coalition of Alaskan fishermen, cannery workers and others affected by the spill, with the Supreme Court ruling that it would only need to pay $500 million in damages instead of the original $2.5 billion. Lawyers for the plaintiffs argue that, on top of the $500 million, Exxon also owes the Alaskans $500 million -- the equivalent of 12 years' worth of interest (since the date of the original judgment on September 24, 1996).
Exxon interpretation would allow it to only pay several months' worth in interest
Exxon, obviously, did not agree with the lawyers' interpretation, saying that it should only owe interest from June 25, the date of the Supreme Court's decision. This comes at a time when Exxon announced $14.8 billion in quarterly profits, the largest of any U.S. company in history and divulged that it had spent $8 billion to buy back its own stock.
Before any money gets disbursed to the plaintiffs (assuming they win their case, of course), another dispute involving Sea Hawk Seafoods, a Seattle-based company that operated a fish-processing plant in the area, will need to be resolved. The company has challenged the court's formula for distributing the money, so a decision will need to be reached before the other plaintiffs can begin receiving an average of $15,000 (double that if Exxon is made to cough up the interest) each.
Looks like Exxon may need to pour more cash into blanketing the airwaves with sappy, tear-jerking ads if it hopes to get rid of all this bad (but well-deserved) publicity.
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Short story.
Exxon spent about $3 Billion (yep, not a typo, that's Billion) on clean up effortsand despite the massive interference of the FedGov, they did an OK job.
The State, in court, tried to nail them with 5 Billion in "punitive damages" - this on top of the Billions already paid to locals.
So they did what Corporations do - they went to court. All the way to the Supreme Court (SCOUS) even. And - guess what? They won every step of the way.
The damage award was cut once, but a State judge in Alaska moved it back up to the billion range. So, they went back to court. Exxon won, again.
Some award stood, though it required a lower court to throw out several centuries' worth of Admiralty and case law.
The plaintiffs now wanted interest from Day One. Exxon said no - they worked through the courts because that is the way the law works. At any time, the issue could have settled out of court - the visions of the millions the lawyers would make no doubt played into the whole drama.
And in the end, laywers fees will *really reduce* the actual cash paid to surviving plaintiffs.
Back on task - So, under the law - no interest.
It would seem no matter rich, or poor, the law applies to everyone - profits notwithstanding.
The story itself is much more complicated.
IF you are interested in facts and not business bashing, you can use to the 'web to look up facts, court case history, court decisions and all.
Because, in the end, the law has to protect everybody or it cannot (or will not) protect anyone - including you and me.
Don, the money they initially spent on clean up efforts was a publicity stunt. They sprayed water on the beaches, which makes them look cleaner, but does nothing to remove oil from the environment. Even today, you can dig down about an inch and hit a layer of oil on those beached. Even today many species of fish are still missing from this area that was once abundant.
Whether or not they win or lose in court, they completely destroyed hundreds of miles of coastline, and several hundred square miles of aquatic habitat.
The ships captain was drunk, hit ground, and caused a major catastrophe that affected and still affects the livelihood of residents in those towns that mostly depend on a fishing economy. ExxonMobil hired that captain, owned that boat, and needs to repay the people for their losses, and clean up the environment to the same degree as it was before the spill. I don't care if that costs them hundreds of billions. They made a mess, and they need to clean it up.
I agree they should clean up the mess, or should have. It's probably a little late now. But Don makes a good point that this is most likely about lawyers fees and the money won't go towards cleaning up anything. I feel like Exxon is an easy target right now with the publicity of their profits, whereas a much smaller company would not be worth the lawyers' time to go after. You can't expect that a corporation should pay more in damages just because it makes more money. Corporations have the same legal rights as individuals. You wouldn't expect criminals guilty of the same crime to be punished according to their income.
Don is right.
However much you may not like it, the courts made a ruling, and Exxon is abiding by that ruling.
This is how our society works--we settle our disputes in court.
Don is right.
However much you may not like it, the courts made a ruling, and Exxon is abiding by that ruling.
This is how our society works--we settle our disputes in court.
Exxon will do anything to minimise the cost of their mistake.
Given that this environmental disaster could have been avoided had Exxon not minimised their costs at the expense of safety.
I wonder when the next Exxon disaster will occur - before or after they've paid for the last one?