Friday March 26 2:51 PM ETAttorneys Demand Exxon Pay Damages
NEW YORK (Reuters) - Attorneys general from 37 U.S. states demanded that Exxon Corp. pay $5.3 billion in punitive damages for the Exxon Valdez oil spill in Alaska, a verdict the oil major has been trying to overturn since 1994.
"As our state's chief legal officers, we call upon the Exxon Corporation to acknowledge its corporate responsibility to the people, businesses and communities affected by the spill by paying the federal jury verdict awarded five years ago," the attorneys general said in a letter sent Thursday to Exxon Chairman and Chief Executive Lee Raymond.
The state attorneys general also expressed their concern that Exxon is profiting from delaying any payment.
"Each year Exxon delays payment of its obligation it earns an estimated $400 million from the difference between the statutory interest rate on judgements of 6 percent and the company's internal rate of return of about 14 percent," said the letter, which was signed by the attorneys general from California, New York and Massachusetts among others.
Ten years ago, the Exxon Valdez tanker spilled more than 11 million gallons of Alaskan crude oil into the Prince William Sound, devastating the area's rich ecosystem.
The $5.3 billion in damages for the spill were assessed by a U.S. district court in September 1994, and since then Exxon has been fighting in court to overturn them, arguing that the huge sum was "unfair."
Last August, a federal judge rejected Exxon's request for a new trial, and upheld the 1994 verdict. Exxon's appeal is currently in the Ninth Circuit Court of Appeals, which will determine the timetable of the appeal's progress.
Exxon, pointing to $300 million in damages the company paid voluntarily after the spill, denied allegations that it was profiting from delaying payments.
"The letter's contention that Exxon stands to profit by delaying this case is false," the oil company said in a statement.
"We are appealing the $5 billion punitive damage verdict because we believe it is unjust and excessive. Our appeal is intended to have the award overturned, not to delay further payments," Exxon said.
"Exxon is exercising a fundamental right to appeal these damages, a right to which every American individual and company is entitled. This is a core value of our judicial system which any AG (Attorney General) should understand and support," the statement said.
A spokesman for the group representing 40,000 people affected by the spill, Survivors of the Exxon Valdez Oil Spill, reacted angrily to Exxon's statements that the attorneys general may have been misinformed.
"People all across the country and the world are indignant at Exxon's arrogance," said Steven Goldstein, press secretary for the group. "The 37 state attorneys general know what they are talking about," Goldstein said.
"Exxon had been counting on the political pressure to subside once the 10th anniversary (of the spill) had past. But guess what? The pressure's still on," he said.
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