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. Last Updated: 07/27/2016

Exxon Fights $4Bln Award for Oil Spill

DALLAS -- A federal appeals court has again ordered a court in Alaska to reconsider a multibillion dollar punitive damages award against ExxonMobil Corp. for the Exxon Valdez oil spill.

ExxonMobil, the world's largest publicly traded oil company, said late last week it should pay no more than $25 million in damages -- a fraction of the original $5 billion award. A jury in Alaska approved a $5 billion award to punish the company for spilling 42 million liters of crude oil into Prince William Sound in 1989. The U.S. 9th Circuit Court of Appeals in San Francisco said the award was excessive and sent it back to U.S. District Judge Russel Holland in Anchorage. Holland reduced the award to $4 billion last year. ExxonMobil appealed, saying the reduced figure was still too high.

Dave Oesting, the lead plaintiff attorney in Anchorage, said the order to Judge Holland was a two-sentence directive merely asking his court to review the original ruling in light of the Supreme Court ruling.

"They're [Exxon] taking it totally out of context," he said. "They [the court] make no judgment about amount."

Oesting said he believed the $4 billion figure would hold up after the review.

"Unfortunately, this is going to cause more delay [in payment]," said Gerard Nolting, another attorney for plaintiffs.

ExxonMobil argued before the 9th Circuit court that under a U.S. Supreme Court decision this year, punitive damages should not exceed the amount the company was forced to pay by court order to compensate victims of the oil spill.

"The last time we argued that punitive damages should be no more than $40 million [based on previous law]. Now we'll argue that under [this year's court ruling involving State Farm insurance] it really should be no more than $25 million," said Tom Cirigliano, a spokesman for ExxonMobil.

ExxonMobil said it cleaned up the spill and voluntarily compensated those who claimed direct damages. The company has said it paid out $300 million voluntarily to more than 11,000 Alaskans and businesses affected by the 11 million gallon spill from the Valdez -- the worst from a tanker in U.S. waters. It spread oil to more than 1,600 kilometers of coastline and caused what government scientists say are lingering damages to a variety of marine species.

The company said it also paid another $2.2 billion for cleanup operations from 1989 to 1992. It paid $1 billion in settlements with the state and federal governments. (AP, Reuters)