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Thursday, 8 November, 2001, 05:20 GMT
Exxon damages ruled excessive
Exxon Valdez oil tanker
The Exxon Valdez accident was America's worst oil spill
The $5bn punitive damages Exxon Mobil was ordered to pay after America's worst oil spill has been ruled excessive by a US federal appeals court.

The court acknowledged that some damages were justified to compensate commercial fishermen and others who suffered from the disaster - but recommended that a lower amount be set.

It's a black day in the neighbourhood. I'm stunned. I think this is going to be devastating to people

Fisherman Riki Ott
Lawyers for the Alaskan fishermen and other plaintiffs said they still expected to win significant damages from the company, and would lodge new appeals if they considered the amount to be too low.

The Exxon Valdez tanker ran aground in Prince William Sound in 1989, spilling millions of gallons of oil off Alaska's coast and polluting 1,610 km (1,000 miles) of shoreline with disastrous consequences for fishing and the environment.

The $5bn award against Exxon was ordered by a jury in Alaska in 1994, the largest punitive damages in history at the time.

Despite Exxon's claims that the verdict was "completely unwarranted, unfair and excessive", the award was repeatedly upheld last year by the US Supreme Court.

'Already compensated'

The San Francisco-based federal appeals court took a different view on Wednesday, saying the amount was excessive in the light of recent Supreme Court decisions governing such awards.

Capt Joseph Hazelwood
Capt Joseph Hazelwood: Accused of recklessness
"The plaintiffs here were almost entirely compensated for their damages years ago," the panel said.

They were referring to $287m compensatory damages awarded to commercial salmon and herring fishermen during the 1994 trial.

"The punitive damages at issue were awarded to punish Exxon, not to pay back the plaintiffs," the court said in its unanimous decision.

The reduced charges should now be decided by a district court.

Not the end

The oil giant has argued that it should not have to pay any punitive damages, because it learnt its lesson, and spent more than $3bn to clean up the spill and settle lawsuits.

The plaintiffs argue that the $5bn award was appropriate given Exxon's "reckless conduct" and that of the tanker's captain, Joseph Hazelwood.

One of the lawyers, David Oesting, warned that this was not the end of the case.

"I don't see this in the least as the end of the line. We are going to get punitive damages in this case - the question is just how much," he said.

Back in Alaska, local fisherman were shocked by the verdict.

"It's a black day in the neighbourhood. I'm stunned. I'm totally stunned. I think this is going to be devastating to people, just devastating," said Riki Ott, a fisherman and environmentalist.

See also:

02 Oct 00 | Americas
Court upholds Exxon damages
25 Mar 99 | From Our Own Correspondent
Exxon Valdez anniversary
14 Mar 00 | Europe
Cancer fears over oil spill
20 Dec 99 | Europe
Oil spill plan activated
23 Mar 99 | Sci/Tech
Exxon Valdez: Tip of an oily iceberg
16 Mar 00 | Asia-Pacific
Tanker firm fined for oil spill
23 Mar 99 | Americas
Exxon Valdez: Ten years on
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