Supreme Court Slashes Exxon Damages Justices rule that the punitive damages were excessive under maritime law. Instead of $2.5 billion, Exxon now has to pay just $500 million. "It was like getting the rug pulled out from under you," says plaintiff Osa Schultz.

Supreme Court Slashes Exxon Damages

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From the studios of NPR West, this is Day to Day. A victory for Exxon at the Supreme Court. I'm Alex Cohen.


And I'm Madeleine Brand. The court ruled that the 2.5 billion dollars the company was ordered to pay for the 1989 Exxon Valdez oil spill was excessive, and the justices reduced the amount to 500 million dollars. We'll talk about the ruling in a moment, with slate's Dahlia Lithwick. First let's go back to that day in March of 1989 when the oil tanker ran into a reef off the coast of Alaska.

(Soundbite of ship to ship call)

Mr. JOSEPH HAZELWOOD (Captain, Exxon Valdez): Valdez traffic (unintelligible). Valdez traffic over.

BRAND: A ship to ship call to the coastguard from the captain of the Exxon Valdez, Joseph Hazelwood.

Mr. HAZELWOOD: Valdez back. We've messed up. We're on the ground (unintelligible) I don't know, we're leaking some oil, and we're going to be here for a while.

COHEN: It was one of the largest oil spills in U.S. history. More than 11 million gallons of crude oil spilled into Prince William Sound in Alaska. It destroyed the fishing industry for years and ruined many small businesses on Alaska's coast.

BRAND: One of those victims is Osa Schultz. She and her husband owned a fishing business on Prince William Sound back when the oil spill happened in 1989 and that oil spill destroyed their business. They were among the plaintiffs who sued Exxon for damages and Osa Schultz is now joining us from Cordova, Alaska, and welcome to the program. What is your reaction to this decision?

Ms. OSA SCHULTZ (Victim of Exxon Valdez Oil Spill): I'm very disappointed. I think it was a cheap way out. They denied us the damages that we were awarded, the amount anyway, they cut it. And that amount, you know, will help, but it doesn't come anywhere near what we really lost.

BRAND: So the decision they cut the 2.5 billion to 500 million, that means with 33,000, lot's of numbers here? 33,000 Alaskans in line to get some sort of damages that means each person will get 15,000 dollars.

Ms. SCHULTZ: Yes. Whoopi! I mean, I'm disappointed in that light because we lost so much money that compensatory damages were based on the first year to three years losses. And we lost money for years after that and there's just no way that should be used as a basis, like I'm looking forward to reading what the court actually ruled and what the reasoning was.

BRAND: Well I think from my cursory reading of the Opinion, the justices basically said that you can't - that the punitive damages that were awarded in this case, the 2.5 billion were excessive. They were much more than the formula should allow.

Ms. SCHULTZ: Yeah, whose formula? That was always our big issue was that Exxon walked in here and said we're so sorry, you know we'll make it all better, and they did with core press from our perspective and they just whitewashed the whole thing. It's really scary how powerful they are. And I think the blessing in all this is that it's over, finally, for one thing. But also that the Supreme Court did slap them in the face and said you know, you do owe punitive damages, so in that way we won.

BRAND: This has been a battle for nearly 20 years. The oil spill happened in 1989. How much to you reckon you've lost monetarily in these last 19 years?

Ms. SCHULTZ: You know, I don't think I could put a value on it, because the thing that we lost the most was the ground, the financial ground. Because when it happened, we were just on the verge of some very good years and there is no question about that. There are so many statistics that could to back that up, from the fish runs, from the market work that we'd been doing for the value of Harbor salmon. Look where it has come to now, and it's extremely well known and very good fish. And so it was like getting the rug pulled from under you right when you had the whole room set up right.

And that's what hurt the most as we were just in our productive years to really to go out and make a difference in our lives. The whole town, so many people had to file bankruptcy and lost their businesses altogether. We've been able to hang on because we've taken out loans, but it's going to still be a struggle to pay those off and the little bit of money that it's going to bring is not going to do that. So we'll keep working.

BRAND: So the fishing never really came back to what it was pre-1989?

Ms. SCHULTZ: Oh, it did. And you know it was the slam against the businesses I think. A lot of them closed here in Cordova. Sales haven't 100 percent recovered because the herrings haven't come back.

BRAND: Are there any remnants of the spill still left? Let's say on the beaches?

Ms. SCHULTZ: Oh yeah. It's an annual field trip for the high school that goes out and examines what's there for the science center and collects crude that's still not broken down. And Exxon didn't clean it up, they just made a big show.

BRAND: Osa Schultz was one of the plaintiffs who sued Exxon for damages after the Exxon Valdez oil spill. That oil spill back in 1989 leaked 11 million gallons of oil into the Prince William Sound and we've been talking about today's Supreme Court decision which cut the punitive damage awards from 2.5 billion to 500 million dollars for the residents of that area. Osa Schultz, thank you very much for joining us.

Ms. SCHULTZ: Thank you.

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