May 11, 2011

Exxon Valdez Oil Spill Litigation Update

Update: May 11, 2011

Cleaning Up, David Lebedoff's account of the Exxon Valdez oil spill and the ensuing litigation, in which Faegre & Benson partner Brian O'Neill played a central part, has been updated for Kindle and is available from Amazon.com. The updated edition contains new post-Gulf spill material showing that the tragic denial of victims' claims that occurred in the Exxon matter is likely to be repeated in the Gulf situation.

Update: July 27, 2010

Today, Brian O'Neill will be testifying before the Senate Judiciary Committee for the "Exxon Valdez to Deepwater Horizon: Protecting Victims of Major Oil Spills" hearing. Brian's biography and written remarks can be viewed here and here. The hearing will be offered as a webcast here.

Update: March 17, 2010

Many people, who were paid in 2009, are calling with questions about their 1099's. The amount reported on the 1099 equals your gross payment, (labeled as "Allocation Minus Previous Payment" on the statement that came with your check), therefore, the attorney fees and any money paid to lien agents or assignees is reported on the 1099. The lien agents or assignees will also receive a 1099 from the EQSF. For more information please see the EQSF's website, www.exspill.com. For guidance on tax issues, please refer to pages 32 and 33 of IRS Publication 525 (2009), and see a tax professional.

Statement Required by U.S. Treasury Department. The U.S. Treasury Department requires us to advise you that this written advice (including any attachments) is not intended or written by our firm to be used, and cannot be used by any taxpayer, for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code. Written advice from our firm relating to Federal tax matters may not, without our express written consent, be used in promoting, marketing or recommending any entity, investment plan or arrangement to any taxpayer, other than the recipient of the written advice.

Update: February 1, 2010

The following summarizes the progress of the EVOS litigation and the status of payments to claimants.

In 1994, a jury in Anchorage found Exxon reckless and awarded the Plaintiffs $5 billion dollars in punitive damages. Exxon appealed the jury verdict to the Ninth Circuit Court of Appeals, which reduced the punitive damages to $2.5 billion in December 2006. Exxon then appealed to the U.S. Supreme Court. The U.S. Supreme Court's decision in June 2008 capped the punitive damages at $507.5 million.

In September 2008, Exxon finally made a payment of punitive damages to the Exxon Qualified Settlement Fund (EQSF) in the amount of $383,349,750. Exxon withheld $70 million based on its belief that the Plaintiffs should pay the costs Exxon incurred on appeal. Exxon also refused to pay interest on the punitive damages. The first wave of payments of punitive damages to claimants began in November 2008.

On June 15, 2009, the Ninth Circuit Court of Appeals ruled in favor of the Plaintiffs on both issues. In July 2009, Exxon transferred $470 million in interest to the EQSF. These funds are now being disbursed. Exxon continued their appeal of the $70 million in costs.

In December 2009, Exxon abandoned their appeal of the $70 million and transferred the money to the EQSF. A Satisfaction of Judgment was finally entered. We expect that the $70 million, along with all other funds that have been held in reserve, will be paid out in 2010.

For information about disbursements of funds to claimants please check the "News" tab on the EQSF's website: www.exspill.com.

Update: July 1, 2009

On Monday, June 15th, the Ninth Circuit Court of Appeals ruled that Exxon must pay interest on the $507.5 million in punitive damages awarded by the U. S. Supreme Court. Exxon argued that the 5.9% interest rate should start accruing at the time of the Supreme Court's ruling in June 2008, the Court of Appeals agreed with the Plaintiffs that the interest must begin accruing at the time of the original judgment, which was in September 1996. A copy of the ruling can be found here.

On July 1, 2009, Exxon paid the Plaintiffs $470 million in interest, and the Exxon Qualified Settlement Fund (EQSF) is looking to start paying claims as soon as possible. Press reports suggest that this may happen by the end of this month, but this is overly optimistic. The next steps will be for the EQSF to submit payment applications to the Court in Anchorage, and once the Court approves the payments the process of issuing checks can begin.

The Ninth Circuit Court of Appeals also ruled that the Plaintiffs were not required to pay Exxon $70 million in costs that Exxon has withheld from the punitive damages judgment. On June 29, Exxon filed papers with the ninth circuit court to seek a rehearing en banc on this issue.

Update: March 17, 2009

The payments to the 5,331 claims mentioned in the January 20th update have started going out in weekly batches. The EQSF expects to complete these payments by early April.

Many people, who were paid in 2008, are calling with questions about their 1099s. If you are represented by Faegre & Benson, the attorney fees are included in your 1099. The amount in the 1099 will therefore equal your "Allocation Minus Previous Payment," as indicated in the statement that came with your check. For guidance on tax issues, please refer to page 32 of IRS Publication 525 (2008), and see a tax professional.

Statement Required by U.S. Treasury Department. The U.S. Treasury Department requires us to advise you that this written advice (including any attachments) is not intended or written by our firm to be used, and cannot be used by any taxpayer, for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code. Written advice from our firm relating to Federal tax matters may not, without our express written consent, be used in promoting, marketing or recommending any entity, investment plan or arrangement to any taxpayer, other than the recipient of the written advice.

Update: January 20, 2009

Today a second application for payment of the punitive damages principal was filed with Judge Holland. This application applies to the salmon fisheries in Chignik, Cook Inlet, Kodiak, and Prince William Sound. It also includes application for payment to Natives and the Prince William Sound 1989 fund. This application requests the authority to pay 5,331 claims that were not included in the fist wave of payments made to these claim categories in December. If you have multiple liens, such as an IRS lien, and you signed up for voluntary payment of estimated taxes, your claim is not included in this application. Rather, your claim will be included in a third application to the court. For more information on the payment process, and to read the court filing, click here.

For those people who were paid in 2008, the EQSF anticipates sending out 1099 forms during the last week of January.

Update: December 22, 2008

The oral argument on the cost and interest issues were held last Monday at the Ninth Circuit Court of Appeals. Click here to read a transcript of the argument, and here to listen to the audio of the argument. You will be prompted to enter docket number 04-35182 to listen to the audio file.

Update: December 8, 2008

The direct deposit payments began on Friday and are continuing today. Checks are being printed this week for those who do not have direct deposit. The printing should be completed by this Friday and checks will be mailed next week. Please see the November 24th update for information on who is included in this wave of payments.

Update: November 26, 2008

A press release from the EQSF regarding the process of distributing punitive damages money in December to claimants was issued today. To read the complete press release, click here.

Update: November 24, 2008

Today, Judge Holland authorized the first distribution of punitive damages. This is a distribution to claimants with unencumbered claims in the ten oiled salmon fisheries, Native Alaskans, and the Prince William Sound 1989 fund. Distributions will occur on a rolling basis, so please be patient if your name is not on the list. The first checks are expected to be sent out next week.

A claim is considered encumbered if any portion is going to a second party, such as the IRS, a bankruptcy trustee, or an ex-spouse through a divorce decree. If your name is listed with an allocation of $0.00, you will not receive a portion of the punitive damages award. Such zero dollar recoveries occur when claimants' gross allocations are less than their previous payments. Claimants with zero dollar recoveries may be entitled to a portion of the interest that is awarded.

In a separate order issued today, Judge Holland explained why the Court refused to hold back a portion of the distribution, as urged by Sea Hawk Seafoods. It is Sea Hawk's position that the distribution conflicts with the Supreme Court's ruling. Using strong language, the Court rejected Sea Hawk's position as frivolous. A copy of the order is here.

Update: October 27, 2008

On Friday, the plaintiffs filed their opposition to Sea Hawks' motion to vacate the plan of allocation. In the brief, the plaintiffs also urge Judge Holland to rule on Sea Hawks' motion by November 15th, so that a distribution to the ten oiled salmon fisheries, Native Alaskans, and Prince William Sound 1989 fund can be made this year. A copy of the brief is here.

Update: October 20, 2008

The parties have filed their next round of briefs with the Ninth Circuit Court of Appeals regarding the interest on the punitive damages and certain costs. A copy of the plaintiffs' brief is here, and Exxon's brief is here.

Update: October 10, 2008

Yesterday, Sea Hawk Seafoods, Inc. filed a motion in the Alaska District Court to vacate the Plan of Allocation. This may impact the timing of the pending distribution of the punitive damages.

Update: October 9, 2008

The Ninth Circuit Court of Appeals has scheduled oral argument on the interest and cost issues for Monday, December 15, 2008, in Pasadena, California. A copy of the order is attached here.

Update: October 8, 2008

EVOS Tax Legislation has been signed into law as part of the Emergency Economic Stabilization Act of 2008 (the "bail-out bill"). The legislation will provide tax relief to some claimants of the Exxon Valdez Oil Spill. Click here to view the text of the bill.

Key provisions include:

1. Three year income averaging for "Qualified Settlement Income" received from the Exxon Valdez litigation. Qualified Settlement Income includes punitive damages awarded and any associated interest that is received.

2. Claimants may contribute up to $100,000 of Qualified Settlement Income to an Individual Retirement Account (IRA). The contributions can be made in each year Qualified Settlement Income is received, but in aggregate may not exceed the $100,000 limit. Eligible retirement plans include traditional IRAs and Roth IRAs. Contributions must be made by the tax return filing due date (not including extensions) for the year in which the Qualified Settlement Income is received. Certain other rules apply.

3. No portion of Qualified Settlement Income will be treated as self-employment income or wages for purposes of Employment Taxes.

4. The tax benefits are applicable to a "Qualified Taxpayer" which is defined as: (1) any individual who is a plaintiff in the EVOS litigation (No. 89-095-CV); or (2) any individual who is a beneficiary of the estate of a plaintiff and who was the spouse or an immediate relative of the plaintiff.

Information on income averaging generally (not specifically designed for EVOS claimants) is available on the IRS website. Income averaging and rules governing retirement contributions can be complex, and claimants should consult their individual tax advisors.

Statement Required by U.S. Treasury Department. The U.S. Treasury Department requires us to advise you that this written advice (including any attachments) is not intended or written by our firm to be used, and cannot be used by any taxpayer, for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code. Written advice from our firm relating to Federal tax matters may not, without our express written consent, be used in promoting, marketing or recommending any entity, investment plan or arrangement to any taxpayer, other than the recipient of the written advice.

Update: September 24, 2008
 
Today the plaintiffs' filed their first brief with the Ninth Circuit Court of Appeals arguing that Exxon must pay interest for the last twelve years on the punitive damage award.  The brief also argues that the plaintiffs' should not have to pay Exxon's appellate costs.  All briefs are due by the end of October.
Update: September 10, 2008
Today the Ninth Circuit issued two orders; the first is the judgment on the $507.5 million punitive damages award, and the second stays the mandate pending the outcome of the dispute over interest and costs, and sets the briefing schedule for the dispute.

Update: August 27, 2008

Exxon has now agreed to make a payment to plaintiffs of approximately $383 million in partial satisfaction on the $507.5 million punitive damage award in the next few days.

Exxon has given notice that it continues to dispute plaintiffs' entitlement to interest, as well as costs. Under the agreement reached on the payment, receipt of the money by plaintiffs will not prejudice Exxon's right to argue that it may offset some of its costs against the balance of the judgment, and that plaintiffs are not entitled to interest. Nor will plaintiffs be prejudiced in their argument that Exxon must pay interest since 1996, and that Exxon is entitled to no offset for the cost of its letter of credit. We expect those matters to be presented to the Ninth Circuit Court of Appeals within the next month.

We also expect the settlement fund to begin distributing a substantial portion of the $383 million payment in October 2008. Partial attorneys fees payments and cost reimbursement will be part of the process.

Click here to view an article from the Anchorage Daily News providing additional background.

Update: August 12, 2008

Today the United States Supreme Court has officially remanded the Exxon litigation back to the Ninth Circuit Court of Appeals to resolve the dispute over how much interest Exxon has to pay.

Commentary on the judgment from SCOTUSblog is below.

http://www.scotusblog.com/wp/court-declines-to-rule-on-exxon-interest/

Posted By Lyle Denniston On August 12, 2008

The Supreme Court refused on Tuesday to decide whether the fishermen and others who sued over the Exxon Valdez oil spill are entitled to collect interest on the punitive damages award they won — an award that was sharply reduced by the Court. Instead, the Court sent the issue back to the Ninth Circuit Court to consider, "without prejudice" to either side's argument on the issue. The Court's judgment is here.

The Court's action came in the form of a final judgment, putting into effect its ruling on June 25 in Exxon Shipping, et al., v. Baker, et al. (07-219). In that ruling, the Court reduced the punitives award from $2.5 billion to the same level as the previous award of compensatory damages — $507.5 million. The Court said then that, at least in the maritime law field, a punitive award for such an incident should be at most on the same level as the compensatory award — that is, 1 to1.

In that ruling, the Court did not discuss the issue of whether those who sued Exxon Shipping Co. and its parent, Exxon Mobil Corp., for the 1989 oil spill into Prince William Sound in Alaska were entitled to interest on the punitive verdict. Two weeks later, those who sued asked the Court to "make clear in its judgment" either that they were entitled to interest, or else that a Court rule dealing with interest issues did not apply

They are seeking interest at a rate of 5.9 percent from Sept. 24, 1996 — leading, according to their lawyers, to an award of $488 million. The date chosen is keyed to the final ruling of a U.S. District Court awarding punitive damages (at that time, $4.5 billion) and requiring Exxon to pay interest on it.

Their July 8 filing said they were concerned that, if the Court's judgment in the case did not mention interest, "then Exxon may argue on remand that this Court's opinion and judgment deprive [those who sued] of their right to interest on the new punitive judgment that will be entered, despite the district court's prior and unappealed ruling on this issue."

In response, Exxon on July 15 urged the Court to decide the interest issue itself. If the Court did not do so, it contended, "no interest is allowed" under the Court's Rule 42.1. The Court should rule, it suggested, "to forestall further litigation."

The big oil company and its shipping subsidiary said there was no "sound basis" to award "approximately $488 miliion over and above the $507.5 million that this Court determined was the legally proper amount to punish and deter."

The Court, now in summer recess, has been pondering the issue since July 18, when those who sued filed the final paper in the dispute, their reply. At midday Tuesday, the Court issued its formal judgment.

The Court said it was returning the case to the NInth Circuit to reduce the punitive award as required by the June 25 ruling, "and to address the parties' contentions about respondents' entitlement to interest on the award remaining, a matter on which this Court declines to rule in the first instance, without prejudice to the position of any party."

The Court added that Exxon Shipping and its parent were entilted to recover $14,324 in costs — $14,024 for printing the record and $300 for the costs of the Court's Clerk.

The judgment made no mention of the Court's Rule 42.1, and the competing interpretations of that offered by the two sides. That Rule specifies the interest rate to be paid when interest arises in a federal court case — the amount set by law, which is now 5.9 percent. That was not in dispute. But the Rule also says that, if the Court has "modified or reversed" a lower court's judgment, and ordered the lower court to award "a judgment for money," the Court would provide "instructions with respect to the allowance of interest."

Those who sued argued that the Rule did not even apply in the Exxon Valdez case, because the District Court in the case already had ruled that they were entitled to interest on the judgment. The Rule, they added, "addresses a situation in which this Court directs that plaintiffs be awarded money to which they had not previously established a legal entitlement."

But, if the Rule did apply, they went on, the Court should specify in its final document implementing the decision that they were entitled to interest.

Exxon countered that the Rule directly applied in this case, because the Court had modified the size of the punitive awards. The only issue, it added, "is whether interest should be awarded from the date of the original district court judgment (September 24, 1996) as plaintiffs seek, or whether it should be awarded only from some later date, such as the date of this Court's judgment fixing the legally proper amount of punitive damages."

The big oil company contended that there was no reason to "penalize" it by awarding another $488 million.

By the Justices action on Tuesday, there was no clarification of whether Rule 42.1 even applied or what it might mean in such a case in the future. The Rule's meaning will not be an issue when the case goes back to the Ninth Circuit. But the question of the meaning of the District Court's 1996 ruling, and the date on which any interest on the puntives award should start running, will be central to that reopened controversy.

It is conceivable, of course, that whoever loses in the Ninth Circuit could again seek to appeal to the Supreme Court. It is also possible that the Ninth Circuit may return the dispute to the District Court for an initial review.

Update: July 24, 2008

Here is a calculator (MS Excel file) that will allow you to estimate what your recovery will be if the Supreme Court orders Exxon to pay interest from the date of the original judgment on September 24, 1996. Just open the file (you may have to save it to your computer), select your claim category from the drop down list, and enter your final percent share.

Update: July 8, 2008

We strongly encourage all claimants to sign up for direct deposit. Direct deposit is free, convenient and more secure than mailing you a check. It will allow the Exxon Qualified Settlement Fund Administrator to transfer your settlement money to your checking or savings account more quickly, and you will have immediate access to your award. It is also a more cost efficient way to process the punitive damage award. Simply go to the EQSF's website www.exspill.com to download a form or call the EQSF at 1-800-397-7455.

Update: June 25, 2008

The Supreme Court released its opinion in Exxon today. The Court held that the punitive damages awarded by the jury and subsequently reduced by the Ninth Circuit Court of Appeals are excessive based on maritime common law. In particular, the Court held that the punitive damages should be equal to the compensatory damages, which the Court recognized is $507.5 million in this case. The case is vacated and remanded to the Ninth Circuit to reduce the punitive damage award. With interest, the punitive damage award is expected to be nearly one billion dollars. The Court is equally divided on whether maritime law allows corporate liability for punitive damages based on the acts of managerial agents. The Ninth Circuit's decision is therefore undisturbed in this respect. In addition, the Court held that the Clean Water Act's water pollution penalties do not preempt punitive-damages awards in maritime spill cases.

Justice Souter wrote the opinion of the Court, in which Justices Roberts, Scalia, Kennedy, and Thomas joined. Justices Stevens, Ginsburg, and Breyer concurred in part and dissented in part, indicating that they would have upheld the Ninth Circuit's decision on the size of the punitive damage award.

Update: February 29, 2008

On Wednesday, February 27th, oral arguments on the Exxon Valdez Oil Spill Litigation were heard at the United States Supreme Court. A decision is expected from the court by the end of June. Click on the link below to view the transcript of Wednesday's argument.

Supreme Court Oral Argument Transcript

Update: February 20, 2008

Exxon has filed its reply brief on the merits with the Supreme Court.

Reply Brief For Petitioners

Update: January 30, 2008

On January 22nd, Plaintiffs' filed with the Supreme Court their brief opposing Exxon's appeal of the $2.5 billion punitive damages judgment. A link to the brief is located below.

On January 29th, sixteen separate amicus (friend of the court) briefs were filed by individuals, governmental and private organizations, and Indian tribes, urging the Supreme Court to affirm the $2.5 billion punitive damages award against Exxon. A summary of the Interest of Amici and a Summary of the Arguments as well as a link to each amicus brief is located below.

Oral arguments will be heard at the Supreme Court on Wednesday, February 27, 2008.

Briefs Filed On Behalf Of Respondents

Update: January 16, 2008

The Alaska Legislative Council has filed an Amicus Curiae (friend of the Court) brief with the Supreme Court opposing Exxon's appeal of the punitive damages judgment. A copy of the Council's brief is located here.

Brief of the Alaska Legislative Council

Update: December 27, 2007

The Supreme Court has set the argument for Wednesday, February 27, 2008.

A number of Amicus Curiae (friend of the court) briefs have been filed in support of Exxon. Copies of the briefs are located here.

  • Amicus Brief – WLF in Support of Exxon
  • Amicus Brief – PLAC in Support of Exxon
  • Amicus Brief - Transportation Institute in Support of Exxon
  • Amicus Brief – Chamber of Commerce in Support of Exxon
  • Amicus Brief – American Maritime Safety in Support of Exxon
  • Amicus Brief – International Chamber of Shipping in Support of Exxon
  • Amicus Brief – API et al in Support of Exxon

    Update: December 26, 2007

    Sarah Armstrong, who was a dear friend and colleague, passed away on Christmas Eve. Her sister sent us the following e-mail that we would like to share.

    Dear Friends at Faegre & Benson,

    I am very, very sorry to write that my sister, Sarah Armstrong, died unexpectedly on Christmas Eve, December 24. Her truck skittered off an icy road and hit a tree. The troopers said she did not suffer. She looked like she was sleeping.

    We are planning a small memorial for her in Clam Gulch, where she will be buried, on Monday, December 31.

    Our beloved Sarah died unexpectedly on Christmas Eve, the 24th of December. She was born with her twin sister Meg in New York City on January 10, 1961. They grew up in Mt. Carroll, a small town in Northwestern Illinois. Sarah moved to Minneapolis to complete her Bachelor's degree, and then completed her J.D., cum laude, at the University of Minnesota Law School in 1988. She joined Faegre & Benson in the same year and, as a member of their environmental law team, she supported cases that helped save the lives of black footed ferrets, whales and Elk. In 1989, Sarah joined the team that would come to Alaska to represent fishermen whose livelihoods had been damaged by the Exxon Valdez Spill. In Alaska, Sarah met and married the love of her life, Dean Osmar. She became a set net fisherperson and dog musher and loved to go to the Caribou hill with her husband, and to mush by the moonlight.

    She is survived by her loving Mother, Joanne, Sisters Meg and Jenny, Brother-in-law Barry, Stepfather Don, and nephew and nieces Bruno, Sofia and Jessica, and numerous aunts and uncles, and by Dean's children and grandchildren. She is preceded in death by her father, Andrew. Her faithful friend Bernie (a Keyes Hound), Hermann the Ermine, and all of her other woodland companions miss her very much.

    Sarah's work at Faegre & Benson, on environmental projects, enabled her to meet Dean and begin this beautiful life in Alaska. She died happy, well loved and very much in the midst of her life.

    Love, Meg Armstrong

    Update: December 18, 2007

    Yesterday, Exxon filed a brief on the merits of their appeal of the punitive damages to the United States Supreme Court. The plaintiffs' response to Exxon's brief is due in mid-January. Click here to view a copy of Exxon's brief.

    Update: December 5, 2007

    There will be additional EVOS / Client Litigation Update meetings held at the following dates and locations.

    Saturday, Dec. 15, at 1:00 p.m. – Kodiak High School, Choral Pod Room
    Monday, Dec. 17, at 11:00 a.m. – Loussac Library, Assembly Chambers, 3600 Denali St., Anchorage, AK

    November 26, 2007

    Cordova singer/songwriter, Malani O'Toole has released an album that includes a song called "What Exxon Means". To listen to the song, and for more information about Malani visit her Web site at http://www.malanimusic.com/.

    November 21, 2007

    There will be a series of EVOS / Client Litigation Update meetings held at the following dates and locations.

    Wednesday, Nov. 14, at 11:30 a.m. - Challenger Center, Kenai, AYesterday, Exxon filed a brief on the merits of their appeal of the punitive damages to the United States Supreme Court. The plaintiffs' response to Exxon's brief is due in mid-January.
    Thursday, Nov. 15, at 11:30 a.m. - Masonic Hall, Cordova, AK
    Sunday, Nov. 18, at 2:00 p.m. - South Lake Union Naval Reserve, 860 Terry Ave N. (use Mercer St. exit from I-5), Seattle, WA
    Thursday, Nov. 29 at 8:30 a.m., the Majestic, 1027 North Forest Street - Bellingham, WA
    Friday, Nov. 30 at 8:30 a.m., Doubletree Hotel * Cascade Room, 1000 NE Multnomah Street, - Portland, OR

     

    October 29, 2007

    The Supreme Court agreed on Monday to rule on the legality of the $2.5 billion punitive damages award against Exxon Mobil Corp. and its shipping subsidiary for the massive oil spill in Alaska's Prince William Sound in 1989 — an incident that has sparked a 18-year courtroom battle over money damages. The Court limited its review to issues involving maritime law, declining to hear a claim that the verdict was excessive under the Constitution's Due Process Clause. The Court also refused to hear a cross-appeal, seeking to reinstate a $5 billion damages award.

    October 16, 2007

    In the last few weeks, all claimants have been sent an informational packet from the Exxon Qualified Settlement Fund (EQSF). This should not be ignored. The EQSF has been appointed by the Court to process and pay all claims in the litigation. One of the items in the packet is an authorization for direct deposit. If you did not receive the packet please contact your law firm, or the EQSF at 1-800-EXSPILL.

    The briefing to the Supreme Court for the Petitions for Certiorari have now been completed, click below to view the briefs. The Supreme Court is scheduled to review the petitions during their October 26, 2007, conference. Hopefully we will get a decision from the Supreme Court during the week of October 29, 2007, although the Court is not obligated to make a decision by that time.

  • Certiorari Petition
  • Opposition to Certiorari Petition
  • Certiorari Reply
  • Cross Petition
  • Opposition to Cross Petition
  • Reply to Cross Petition

    Update: September 21 2007

    Today, the plaintiffs filed with the U.S. Supreme Court a brief in opposition to Exxon's petition for writ of certiorari .

    Update: August 29, 2007

    On August 20, 2007, Exxon filed a petition for writ of certiorari to the U.S. Supreme Court, and today the plaintiffs filed a conditional cross-petition . Each party has 30 days to file an opposition to the other's petition. The Supreme Court's 2007 term begins on Monday, October 1, 2007. While approximately 8,000 petitions are filed with the Court every term, only about 100 are granted. The Supreme Court does not have a deadline to rule on the petitions, but we expect that they will either grant or deny them before the end of the year.

    Update: July 11, 2007

    When a person with an Exxon claim dies, any remaining funds for the claim will be paid to the decedent's estate. The IRS, however, requires that the Exxon Qualified Settlement Fund Administrator (EQSF) collect the following documentation before making payments to an estate:

    • 1. A certified copy of the death certificate;

    • 2. An IRS form W-9 with a tax id number (EIN) for the estate. The EIN can be obtained from the IRS by using an IRS form SS-4. See below to see how to obtain W-9 and SS-4 forms from the IRS website; and

    • 3. One of the following documents from the probate proceedings: Letters Testamentary and Acceptance, Letters Testamentary in Supervised Administration, Letters of Administration and Acceptance, and/or Letters of Administration.

    Feel free to contact Faegre & Benson's Oil Spill Claims office at 1-800-328-4393 for assistance.

    Update: June 30, 2007

    Please click here to view the PowerPoint presentation that Brian O'Neill presented to UCIDA.

    Update: June 21, 2007

    We are attempting to locate people with bad addresses in our Exxon Claims Database, if you know any of the people on the list please encourage them to contact our Exxon Claims Office at 1-800-328-4393. We have also attached the list at the bottom of this article.

    Update: May 23, 2007

    The Ninth Circuit Court of Appeals has rejected Exxon's petition for a rehearing en banc. The parties now have 90 days to file a petition to the U.S. Supreme Court. We expect that the U.S. Supreme Court will rule on the petition before the end of the year. To view a copy of the Ninth Circuit's order, click here.

    Update: March 7, 2007

    On Friday, March 2, 2007, at the request of the Ninth Circuit, the Plaintiffs' filed a response to Exxon's petition for panel rehearing and petition for rehearing en banc. Copies of Exxon's petition for rehearing, and the Plaintiffs' response are attached.

    Update: January 16, 2007

    On Friday, January 12, 2007, Exxon filed a petition to the Ninth Circuit Court of Appeals for panel rehearing and petition for rehearing en banc (The Chief Judge and 14 other judges). The Ninth Circuit receives approximately 1,000 petitions for en banc consideration each year, but only grants about 20. According to the Court's rules, we will not file a response unless requested to do so by the Court. Typically, the Court will decide on the petition within a few months.

    Exxon's petition has stopped the clock to petition for appeal to the US Supreme Court.

    Update: December 22, 2006

    The Ninth Circuit Court of Appeals issued its decision on Friday, December 22, 2006 in response to the appeal regarding the punitive damages imposed in the Exxon Valdez oil spill litigation. The Ninth Circuit reduced the punitive damages award by $2 billion, making the final award $2.5 billion, not including post-judgment interest. We estimate that the interest accrued is approximately $2 billion, bringing the total amount to about $4.5 billion. Although we are disappointed the Court reduced the amount, we feel the Court's decision is a major step toward bringing the litigation to a close. Although Exxon does have a right to petition for a hearing en banc and/or to petition the U.S. Supreme Court to review the award, we do not believe either court will grant Exxon's petition. We anticipate that the litigation will conclude in the next year, including distribution of checks to clients. (December 22, 2006)

    Click here to read the Ninth Circuit's decision.

    Update: June 23, 2006

    On June 21, Senators Lisa Murkowski (AK) and Patty Murray (WA), along with 24 other senators, sent a letter to the Chairman and CEO of ExxonMobil Corporation urging it to once and for all resolve the Exxon Valdez Oil Spill litigation. Copies of Senator Murkowski's press release and the letter to Exxon are attached.

    Update: June 12, 2006

    Alaska Senator Lisa Murkowski recently introduced legislation to provide tax benefits for the plaintiffs in the Exxon Valdez oil spill litigation. The proposed tax legislation will allow for:

    • Income averaging;

    • Contribution to retirement plans;

    • Exemption from paying SECA (Social Security) tax.

    Copies of the Senator's press release and the proposed legislation are attached.

    Update: January 30, 2006

    On Friday, January 27, the United States Court of Appeals for the Ninth Circuit heard the argument regarding the appropriate level of punitive damages to assess against Exxon Mobil Corporation for the grounding of the oil tanker Exxon Valdez in March 1989.

    The Exxon Valdez spilled approximately 10 million gallons of oil into the waters of Alaska's Prince William Sound in what remains to this day the most devastating oil spill in U.S. waters. The Exxon Valdez was under the command of an inebriated captain, Joe Hazelwood at the time of the grounding. Exxon was aware that Captain Hazelwood was a relapsed alcoholic, yet left him in charge of a supertanker laden with millions of gallons of toxic crude oil, with devastating consequences.

    Over 34,000 injured persons -- fishermen, natives, local governments, and others -- sued Exxon seeking compensation for the economic damage caused by the oil spill. Ever since a jury collectively awarded these plaintiffs $5 billion in punitive damages in September 1994, Exxon has sought to appeal and delay payment of punitive damage compensation to the oil spill's victims. The people of Prince William Sound and adjacent areas in Alaska continue to suffer from the Exxon Valdez oil spill's effects on fisheries and subsistence resources that have never fully recovered.

    This case is straightforward on the facts. Exxon knowingly left a relapsed alcoholic captain in charge of a supertanker, aware of the great potential for injury such a situation presented, and the inevitable terrible result ensued. The punitive damage award in this case is an appropriate penalty for Exxon's conduct that resulted in grave injury to thousands of people, who have yet to be compensated. We hope that the Ninth Circuit will affirm the thoroughly considered jury verdict and order of the district judge awarding punitive damages. We also hope that the Ninth Circuit's decision will close these long legal proceedings and enable the people of coastal Alaska to reestablish their lives and livelihoods.

    Update: December 1, 2005

    On Wednesday, November 30th, the Ninth Circuit Court of Appeals scheduled oral argument for Friday, January 27, 2006, at 11:00 a.m., in courtroom #1 of the:
    James R. Browning US Courthouse
    95 Seventh Street
    San Francisco, CA

    Update: November 28, 2005

    On Saturday, November 19th, Brian O'Neill gave a presentation on the status of the Exxon Valdez litigation at the Pacific Marine Expo in Seattle.

    Update: October 4, 2005

    As stated previously, the briefing to the Ninth Circuit was completed on November 19, 2004. Because oral arguments have not yet been scheduled the plaintiffs filed a motion to set the oral arguments.

    A copy of the plaintiffs' motion is here.

    Update: July 7, 2005

    The last brief was filed with the Ninth Circuit on November 19, 2004. The next step is to have the oral arguments, however, to date we have not received the scheduling order from the Court. When we do receive the scheduling order, the information about the oral arguments will be posted here. A copy of the plaintiffs' reply brief is here.

    Update: August 31, 2004

    On Monday, August 30, 2004, the plaintiffs filed their brief in the Ninth Circuit Court of Appeals. The plaintiffs' brief is an answer to the opening brief filed by Exxon on June 28th, and it is a cross-appeal that asks the Ninth Circuit to reinstate the punitive damages jury verdict of $5 billion. Exxon's response to the plaintiffs' brief is due at the end of September, and the plaintiffs' final reply brief is due in mid-October. After the last brief has been filed, the Ninth Circuit will issue an order scheduling oral argument. At the conclusion of the oral argument, the case is submitted to a panel of three judges who will rule on the appeal. We do not know how long it will take the panel to make its decision.

    A copy of the plaintiffs' brief is here.

    Update: June 29, 2004

    On Monday, June 28, 2004, Exxon filed the opening brief in their appeal of the $4.5 billion punitive damages judgment, which was filed by Judge Russel Holland on January 28, 2004. The appeal is being heard in the Ninth Circuit Court of Appeals. The briefing is expected to last until mid-September. After the last brief has been filed, the Ninth Circuit will issue an order scheduling oral argument. At the conclusion of the oral argument the case is submitted to a panel of three judges who will make the ruling on the appeal. We do not know how long it will take the panel to make its decision.

    Update: February 3, 2004

    On Wednesday, January 28, 2004, Judge Russel Holland ruled that Exxon has to pay $4.5 billion in punitive damages, and over $2.3 billion in interest to the plaintiffs in the Exxon Valdez Oil Spill Litigation. This ruling stems from the Ninth Circuit Court of Appeals' remand last August, which instructed Judge Holland to review the Supreme Court decision in State Farm v. Campbell, 123 S.Ct. 1513 (April, 2003) and determine what, if any, the effect the Supreme Court's decision in State Farm would have on the punitive damage award in the Exxon Valdez litigation. After briefing and oral argument by both parties, Judge Holland determined that State Farm supported the jury verdict of $5 billion. The previous mandate from the Ninth Circuit, however, obliged Judge Holland to make some reduction of the verdict, he therefore set the punitive damages judgment at $4.5 billion. Exxon has announced that it will appeal this decision to the Ninth Circuit.

    In a separate decision issued on Thursday, January 29, 2004, Judge Holland awarded the plaintiffs' lawyers fees of 22.4% of the punitive damages recovery. The lawyers, however, will not be paid their share of the punitive damages until the litigation, including all appeals, is complete and the claimants have been paid.

    Click here to access downloadable copies of both orders (Orders 364 and 365).

    Update: December 30, 2003

    By the end of September there had been an initial payment to each of the Round 1 oiled salmon fisheries. Since that time, the EQSF has been focusing on releasing "held" checks, and completing payments to lien agencies. This process will continue into next year. It is anticipated that in early 2004 the final percent share letters for the Round 2 oiled herring fisheries will be sent out facilitating payment to these claim categories.

    On December 3, 2003, oral arguments were held in front of Judge Holland in Anchorage regarding the latest remand of the punitive damages judgment from the Ninth Circuit. Judge Holland commented that he expects to have an opinion out by the end of January. We anticipate that after Judge Holland's decision there will be another appeal to the Ninth Circuit Court of Appeals.

    Update: August 26, 2003

    During the last year, payments from the Supplemental Claims Fund, Compensatory Damages Fund, and the Compensatory Interest Fund were made to Round 1 claimants, which consist of the salmon fisheries in Chignik, Cook Inlet, Kodiak, and Prince William Sound. However, as of this date, the payments to the Prince William Sound Salmon Seine fishery have not gone out. As soon as the PWS Salmon Seiners are paid, the EQSF will review and release any "held" checks from Round 1.

    The Ninth Circuit Court of Appeals recently remanded the $4 billion punitive damage judgment back to Judge Holland in Anchorage, so he can determine whether the Supreme Court ruling in State Farm v. Campbell, 123 S.Ct. 1513 (April, 2003) has any impact on the punitive damages in the Exxon Valdez litigation. While the frustration of the additional delay is felt by everyone, we feel that it is best for Judge Holland to get the first crack at any new issues raised by State Farm (we believe there are very few).

    Update: March 17, 2003

    In November and December of 2002, payments from the Supplemental Claims Fund, Compensatory Damages Fund, and the Compensatory Interest Fund were made to claimants in the Cook Inlet Salmon Drift Net (S03H) and Cook Inlet Salmon Set Net (S04H) fisheries. Payments to the remaining oiled salmon fisheries in Cook Inlet, Chignik, Kodiak, and Prince William Sound should occur over the next few months.

    Exxon has appealed the new punitive damages judgment of $4 billion. The Ninth Circuit Court of Appeals has scheduled the appellate briefing to begin in June, and the briefing should be completed in August. At this point we do not know when or where the oral argument will take place; the Ninth Circuit will schedule the oral argument after the briefing has been completed.

    Update: December 9, 2002

    As you are aware, last year the Ninth Circuit Court of Appeals vacated the $5 billion punitive damage award and sent it back to Judge Holland to apply the three-part Supreme Court BMW v. Gore test to the facts of this case. On Friday, December 9, 2002, Judge Holland reduced the punitive award to $4 billion, plus interest from September 24, 1996.

    In the decision, Judge Holland stated that he believed that the original $5 billion award was appropriate, but that the Court of Appeals decision required him to lower the otherwise valid award. Exxon has indicated that they are going to continue to appeal the punitive damage verdict, so we all will have to endure another trip to the Ninth Circuit. However, Judge Holland's decision contains 52 pages of careful factual findings supporting the $4 billion award, and we are optimistic about our chances on appeal. As always, we appreciate the incredible patience that our clients have displayed during this long fight. Please hang in there with us.

    A copy of Judge Holland's order 358 in the case is attached.

    Update: October 14, 2002

    In the fall of last year, the Ninth Circuit remanded the jury's 5 billion dollar punitive damage amount back to Judge Holland in Anchorage to rereview the amount of the award in light of two recent Supreme Court decisions. The sole issue before the court is "What is the maximum amount of punitive damages the Constitution allows in this case?", Exxon takes the position it is 40 million dollars, and we take the position it is the 5 billion dollar jury award. The parties completed briefing the court and Brian O'Neill argued the issue against Exxon to Judge Holland on October 11th. We expect a favorable ruling from Judge Holland, an Exxon appeal, and a favorable appellate ruling, allowing us to bring this struggle to an end in the next year.

    The compensatory damages are currently being distributed to the Round 1 claim categories, which consists of the oiled salmon, and native subsistence claims.

    November 7, 2001

    On Wednesday, November 7, 2001, a three-judge panel of the Ninth Circuit U.S. Court of Appeals affirmed in part and vacated in part the judgment entered by District Court Judge Russell Holland following the 1994 jury verdict awarding commercial fishermen, Alaska natives, landowners and other plaintiffs $5 billion in punitive damages against Exxon.

    Specifically, the Court of Appeals

    (1) rejected Exxon's argument that federal maritime law does not allow punitive damages to be awarded in oil spill cases;

    (2) rejected Exxon's argument that Judge Holland's instructions to the jury were wrong;

    (3) rejected Exxon's argument that Judge Holland should not have allowed evidence of Hazelwood's blood tests and medical records to be considered by the jury;

    (4) rejected Exxon's argument that the jury improperly considered information obtained outside the courtroom;

    (5) rejected Exxon's argument that the jury award of compensatory damages to chum salmon fishermen and setnetters should be reduced;

    (6) reinstated the claims of seafood processors and tender boat owners/crews, which Judge Holland had dismissed; and

    (7) vacated the $5 billion punitive damage award, sending it back to Judge Holland with instructions to Judge Holland to decide what the amount should be, after applying the three-part test set forth by the U.S. Supreme Court in two cases (BMW v. Gore and Cooper Industries v. Leatherman), both of which were decided while the Exxon Valdez verdict was on appeal.

    The result of the Court of Appeals decision is that the case will be sent back to Judge Holland's courtroom for two purposes. The plaintiffs whose cases were dismissed erroneously will be entitled to a jury trial on the amount of their spill-related losses. Secondly, Judge Holland will hold a hearing on how the three-part Supreme Court test applies to the facts of this case. (The three part test calls for Judge Holland to weigh the reprehensibility of Exxon's conduct; consider the ratio of punitive to compensatory damages, including the damages suffered by the processors and tendermen; and compare the punitive damages verdict with the civil and criminal penalties which are imposed by the state and federal governments for comparable misconduct.) He will then adjust the amount of the punitive damage verdict accordingly.

    We remain fully committed to the fight, and will not rest until Exxon is brought to justice. While the Court of Appeals ruling is disappointing, as it allows Exxon to continue to delay paying its due, the court did not overturn the jury verdict and order a new trial as Exxon had hoped — a trial in which Exxon hoped there would be no punitive damage award permitted.


    Click on the following link to read the Decision Summary.

    Related Materials

    District Court:

    Ninth Circuit Court of Appeals:

    U.S. Supreme Court:

    Other:

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