Exxon plaintiffs make final plea for interest

Lawyers for a class of fisherman and other Alaskans affected by the Exxon Valdez oil spill submitted what is likely their last request earlier today for the Court to award some $488 million in interest on the punitive damage award authorized in the recent decision in Exxon v. Baker (07-219). The reply, filed less than two weeks after the plaintiffs initially asked the Justices to resolve the question, stressed the financial injustice of limiting the punitive award to the same amount – $507.5 million – originally approved by an Alaskan federal judge more than a decade ago.

“The practical effect of granting Exxon’s request,” the reply said, 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.”  By comparison, the filing said, Exxon has earned a net $3.9 billion on the amount of the punitive award – and $3 billion since 2005 alone – when measured as the difference between the rate of interest under federal law to which the plaintiffs would be entitled (5.9 percent) and the oil giant’s own internal rate of return.

The dispute has arisen over the parties’ conflicting interpretations of a Supreme Court rule (42.1) governing interest on damage awards.  The plaintiffs contend the rule only applies when the Court orders damages for the first time – unlike the present case, in which the Justices reduced the punitive award from $2.5 billion to $507.5 million, equal to the amount of compensatory damages originally found by the jury. Exxon maintains that because the Court’s ruling was silent on whether the plaintiffs were entitled to interest on the remaining amount, the rule entitles them to recover no more than the original judgment.

As of this afternoon, the Court had not given any indication as to when or whether the Justices would resolve the question. Click here for more background on the plaintiffs’ original submission, and here for more background on Exxon’s response.