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It doesn't seem like it's been almost 20 years since the devastating oil spill that hit Prince William Sound, Alaska, but it has been, and finally, 19 years later, Exxon Mobil (NYSE: XOM) has started to send out lawsuit settlements to those affected by the spill.In the first decision on the settlement, the company was ordered back in 1994 to pay damages of $5 billion for its role in the environmental disaster. But after years and years of legal battles, the company was able to first get the $5 billion cut in half, and then this June had the damages reduced yet again, down to $507 million.
The payments come with a bitter-sweet taste, as many of the plaintiffs are glad that something is being paid, but feel that the sums they are getting fall far short of what should have been owed to them.
While it is good to see Exxon finally start to send out some payments, the company is still fighting to the end to keep its settlement as low as possible. The current payments are only going to a select number of plaintiffs, and there are still large numbers of plaintiffs that do not know when or if they are going to see anything from the company.
There is also the matter of interest. Should Exxon also be forced to add interest onto its payments? The company does not think so, and that is yet another legal battle that the company is going to fight. The total interest on the settlement would be $488 million, so while that may not be a material amount for Exxon, for the plaintiffs in the case that would mean that their settlement checks would be about twice what they are now.
So while this chapter is not officially closed for Alaska fisherman who lost their livelihood on the fateful day that 11 million gallons of oil spilled out of the Valdez tanker, at least there is some closure to the nearly 20-year long wait. So far, both sides have agreed to where $383 million of the $507 million will go, but they are still working out the details on the remainder of the monies.
Said one Alaskan fisherman, Mike Webber, "Even if we got the full $5 billion, we still wouldn't come close to what we would have made in 20 years of fishing," and he went on to say that, "One good thing is that this case is coming to an end. ... It's been an open sore."
So, for some the money coming is a welcome sight, but for others it just feels like a slap in the face from Exxon and the Federal Courts.
What are your thoughts on this matter? Do you think that Exxon got off easy with this decision, or should it be good enough that the company has stated that it already spent over $3 billion in cleanup costs?
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.
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Reader Comments (Page 1 of 1)
12-09-2008 @ 6:15PM
gerald said...
Quit buying Exxon products. This is a sad day in America when a company that screwed up so many lives and the environment and they refuse to pay for 19 years while they make billions in new profits. I don't buy Exxon and you shouldn't either.
12-09-2008 @ 6:50PM
JCH said...
First, a prize for anybody who can, without looking it up first, name any of the oil companies responsible for larger spills, or significant losses of human life.
It is my understanding that Exxon immediately paid around 350 million dollars, the estimate of actual damages at the time, when the spill happened, and then, in the next few years, spent a couple of billion dollars cleaning up the spill.
The 5 billion award was a punitive-damage award, which Exxon, well within its rights, fought.
12-09-2008 @ 7:41PM
Ashwin said...
This is completely fair. ExxonMobil already cleaned up the spill, and anyway, its doing something. If they didn't have any basis, its unlikely their payments would have been reduced in the first place.
12-09-2008 @ 8:22PM
Julius said...
20 years ago I worked for an environmental company which did a lot of Exxon environmental projects in NJ, PA, NY. Back then I realized what is Exxon really is when it comes to our environment. So I stopped buying Exxon products 20 yeras ago.
12-09-2008 @ 11:36PM
Chris K. said...
Through either dishonesty, politics, or perhaps just plane ignorance, the article cited never mentions the fact that these $5B in damages being disputed are punitive damages. I.e., $5B on top of all the clean up fees, legal fines, and compensatory damages. The compensatory damages are designed to cover the actual costs (losses) that resulted form XOM's negligence. XOM has a fiduciary obligation to its shareholders to fight for reduction, if not elimination, of the punitive damage award.
Those with the most to gain from the award are the lawyers for the plaintiffs in the class action suit.
12-10-2008 @ 4:32AM
al coholic said...
Why shouldn't Exxon be liable for the a wad of punitive charges. The captain of the Valdez was a known alcoholic and the accident was totally unecessary.
If Exxon didn't drag this out for such a ridiculous period of time the lawyers fees would have been minimized.
Exxon is just plain guilty as hell and I, for one, will never knowingly buy any of their products. Maybe the power of the Internet can be brought to bear against this "evil empire."
12-10-2008 @ 7:58AM
lou said...
When a person loses their livelihood because of carelessness of a huge corporation, I believe that livelihood should be reimbursed. It was total carelessness that created that mess, they should pay those fishermen, plus interest. They have already lost enough through legal battles with Exxon. Let the little guy win some, or everyone will be under corporate rule!
12-10-2008 @ 10:50AM
BOB R RIDENER said...
I feel that exxon is an example of the greed that seems to typlify too many of our major corporations today. It would have taken lass than a weeks profit to pay the entire award.
shame!!
12-10-2008 @ 11:00AM
nick said...
The sad thing is lawyers like Sen Edwards are the ones who are getting rich on these type of settlements. The poor slob gets screwed every time.
12-10-2008 @ 11:21AM
imme534333 said...
Exxon claims punitive damages would be excessive punishment beside the $3.4 billion in cleanup costs, compensatory payments and fines it already has paid.
12-10-2008 @ 11:54AM
ROBERT said...
EXXON ALREADY HAS DONE ENOUGH..THEY CLEANED IT UP. THE LAWYERS MAKE ALL THE MONEY..
12-10-2008 @ 12:10PM
Kim said...
I hate long drawn out battles. Exxon should have paid up and put this all to rest 20 years ago. It is bad publicity every time this gets dredged up.
12-10-2008 @ 12:36PM
helen t. said...
I will make every effort not to buy any Exxon products again.
I do not like bullies...
12-10-2008 @ 12:57PM
francas said...
What a joke , did exxon pay enough, no frigen way, but the Alaskans can ask how much did their corrupt officals get , Governor included
12-10-2008 @ 1:41PM
Bob said...
This is the same reason I quit purchasing Exxon products along time ago. I would rather push my car down the road then buy this arrogant company's fuel.
12-10-2008 @ 1:56PM
tonto said...
HOW MUCH DOES PALIN GET HER GREEDY LITTLE HANDS ON ??
12-15-2008 @ 9:06PM
kate said...
Am I the only one completely disgusted by the fact that exxon mobil has 5 billion ?!?!?!?!?!?!?!? the level of worldwide corruption makes me sick. Seriously what does one need with sooo much money? You hear all the time social security is broke, we can't afford universal healthcare. but we have 700 million for a bailout. yes yes i know its supposedly a "loan" that the govt ( if it actual works out the way its suppose to ) will earn money from but I have NO trust anymore. this is simply and completely immortal.